Redefine: H1 profit up 2.4x, but almost all of it is from revaluation, not operations

On August 25, Redefine released results for the first half of fiscal 2026. Net profit jumped 140.9% YoY to ZAR 6,236 million, but EBITDA rose only 4.7%, with EBITDA margin expanding just 0.5 pp to 54.4%. At the current price, the share looks rather attractive: a dividend yield of about 7.9% and moderate operating growth are offset by high leverage, but the portal's model sees +5% upside.

Key takeaways

— H1 net profit grew 2.4x, but mostly due to revaluation, not operations

— Revenue and EBITDA grow moderately, EBITDA margin barely changed

— Leverage remains high: net debt at 6.94x EBITDA over the last 12 months

— Trailing 12-month dividend yield is 7.9%, above the key rate, but payouts depend on one-offs

— The portal's model implies about 5% upside

— Operating cash flow over 12 months is ZAR 3,500 million, covering only part of dividend payments

Key figures, ZAR bn

H1 net profit grew 2.4x, but mostly due to revaluation, not operations

For the first half of fiscal 2026, net profit reached ZAR 6,236 million, up 140.9% from the same period a year earlier. The growth looks impressive, but it is not backed by operating metrics: EBITDA for the half-year rose only 4.7%, and revenue – by 3.7%.

The main contribution to profit, judging by the dynamics, came from revaluation of investment property – a typical item for real estate funds that does not generate cash flow. Net margin for the half-year was 64.4% versus 27.7% a year earlier, also indicating the one-off nature of a significant part of profit.

Revenue and EBITDA grow moderately, EBITDA margin barely changed

За первое полугодие выручка увеличилась на 3,7% год к году, а EBITDA – на 4,7%. Рентабельность по EBITDA составила 54,4% против 53,9% годом ранее – расширение всего на 0,5 п.п., что говорит о стабильном, но не ускоряющемся операционном бизнесе.

Умеренный рост выручки и EBITDA характерен для зрелого портфеля недвижимости, где арендный доход растёт медленно, а операционные расходы контролируются. Существенного улучшения маржинальности не произошло, что ограничивает потенциал роста операционной прибыли.

Valuation on the latest reported figures