Wrap Text
Condensed Consolidated Financial Results For The Twelve Months Ended 31 March 2018
Sirius Real Estate Limited
(Incorporated in Guernsey)
Company number: 46442
Share code: SRE
ISIN: GG00B1W3VF54
("Sirius", "the Group" or "the Company")
Condensed consolidated financial results for the twelve months ended 31 March 2018
Record Organic Rental Growth whilst Recycling and Reinvesting in Assets for the Future
Successful recycling and investment for the future
- Intensive period of asset acquisition and recycling:
- Completed the sale of three mature assets generating EUR6.7 million net operating income on 90% occupancy for EUR103.0 million
- Acquired thirteen new assets for EUR163.7 million (including two assets completed on 1 April 2018) generating EUR8.3
million net operating income on 58% occupancy
- Disposal of non-core sites progressing well with the completion of the sale of the Bremen Brinkmann asset post
period end leaving one last non-core site to be disposed
- New assets provide the Company with approximately 80,000sqm of vacant or sub-optimal space in which to invest and
continue generating returns
Operating platform delivers new organic sales record
- Total income increased to EUR72.1 million (2017: EUR68.8 million)
- Total annualised rental income increased by 12% to EUR79.5 million (2017: EUR71.0 million) (including two acquisitions completed on 1 April 2018)
- Like for like annualised rental income record increase of 6.2%
- Like for like occupancy increased from 79.8% to 82.5% (total occupancy 79.7% including acquisitions)
- Signed 160,133 sqm of new lettings at 6.01 per sqm (2017: 151,320 sqm at EUR5.60 per sqm) from 14,805 lettings enquiries at a conversion rate of 14%
- Average rental rate increase of 3.6% to EUR5.46 per sqm (including two acquisitions completed on 1 April 2018) from EUR5.27 per sqm as at 31 March 2017
Increased profits and dividend
- Profit before tax in the period grew 17% to EUR89.6 million (2017: EUR76.4 million) including revaluation gains net of capex of EUR63.5 million
- Funds from operations ("FFO") grew by 4% to EUR38.4 million (2017: EUR37.1 million) despite loss of income relating to disposed assets and timing of acquisitions
- Pay-out ratio at 75% of FFO (2017: 65%) in order to maintain positive dividend growth and offset the impact on earnings of recycling activity
- Dividend of 1.60c per share for the six months to 31 March 2018 represents a 4.6% increase in the same period in the prior
year (2017: 1.53c). Total dividend for the year of 3.16c, an increase of 8.2% on the 2.92c total dividend for the year ended 31 March 2017
- Total shareholder return based on adjusted NAV and dividends paid of 17.0% (2017: 15.3%)
Portfolio value increased by EUR126.1 million driven by transactional activity and strong uplifts
- Book value of portfolio including assets held for sale and two acquisitions that completed on 1 April 2018 increased to EUR967.3 million
- Like for like valuation increase of EUR84.4 million or 11.6% (2017:7.7%)
- Valuation uplift of EUR84.2 million (EUR63.5 million net of capex) recorded in the period reflective of increases in income and yield
compression of approximately 37bps
- Gross yield of portfolio of 8.1% remains high compared to recent transactional evidence
Original capex investment programme substantially complete and new acquisition programme in progress
- Original capex investment programme substantially complete:
- Transformed 186,621 sqm (90% of total space in programme) of vacant and sub optimal space
- Invested EUR18.8 million to date
- Generated annualised rental income of EUR10.9 million
- New acquisitions capex investment programme for assets acquired since 1 April 2016 initiated:
- Targeting 121,065 sqm of vacant and sub optimal space
- Proposed investment of EUR26.1 million
- Target rental income of EUR8.1 million
Andrew Coombs, Chief Executive Officer of Sirius Real Estate, said:
"We are delighted to have delivered a 17% total shareholder return based on adjusted NAV and dividends paid in the year. Equally,
a record 6.2% increase in like for like annualised rental growth, the highest performance in the Group's history, in a period when
our key focus was on recycling and reinvesting is an exceptional performance and reflects well on the strength of our in-house
sales and marketing platform.
Sirius has continued to grow while recycling mature and non-core assets into thirteen new business parks with much greater
potential for income and capital growth into the future. We still have the financial capacity to acquire over EUR100 million of assets
for which we have a healthy pipeline of opportunities located in our target areas around Germany's big seven cities where we have
extensive market knowledge and expertise".
Enquiries:
Sirius Real Estate +49 (0)30 285010110
Andrew Coombs, CEO
Alistair Marks, CFO
Novella +44 (0)20 3151 7008
Tim Robertson
Toby Andrews
Background to Sirius Real Estate:
Sirius is a property company listed on the Main Market and premium segment of the London Stock Exchange and the Main Board
of the Johannesburg Stock Exchange. It is a leading operator of branded business parks, providing conventional space and flexible
workspace in Germany. The Company's core strategy is the acquisition of industrial and office business parks at attractive yields,
the integration of these business parks into its network of sites under the Company's own name as well as offering a range of
branded products within those sites, and the reconfiguration and upgrade of existing and vacant space to appeal to the local market
through intensive asset management and investment. The Company's strategy aims to deliver attractive returns for shareholders by
increasing rental income and improving cost recoveries and capital values, as well as by enhancing those returns through financing
its assets on favourable terms. Once sites are mature and net income and values have been optimised, the Company may take the
opportunity to refinance the sites to release capital for investment in new sites or consider the disposal of sites in order to recycle
equity into assets which present greater opportunity for the asset management skills of the Company's team.
For more information, please visit: www.sirius-real-estate.com.
Images of the Sirius property portfolio are available from: https://www.flickr.com/photos/sirius_re/.
Chairman's Statement
Introduction
Sirius's core objective remains the delivery of attractive risk-adjusted returns through a mix of dividend yield and capital value
appreciation. This is achieved by maximising the opportunities across its portfolio of 54 business parks it owns and manages. Key
to this is the in-house model and operating platform which has significantly reduced the Company's reliance on third party
contractors leading to market expertise and experience being built up and maintained within the business which represents a key
point of difference for Sirius. The year under review saw Sirius commence its capital recycling programme and replace two mature
assets and one non-core site with new assets with greater scope for income and capital growth. Many of the new assets that have
been acquired have high levels of vacancy providing the Company with a prime opportunity to apply its proven ability to transform
vacant and sub-optimal space and create significant future value.
In December 2017, Neil Sachdev stepped down from the Board and the Company is making good progress in its search for a new
Chairman. In the interim period the Board has appointed me as Acting Chairman.
FY 17/18 highlights
It is a pleasure to be able to report on an excellent twelve months of trading for Sirius, during which the Company continued to grow
earnings whilst successfully recycling EUR103.0 million of capital from disposals, together with fund raising proceeds and bank
lending, into thirteen new assets with greater future growth potential. The Company delivered a profit before tax of EUR89.6 million, up
17% on the prior year, whilst funds from operations ("FFO") increased by 4% to EUR38.4 million despite the earnings lag relating to
disposed assets. The increase was mainly driven by the 6.2% like-for-like annualised rental income growth that was generated on
the existing portfolio* which drove the total annualised rental income, including the two acquisitions which completed on 1 April
2018, to EUR79.5 million (2017: EUR71.0 million). This performance demonstrates the strength of the Company's operating platform to
drive organic growth and the appeal of conventional and flexible workspace solutions to the German market especially the
burgeoning Mittelstand market made up of small to medium-sized enterprises.
* Excludes disposals and acquisitions.
Shareholder returns
The Company's stated policy is to pay dividends based on 65% of the Group's FFO but as we indicated last year, due to the high
level of disposals and the desire to maintain positive dividend growth, the Board would consider temporarily increasing the pay-out
ratio. As a result, the Board has declared a final dividend of 1.60c per share representing 75% of FFO, a 4.6% increase on the
same period last year. The total dividend for the year is 3.16c, an increase of 8.2% on the 2.92c total dividend for the year ended
31 March 2017.
Financial year Dividend per share
2015-2016 2.22
2016-2017 2.92
2017-2018 3.16
The Sirius business model continues to deliver not only progressive income returns but also attractive capital growth as measured
by adjusted net asset value per share ("adjusted NAV"). Combining the growth in adjusted NAV and dividends paid, the Company
has consistently delivered an annual return in excess of 15% for the last three years and this year was no exception with a return of
17.0% being recorded. Whilst income contributed approximately one-third and capital growth two-thirds of those total shareholder
returns, it is pleasing to note that the valuation movement of our underlying investment property is heavily derived from organic
increases in income rather than yield movement. This focus on growing income at property level positions the Company well for the
future irrespective of the prevailing market conditions.
Financial year Total shareholder return
2015-2016 16.0%
2016-2017 15.3%
2017-2018 17.0%
* Using adjusted NAV per share which excludes provisions for deferred tax and financial derivatives and includes dividends paid.
Governance and culture
The Board is fully committed to the UK Corporate Governance Code ("UK Code") as published in June 2016 by the Financial
Reporting Council as well as the King IV Report on Corporate Governance for South Africa 2016 ("King IV Code") as issued by the
Institute of Directors in Southern Africa NPC in November 2016. I am pleased to report that we are compliant with all principles of
the UK Code. The JSE has granted the Company dispensation not to report on its application of the King IV Code, provided that
Sirius continues to comply with the mandatory corporate governance provisions pursuant to paragraph 3.84 of the JSE Listing
Requirements. One positive development arising from the King IV Code has been the establishment of a new Social & Ethics
Committee which will help ensure we continue to conduct our business in a manner that upholds the principles of integrity and
equality in everything we do.
Ensuring our Board has the right expertise to support and challenge the business is of paramount importance. We regularly review
the composition of the Board to ensure our combined skill set is aligned to the strategic priorities of the business. We were
delighted to welcome Jill May onto the Board in November 2017 as a Non-executive Director. As a former panel member of the
Competition and Markets Authority and a current Non-executive Director of the Institute of Chartered Accountants (ICAEW), as well
as two listed investment companies, Ruffer and JP Morgan Claverhouse, Jill brings a wealth of experience in financial and
capital markets.
In September 2017, after more than ten years of distinguished service, Robert Sinclair formally stepped down from the Board. We
remain ever grateful for the stewardship the Company benefited from during Robert's service and we warmly send him our best wishes.
KPMG LLP, London will not offer themselves up for re-election as the Company's auditors at the next Annual General Meeting. The
Board considered that in light of new regulation regarding the rotation of auditors, and, in line with best practice, and due to the
length of time KPMG had acted as audit firm to the Company that a formal audit tender process would be undertaken during the
reporting period. Following the completion of the audit tender process the Company advises that KPMG LLP will resign as auditors
at the completion of this year's audit and Ernst & Young LLP will be appointed. The Board is recommending that Ernst & Young
LLP be re-appointed as auditor from the date of the AGM in September 2018. We would like to thank KPMG for their long and
dedicated service to the Company since it was first formed.
Thank you and outlook
As the Group expands so does the number of stakeholders in the Company, all of whom contribute to its ongoing success. On
behalf of the Board I would like to thank all those connected to Sirius for their efforts and hard work without which the Company
could not have achieved what it has in the year to March 2018. Having refuelled the business with 13 new assets, including
Saarbrücken and Dusseldorf II which completed on April 1 2018, the Company's annualised rental income was EUR79.5 million which
suggests the Company is well set to continue increasing recurring revenues and capital values into the next year. Whilst we remain
cautious about the market and economic conditions in Germany and Europe, its proven track record of adding value through
intensive asset management activity gives us confidence of another busy and successful year ahead.
James Peggie
Acting Chairman
Asset management review
Asset recycling and our operating platform prepare for the next phase of growth
Introduction
The Sirius in-house asset and property management model continues to be a significant driver of value across the business and
one of the key reasons that the Company is able to make the level of returns on its assets that it does. While common practice is to
outsource many of the key functions of asset and property management, Sirius continues to reap the rewards that come with being able
to manage its portfolio with its own dedicated resources. This is conducted through a highly specialised operating platform with a
substantial IT infrastructure and over 230 full-time employees, and continues to focus on acquisitions, disposals, financing, capital
investment and development, lettings, service charge recovery, supplier management, debt collection, lease management, financial
reporting and many other aspects of portfolio management. Progress on all elements has been made in the year under review,
which has seen the Company's strong track record in growing profits and adding significant value to the portfolio continue.
Asset recycling, acquisitions and disposals
The Company has been through an intensive asset acquisition and recycling plan this financial year through which the following
has been achieved:
- the completion of the sale of three assets with proceeds totalling EUR103.0 million in the first half of the financial year.
- the completion of two equity raises; EUR25.0 million in August 2017 and EUR40.0 million in March 2018.
- the acquisition of EUR163.7 million of new assets (including two assets that completed on 1 April 2018).
The acquisitions were funded by a combination of new equity, three new banking facilities as well as the proceeds from disposals.
The recycling will prove to be accretive to shareholders because mature assets with little opportunity remaining for further
improvement have been replaced with assets with substantially more opportunity for income and valuation enhancement through
the Company's asset management initiatives. This is highlighted by the fact that the three assets sold for EUR103.0 million were
contributing EUR6.7 million of net operating income on 90% occupancy whereas the thirteen assets acquired cost a total of EUR163.7
million including acquisition costs but were generating EUR8.3 million of net operating income from only 58% occupancy at the time of
acquisition. These new assets provide the Company with close to 80,000sqm of vacant and sub-optimal space to invest into.
A summary of the disposal activity in the year to 31 March 2018 is included in the table below:
Non- EPRA
Annualised Recoverable Annualised Net
Total Rental Service Maintenance Acquisition Initial
Proceeds Total Occupancy Vacant Income Costs Costs NOI Yield*
Disposals EURm Sqm % Sqm EURm EUR000 EUR000 EURm %
Munich RMS 85.0 71.8 88% 7,027 5.4 (98) (40) 5.3 5.9%
Düsseldorf 11.0 16.6 96% 657 0.9 (23) (10) 0.8 7.2%
Kiel 7.0 10.1 90% 1,006 0.6 (22) (10) 0.6 7.4%
Total 103.0 98.4 90% 8,690 6.9 (143) (60) 6.7 6.2%
* Includes estimated purchasers costs
The two assets sold in Munich and Düsseldorf were considered mature assets, having been owned and subject to intensive asset
management for several years whilst the Kiel asset was considered to be in a non-core location where favourable pricing made for
an attractive exit. The three assets which were disposed of generated EUR103.0 million of proceeds representing a blended EPRA net
initial purchaser's yield of 6.2%.
