Far Property Company could retain up to P60.7 million if all investors elect to receive their entire distribution in additional linked units rather than cash, giving the property group more funds for developments and refurbishments as its borrowing costs rise.
The Botswana Stock Exchange-listed company says half of its distribution for the financial year ended June 30, 2026, will be paid in additional linked units rather than cash. Investors can elect to receive the remaining half in units as well, allowing the group to retain more capital for expansion and reduce its reliance on loans.
The P60.7 million represents the amount Far Property could capitalise if all investors choose to reinvest their entire distribution in units.
Executive director Vidya Sanooj said investors who take no action would automatically receive 50 percent of their distribution in cash and 50 percent in linked units. Those who want their entire payout in units must complete an election form.
The move comes as the group’s financing costs rise faster than revenue. Finance costs increased by 27 percent to P45.9 million in the year ended June 2026, from P36.2 million a year earlier, while revenue grew by 8 percent to P189 million.
Current and non-current borrowings reached a combined P516.2 million, up from P425 million, excluding separately reported overdrafts and lease liabilities.
Far Property says the retained distributions will help fund current and future projects, refurbish properties and “reduce exposure to loan finance”. Its abridged audited results show five projects underway, alongside plans to develop existing land holdings and make further strategic investments in Zambia and Namibia.
The arrangement would allow the company to retain money that would otherwise be paid to shareholders. Investors would reinvest some or all of their distributions by receiving additional linked units, without contributing fresh cash.
Far Property declared a distribution of 13.28 thebe per linked unit for the financial year. A linked unit combines a share with a debenture, giving investors exposure to both dividends and interest. Interest accounts for 13.17 thebe of the latest distribution, while the dividend makes up the remaining 0.11 thebe.
According to the distribution circular, new units will be issued at P1.80 each, with entitlements calculated after applicable withholding taxes. The company says the issue price is based on the weighted average traded price over the three weeks preceding June 30.
Full participation would result in approximately 33.73 million new linked units, increasing the total in issue from 498.23 million to 531.96 million. The new securities would carry the same rights as existing units.
Far Property says the scrip arrangement avoids the substantial dealing costs associated with a new rights issue. However, no unitholders had committed to receiving their entire distribution in units when the circular was issued.
The effort to retain distributions comes alongside stronger cash generation from the business. Net cash generated from operating activities increased to P199.5 million from P98.9 million a year earlier, while investing activities absorbed P152.6 million, compared with P119 million previously.
The figures point to an improvement in operating cash flow alongside increased investment spending. Retained distributions would provide an additional funding source as the group develops its portfolio and seeks to “develop existing land bank to add more properties in the portfolio with high quality tenants and better rent yield”.
Profit before tax rose by 21 percent to P188.9 million, supported by a larger increase in property valuations. Fair-value gains reached P58.5 million, compared with P22.8 million a year earlier.
Net income from operations grew more slowly, increasing by 5 percent to P133.2 million as higher financing costs absorbed part of the improvement in operating profit. Property valuation gains boost reported earnings but do not, in themselves, generate cash to finance construction or refurbishments.
The group’s investment properties were valued at P1.98 billion at year-end, up 12 percent. Botswana remained its largest market, accounting for 84 percent of revenue, followed by South Africa at 10 percent, Zambia at 5 percent and Namibia at 1 percent.
Far Property says its strategy is focused on improving and stabilising yields through expansion into new markets and diversification of its existing portfolio. It also plans to expand its commercial land holdings for future development.
Investors have until November 5 to elect to receive their full distribution in units. Their decisions will determine how much of the potential P60.7 million the company ultimately retains.
