Investment Idea: Redefine

RDF recently released its mixed 1H24 results, however, this has not changed our view on the company. 

RDF’s interest cover has decreased from 2.4x in FY23 to 2.2x in 1H24 but is still above its covenant of 2x. 

The loan-to value (LTV) for the group increased from 41.1% in FY23 to 42.6% in 1H24 which is above the medium-term target range of 38% to 41%.

The main drivers of the increase were the recent Mall of the South acquisition, but the group intends to lower the LTV to the medium-target range. 

Revenue was up by 8% with distributable income up by 6% from 23.91 cents per share (cps) to 25.34cps. Dividends per share decreased marginally from 20.32cps compared to 20.27cps.

The payout ratio for the period is at 80%, on the lower end of the FY24 guided range of 80% to 90%. - We maintain our buy recommendation.