A summary of the acquisition activity in the year to 31 March 2018 is included in the table below:
Acquisition
non-
Annualised recoverable
acquisition service Acquisition Annualised EPRA net
Total investment Total Acquisition Acquisition rental charge maintenance acquisition initial
(incl. acquisition costs) acquisition occupancy vacant income costs costs NOI yield
Acquisitions EUR000 sqm % sqm EUR000 EUR000 EUR000 EUR %
Completed
Cologne 22,904 20,342 100% 105 2,038 (171) (18) 1,849 8.1
Grasbrunn 18,075 14,791 4% 14,279 97 (319) (17) (239) -1.3
Mahlsdorf II 6,394 12,826 62% 4,845 531 (136) (8) 387 6.1
Neuss 16,093 18,258 38% 11,344 670 (296) (14) 360 2.2
Neu-Isenburg 9,635 7,996 41% 4,692 472 (117) (7) 348 3.6
Frankfurt 4,498 4,064 28% 2,926 153 (107) (2) 44 1.0
Frankfurt II 6,079 5,035 87% 673 499 (49) (5) 445 7.3
Krefeld III 9,161 10,398 72% 2,875 729 (106) (9) 614 6.7
Hamburg 8,412 11,223 0% 11,223 - (215) (7) (222) -2.6
Schenefeld 15,118 42,220 71% 12,164 1,460 (261) (19) 1,180 7.8
Frickenhausen 11,149 28,594 50% 14,423 800 (323) (26) 451 4.0
Subtotal 127,518 175,747 55% 79,549 7,449 (2,100) (132) 5,217 4.1
Completed post period
Saarbrücken 28,065 47,350 65% 16,744 3,057 (491) (43) 2,523 9.0
Düsseldorf II 8,084 8,672 80% 1,704 627 (83) (8) 536 6.6
Subtotal 36,149 56,022 67% 18,448 3,684 (574) (51) 3,059 8.5
Total 163,667 231,769 58% 97,997 11,133 (2,674) (183) 8,276 5.1
The acquisitions in general have much more opportunity than those acquired over the previous two years but some assets, like
those located in Cologne, Frankfurt II and Düsseldorf II are characterised by high occupancy and stable income and have been
acquired in order to combine with the opportunistic assets to make portfolios more suitable for bank financing. Frankfurt II was used
as replacement for the Kiel asset within the original SEB loan facility whilst the Cologne and Düsseldorf assets act as the anchor
assets within the new SEB 3 facility which completed in March 2018.
The Company's management has been focusing on acquiring assets in the areas outlying Germany's "big seven" cities and
reducing those assets owned outside of these areas and this is certainly reflected in the asset recycling programme to date. All
assets acquired, with the exception of Saarbrücken, are located either around the Berlin, Munich, Frankfurt, Stuttgart, Cologne and
Düsseldorf markets where benefits from operational synergies can be made, and tenant demand is at its strongest. Additionally,
two assets were acquired in the Hamburg area which is a market that the Company has been seeking to enter for some time. The
Hamburg Lademannbogen and Schenefeld sites are located in areas with attractive fundamentals and together provide an
excellent mix of stability in the logistics space and opportunity within the office space.
In addition to the empty office building in Hamburg Lademannbogen, most of the opportunity within the acquisition portfolio lies
within the assets located in Neuss (Düsseldorf), Neu-Isenburg (Frankfurt), Grasbrunn (Munich), Frickenhausen (Stuttgart),
Mahlsdorf II (Berlin) and Frankfurt I, which combined have a blended occupancy of around 39%. This provides the Company with
real opportunity to grow income, and hence values, by utilising the capability of its operating platform and take advantage of the
high occupier demand for office and light industrial space that these markets are experiencing as well as benefiting from the
operational synergies mentioned above.
Market conditions are making it more challenging to access higher occupied properties which fit the Company's investment profile
at the prices that are desired and as a result of that the number of year on year acquisition opportunities reviewed increased by
20%. The change in the market conditions are reflected in the significant yield compression seen in the German market over the
last few years, particularly for portfolio deals. Whilst this is good for further asset recycling, our acquisition focus has shifted towards
assets offering investor returns based upon solid IRR's over a three to five year period rather than 75% plus occupied properties
with good net initial yields. This is because at this point in the cycle we believe the best way in which we can generate attractive
and consistent risk-adjusted returns for shareholders is to acquire properties typically with less than 80% occupancy where the
Company can make use of its central platform to fill vacancy and improve the yields going forward. In summary it is the IRR that
has become the focus rather that the net initial yield.
Substantial work and resource continues to be devoted is required to finding assets and accurately determining potential returns. In
the reported year and conducted deep reviews including micro-market analysis and detailed asset-level business plans on 84
acquisition opportunities. As a result of this activity we acquired 13 new assets including the two which completed immediately after
the year end. The benefits from executing our investment process in such a disciplined way are we believe so significant that the
efforts in relation to identifying investments are justified. Of the sites acquired in the year under review annualised rental income
had already increased by 4% or EUR469,000 by 31 March 2018, providing encouraging evidence of how the operating platform can
quickly begin to realise the potential value established from its due diligence.
Looking forward, the Group still has the proceeds from the EUR40.0 million equity raise completed in March 2018 to invest as well as
funds from three disposal transactions which have completed or are expected to complete after the financial year end. These are
classified as assets held for sale as at 31 March 2018 and are detailed in the table below.
Book value
Assets held for sale March 2018
Site EUR'000
Bremen Brinkmann 15,500
Rostock land 1,200
Markgröningen residential building 625
Total 17,325
The sale of the non-core Bremen Brinkmann asset is significant because this is one of two non-core sites (both in Bremen)
identified within the portfolio that have been earmarked for disposal for a number of years. With 48,699sqm of vacant space at 31
March 2018 and a short lease expiry profile, the sale of Brinkmann, the much more valuable of the two, provides a good opportunity
to recycle capital out of an asset in a challenging location into other opportunities where our equity can be utilised to greater effect.
In the period the Company also notarised for sale a piece of non-income producing land located in Rostock for EUR1.2 million as well
as a derelict residential apartment block in Markgröningen for EUR0.6 million. The proceeds from the Rostock and Markgröningen
sales will be redeployed into our capex investment programme.
The combination of the activity outlined above, along with new banking facilities, provides the Company with the resources to
acquire over EUR100.0 million of additional assets.
Rental growth and new lettings
The year under review was an exceptional one from an organic rental growth perspective with the Company reporting a 6.2% like-
for-like annualised rental income increase. This is the highest ever annual organic annualised rental income increase that the
Company has achieved and partly indicative of a strong market, but more importantly how well Sirius's asset management platform
is functioning. Total Company annualised rental income grew from EUR71.0 million at the start of the period to EUR79.5 million when
factoring in the two acquisitions that completed on 1 April 2018. The increase in annualised rental income of EUR8.5 million is
explained as follows:
- a loss of EUR7.1 million from disposals;
- a gain of EUR11.6 million from acquisitions;
- a loss of EUR0.7 million from non-core assets held for sale; and
- a gain of EUR4.7 million from organic growth on the existing portfolio not held for sale.
Like-for-like organic growth, excluding Bremen Brinkman, has come from a combination of move ins of 159,938sqm at an average
rate of EUR5.77 per sqm compared to move outs of 115,554sqm at an average rate of EUR5.72 per sqm as well as a further EUR1.5 million
of annualised rental income from contracted rent increases and uplifts upon renewal. The contractual and renewal increases
represent a 2.4% elevation on the rents at the start of the financial year. Together this has resulted in the average rate of passing
rents for the like-for-like portfolio increasing by 2.9% from EUR5.11 to EUR5.26 per sqm. The total portfolio, including when combined with
the acquisitions including Saarbrücken and Düsseldorf II, has an average rate of EUR5.46 per sqm (31 March 2017: EUR5.27).
The occupancy across the portfolio including Saarbrücken and Düsseldorf II has remained flat at 79% despite selling assets with
98,425sqm of net lettable area and 90% occupancy and replacing them with assets containing 231,769sqm of net lettable area but
only 58% occupancy. Following the completion of the Bremen Brinkman disposal, the Company's occupancy increased to 81%
based on 31 March 2018 data.
One of the main drivers behind the strong lettings performance has been the capability of the Company's internal sales and
marketing platform to generate 14,805 enquiries for the year of which 81% came from the Company's internally developed websites
and large number of online portals through which Sirius advertises. Improving the quality of leads is a continuing focus and in the
period Sirius was able to improve the enquiry to new lettings conversion ratio to 14% which also represents a historical high for the
Company and resulted in 2,132 new deals being signed in the year. Sirius is also developing its external broker channels to focus
mainly on larger lettings and having so many different options for the generation of new lettings allows the Company to be flexible
in space configuration and development which provides much more optionality to tenants. Capturing and understanding the
demand dynamics of the market can only truly be achieved when enquiries are dealt with internally, like Sirius does, and this
knowledge and understanding is utilised very effectively in both acquisition and ongoing asset management activities.
Capex investment programmes
The Group's capex investment programmes are continuing to be a key driver of growing rental income and valuations. In the year
EUR7.0 million was invested into sub-optimal vacancy and a further EUR3.8 million annualised rental income was contracted in the period.
The capex investment programmes are specifically designed to unlock income and value through the transformation of vacant and
sub-optimal space into both higher quality conventional space and the Company's innovative range of smartspace products. This
allows Sirius to develop and realise much more from space that other owners and operators would often consider structural
vacancy. Some asset level examples of how such exceptional returns are generated from the capex investment programme can be
seen in the case study section of the Annual Report.
The original capex investment programme commenced in January 2014 and was focused on just over 200,000sqm of sub-optimal
space suitable for transformation. We are pleased to report that as at 31 March 2018 this programme is substantially complete with a
total of 186,621sqm of this space completely refurbished and the remaining 17,400sqm either in the process of being refurbished or
awaiting permissions to proceed. A total of EUR18.8 million has been invested into the completed space and, at 82% occupancy, it is
generating EUR10.9 million of annualised rental income representing an income return on investment of 58%. This return does not
include the additional benefit of improved cost recovery from letting this space or the valuation increases that have been generated
as a result of the improved income returns.
More detail on the programme to date is provided in the following table:
Annualised
rental
Annualised income Rate
rental income increase Per sqm
Investment increase achieved to Occupancy Rate per sqm Achieved to
Original Capex Investment budgeted Actual spend budgeted March 18 Occupancy Achieved to budgeted March 18
Programme Progress Sqm EURm EURm EURm EURm budgeted March 18 EUR EUR
Completed 186,621 22.5 18.8 9.9 10.9 80% 82% 5.50 5.93
In Progress 9,134 2.4 0.2 0.9 - 90% - 8.95 -
To Commence in
Next Financial Year 8,266 1.0 0.1 0.4 - 80% - 4.73 -
Total 204,021 25.9 19.1 11.2 10.9 81% - 5.60 -
The original capex investment programme has further potential for increasing rents and values mainly from the remaining 17,400
sqm of space that has not been fully renovated. This space is expected to be completed and available for letting in the new
financial year. In order to complete the entire original capex investment programme a further EUR4.4 million of investment is required
and EUR1.3 million more annualised rental income is expected as a result when it is completed.
Furthermore, the investment programme is expected to be delivered well within the original capex investment budget, a reflection
of the Company's increased operational efficiency and effectiveness in delivering a wide range of investment projects.
A follow-on acquisitions capex investment programme has been developed over the last two years relating to assets acquired since
April 2016. The Company has identified 121,065sqm of sub-optimal and vacant space suitable for investment within 19 assets
acquired as part of this second programme. The Company expects to invest a total of EUR26.1 million to generate EUR8.1 million of
incremental annualised rental income on a blended occupancy of 76% as highlighted below:
Annualised
rental
Annualised income Rate
rental income increase Per sqm
New acquisition capex Investment increase achieved to Occupancy Rate per sqm achieved to
investment programme budgeted Actual spend budgeted March 18 Occupancy achieved to budgeted March 18
progress Sqm EURm EURm EURm EURm budgeted March 18 EUR EUR
Completed 24,382 3.0 2.0 1.8 1.7 87% 59% 7.10 9.99
In progress 15,042 4.5 1.0 1.2 0.1 83% - 8.04 -
To commence in next
financial year 81,641 18.6 - 5.1 - 71% - 7.41 -
Total 121,065 26.1 3.0 8.1 1.8 76% - 7.39 -
With the occupier market being as strong as it is, the speed at which this space can be transformed is important for delivering the
target returns expected from these properties. As at 31 March 2018 24,382sqm of the 121,065sqm space identified was fully
converted with an investment of EUR2.0 million generating incremental annualised rental income of EUR1.7 million leaving EUR22.87 million
left to invest into the remaining 96,683sqm to generate a further EUR7.0 million annualised rental income from the programme over the
next three years. As can be seen, the expected returns, from an income perspective, on the new acquisitions investment programme
are lower than those achieved from the original capex investment programme. However due to the condition of the relevant space
being of a lower standard and, therefore requiring higher levels of investment, the value initially attributed to this space is also lower
which means that the returns from a valuation perspective are expected to be higher. Therefore the total shareholder returns at the
site level should be similar to those achieved by the original capex investment programme.
Stable portfolio with substantial opportunity
Whilst the portfolio has seen a lot of asset recycling and tenant churn in the period, the make-up of the Company's rental income has
remained strong. The stable income which comes from the top 50 anchor tenants accounts for around 45% of total annualised rental
income and provides an excellent base to generate the more flexible, higher-rate income from the Company's smartspace products which
now accounts for around 7% of the annualised rent roll. The remaining 48% of Sirius's annualised rent roll is contracted to over 2,000
SME tenants which is Sirius's key target market from which it is able to utilise its operating platform to successfully increase occupancy
and generate most of its annual uplifts. This tenant mix combined with the Company's asset management, when considering the points
mentioned above, provide Sirius's shareholders with a portfolio that possesses a much lower risk profile than would be typically associated
with the asset class and 2.6 years weighted average lease expiry across the portfolio. As a result the Company benefits from the high
yields and value-add opportunities associated with industrial assets whilst mitigating risk to a far greater extent than many of its competitors.
