Our opinion on the current state of RES

The Resilient group of companies (Resilient, Lighthouse - previously Greenbay, Rockcastle and Fortress) used to be the high-flyers of the property sector until the beginning of 2018 when a damning report was produced by 360ne Asset Management. The report claimed that the high prices enjoyed by the shares of these four real estate investment trusts (REIT) was primarily a result of their incestuous cross-shareholdings. This caused the price of Resilient (and the other members of the group) to plummet to R51.50 by the 3rd of April 2018. After the report it was wallowing between R50 and R70 until COVID-19 took it down to between R30 and R45. A lengthy investigation by the Financial Sector Conduct Authority (FSCA) finally showed on 8th November 2019 that there had been no insider trading or share manipulation and the share has recovered some of what it lost. In its results for the six months to 30th June 2023 the company reported revenue up 8,9% and headline earnings per share (HEPS) up 22,4%. The company's net asset value (NAV) increased slightly to 5995c per share. The company said, "Resilient continues to emphasise keeping malls and tenants open for trade through periods of loadshedding. Growth in comparable sales has improved from the 2,9% reported for the four months to April". In a pre-close update for the ten months to 31st October 2023 the company reported foot traffic up 4,9% and vacancies of 1,5%. The company said, "Strong trading performances were achieved in the Northern Cape, Limpopo and Mpumalanga provinces. The growth in KwaZulu-Natal was limited (0,7%) due to the high base in the previous comparable period. Growth in the North West province (1,8%) was impacted by construction activities at Mahikeng Mall as well as ongoing road works in front of the mall". Technically, the share has been moving downwards since the beginning of 2022. The company is considering delisting from the JSE.