Delta hopes to have JSE suspension lifted soon

With embattled Delta Property Fund publishing its restated results for the 2020 financial year (ending February 29, 2020) in April and on Tuesday finally publishing its delayed interim results for the half-year ending August 31, 2020, the group plans to apply to the JSE for the lifting of the suspension of trading in its shares.

Delta has been suspended from trading its shares on the JSE since mid-December after the group withdrew its 2020 financial statements following a forensic investigation into former executives found instances of unsubstantiated payments, procurement irregularities and other unethical business dealings totalling some R46 million.

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“[The] publication of reissued 2020 financial statements and half-year results paves way for the company to apply to the JSE for reinstatement of trading in the share,” the real estate investment trust (Reit) said in an interim results statement on Tuesday.

Delta’s latest results have been delayed a few times, with the fund originally saying it would publish both the 2021 interim results and full-year results to the end of February 2021 together in May.

On Friday, it updated the market in a Sens statement noting that it would publish the interim results on Monday, however the full-year results would now only be published at the end of June.

Delta blamed the delay on the significant time and resources expended by the company and its auditor, BDO, on the re-issue of the company’s audited financial statements for the year ended February 28, 2020 as well as the preparation of its latest interim results.

But even the interim results were delayed again and only came out on Tuesday morning.

“Due to the 2020 financial statements having a bearing on and being as a comparative basis for the company’s interim results, the company was not in a position to release the interim results within three months after the period end,” Delta explained in its interim results Sens statement.

“As a consequence of the withdrawal of the 2020 financial statements, the JSE suspended trading in the shares of Delta on December 15, 2020,” it further noted.

Reiterating the Sens statement, Delta’s interim CEO Bongi Masinga said that the results for the six months ended August 31, 2020 mark a period of significant changes for Delta.

“These include the appointment of new members to the board of directors to drive a step-change in the group’s performance, the appointment  of a new interim executive leadership team, as well as two separate independent forensic investigations into irregularities which resulted in the withdrawal and reissue of the financial statements for the year ended February 29, 2020,” she pointed out.

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“Our immediate objective of stabilising the company and the senior team has been met, and the recruitment process for a permanent CEO is progressing well,” Masinga added.

Delta’s interim results show that distributable income per share plunged over 46%, to 16.3 cents for the six months ended August 31, 2020 (30.33 cents per share for HY2019).

“In performing the solvency and liquidity test conducted in terms of S46 of the Companies Act, which takes into consideration the working capital cash flow forecast, expected working capital requirements, capital expenditure requirements and contracted tenant installations relating to historic lease renewals, the board resolved not to declare an interim distribution,” it noted in the interim results Sens statement.

In 2019, the fund paid out an interim dividend of 12.19 cents per share.