The table below illustrates the tenant mix across our portfolio at the end of the reporting period:
No. of
tenants as at Annualised % of total Rate
31 March Occupied rental income annualised per sqm
Type of tenant 2018 sqm EURm rental income EUR
Top 50 anchor tenants* 50 544,669 34.3 45% 5.26
Smartspace SME tenants** 2,163 59,853 5.2 7% 7.19
Other SME tenants*** 2,219 571,468 36.3 48% 5.29
Total 4,432 1,175,991 75.8 100% 5.37
* Mainly large national/international private and public tenants
** Mainly small and medium sized private and retail tenants
*** Mainly small and medium sized private and public tenants
Opportunity within vacancy
The opportunity that remains within the portfolio is expected to be realised through the Company's asset management initiatives,
including the capex investment programmes, as well as through the potential for lower valuation yields than the 8.1% gross yield
that the core portfolio is currently valued at. An analysis of the vacant space as at 1 April 2018 (including the Saarbrücken and
Düsseldorf II acquisitions) highlights the opportunity from developing the sub-optimal space as well as selling the non-core sites.
This can be seen by comparing the two tables below which show the existing vacancy analysis compared to a pro-forma table
which adjusts the existing position by excluding the two non-core Bremen assets (one of which was sold on shortly after the period
end) and the expected impact of the capex investment programmes when fully completed.
Vacancy Analysis - March 2018 position including Düsseldorf II and Saarbrücken acquisitions which completed on 1 April 2018
Total space 1,531,774
Occupied space 1,213,565
Vacant space 318,209
Occupancy 79%
Sub optimal space % of total space Sqm Capex investment EUR ERV (post invest) EUR
Subject to original capex investment programme 2%- 16,574 3,198,000 1,241,000
Subject to acquisition capex investment programme 6% 92,922 22,017,000 6,210,000
Flexilager vacancy - 7,218 106,000 226,000
Total sub optimal space 8% 116,715 25,321,000 7,677,000
Vacancy of non-core sites* 6% 93,433 - -
Structural vacancy core sites 2% 25,749 - -
Lettable vacancy
Smartspace 1%- 18,321 - 1,346,000
Other vacancy 4%- 63,991 3,708,000 3,444,000
Total lettable space 5% 82,313 - -
Total vacancy 21% 318,209 29,029,000 12,466,000
Current total vacancy of 21% can be reduced to 10% based on completing the capex investment programmes, letting up 80% of
this space (as budgeted) as well as disposing of the two non-core Bremen assets. In this scenario, the true lettable vacancy, which
is not classified as structural vacancy or going through a capex investment programme, would increase from 5% to 8% which
indicates that there could be further opportunity for occupancy growth in addition to this.
When considering the implications for the valuation of the Company's portfolio, it is useful to separate the mature portfolio from the
value-add portfolio. The table below shows the key metrics of the 31 March 2018 valuation as well as including the Saarbrücken
and Düsseldorf II acquisitions at cost.
Rent Book Capital Vacant Rate
roll value Non-recs NOI value/EUR space psm Occupancy
EURm EURm EURm EURm sqm Gross yield Net yield sqm EUR %
Core value-add 40.0 486.3 (5.5) 34.6 552 8.2% 7.1% 193,136 5.55 75.7%
Core mature 37.2 461.7 (1.2) 35.9 785 8.0% 7.8% 28,794 5.73 94.9%
Non-core 2.3 19.4 (1.5) 0.8 107 12.0% 4.1% 96,279 2.67 43.0%
Other (1.8) (1.8)
Total 79.5 967.3 (10.1) 69.4 586 8.2% 7.2% 318,209 5.46 79.27%
What is evident from the table above is that when assets are mature, the gap between gross and net yields reduces significantly
due to the higher recovery of costs. Additionally from the transactions that we are seeing complete in the market currently as well
as from analyst research, gross yields, on the higher occupied assets in particular, have come in significantly over the last two
years. The combination of the extra occupancy and income that is expected to come from the capex investment programme and a
reduction of the c.8.1% gross yield at which the core portfolio is currently valued would have a substantial impact on the value of
the Group's portfolio. This point is strengthened from the fact that the assets will be of a higher quality post the capex investment
and that the assets are now predominantly located around the big seven German cities.
Smartspace and First Choice
Smartspace continues to be a success story and is proving to be particularly popular with tenants seeking a flexible workspace
solution. The four smartspace products are specifically designed, from a landlord perspective, to create high-quality workspace from
sub-optimal and vacant space and from a tenant perspective, provide flexibility for the changing requirements of small businesses,
including a fixed price that provides the financial certainty that many smaller customers desire.
The annualised rental income now generated from smartspace products and First Choice has increased from EUR4.8 million to EUR5.2
million in the period due to the creation of more smartspace product through the capex investment programmes as well as further
lettings of previously created space. Whilst the total smartspace remained flat in the year as a result of disposal activity, occupancy
increased to 70% for the first time (31 March 2017: 68%) and rate increased by 8.1% from EUR6.65 to EUR7.19.
From an investment point of view, the returns that are achieved from entire business parks are significantly enhanced by smartspace
conversion because it mainly relates to transforming sub-optimal and vacant space into high-quality offices, storage space and
workboxes. This is essentially converting space that is acquired for a very low cost into premium space. Some of the benefits of using
smartspace are illustrated in the case studies section of the Annual Report.
During the period a further 6,232sqm of smartspace Office, 510sqm of smartspace Workbox and 3,624sqm of smartspace Storage
were created from vacant, sub-optimal space and Flexilager, the low cost storage product that the Company uses typically to fill
space while it develops plans for vacant space. Additionally the Company opened the First Choice Business Centre on an owned
site to compliment the First Choice Business Centre which has been run through an operating and management agreement in
Essen for several years.
The new First Choice Business Centre was created on the ground floor of an office building acquired in Wiesbaden in November
2016 and is proving to be an ideal location for the product. The premium office specification in a pure office property clearly
distinguishes First Choice office space from smartspace offices with First Choice being a five-star premium product and smartspace
being closer to three-star. The Wiesbaden First Choice Business Centre opened for business in October 2017 and was already
40% occupied as at 31 March 2018 and generating rental income, excluding service charge cost recovery, of an impressive EUR28.81
per sqm. It offers a combination of office and co-working space. Now that the awareness of the news centre is greater, we are
expecting to have it close to fully occupied in the first half of the new financial year.
The table below gives more detail on the smartspace and First Choice offerings across the whole portfolio:
Annualised
rental income % of total smartspace Rate per sqm (excl.
Total Occupied Occupancy (excl. service charge) annualised Service charge)
Smartspace product type sqm sqm % EURm rental income EUR
First Choice Office 1,275 510 40% 0.2 3% 28.81
SMSP Office 33,799 26,437 78% 2.6 50% 8.18
SMSP Workbox 6,268 4,840 77% 0.4 7% 6.07
SMSP Storage 32,620 23,880 73% 1.7 34% 6.06
SMSP Subtotal 73,963 55,666 75% 4.9 94% 7.28
SMSP Flexilager* 11,406 4,187 37% 0.3 6% 6.06
SMSP TOTAL 85,368 59,853 70% 5.2 100% 7.19
* Not adjusted for common areas.
Financial review
Recycling of capital fuelling future growth
Once again the Company has delivered a strong financial performance in the year ended 31 March 2018 despite the reduction in
earnings from the disposal of mature assets at the start of the period which were replaced with more opportunistic assets towards the
middle and end of the period. The resultant drag on earnings from the timings of the asset recycling was however largely offset by
exceptional organic growth within the existing portfolio in the year. This growth has fed into the portfolio valuations and subsequently
we have also seen significant growth in adjusted net asset value per share ("adjusted NAV"). Total shareholder return (TSR), based
on adjusted NAV plus dividends paid was 17.0% (31 March 2017: 15.3%) and represents the best ever annual performance for the
Company. Importantly, the TSR was 31% driven by dividends paid to shareholders and 69% by capital growth highlighting the ability of
the Company to deliver strong income and capital returns whilst continuing to grow the business both organically and acquisitively.
The capex investment programmes continue to be major contributors to this performance through the exceptional returns, from
both an income and value perspective, which are being realised from this investment. Excellent progress has been made on the
capex investment programme this year and the asset recycling programme is not only substantially improving the quality of the
portfolio but it is also increasing the opportunity remaining within the business.
The Company is now well placed to begin its next phase of growth in which multiple expansion and financing possibilities may be
considered. The Company's increased size, highly-effective management platform and excellent track record will remain central to
executing these plans. Another element which will be important for this growth is the strong shareholder support for the Company as
evidenced by two successful capital raisings in the period totalling approximately EUR65.0 million. This has facilitated some of the
acquisition activity within the year as well as provided the Company with firepower for further acquisitions into the new financial year.
Trading performance
Sirius has reported a profit before tax in the year ending 31 March 2018 of EUR89.6 million (31 March 2017: EUR76.4 million) which is a
17% increase from the prior year. This includes property revaluation gains, net of total capex invested, of EUR63.5 million (31 March
2017: EUR49.8 million) as well as the effect of a number of non-recurring items. The adjusted profit before tax* for the period was up 4% to
EUR36.7 million (31 March 2017: EUR35.3 million) whilst funds from operations** ("FFO") also increased by 4% to EUR38.4 million (31
March 2017: EUR37.1 million). This is a very strong performance considering that close to EUR6.3m of net operating income was lost
from disposals in the year whereas acquisitions have only contributed around EUR2.6 million of net operating income in the period.
Total income for the period was EUR72.1 million (31 March 2017: EUR68.8 million) which represents higher growth than earnings and is
indicative of the higher vacancy and corresponding irrecoverable costs on the assets acquired during the year.
On a per share basis, basic EPS showed a 9.3% increase reflecting the strong valuation gains in the period whilst adjusted EPS,
basic EPRA EPS and diluted EPRA EPS were impacted by the asset recycling described above as well as the increase in the
number of shares issued from the equity raises completing in the year for which the proceeds take time to invest. As a result, the
Board decided to temporarily increase the dividend pay-out ratio from 65% of FFO to 75% of FFO this financial year in order to
distribute some of the profits made from disposals, which are not included within FFO, and compensate shareholders for the timing
issue between disposals and acquisitions.
* Reported profit before tax adjusted for property revaluation, change in fair value of derivative financial instruments, gains and
losses on disposals and other adjusting items including expense relating to long-term incentive plans.
** Adjusted profit before tax adjusted for depreciation, amortisation of financing fees and current tax receivable/incurred.
Earnings 31 March 2018 Earnings 31 March 2017 Change
EUR'000 No. of Shares cents per share EUR'000 No. of shares cents per share %
Basic EPS 81,272 914,479,339 8.89 66,911 822,957,685 8.13 9.3
Adjusted EPS 36,041 914,479,339 3.94 34,963 822,957,685 4.25 (7.3)
Basic EPRA EPS 27,783 914,479,339 3.04 26,188 822,957,685 3.18 (4.4)
Diluted EPRA EPS 27,783 939,394,339 2.96 26,188 846,807,685 3.09 (4.2)
As at 31 March 2018 (including the Saarbrücken & Düsseldorf II acquisitions) the annualised rental income of the portfolio was
EUR79.5 million (31 March 2017: EUR71.0 million), an increase in the period of EUR8.5 million which is described in more detail in the Asset
management review of the Annual Report. The rental income recorded in earnings in the period was only EUR70.0 million* which is
below the level at the start of the year. This is reflective of the asset recycling points mentioned above; however, with a starting rent
roll for the new year of EUR79.5 million and significant resources to acquire more assets, we should start to see some of the benefits
from the recycling coming through in the next financial year.
* Total income of EUR72.0 million includes EUR2.0 million of other income.
As mentioned above, the full year's FFO result of EUR38.4 million represented an increase of EUR1.3 million from the EUR37.1 million
recorded last year despite the negative impact of around EUR3.0 million from asset recycling. Adjusting for this would give rise to
around a 12% or EUR4.3 million FFO increase of approximately 12% which is more representative of the organic improvements seen
over the last two years.
Most of the organic growth achieved within the earnings numbers this year has come from the 6.2% like-for-like annualised rental
income increase, combined with the 5.1% that was achieved last year. In addition to this there has also been further improvements
to service charge recovery, partly from increased occupancy of the existing portfolio, but more significantly from further
improvements in our allocation and recovery techniques. These techniques will be rolled out to the acquired sites where we expect
to see further improvements over the coming years.
Portfolio valuation
The portfolio, including assets held for sale, was independently valued at EUR933.7 million by Cushman & Wakefield LLP at 31 March
2018 (31 March 2017: EUR829.7 million) which converts to a book value of EUR931.2 million after the provision for tenant incentives.
Adjusting for assets held for sale and including at cost the two acquisition assets in Saarbrücken and Düsseldorf II, which
completed on 1 April 2018, would increase the portfolio book value to EUR967.3 million. The increase in book value of the portfolio of
EUR126.1 million in the period is illustrated in the following table.
2018
EUR000
Total investment properties at book value as at 1 April* 823,295
Additions 127,799
Capital expenditure 20,662
Disposals** (104,040)
Surplus on revaluation above capex 58,971
Adjustment in respect of lease incentives (487)
Movement in Directors' discretionary impairment of non-core assets 4,968
Total investment properties at book value as at 31 March* 931,168
Additions completed 1 April 2018 (Saarbrücken and Düsseldorf II)*** 36,149
Adjusted investment properties at book value as at 31 March* 967,317
* Including assets held for sale
** Including disposals relating to assets held for sale
*** Using expected total acquisition costs
The portfolio valuation movement which relates to newly acquired assets (31 March 2018 valuation compared to total acquisition
costs) was a negative EUR20k whereas book valuation increases on assets held for the entire period amounted to EUR84.4 million or
11.6% (31 March 2017: 7.7%). The valuation of the eleven sites that were acquired in the period was EUR127.5 million which was 7.6%
higher than their purchase price albeit slightly lower than the total acquisition costs as mentioned above. This confirms that the
Company continues to purchase assets well.
