Liberty Two Degrees FY HEPS up 9.2%
Shares of Liberty Two Degrees leaped over 7 per cent following the release of its annual results. The property company said traffic across its malls was robust in the year to December and exceeded pre-pandemic levels. While it paid out 100 per cent of distributable earnings to shareholders, distributions could have been higher had it not been for the dispute with the City of Joburg over municipal rates, which the company lost. CNBC Africa’s Fifi Peters spoke with Amelia Beattie, Chief Executive officer at Liberty Two Degrees.
Mon, 27 Feb 2023 10:55:38 GMT
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AI Generated Summary
- Guidance Uncertainties: Liberty Two Degrees faces challenges in providing guidance amid dynamic market conditions and regulatory uncertainties, with distributions potentially stagnant or growing by up to 8% based on key factors like load shedding and customer spending.
- Dispute Over Municipal Rates: The company's dispute with the City of Joburg over unpaid municipal rates highlights differing interpretations of the Municipal Rates Act, leading to unsustainable rate increases and financial strains.
- Renewable Energy Initiatives: Liberty Two Degrees is proactively investing in renewable energy solutions like solar power and HVAC upgrades to mitigate rising utility costs and enhance operational sustainability.
Liberty Two Degrees, a prominent property company, witnessed a significant surge in its shares by over 7% subsequent to the release of its annual results. The company reported robust mall traffic throughout the year ending in December, surpassing pre-pandemic levels. However, despite paying out 100% of distributable earnings to shareholders, Liberty Two Degrees faced constraints on higher distributions due to a dispute with the City of Joburg over municipal rates which the company ultimately lost. To delve deeper into this, CNBC Africa's Fifi Peters engaged in a conversation with Amelia Beattie, the Chief Executive Officer at Liberty Two Degrees. Beattie shed light on the challenges and opportunities lying ahead for the company. One of the primary uncertainties for Liberty Two Degrees lies in providing guidance amidst a dynamic and volatile environment. Beattie mentioned that distributions could either remain stagnant or witness growth of up to 8%, contingent on various factors such as the severity of load shedding, resolution of municipal rate issues, and customer spending behavior. The company's ability to sustain or increase distributions hinges on these critical variables. Moving on to the dispute over municipal rates with the City of Joburg, Beattie clarified the differences in interpretation which led to the impasse. Despite maintaining a consistent track record of settling dues promptly, a variance in understanding the Municipal Rates Act emerged between Liberty Two Degrees and the city authorities. Beattie emphasized that the lengthy resolution process adversely impacted the company, escalating rates to unsustainable levels at locations like Santan City. In response to rising utility costs, especially electricity, Liberty Two Degrees has been exploring renewable energy solutions to mitigate expenses and enhance sustainability. Initiatives like solar power installations and HVAC system upgrades reflect the company's commitment to cost-efficiency and environmental responsibility. Amidst these challenges, Beattie highlighted the significance of driving operational efficiencies to support tenants and optimize mall operations. In conclusion, Beattie addressed the prospect of positive reversions, emphasizing a correlation with tenant performance and turnover growth. Despite recent improvements, achieving positive reversions remains contingent on sustained trading momentum and economic resilience. The coming months will be crucial for Liberty Two Degrees as it navigates uncertainties and seeks strategic solutions to propel growth and mitigate risks in an evolving business landscape.
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