Pre-close announcement for the year ending 31 March 2024

The Group is benefiting from the management internalisation and the strategic repositioning of the Group as an integrated international real estate business. The Group is delivering on its stated strategy with several strategic objectives achieved over the period.


Pre-close highlights

Burstone has released its pre-close update for the year-ending 31 March 2024. A conference call was held on 27 March. Further information is provided below.
Pre-close conference call

Pre-close conference call

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Pre-close announcement

Pre-close announcement

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Key highlights

Highlights from the announcement include:
  • The Group is already benefiting from synergies created by the internalisation, integration of its business and its enhanced international footprint.

  • The annualised net management fee saving resulting from the internalisation is anticipated to be in excess of the R74 million as announced at the time of the transaction.

  • The Group has increased its international footprint through its Joint Venture with the Irongate Group in Australia (now A$490 million third party capital under management, up 8% since acquisition).

  • The Group has made progress on several capital light initiatives.

  • The Group has delivered on several cost saving initiatives including c.€2 million corporate savings in Europe during the financial year, with further synergies expected in the financial year ending 31 March 2025 (“FY25”).

  • The de-gearing of the Group balance sheet continues with c.R1.8 billion of assets sold over the past financial year (South Africa: c.R1.2 billion and Europe: €33 million).

  • A further c.R1.3 billion of assets have been identified for sale in South Africa and a pipeline of sales (direct and / or as part of sub-portfolio management opportunities) of c.€150 million to €200 million in Europe which the Group will look to pursue in FY25.

  • The Group is expected to deliver a strong second half performance, with distributable income per share (“DIPS”) expected to be c.6% to c.8% higher than the second half of the 2023 financial year (“2H23”).

  • The Group has benefited from:

    • Solid operational performances from the South African and European businesses;

    • The European business is expected to report a solid second half performance, up c.20% to 21% in Euros on 2H23, resulting from normalisation of funding costs and positive impact of rental growth combined with delivery of cost initiatives;

    • Stability across the portfolio with vacancy levels in South Africa and Europe remaining at low levels of c.5% and c.2%, respectively;

    • Positive impact from the recent management company internalisation leading to operational efficiencies within the Group;

  • Growth in income as a result of new business activity, linked to the rollout of the Group’s capital light strategy.

  • As expected, Group results have been impacted by higher funding costs with total interest costs expected to increase by c.R275 million over the period.

  • As a result, overall Group DIPS is expected to be in line with previous guidance at approximately 0% to 2% higher than the 2023 financial year, with FY24 DIPS expected to deliver between 104.64 cps to 106.73 cps (Mar-23: 104.64 cps).

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