The valuation increases in the existing portfolio can be attributed to the rental income increases we have discussed as well as
37bps of gross yield compression. This further reinforces the high returns from both an income and valuation perspective that are
being achieved from the investment within the capex investment programme.
The entire portfolio as at 31 March 2018 comprised 52 assets with a book value of EUR931.2 million and can be reconciled to the
Cushman & Wakefield market valuation as follows:
31 March 2018 31 March 2017
EURm EURm
Investment properties at market value 933.7 829.7
Uplift in respect of assets held for sale 1.0 1.6
Adjustment in respect of lease incentives (3.5) (3.0)
Directors' impairment of non-core asset valuations - (5.0)
Balance as at period end 931.2 823.3
Focusing on the core portfolio, the 31 March 2018 book value of EUR911.9 million represents an average gross yield of 8.1% (31
March 2017: 8.3%), a net yield of 7.4% (31 March 2017: 7.4%*) and an EPRA net yield (including purchaser costs) of 6.8% (31
March 2017: 6.8%*). The average capital value per sqm of the core portfolio is EUR645 (31 March 2017: EUR620*) which remains well
below replacement cost.
* Adjusted for disposals.
Even though yield compression has been seen in many of the Group's recent revaluations, the gross yields on the core portfolio of 8.1%
could still be regarded as relatively high. In addition to this, the capex investment programme is predominantly focused on the vacant
space of the value-add portfolio and transforming this space from sub-optimal, low quality vacancy into more desirable, high quality
workspace which the Company's lettings and marketing platform has proven to be very effective at filling with new tenants.
Unlike yield movements which are dependent on the wider market, the value creation from the capex investment programme is more
within the Company's control and the track record indicates that this can be realised regardless of market conditions. As such, we are
hopeful that the recent positive trends we have seen within the portfolio valuations can continue going forward independent of
movements in yield.
The valuation increases are obviously the main driver of NAV growth but the fact that there is a policy to pay out only 65% (75%
this year) of FFO as dividend also has an impact. The adjusted NAV^ per share increased to 65.71c at 31 March 2018, an increase
of 11.7% from 58.82c as at 31 March 2017. As mentioned above, when this is combined with the 3.09c from the two dividends that
was paid out this year, the total shareholder return of adjusted NAV growth plus dividends paid was 17.0% (31 March 2017: 15.3%).
The movement in adjusted NAV is explained in the following table:
^ Excludes the provisions for deferred tax and derivative financial instruments.
EUR cent per
share
Adjusted NAV per share at 31 March 2017 58.82
Equity raise, share awards & non-recurring items (0.51)
Recurring profit before tax 3.71
Surplus on revaluation 6.40
Scrip and cash dividend paid (2.71)
Adjusted NAV per share at 31 March 2018 65.71
EPRA adjustments (1.53)
EPRA NAV per share at 31 March 2018 64.18
The EPRA net asset value ("EPRA NAV") per share, which excludes the provisions for deferred tax and derivative financial
instruments, but includes the potential impact of shares issued in relation to the Company's long-term incentive programmes, was
64.18c (31 March 2017: 57.84c).
Financing
The Company continues to access long-term debt at attractive interest rates as well as having the trust and relationships with banks to
finance opportunistic assets with very low occupancy rates. This was again evident in the three new facilities that were secured in the
year to 31 March 2018. One of the differences in the deals to finance opportunistic assets is that alongside the acquisition facilities that
the banks grant, capex facilities have been agreed which Sirius can drawdown in the first few years in order to fund the capex
investment programme on these assets. Given the higher returns that are made from this programme and the low interest rates that
these facilities command, this is by far the most accretive way to fund capex. The details of the three new facilities are outlined below:
- In November 2017, the Group agreed to a seven year facility agreement with SEB AG for EUR22.9 million which was drawn down
in two tranches and hedged with interest rate swaps locking in an initial all-in rate of 2.58%. Additionally a capex facility of EUR7.0
million is included within this loan which can be drawn down to fund capex within the first five years. The capex facility will be on
a floating interest rate. The loan and swaps both terminate on 30 October 2024. This facility was secured against a portfolio of
three assets with a blended occupancy of 26.7% and initial interest cover of only 1.04x. As such a higher margin was necessary
however this steps down by 10bps when the occupancy of the portfolio exceeds 70%. Amortisation of 2.0% per annum of the
acquisition facility was agreed with the remainder due in one instalment on the final maturity date. Given the low interest cover
from the assets that the loan is secured against, the bank requires an ultimate parent company guarantee on this loan whilst
occupancy is below a certain percentage.
- On 26 March 2018, the Group agreed to another seven year facility agreement with SEB AG for a EUR38.0 million acquisition
facility and an EUR8.0 million capex facility. The loan facility is currently incurring a floating interest rate of 1.58% over six month
EURIBOR (not less than 0%) but the Company is required to enter into hedging arrangements on this facility by the end of June
2018. The loan terminates on 25 March 2025 and amortisation is 2% per annum on the acquisition facility with the remainder
due in one instalment on the final maturity date. The higher exposure that SEB now has with Sirius meant that the bank
required an ultimate parent guarantee for this facility along with some group level financial covenants.
- In March 2018, the Group agreed to a seven year facility agreement with Saarbrücken Sparkasse for EUR18.0 million. The loan is
charged with an all-in fixed interest rate of 1.53% for the full term of the loan which expires on 28 February 2025. Amortisation is
applied at 4.0% per annum with the remainder due in one instalment on the final maturity date. The facility is secured over the
Saarbrücken asset which completed on 1 April 2018 and was acquired for a purchase price of EUR26.1 million.
The Group's total cost of borrowings has remained at 2.0% (31 March 2017: 2.0%) and the weighted average debt expiry is 5.2
years (31 March 2017: 5.8 years). Total debt at the period end was EUR373.1 million (31 March 2017: EUR348.6 million) up EUR24.5 million
from last year and reflective of the EUR79.0 million of new borrowings completed in the year, as described above, less EUR46.7 million of
repayments relating to the disposals of the Düsseldorf and Munich Rupert Mayer Strasse assets and scheduled amortisation of
EUR7.8 million.
The Group's gross loan to value ("gross LTV") ratio of 40.8% (31 March 2017: 42.3%) includes the new borrowings but not the two
assets that completed on 1 April 2018 and were paid for in March 2018. When including the properties that completed immediately
after year end and assets held for sale, gross LTV of the portfolio reduces to 38.6%, well within the Company target of 40%. Net
LTV* reduced to 31.9% (31 March 2017: 38.0%) on 1 April 2018 after the Saarbrücken and Düsseldorf II asset acquisitions were completed.
* Net LTV is the ratio of principal value of gross debt less cash, excluding that which is restricted, to the aggregate value of investment property.
Dividend
Whilst it remains the Company's normal policy to pay dividends based on 65% of the Group's FFO, the Board communicated in the
Annual Report for the year ended 31 March 2017 the possibility of temporarily increasing the dividend pay-out ratio in order to
maintain positive dividend growth whilst the proceeds from disposals of high-income producing mature assets are reinvested. As
illustrated in this report, the Group's FFO this year has been negatively impacted by around EUR3.0 million by the net impact of asset
recycling however as the disposal proceeds are now fully reinvested, the new financial year is expected to see a commensurate
benefit in earnings. Considering this as well as the premiums to book value at which disposals have been made, the Board has
decided to maintain the dividend pay-out ratio at 75% as reported in the Group's 30 September 2017 interim accounts. As the
proceeds from the latest equity raise are invested and acquisition sites become integrated into our operating platform we expect the
pay-out ratio to gradually move back towards our stated policy of 65%.
In accordance with this, the Board has declared a final dividend of 1.60c per share for the six month period ended 31 March 2018
which is an increase of 4.6% on the 1.53c dividend relating to the same period last year. The total dividend for the year is 3.16c, an
increase of 8.2% on the 2.92c total dividend for the year ended 31 March 2017.
It is expected that the ex-dividend date will be on or around 11 July 2018 for shareholders on the South African register and on or
around 12 July 2018 for shareholders on the UK register. It is further expected that the record date will be on or around 13 July
2018 for shareholders on the South African and UK registers and the dividend will be paid on or around 17 August 2018 for
shareholders on both registers.
Outlook
Sirius has completed another active and positive year with high volumes of transactional activity including successfully reinvesting
the proceeds from disposals of non-core and mature assets and equity raises into some excellent acquisitions with much greater
opportunity in future years. This activity will continue into the new financial year with further disposals of non-core sites and the
proceeds from the latest EUR40.0 million equity raise providing the Company with the funds, along with some further bank financing, to
acquire over EUR100.0 million of assets. The pipeline for this investment is looking healthy and we look forward to updating
shareholders on this in due course.
The Company's operating platform is continuing to produce exceptional results with our best ever year for organic rental income
growth and total shareholder return being recorded along with further significant improvements in service charge cost recovery. The
capex investment programmes continue to deliver outstanding results and the new acquisitions have added valuable sub-optimal
and vacant space to the programmes. All of this means that the Company is achieving the exceptionally high returns it desires at
the asset level and the potential for this to continue into the future has been greatly enhanced by the asset recycling programme.
The focus of the Company remains to deliver attractive risk-adjusted returns by growing recurring income and capital values
through intensive asset management and we look forward to updating shareholders on further progress over the coming year.
Alistair Marks
Chief Financial Officer
1 June 2018
Consolidated statement of comprehensive income
for the year ended 31 March 2018
Year ended Year ended
31 March 2018 31 March 2017
Notes EUR000 EUR000
Rental income 5 72,139 68,793
Direct costs 6 (9,067) (8,267)
Net operating income 63,072 60,526
Surplus on revaluation of investment properties 13 63,452 49,782
(Loss)/gain on disposal of properties 6 (2,502) 79
Administrative expenses 6 (24,184) (23,883)
Operating profit 99,838 86,504
Finance income 9 13 23
Finance expense 9 (10,246) (10,224)
Change in fair value of derivative financial instruments 43 133
Net finance costs (10,190) (10,068)
Profit before tax 89,648 76,436
Taxation 10 (8,285) (9,500)
Profit for the year 81,363 66,936
Profit attributable to:
Owners of the Company 81,272 66,911
Non-controlling interest 91 25
Total comprehensive income for the year 81,363 66,936
Earnings per share
Basic earnings per share 11 8.89c 8.13c
Diluted earnings per share 11 8.65c 7.90c
Basic EPRA earnings per share 11 3.04c 3.18c
Diluted EPRA earnings per share 11 2.96c 3.09c
Consolidated statement of financial position
as at 31 March 2018
31 March 2018 31 March 2017
Notes EUR000 EUR000
Non-current assets
Investment properties 13 913,843 727,295
Plant and equipment 15 3,126 2,564
Goodwill 16 3,738 3,738
Deferred tax assets 10 811 240
Total non-current assets 921,518 733,837
Current assets
Investment properties held for sale 14 17,325 96,000
Trade and other receivables 17 45,063 14,290
Cash and cash equivalents 18 79,605 48,695
Total current assets 141,993 158,985
Total assets 1,063,511 892,822
Current liabilities
Trade and other payables 19 (40,972) (33,963)
Interest-bearing loans and borrowings 20 (7,844) (7,068)
Current tax liabilities (3,045) (465)
Derivative financial instruments (6) (7)
Total current liabilities (51,867) (41,503)
Non-current liabilities
Interest-bearing loans and borrowings 20 (359,234) (334,724)
Derivative financial instruments (292) (334)
Deferred tax liabilities 10 (26,485) (20,993)
Total non-current liabilities (386,011) (356,051)
Total liabilities (437,878) (397,554)
Net assets 625,633 495,268
Equity
Issued share capital 23 - -
Other distributable reserve 24 519,320 470,318
Retained earnings 106,141 24,869
Total equity attributable to the equity holders of the Company 625,461 495,187
Non-controlling interests 172 81
Total equity 625,633 495,268
EPRA net asset value per share 12 64.18c 57.84c
The financial statements were approved by the Board of Directors on 1 June 2018 and were signed on its behalf by:
Alistair Marks
Chief Financial Officer
Company number: 46442
Consolidated statement of changes in equity
for the year ended 31 March 2018
Total equity
attributable to
Issued Other the equity
share distributable Retained holders of the Non-controlling Total
capital reserve earnings Company interests equity
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
As at 31 March 2016 - 429,094 (42,042) 387,052 56 387,108
Shares issued, net of costs - 43,620 - 43,620 - 43,620
Share-based payment transactions - 4,289 - 4,289 - 4,289
Conversion of shareholder loan - 5,000 - 5,000 - 5,000
Dividends paid - (11,685) - (11,685) - (11,685)
Total comprehensive income for the year - - 66,911 66,911 25 66,936
As at 31 March 2017 - 470,318 24,869 495,187 81 495,268
Shares issued, net of costs - 63,352 - 63,352 - 63,352
Share-based payment transactions - 3,674 - 3,674 - 3,674
Dividends paid - (18,024) - (18,024) - (18,024)
Total comprehensive income for the year - - 81,272 81,272 91 81,363
As at 31 March 2018 - 519,320 106,141 625,461 172 625,633
Consolidated statement of cash flows
for the year ended 31 March 2018
Year ended Year ended
31 March 31 March
2018 2017
Notes EUR000 EUR000
Operating activities
Profit after tax 81,272 66,911
Taxation 10 8,285 9,500
Non-controlling interests 91 25
Loss/(gain) on sale of properties 6 2,502 (79)
Share-based payments 6 4,310 4,290
Surplus on revaluation of investment properties 13 (63,452) (49,782)
Change in fair value of derivative financial instruments (43) (133)
Depreciation 6 1,086 868
Finance income 9 (13) (23)
Finance expense 9 8,898 9,795
Exit fees/prepayment penalties 9 1,348 428
Cash flows from operations before changes in working capital 44,284 41,800
Changes in working capital
(Increase)/decrease in trade and other receivables (2,730) 4,984
Increase in trade and other payables 2,271 3,168
Taxation paid (756) (17)
Cash flows from operating activities 43,069 49,935
Investing activities
Purchase of investment properties (121,252) (76,265)
Prepayments relating to new acquisitions 17 (34,585) (6,547)
Capital expenditure (19,104) (16,540)
Purchase of plant and equipment 15 (1,649) (1,523)
Net proceeds on disposal of properties 102,510 7,201
Interest received 6 13 23
Cash flows used in investing activities (74,067) (93,651)
Financing activities
Issue of shares 63,352 43,620
Dividends paid 25 (18,024) (11,685)
Proceeds from loans 20 78,930 211,500
Repayment of loans (53,551) (159,077)
Exit fees/prepayment penalties (1,348) (428)
Finance charges paid (7,451) (11,393)
Cash flows from financing activities 61,908 72,537
Increase in cash and cash equivalents 30,910 28,821
Cash and cash equivalents at the beginning of the year 48,695 19,874
Cash and cash equivalents at the end of the year 18 79,605 48,695
Notes to the financial statements
for the year ended 31 March 2018
1. General information
Sirius Real Estate Limited (the "Company") is a company incorporated in Guernsey and resident in the United Kingdom, whose
shares are publicly traded on the Main Markets of the London Stock Exchange ("LSE") (primary listing) and the Main Board of the
Johannesburg Stock Exchange ("JSE") (primary listing).
The consolidated financial information of the Company comprises that of the Company and its subsidiaries (together referred to as
the "Group") for the year ended 31 March 2018.
The principal activity of the Group is the investment in, and development of, commercial property to provide conventional and
flexible workspace in Germany.
2. Significant accounting policies
(a) Basis of preparation
The consolidated financial information has been prepared on a historical cost basis, except for investment properties, investment
properties held for sale and derivative financial instruments, which have been measured at fair value. The consolidated financial
information is presented in euros and all values are rounded to the nearest thousand (EUR000) except where otherwise indicated. The
functional currency of the Group is euro.
(b) Statement of compliance
The condensed consolidated financial information has been prepared in accordance with IFRS, IAS 34 - Interim Reporting, the
requirements of the Listing Rules of the UK Listing Authority, and in accordance with IFRS adopted for use in the EU ("Adopted
IFRS"), the Companies (Guernsey) Law, 2008, the SAICA Financial Reporting Guides, as issued by the Accounting Practices
Committee; the Financial Reporting Pronouncements, as issued by the Financial Reporting Standards Council. The consolidated
financial statements give a true and fair view and are in compliance with the Companies (Guernsey) Law, 2008. Accounting policies
are consistent with those of prior periods.
These condensed consolidated financial statements are not audited but are extracted from audited information. The audited annual
financial statements were audited by KPMG LLP, London, who expressed an unmodified opinion thereon. The audited annual
financial statements and the auditor's report thereon are available for inspection at the Company's registered office. The directors
take full responsibility for the preparation of these condensed consolidated financial statements and the financial information has
been correctly extracted from the underlying audited annual financial statements.
(c) Going concern
Having reviewed the Group's current and future trading, cash flow and covenant forecasts, together with sensitivities and
exercisable mitigating factors and the available facilities, the Board has a reasonable expectation that the Group has adequate
resources to continue in operational existence for the next twelve months. Accordingly, the Board continued to adopt the going
concern basis in preparing the historical financial information.
(d) Basis of consolidation
The consolidated financial information comprises the financial information of the Group as at 31 March 2018. The financial
information of the subsidiaries is prepared for the same reporting period as the Company, using consistent accounting policies.
All intra-group balances and transactions and any unrealised income and expenses arising from intra-group transactions are
eliminated in preparing the consolidated financial statements.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to
be consolidated until the date that such control ceases.
Non-controlling interests represent the portion of profit or loss and net assets not held by the Group and are presented separately
in the consolidated statement of comprehensive income and within equity in the consolidated statement of financial position,
separately from the Company's shareholders' equity.
(e) Acquisitions
Investment property acquisitions that are not accounted for as business combinations under IFRS 3 are dealt with as acquisitions of
investment property assets.
(f) Foreign currency translation
The consolidated financial information is presented in euros, which is the functional and presentational currency of all members of
the Group.
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rate ruling at the date of the
transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated into the functional currency at the
exchange rate ruling at the statement of financial position date. All differences are taken to the statement of comprehensive income.
(g) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be
reliably measured. In particular:
Rental income
Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease unless another
systematic basis is more representative of the time pattern in which the benefit derived from the leased asset is diminished.
Fixed or determinable rental increases, which can take the form of actual amounts or agreed percentages, are recognised on a
straight-line basis over the term of material leases. If the increases are related to a price index to cover inflationary cost increases
then the policy is not to spread the amount but to recognise them when the increase takes place.
The value of rent free periods and all similar lease incentives is spread on a straight-line basis over the term of material leases only.
Where there is a reasonable expectation that the tenant will exercise break options, the value of rent free periods and all similar
lease incentives is booked up to the break date.
Interest income
Interest income is recognised as it accrues (using the effective interest method, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial instrument).
Service charges
Service charge income receivable is not treated as revenue; rather, it is set off against the direct costs to which such income relates.
(h) Leases
Group as lessor
Leases where the Group does not transfer substantially all the risks and benefits of ownership of the asset are classified as
operating leases.
(i) Income tax
Current income tax
Current income tax assets and liabilities are measured at the reporting date at the amount expected to be recovered from or paid to
the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted by the reporting date.
Certain subsidiaries may be subject to foreign taxes in respect of foreign sources of income. Sirius Real Estate Limited is UK
resident for tax purposes.
Deferred income tax
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements, with the following exceptions:
- where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not
a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
- in respect of taxable temporary differences associated with investments in subsidiaries, where the timing of the reversal of the
temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable
future; and
- deferred tax assets are only recognised to the extent that it is foreseeable that taxable profit will be available against which the
deductible temporary differences, carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply in the
year when the related asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
(j) Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
- where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case
the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
- receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in
the statement of financial position.
(k) Investment properties
Investment properties are properties owned by the Group which are held for long-term rental income, capital appreciation or both.
Investment properties are initially recognised at cost, including transaction costs when legal ownership of the property is
transferred. Where recognition criteria are met the carrying amount includes subsequent costs to add to or replace part of an
investment property. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market
conditions at the reporting date.
Investment properties are derecognised when the risks and rewards of ownership of the asset are transferred to a third party.
Gains or losses arising from changes in the fair values of investment properties are included in profit or loss of the statement of
comprehensive income in the period in which they arise.
The fair value of the Group's investment properties at 31 March 2018 has been arrived at on the basis of a valuation carried out at
that date by Cushman & Wakefield LLP (2017: Cushman & Wakefield LLP), an independent valuer. The valuations are in
accordance with standards complying with the Royal Institute of Chartered Surveyors' ("RICS's") approval and the conceptual
framework that has been settled by the International Valuation Standards Committee.
The valuation is based upon assumptions including future rental income, anticipated non-recoverable and maintenance costs,
expected capital expenditure and an appropriate discount rate. The properties are valued on the basis of a discounted cash flow
model using a range of 10-14 years supported by comparable evidence. The discounted cash flow calculation is a valuation of
rental income considering non-recoverable costs and applying a discount rate for the current income risk over the measurement
period. At the end of the period in which the cash flow is modelled, a determining residual value (exit scenario) is calculated. A
capitalisation rate is applied to the more uncertain future income, discounted to present value. Each property is visited by the
external valuer at least once every two years. The information provided to and assumptions made by the external valuer have not
materially changed in the year.
Directors can make discretionary impairments of non-core assets when strong evidence exists to support an adjustment. In such
circumstances the Audit Committee performs a review and satisfies itself the impairment can be fully substantiated and
appropriately supported before a write-down is recognised in the Company's books and records.
(l) Disposals of investment property
Investment property disposals are recognised in the financial information on the date of completion. Profit or loss arising on
disposal of investment properties is calculated by reference to the most recent carrying value of the asset adjusted for subsequent
capital expenditure.
(m) Investment properties held for sale
Investment properties held for sale are separately disclosed at the asset's fair value. In order for an investment property held for
sale to be recognised, the following conditions must be met:
- the asset must be available for immediate sale in its present condition and location;
- the asset is being actively marketed;
- the asset's sale is expected to be completed within twelve months of classification as held for sale;
- there must be no expectation that the plan for selling the asset will be withdrawn or changed significantly; and
- the successful sale of the asset must be highly probable.
(n) Plant and equipment
Recognition and measurement
Items of plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Depreciation
Where parts of an item of plant and equipment have different useful lives, they are accounted for as separate items of plant
and equipment.
Depreciation is charged in the statement of comprehensive income on a straight-line basis over the estimated useful lives of each
part of an item of the fixed assets. The estimated useful lives are as follows:
Plant and equipment four to ten years
Fixtures and fittings four years
Depreciation methods, useful lives and residual values are reviewed at each reporting date.
(o) Goodwill
Goodwill arising on consolidation represents the excess of the cost of the purchase consideration over the Group's interest in the
fair value of the identifiable assets and liabilities of a subsidiary at the date of acquisition.
Goodwill is initially recognised at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill is
not amortised but is tested annually for impairment, or more frequently when there is an indication that the business to which the
goodwill applies may be impaired.
(p) Trade receivables
Trade receivables are recognised initially at fair value and are subsequently measured at amortised cost using the effective interest
method, less an allowance for impairment.
(q) Treasury Shares
Own equity instruments which are reacquired ("Treasury Shares") are deducted from equity. No gain or loss is recognised in the
statement of comprehensive income on the purchase, sale, issue or cancellation of the Group's equity instruments.
(r) Share-based payments
The grant date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a
corresponding increase in equity, over the period that the employees unconditionally become entitled to the awards.
The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market
vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of
awards that meet the related service and non-market performance conditions at the vesting date.
(s) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and in hand, demand deposits and other short-term, highly liquid investments
with original maturities of three months or less that are readily convertible to a known amount of cash and are subject to an
insignificant risk of change in value.
(t) Bank borrowings and costs
Interest-bearing bank loans and borrowings are initially recorded at fair value, net of direct issue costs.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective
interest method.
Borrowing costs directly attributable to the financing of assets are capitalised as part of the cost of the asset. All other borrowing
costs are expensed in the period in which they occur. Borrowing costs consist of valuation, professional fees and other costs that
an entity incurs in connection with the borrowing of funds.
(u) Trade payables
Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest
rate method.
(v) Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.
(w) Dividends
Dividend distributions to the Company's shareholders are recognised as a liability in the consolidated financial information in the
period in which the dividends are approved by the Company's Board. The final dividend relating to the year ended 31 March 2018
will be approved and recognised in the financial year ending 31 March 2019.
(x) Impairment excluding investment properties
(i) Financial assets
A financial asset (excluding financial assets at fair value through profit and loss) is assessed at each reporting date to determine
whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence
indicates that one or more events have had a negative effect on the estimated future cash flows of that asset. Objective evidence of
impairment includes observable data that comes to the attention of the Group about one or more of the following loss events:
- significant financial difficulty of the debtor;
- excessive or persistent debtor ageing;
- a breach of contract, such as a default or delinquency in interest or principal payments; or
- it becomes probable that the debtor will enter bankruptcy or other financial reorganisation.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows discounted at the original effective interest rate.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are
assessed collectively in groups that share similar credit risk characteristics.
All impairment losses are recognised in profit or loss of the statement of comprehensive income.
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was
recognised. For financial assets measured at amortised cost, the reversal is recognised in profit or loss of the statement of
comprehensive income.
(ii) Non-financial assets
The carrying amounts of the Group's non-financial assets, other than investment property and deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's
recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment
testing, assets are grouped together into the smallest group of assets that generate cash inflows from continuing use that are
largely independent of the cash inflows of other assets or groups of assets (the "cash-generating unit").
An impairment loss is recognised if the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable
amount. Impairment losses are recognised in profit or loss of the statement of comprehensive income. Impairment losses
recognised in profit or loss in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill
allocated to the units and then to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis.
(y) Standards effective in the year
The accounting policies adopted are consistent with those of the previous financial year. In the fiscal year 2017-2018, IFRS
Standards or IFRIC Interpretations to be applied for the first time caused no material changes for the Group.
(aa) Standards and interpretations in issue and not yet effective
IFRS 9
With the publication of the final version of IFRS 9 "Financial Instruments" in July 2014, the IASB completed its project for replacing
IAS 39 "Financial Instruments: Recognition and Measurement". IFRS 9 provides a standardised approach for classification and
measurement of financial assets and liabilities which is primarily based on the company's business model and the cash flows of the
financial instrument. IFRS 9 contains three principal classification categories for financial assets: measured at amortised cost,
FVOCI and FVTPL. The standard eliminates the existing IAS 39 categories of held to maturity, loans and receivables and available
for sale.
In addition, IFRS 9 replaces the "incurred loss" model in IAS 39 with a forward-looking "expected credit loss" (ECL) model. This will
require considerable judgement about how changes in economic factors affect ECLs, which will be determined on a probability-
weighted basis. The new impairment model will apply to financial assets measured at amortised cost or FVOCI, except for
investments in equity instruments, and to contract assets.
Finally, IFRS 9 also contains new guidelines for the use of hedge accounting, targeted in particular at better illustration of the risk
management activities of a company and the monitoring of non-financial risks.
The Group has to apply IFRS 9 in the accounting period beginning 1 April 2018. The Group will take advantage of the exemption
allowing it not to restate comparative information for prior periods with respect to classification and measurement (including
impairment) changes. Differences in the carrying amounts of financial assets and financial liabilities resulting from the adoption of
IFRS 9 will generally be recognised in retained earnings and reserves as at 1 April 2018.
Based on its assessment, the Group believes that the new classification and valuation of financial assets as well as the accounting
for financial liabilities will only change to an insignificant extent. The Group will apply the simplified procedure for the determination
of risk provision for expected credit losses for all trade receivables and contract assets in accordance with IFRS 15. Therefore, the
Group does not expect any significant change in risk provisions compared to the current accounting. Due to the low level of
relevant hedging instruments the Group expects no material adaptation effects. Overall, there will not be significant changes in the
presentation and recognition of financial assets and liabilities because of the application of IFRS 9.
IFRS 15
IFRS 15 "Revenue from Contracts with Customers" was issued in May 2014 and applies to an annual reporting period beginning on
or after 1 January 2018. IFRS 15 will completely replace the existing regulations for the recognition of revenue, including related
interpretations, in accordance with IAS 18 "Revenue" and IAS 11 "Construction Contracts". Consequently, revenues will be
recognised in the future, when the customer obtains control over the agreed goods and services and can derive benefits from
these. Revenues are recognised in the amount of the consideration that the company will presumably receive. The standard
provides a single, principles-based, five-step model to be applied to all contracts with customers, in which the volume of sales and
the time or the period of revenue recognition can be determined.
The model is as follows:
1) identification of the customer contract;
2) identification of the individual performance obligations;
3) determination of the transaction price;
4) allocation of the transaction price to the separate contractual obligations and,
5) the realization of revenue when individual contractual obligations are fulfilled.
The Group has to apply IFRS 15 in the accounting period beginning 1 April 2018. The Group plans to adopt IFRS 15 using the
modified retrospective method, with the effect of initially applying this standard recognised at the date of initial application
(i.e. 1 April 2018). As a result, the Group will not apply the requirements of IFRS 15 to the comparative period presented.
As the Group is generating more than 95% of the revenues from lease contracts which are out of the scope of IFRS 15, the
estimated impact on retained earnings will be immaterial.
IFRS 16
IFRS 16 replaces existing leases guidance, including IAS 17 "Leases", IFRIC 4 Determining whether an Arrangement contains a
"Lease", SIC-15 Operating Leases - Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.
The standard is effective for annual periods beginning on or after 1 January 2019. Early adoption is permitted for entities that apply
IFRS 15 at or before the date of initial application of IFRS 16.
IFRS 16 introduces a single, on balance sheet lease accounting model for lessees. A lessee recognises a right-of-use asset
representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are
recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to the current
standard - i.e. lessors continue to classify leases as finance or operating leases.
The Group has completed an initial assessment of the potential impact on its consolidated financial statements but has not yet
completed its detailed assessment. The actual impact of applying IFRS 16 on the financial statements in the period of initial
application will depend on future economic conditions, including the Group's borrowing rate at 1 April 2019, the composition of the
Group's lease portfolio at that date, the Group's latest assessment of whether it will exercise any lease renewal options and the
extent to which the Group chooses to use practical expedients and recognition exemptions.
So far, the most significant impact identified is that the Group will recognise new assets and liabilities for its operating leases of
office buildings and leases for space relating to operating management contracts. As at 31 March 2018, the Group's future
minimum lease payments under non-cancellable operating leases are disclosed under Note 27.
In addition, the nature of expenses related to those leases will now change as IFRS 16 replaces the straight-line operating lease
expense with a depreciation charge for right-of-use assets and interest expense on lease liabilities.
As a lessee, the Group can either apply the standard using a:
- retrospective approach; or
- modified retrospective approach with optional practical expedients.
The Group plans to apply IFRS 16 initially on 1 April 2019, using the modified retrospective approach and will apply the election
consistently to all of its leases.
Therefore, the cumulative effect of adopting IFRS 16 will be recognised as an adjustment to the opening balance of retained
earnings at 1 April 2019, with no restatement of comparative information.
When applying the modified retrospective approach to leases previously classified as operating leases under IAS 17, the lessee
can elect, on a lease-by-lease basis, whether to apply a number of practical expedients on transition. The Group is assessing the
potential impact of using these practical expedients.
3. Significant accounting judgements, estimates and assumptions
Judgements
In the process of applying the Group's accounting policies, which are described in note 2, the Directors have made the following
judgements that have the most significant effect on the amounts recognised in the financial information:
Operating lease commitments - Group as lessor
The Group has entered into commercial property leases on its investment property portfolio. The Group has determined that it
retains all the significant risks and rewards of ownership of these properties and therefore accounts for them as operating leases.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below;
Valuation of investment properties
The fair value of the Group's investment properties, excluding those held for sale of EUR917.3 million (31 March 2017: EUR735.3 million),
was determined by Cushman & Wakefield LLP (2017: Cushman & Wakefield LLP), an independent valuer. After adjusting
investment properties for lease incentive accounting and Directors' discretionary impairments of non-core assets described below,
the book value of investment properties is shown as EUR913.8 million (31 March 2017: EUR727.3 million).
The Cushman & Wakefield LLP valuation is based upon assumptions including future rental income, anticipated maintenance costs
and an appropriate discount rate. The properties are valued on the basis of a ten year discounted cash flow model supported by
comparable evidence. The discounted cash flow calculation is a valuation of rental income considering non-recoverable costs and
applying a discount rate for the current income risk over a ten year period. After ten years, a determining residual value (exit
scenario) is calculated. A capitalisation rate is applied to the more uncertain future income, discounted to a present value.
As a result of the level of judgement used in arriving at the market valuations, the amounts which may ultimately be realised in
respect of any given property may differ from the valuations shown on the statement of financial position.
4. Operating segments
The Directors are of the opinion that the Group is engaged in a single segment of business, being property investment, and in one
geographical area, Germany. All rental income is derived from operations in Germany. There is no one tenant that represents more
than 10% of Group revenues. The chief operating decision maker is considered to be the Board of Directors, which is provided with
consolidated IFRS, as adopted by the European Union ("EU"), information on a quarterly basis.
5. Revenue
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Rental and other income from investment properties 72,139 68,793
Other income relates primarily to income associated with conferencing and catering.
6. Operating profit
The following items have been (credited)/charged in arriving at operating profit:
Direct costs
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Service charge income (41,561) (40,976)
Property costs 48,729 47,563
Non-recoverable maintenance 1,899 1,680
Irrecoverable property costs 9,067 8,267
Loss on disposal of properties
Included within loss on disposal of properties of EUR2,502,000 (2017: gain of EUR79,000) are total proceeds of EUR103,902,000 (2017:
EUR7,370,000) and property and professional costs of EUR106,404,000 (2017: EUR7,291,000).
Administrative expenses
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Audit fee 350 293
Legal and professional fees 2,431 2,128
Other administration costs 1,278 2,368
LTIP & SIP* 4,310 4,136
Staff costs 11,069 9,305
Director fees and expenses 350 241
Depreciation 1,086 868
Marketing 1,745 1,584
Selling costs relating to assets held for sale 52 551
Non-recurring items 1,513 2,409
Administrative expenses 24,184 23,883
* Including related costs of EUR962,000.
During the year fees of EUR34,000 (2017: EUR500,000) were paid to auditors and their associates in respect of other non-audit services
primary relating to tax advisory services, whereby the prior year included costs relating to the Main Market move.
Non-recurring items relate primarily to costs associated with a potential legal claim and additional Main Markets listing costs (2017:
main market listing costs).
Staff costs as stated above relate to costs which are not recovered through service charge.
7. Employee costs and numbers
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Wages and salaries 16,355 13,970
Social security costs 2,927 2,544
Pension 204 174
Other employment costs 95 215
19,581 16,903
The costs for the year ended 31 March 2018 include those relating to Executive Directors and an expense including related costs of
EUR3,541,000 (31 March 2017: EUR4,136,000) relating to the granting or award of shares under LTIPs (see note 8).
All employees are employed directly by one of the following Group subsidiary companies: Sirius Facilities GmbH, Sirius Facilities
(UK) Limited, Curris Facilities & Utilities Management GmbH, SFG NOVA GmbH and Sirius Corporate Services B.V. The average
number of people employed by the Group during the year was 232 (31 March 2017: 204), expressed in full-time equivalents. In
addition, the Board of Directors consists of four Non-executive Directors (31 March 2017: five) and two Executive Directors
(31 March 2017: two) as at 31 March 2018.
8. Employee schemes
Equity-settled share-based payments
LTIP
An LTIP for the benefit of the Executive Directors and the Senior Management Team was approved in October 2015. The fair value
determined at the grant date is expensed on a straight-line basis over the vesting and holding period, based on the Company's
estimate of the shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions. Under the LTIP,
the awards are granted in the form of whole shares at no cost to the participants. Shares vest after the three year performance
period followed by a holding period of twelve months. The performance conditions used to determine the vesting of the award are
based on net asset value and total shareholder return allowing vesting of 0% to a maximum of 125%. As a result, a maximum of
25,150,000 shares were granted, subject to performance criteria, under the scheme in December 2015. An expense including
related costs of EUR3,541,000 was recognised in the statement of comprehensive income to 31 March 2018.
Movements in the number of shares outstanding and their weighted average exercise prices are as follows:
Year ended Year ended
31 March 2018 31 March 2017
Weighted Weighted
average average
exercise exercise
Number of price Number of price
shares EUR shares EUR
Balance outstanding as at the beginning of the period
(nil exercisable) 23,850,000 - 25,150,000 -
Forfeited during the period - - (1,300,000) -
Balance outstanding as at the end of the period
(nil exercisable) 23,850,000 - 23,850,000 -
The fair value per share was determined using the Monte Carlo model, with the following assumptions used in the calculation as at
grant date:
Weighted average share price - EUR 0.52
Weighted average exercise price - EUR -
Expected volatility - % 20
Expected life - years 2.48
Risk free rate based on European treasury bonds' rate of return - % (0.11)
Expected dividend yield - % 3.41
Assumptions considered in the model include: expected volatility of the Company's share price, as determined by calculating the
historical volatility of the Company's share price over the historical period immediately prior to the date of grant and commensurate
with the expected life of the awards; dividend yield based on the actual dividend yield as a percentage of the share price at the date
of grant; expected life of the awards; risk free rates; and correlation between comparators. Based on the performance criteria and
subject to the vesting conditions a total of 23,850,000 shares are expected to be issued.
SIP
A new share incentive plan ("SIP") for the benefit of senior employees of the Company was approved in May 2017. The fair value is
based on the Company's estimate of the shares that will eventually vest. Under the SIP, the awards are granted in the form of
whole shares at no cost to the participants. Shares vest after a one year performance period followed by a holding period of twelve
months. The performance conditions used to determine the vesting of the award are based on the adjusted net asset value
including dividends paid and allow vesting of 100% or 0%. As a result, a maximum of 1,065,000 shares were granted, subject to
performance criteria, under the scheme in June 2017 and an expense including related costs of EUR769,000 was recognised in the
consolidated statement of comprehensive income to 31 March 2018.
Employee benefit scheme
During the year 487,166 shares were issued to the Company's management through its MSP programme
(31 March 2017: 313,608).
A reconciliation of share-based payments and their impact on the consolidated statement of changes in equity is as follows:
Year ended Year ended
31 March 2018 31 March2017
EUR000 EUR000
Charge relating to MSP 326 153
Charge relating to new LTIP 2,617 4,136
Charge relating to new SIP 731 -
Share-based payment transactions as per consolidated statement of changes in equity 3,674 4,289
9. Finance income and expense
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Bank interest income 13 23
Finance income 13 23
Bank loan interest expense (6,721) (7,151)
Bank charges (145) (139)
Amortisation of capitalised finance costs (1,173) (1,172)
Refinancing costs, exit fees and prepayment penalties (2,207) (1,762)
Finance expense (10,246) (10,224)
Net finance expense (10,233) (10,201)
The refinancing costs on derecognition of loans for the year ended 31 March 2018 of EUR2.2 million relate to the costs associated with
the part repayment of tranche 1 of the Berlin Hyp AG/Deutsche Pfandbriefbank AG facility and full repayment of tranche 2 of the
Berlin Hyp AG/Deutsche Pfandbriefbank AG facility following the sales of the Düsseldorf and Munich Rupert Mayer Strasse assets.
10. Taxation
Consolidated statement of comprehensive income
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Current income tax
Current income tax charge (604) (576)
Current income tax charge relating to disposals of investment properties (1,921) -
Accrual relating to tax treatment of swap break (839) 264
Total current income tax (3,364) (312)
Deferred tax
Relating to origination and reversal of temporary differences (5,492) (9,245)
Relating to LTIP charge for the year 571 57
Total deferred tax (4,921) (9,188)
Income tax charge reported in the statement of comprehensive income (8,285) (9,500)
The current income tax charge of EUR3,364,000 (31 March 2017: tax charge of EUR312,000) reflects a release of tax accruals for prior
years as well as the tax charge for the year. The effective income tax rate for the period differs from the standard rate of corporation
tax in Germany of 15.825% (2017: 15.825%). The differences are explained below:
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Profit before tax 89,648 76,436
Profit before tax multiplied by the rate of corporation tax in Germany of 15.825%
(2017: 15.825%) 14,187 12,096
Effects of:
Deductible interest on internal financing (5,573) (4,451)
Non-deductible expenses 835 567
Tax losses utilised (4,726) (1,200)
Property valuation movements due to differences in accounting treatments 3,270 2,657
Adjustments in respect of prior periods 839 (264)
Other (547) 95
Total income tax charge in the statement of comprehensive income 8,285 9,500
Deferred income tax liability
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Opening balance (20,993) (11,748)
Release due to disposals 4,883 -
Taxes on the revaluation of investment properties (10,375) (9,245)
Balance as at year end (26,485) (20,993)
Deferred income tax asset
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Opening balance 240 183
Relating to LTIP charge for the year 571 57
Balance as at year end 811 240
The Group has tax losses of EUR261,763,000 (2017: EUR262,525,000) that are available for offset against future profits of its subsidiaries
in which the losses arose under the restrictions of the minimum taxation rule. Deferred tax assets have not been recognised in
respect of the revaluation losses on investment properties and interest rate swaps as they may not be used to offset taxable profits
elsewhere in the Group as realisation is not assured. Deferred tax assets have been recognised in respect of the valuation of the Company LTIP.
11. Earnings per share
The calculations of the basic, diluted, headline and adjusted earnings per share are based on the following data:
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Earnings
Basic earnings 81,272 66,911
Diluted earnings 81,272 66,911
EPRA earnings 27,783 26,188
Diluted EPRA earnings 27,783 26,188
Headline earnings 27,755 26,318
Diluted headline earnings 27,755 26,318
Adjusted
Basic earnings after tax 81,272 66,911
Deduct revaluation surplus, net of related tax (57,940) (40,514)
Add loss/deduct gain on sale of properties, net of related tax 4,423 (79)
Headline earnings after tax 27,755 26,318
(Deduct)/add change in fair value of derivative financial instruments, net of related tax (63) (156)
Add adjusting items, net of related tax* 8,349 8,801
Adjusted earnings after tax 36,041 34,963
Number of shares
Weighted average number of ordinary shares for the purpose of basic, headline, adjusted
and EPRA basic earnings per share 914,479,339 822,957,685
Weighted average number of ordinary shares for the purpose of diluted and EPRA diluted
earnings per share 939,394,339 846,807,685
Basic earnings per share 8.89c 8.13c
Diluted earnings per share 8.65c 7.90c
Basic EPRA earnings per share 3.04c 3.18c
Diluted EPRA earnings per share 2.96c 3.09c
Headline earnings per share 3.04c 3.20c
Diluted headline earnings per share 2.95c 3.11c
Adjusted earnings per share 3.94c 4.25c
Adjusted diluted earnings per share 3.84c 4.13c
* See reconciliation between adjusting items as stated within earnings per share and those stated within administrative expenses in note 6 below
Year ended Year ended
31 March 2018 31 March 2017
Notes EUR000 EUR000
Non-recurring items 6 1,513 2,409
Finance restructuring costs 9 2,207 1,762
Selling costs relating to assets held for sale 6 52 551
LTIP & SIP 6 4,310 4,136
Change in deferred tax assets 10 (571) (57)
Accrual relating to tax treatment of swap break 10 839 -
Adjusting items as per note 11 8,349 8,801
The Directors have chosen to disclose adjusted earnings per share in order to provide an alternative indication of the Group's
underlying business performance; accordingly, it excludes the effect of adjusting items net of related tax, gains/losses on sale of
properties net of related tax, the revaluation deficits/surpluses on the investment properties net of related tax and derivative
financial instruments net of related tax.
In addition the Directors have chosen to disclose EPRA earnings in order to assist in comparisons with similar businesses. The
reconciliation between basic and diluted earnings and EPRA earnings is as follows:
EPRA earnings
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Basic and diluted earnings attributable to owners of the Company 81,272 66,911
Basic and diluted earnings attributable to non-controlling interest 91 25
Basic and diluted earnings attributable to owners of the Company
and non-controlling interests 81,363 66,936
Surplus on revaluation of investment properties (63,452) (49,782)
Loss/(gain) on disposal of properties (including tax) 4,423 (79)
Change in fair value of derivative financial instruments (43) (133)
Deferred tax in respect of EPRA adjustments 5,492 9,246
EPRA earnings 27,783 26,188
The number of shares has been reduced by 574,892 shares (2017: 1,062,058 shares) that are held by the Company as Treasury
Shares at 31 March 2018, for the calculation of basic, headline, adjusted and diluted earnings per share.
The weighted average number of shares for the purpose of diluted, EPRA diluted, headline diluted and adjusted diluted earnings
per share is calculated as follows:
2018 2017
EUR000 EUR000
Weighted average number of ordinary shares for the purpose of basic,
EPRA basic, headline and adjusted earnings per share 914,479,339 822,957,685
Effect of grant of SIP shares 1,065,000 -
Effect of grant of LTIP shares 23,850,000 23,850,000
Weighted average number of ordinary shares for the purpose of diluted,
EPRA diluted, headline diluted and adjusted diluted earnings per share 939,394,339 846,807,685
The Company has chosen to report EPRA earnings per share ("EPRA EPS"). EPRA EPS is a definition of earnings as set out by
the European Public Real Estate Association. EPRA earnings represents earnings after adjusting for property revaluation, changes
in fair value of derivative financial instruments, profits and losses on disposals and deferred tax in respect of EPRA adjustments.
12. Net assets per share
2018 2017
EUR000 EUR000
Net assets
Net assets for the purpose of assets per share
(assets attributable to the equity holders of the Company) 625,461 495,187
Deferred tax arising on revaluation surplus and LTIP valuation 25,674 20,753
Derivative financial instruments 298 341
Adjusted net assets attributable to equity holders of the Company 651,433 516,281
Number of shares
Number of ordinary shares for the purpose of net assets per share 991,329,614 877,786,535
Number of ordinary shares for the purpose of EPRA net assets per share 1,016,244,614 901,636,535
Net assets per share 63.09c 56.41c
Adjusted net assets per share 65.71c 58.82c
EPRA net assets per share 64.18c 57.84c
Net assets at the end of the year (basic) 625,461 495,187
Directors' discretionary impairment of non-core assets - 4,968
Derivative financial instruments at fair value 298 341
Deferred tax in respect of EPRA adjustments 26,485 20,993
EPRA net assets 652,244 521,489
The number of ordinary shares for the purpose of EPRA net assets per share is calculated as follows:
2018 2017
EUR000 EUR000
Number of ordinary shares for the purpose of net assets per share 991,329,614 877,786,535
Effect of grant of SIP shares 1,065,000 -
Effect of grant of LTIP shares 23,850,000 23,850,000
Number of ordinary shares for the purpose of EPRA net assets per share 1,016,244,614 901,636,535
The Company has chosen to report EPRA net assets per share ("EPRA NAV per share"). EPRA NAV per share is a definition of
net asset value as set out by the European Public Real Estate Association. EPRA NAV represents net assets after adjusting for
derivative finical instruments and deferred tax relating to valuation movement and derivatives. EPRA NAV per share takes into
account the effect of the granting of shares relating to incentive plans.
The number of shares has been reduced by 574,892 shares (2017: 1,062,058 shares) that are held by the Company as Treasury
Shares at 31 March 2018, for the calculation of net assets and adjusted net assets per share.
13. Investment properties
The movement in the book value of investment properties is as follows:
2018 2017
EUR000 EUR000
Total investment properties at book value as at 1 April 727,295 687,453
Additions 127,799 76,265
Capital expenditure 20,662 16,493
Disposals (8,040) (6,698)
Reclassified as investment properties held for sale (17,325) (96,000)
Surplus on revaluation above capex 58,971 50,040
Adjustment in respect of lease incentives (487) (600)
Movement in Directors' impairment of non-core assets 4,968 342
Total investment properties at book value as at 31 March 913,843 727,295
The reconciliation of the valuation carried out by the external valuer to the carrying values shown in the statement of financial
position is as follows:
2018 2017
EUR000 EUR000
Investment properties at market value per valuer's report* 917,340 735,290
Adjustment in respect of lease incentives (3,497) (3,027)
Directors' impairment of non-core assets - (4,968)
Balance as at year end 913,843 727,295
* Excluding assets held for sale of EUR17.3 million.
The fair value (market value) of the Group's investment properties at 31 March 2018 has been arrived at on the basis of a valuation
carried out at that date by Cushman & Wakefield LLP (2017: Cushman & Wakefield LLP), an independent valuer.
The value of each of the properties has been assessed in accordance with the RICS valuation standards on the basis of market
value. See note 2 (k) for further details.
The weighted average lease expiry remaining across the whole portfolio at 31 March 2018 was 2.6 years (2017: 2.5 years).
As a result of the estimates used in arriving at the market valuations, the amounts that may ultimately be realised in respect of any
given property may differ from the valuations shown in the statement of financial position.
The reconciliation of surplus on revaluation above capex as per the statement of comprehensive income is as follows:
2018 2017
EUR000 EUR000
Surplus on revaluation above capex 58,971 50,040
Adjustment in respect of lease incentives (487) (600)
Movement in Directors' impairment of non-core assets 4,968 342
Surplus on revaluation of investment properties reported
in the statement of comprehensive income 63,452 49,782
Included in the surplus on revaluation of investment properties reported in the statement of comprehensive income are gross gains
of EUR72.9 million and gross losses of EUR9.4 million.
Other than the capital commitments disclosed in note 27, the Group is under no contractual obligation to purchase, construct or
develop any investment property. The Group is responsible for routine maintenance to the investment properties.
All investment properties are categorised as Level 3 fair values as they use significant unobservable inputs. There have not been
any transfers between levels during the year. Investment properties have been classed according to their real estate sector.
Information on these significant unobservable inputs per class of investment property is disclosed below:
As at 31 March 2018
Sector Market value (EUR) Technique Significant assumption Range
Business park 913,390,000 Discounted cash flow Current rental income EUR0k-EUR5,858k
Market rental income EUR424k-EUR5,800k
Gross initial yield 0.0%-14.9%
Discount factor 4.9%-8.8%
Void period (months) 12-24
Estimated capital value per sqm EUR275-EUR1,426
Other 3,950,000 Discounted cash flow Current rental income EUR510k-EUR1,932k
Market rental income EUR899k-EUR3,365k
Gross initial yield 8.9%-10.1%
Discount factor 8.5%-12.0%
Void period (months) 12-24
Estimated capital value per sqm EUR67-EUR126
As at 31 March 2017
Sector Market value (EUR) Technique Significant assumption Range
Business park 711,320,000 Discounted cash flow Current rental income EUR288k-EUR5,655k
Market rental income EUR424k-EUR6,035k
Gross initial yield 3.8%-15.6%
Discount factor 4.75%-12.0%
Void period (months) 12-24
Estimated capital value per sqm EUR67-EUR1,261
Other 23,970,000 Discounted cash flow Current rental income EUR398k-EUR1,905k
Market rental income EUR466k-EUR2,119k
Gross initial yield 3.8%-10.1%
Discount factor 6.3%-9.5%
Void period (months) 12-24
Estimated capital value per sqm EUR597-EUR941
The valuation is performed on a lease-by-lease basis due to the mixed-use nature of the sites. This gives rise to large ranges in the inputs.
As a result of the estimates used in arriving at the market valuations, the amounts which may ultimately be realised in respect of
any given property may differ from the valuations shown in the statement of financial position. For example, an increase in market
rental values of 5% would lead to an increase in the fair value of the investment properties of EUR47,690,000 and a decrease in
market rental values of 5% would lead to a decrease in the fair value of the investment properties of EUR47,980,000. Similarly, an
increase in the discount rates of 0.25% would lead to a decrease in the fair value of the investment properties of EUR18,900,000 and a
decrease in the discount rates of 0.25% would lead to an increase in the fair value of the investment properties of EUR19,770,000.
The highest and best use of properties do not differ from their current use.
Most of the Group's properties are pledged as security for loans obtained by the Group. See note 20 for details.
14. Investment properties held for sale
2018 2017
EUR000 EUR000
Bremen Brinkmann 15,500 -
Rostock land 1,200 -
Markgröningen residential 625 -
Munich Rupert Mayer Strasse - 85,000
Düsseldorf - 11,000
Balance as at year end 17,325 96,000
15. Plant and equipment
Plant and Fixtures
equipment and fittings Total
EUR000 EUR000 EUR000
Cost
As at 31 March 2017 6,013 2,826 8,839
Additions in year 896 753 1,649
Disposals in year (15) (34) (49)
As at 31 March 2018 6,894 3,545 10,439
Depreciation
As at 31 March 2017 (4,520) (1,755) (6,275)
Charge for year (780) (306) (1,086)
Disposals in year 14 34 48
As at 31 March 2018 (5,286) (2,027) (7,313)
Net book value as at 31 March 2018 1,608 1,518 3,126
Cost
As at 31 March 2016 4,879 2,542 7,421
Additions in year 1,173 350 1,523
Disposals in year (39) (66) (105)
As at 31 March 2017 6,013 2,826 8,839
Depreciation
As at 31 March 2016 (3,934) (1,544) (5,478)
Charge for year (607) (261) (868)
Disposals in year 21 50 71
As at 31 March 2017 (4,520) (1,755) (6,275)
Net book value as at 31 March 2017 1,493 1,071 2,564
16. Goodwill
2018 2017
EUR000 EUR000
Opening balance 3,738 3,738
Additions - -
Impairment - -
Closing balance 3,738 3,738
On 30 January 2012, a transaction was completed to internalise the Asset Management Agreement and, as a result of the
consideration given exceeding the net assets acquired, goodwill of EUR3,738,000 was recognised. Current business plans indicate
that the balance is unimpaired.
Goodwill is tested at least annually for impairment and whenever there are indications that goodwill might be impaired. The
recoverable amount of a cash-generating unit is based on its value in use. Value in use is the present value of the projected cash
flows of the cash-generating unit. The key assumptions regarding the value-in-use calculations were budgeted growth in revenue
and the discount rate applied. Budgeted profit margins were estimated based on actual performance over the past two financial
years and expected market changes. The discount rate used is a pre-tax rate and reflects the risks specific to the real estate
industry. The Group prepares cash flow forecasts based on the most recent financial budget approved by management, which
covers a one year period. Cash flows beyond this period are extrapolated to a period of five years using a revenue growth rate of
2.0% (2017: 2.0%), which is consistent with the long-term average growth rate for the real estate sector. A discount rate of 7.05%
(2017: 6.75%) and terminal value of 5.05% (2017: 4.75%) was applied in the impairment review. A discount rate of 8.30% (2017:
10.0%) would be required for the carrying value of goodwill to be greater than the fair value. A negative revenue growth rate of
0.77% (2017: 1.16%) would be required for the carrying value of goodwill to be greater than the fair value.
17. Trade and other receivables
2018 2017
EUR000 EUR000
Trade receivables 3,899 2,837
Other receivables 5,523 4,470
Prepayments 35,641 6,983
Balance as at year end 45,063 14,290
Other receivables include lease incentives of EUR3,497,000 (2017: EUR3,269,000).
Prepayments include amounts totalling EUR34,585,000 (2017: EUR6,547,000) relating to the payments and associated costs for the
acquisition of two new sites that completed post period end, see note 30.
18. Cash and cash equivalents
2018 2017
EUR000 EUR000
Cash at bank and in hand 79,605 48,695
Balance as at year end 79,605 48,695
Cash at bank earns interest at floating rates based on daily bank deposit rates. The fair value of cash as at 31 March 2018 is
EUR79,605,000 (2017: EUR48,695,000).
As at 31 March 2018 EUR15,191,000 (2017: EUR12,753,000) of cash is held in blocked accounts. Of this, EUR8,256,000 (2017: EUR6,933,000)
relates to deposits received from tenants. An amount of EUR16,000 (2017: EUR16,000) is cash held in escrow as requested by a supplier
and EUR131,000 (2017: EUR131,000) is held in restricted accounts for office rent deposits. An amount of EUR3,344,000 (2017: EUR2,850,000)
relates to amounts reserved for future bank loan interest and amortisation payments, pursuant to certain of the Group's banking
facilities. An amount of EUR3,268,000 (2017: EUR2,823,000) relates to amounts reserved for future capital expenditure and an amount of
EUR176,000 (2017: EURnil) relates to amounts reserved for future debt servicing, pursuant to certain of the Group's banking facilities.
19. Trade and other payables
2018 2017
EUR000 EUR000
Trade payables 6,381 5,865
Accrued expenses 14,453 12,206
Accrued interest 2,031 509
Other payables 18,107 15,383
Balance as at year end 40,972 33,963
20. Interest-bearing loans and borrowings
Effective
interest
rate 2018 2017
% Maturity EUR000 EUR000
Current
Deutsche Genossenschafts-Hypothekenbank AG
- fixed rate facility 1.59 31 March 2021 320 320
Bayerische Landesbank
- hedged floating rate facility Hedged* 19 October 2020 508 508
SEB AG
- fixed rate facility 1.84 1 September 2022 1,180 1,180
- hedged floating rate facility Hedged** 30 October 2024 229 -
- floating rate facility Floating*** 25 March 2025 760 -
Berlin Hyp AG/Deutsche Pfandbriefbank AG
- floating rate facility Floating**** 27 April 2023 - 1,063
- fixed rate facility 1.66 27 April 2023 2,551 2,413
Berlin Hyp AG
- fixed rate facility 1.48 29 October 2023 1,799 1,773
K-Bonds I
- fixed rate facility 6.00 31 July 2020 1,000 1,000
Saarbrücken Sparkasse
- fixed rate facility 1.53 28 February 2025 726 -
Capitalised finance charges on all loans (1,229) (1,189)
7,844 7,068
Non-current
Deutsche Genossenschafts-Hypothekenbank AG
- fixed rate facility 1.59 31 March 2021 14,040 14,360
Bayerische Landesbank
- hedged floating rate facility Hedged* 19 October 2020 23,606 24,113
SEB AG
- fixed rate facility 1.84 1 September 2022 54,870 56,050
- hedged floating rate facility Hedged** 30 October 2024 22,701 -
- floating rate facility Floating*** 25 March 2025 37,240 -
Berlin Hyp AG/Deutsche Pfandbriefbank AG
- floating rate facility Floating**** 27 April 2023 - 40,375
- fixed rate facility 1.66 27 April 2023 81,554 89,927
Berlin Hyp AG
- fixed rate facility 1.48 29 October 2023 65,697 67,496
K-Bonds I
- fixed rate facility 4.00 31 July 2023 45,000 45,000
- fixed rate facility 6.00 31 July 2020 2,000 3,000
Saarbrücken Sparkasse
- fixed rate facility 1.53 28 February 2025 17,274 -
Capitalised finance charges on all loans (4,748) (5,597)
359,234 334,724
Total 367,078 341,792
* This facility is hedged with a swap charged at a rate of 1.66%.
** Tranche 1 of this facility is hedged with a swap charged at a rate of 2.58%, tranche 2 of this facility is hedged with a swap charged at a rate of 2.56%.
*** This facility is charged with a floating rate of 1.58% over six month EURIBOR (not less than 0%) for the full term of the loan.
**** Tranche 2 of this facility was fully repaid in September 2017.
The borrowings are repayable as follows:
2018 2017
EUR000 EUR000
On demand or within one year 9,073 8,256
In the second year 9,383 8,323
In the third to tenth years inclusive 354,599 331,998
Total 373,055 348,577
The Group has pledged 46 (2017: 38) investment properties to secure related interest-bearing debt facilities granted to the Group
including two properties that completed immediately after period end. Of this the 44 (2017: 38) properties had a combined valuation
of EUR872,408,000 as at 31 March 2018 (2017: EUR774,120,000).
Deutsche Genossenschafts-Hypothekenbank AG
On 24 March 2016, the Group agreed to a facility agreement with Deutsche Genossenschafts-Hypothekenbank AG for EUR16.0
million. As at 31 March 2017 tranche 1 had been drawn down in full totalling EUR15.0 million. The loan terminates on 31 March 2021.
Amortisation is 2% per annum with the remainder of the loan due in the fifth year. The facility is charged at a fixed interest rate of
1.59%. The facility is secured over one property asset and is subject to various covenants with which the Group has complied.
Bayerische Landesbank
On 20 October 2015, the Group agreed to a facility agreement with Bayerische Landesbank for EUR25.4 million. The loan terminates
on 19 October 2020. Amortisation is 2% per annum with the remainder due in the fourth year. The full facility has been hedged at a
rate of 1.66% until 19 October 2020 by way of an interest rate swap. The facility is secured over four property assets and is subject
to various covenants with which the Group has complied.
SEB AG
On 2 September 2015, the Group agreed to a facility agreement with SEB AG for EUR59.0 million to refinance the two existing
Macquarie loan facilities. The loan terminates on 1 September 2022. Amortisation is 2% per annum with the remainder due in the
seventh year. The loan facility is charged at a fixed interest rate of 1.84%. This facility is secured over twelve of the 14 property
assets previously financed through the Macquarie loan facilities, thereby two non-core assets were unencumbered in the
refinancing process. The facility is subject to various covenants with which the Group has complied.
On 30 October 2017, the Group agreed to a second facility agreement with SEB AG for EUR22.9 million. Tranche 1, totalling EUR20.0
million has been hedged at a rate of 2.58% until 30 October 2024 by way of an interest rate swap. Tranche 2, totalling EUR2.9 million
has been hedged at a rate of 2.56% until 30 October 2024 by way of an interest rate swap. The loan terminates on 30 October
2024. Amortisation is 2.0% per annum across the full facility with the remainder due in one instalment on the final maturity date.
The facility is secured over three property assets and is subject to various covenants with which the Group has complied.
On 26 March 2018, the Group agreed to a third facility agreement with SEB AG for EUR38.0 million. The loan terminates on 25 March
2025. Amortisation is 2% per annum with the remainder due in one instalment on the final maturity date. The loan facility is charged
with a floating rate of 1.58% over six month EURIBOR (not less than 0%) for the full term of the loan and requires a hedging
instrument to be put in place in order to fix the rate before the end of June 2018. The facility is secured over six property assets one
of which completed immediately after period end and is subject to various covenants with which the Group has complied.
Berlin Hyp AG/Deutsche Pfandbriefbank AG
On 31 March 2014, the Group agreed to a facility agreement with Berlin Hyp AG and Deutsche Pfandbriefbank AG for EUR115.0
million. The loan terminates on 31 March 2019. Amortisation is 2% p.a. for the first two years, 2.5% for the third year and 3.0%
thereafter, with the remainder due in the fifth year. Half of the facility (EUR55.2 million) is charged interest at 3% plus three months
EURIBOR and is capped at 4.5%, and the other half (EUR55.2 million) has been hedged at a rate of 4.265% until 31 March 2019. This
facility is secured over nine property assets and is subject to various covenants with which the Group has complied. On 28 April
2016, the Group agreed to refinance this facility which had an outstanding balance of EUR110.4 million at 31 March 2016. The new
facility is split in two tranches totalling EUR137.0 million and terminates on 27 April 2023. Tranche 1, totalling EUR94.5 million, is charged
at a fixed interest rate of 1.66% for the full term of the loan. Tranche 2, totalling EUR42.5 million, is charged with a floating rate of
1.57% over three month EURIBOR (not less than 0%) for the full term of the loan. Amortisation is set at 2.5% across the full facility
with the remainder due in one instalment on the final maturity date. The facility is secured over eleven property assets and is
subject to various covenants with which the Group has complied.
On 30 June 2017, the Group repaid a total of EUR5.8 million following the disposal of the Düsseldorf asset. On 30 September 2017,
the Group repaid tranche 2 of the loan in full amounting to EUR40.9 million following the disposal of the Munich Rupert Mayer Strasse
asset. The facility is now secured over nine property assets.
Berlin Hyp AG
On 15 December 2014, the Group agreed to a facility agreement with Berlin Hyp AG for EUR36.0 million. The loan terminates on 31
December 2019. Amortisation is 2% per annum for the first two years, 2.4% for the third year and 2.8% thereafter, with the
remainder due in the fifth year. The facility is charged at a fixed interest rate of 2.85%. This facility is secured over three property
assets and is subject to various covenants with which the Group has complied. On 28 April 2016, the Group agreed to add an
additional tranche to this facility which had an outstanding balance of EUR35.1 million at 31 March 2016. The additional tranche of
EUR4.5 million brings the total loan to EUR39.6 million. The maturity of the additional loan tranche is coterminous with the existing loan at
31 December 2019. Amortisation is 2.5% per annum, with the remainder due at maturity. The additional loan tranche is charged
with a fixed interest rate of 1.32% for the full term of the loan. The original facility agreement was amended to include one
previously unencumbered property asset located in Würselen. The terms of the original loan are unchanged and the loan continues
to be subject to various covenants with which the Group has complied.
On 20 October 2016, the Group concluded an agreement with Berlin Hyp AG to refinance and extend this facility which had an
outstanding balance of EUR39.2 million at 30 September 2016. The new facility totals EUR70.0 million and terminates on 29 October
2023. Amortisation is 2.5% per annum with the remainder due at maturity. The facility is charged with an all-in fixed interest rate of
1.48% for the full term of the loan. The facility is secured over six property assets which include the recent acquisitions in Dresden
and Wiesbaden which were added to the security pool in order to increase the facility. The loan is subject to various covenants with
which the Group has complied.
K-Bonds
On 1 August 2013, the Group agreed to a facility agreement with K-Bonds for EUR52.0 million. The loan consists of a senior tranche of
EUR45.0 million and a junior tranche of EUR7.0 million. The senior tranche has a fixed interest rate of 4% per annum and is due in one
sum on 31 July 2023. The junior tranche has a fixed interest rate of 6% and terminates on 31 July 2020. The junior tranche is
amortised at EUR1.0 million per annum over a seven year period. This facility is secured over four properties and is subject to various
covenants with which the Group has complied.
Saarbrücken Sparkasse
On 28 March 2018, the Group agreed to a facility agreement with Saarbrücken Sparkasse for EUR18.0 million. The loan terminates on
28 February 2025. Amortisation is 4.0% per annum with the remainder due in one instalment on the final maturity date. The facility
is charged with an all-in fixed interest rate of 1.53% for the full term of the loan. The facility is secured over one property asset that
completed immediately after period end and is subject to various covenants with which the Group has complied.
A summary of the Group's debt covenants is set out below:
Property Loan to Interest
values at value Loan to value cover Debt service Debt yield Cover ratio
Outstanding at 31 March ratio at covenant at ratio at cover ratio at ratio at covenant at
31 March 2018 2018 31 March 31 March 31 March 31 March 31 March 31 March
EUR000 EUR000 2018* 2018 2018** 2018** 2018** 2018
Deutsche Genossenschafts-
Hypothekenbank AG 14,360 30,151 47.6% 68.0% n/a 2.03 n/a 1.25
Bayerische Landesbank 24,114 62,780 38.4% 65.0% n/a 3.78 n/a 2.50
SEB AG 56,050 137,715 40.7% 57.5% 7.39 n/a n/a 5.90
SEB AG II 22,930 44,396 51.6% 61.5% n/a n/a 3.39 1.70
SEB AG III 38,000 65,200 58.3% 60.0% n/a n/a 10.81 7.50
Berlin Hyp AG/Deutsche
Pfandbriefbank AG 84,105 263,670 31.9% 62.5% n/a 3.18 n/a 1.50
Berlin Hyp AG 67,496 158,923 42.5% 65.0% n/a 3.28 n/a 1.40
K-Bonds I 48,000 109,573 43.8% n/a 4.06 n/a n/a 2.50
Saarbrücken Sparkasse 18,000 - n/a n/a n/a 2.52 n/a 2.00
Unencumbered properties - 41,435 n/a
Total 373,055 913,843 40.8%
* Based on Cushman & Wakefield LLP valuations adjusted in respect of lease incentives and Directors' discretionary impairment of non-core assets.
** Based on contractual calculations which are often less representative of actual trading performance.
Reconciliation of movements of liabilities arising from financing activities:
Derivatives
held to
hedge
long-term
Liabilities borrowings Equity
Interest rate
swap used Non-
Loans and Other for hedging Share Retained controlling
borrowings liabilities liabilities capital Reserves earnings interest Total
As at 31 March 2017 341,792 509 341 - 470,318 24,869 81 837,910
Changes from
financing cash flow
Proceeds from issue
of share capital - - - - 63,352 - - 63,352
Proceeds from
loans and borrowings 78,930 - - - - - - 78,930
Repayment of loans (53,551) - - - - - - (53,551)
Exit fees/prepayment
penalties - (1,348) - - - - - (1,348)
Interest paid - (7,451) - - - - - (7,451)
Dividend paid - - - - (18,024) - - (18,024)
Total changes from
financing cash flow 25,379 (8,799) - - 45,328 - - 61,908
Changes in fair value - - (43) - - - - (43)
Accrued amortisation
and interest (903) 10,322 - - - - - 9,419
Transaction cost related
to loans and borrowings 810 - - - - - - 810
Total equity-related
other changes - - - - 3,674 81,272 91 85,037
As at 31 March 2018 367,078 2,032 298 - 519,320 106,141 172 995,041
21. Financial risk management objectives and policies
The Group's principal financial liabilities comprise bank loans, derivative financial instruments and trade payables. The main
purpose of these financial instruments is to raise finance for the Group's operations. The Group has various financial assets, such
as trade receivables and cash, which arise directly from its operations.
The main risks arising from the Group's financial instruments are credit risk, liquidity risk, market risk and interest rate risk.
Credit risk
Credit risk arises when a failure by counterparties to discharge their obligations could reduce the amount of future cash inflows from
financial assets on hand at the reporting date. The credit risk on liquid funds is limited because the counterparties are banks with
high credit ratings assigned by international credit rating agencies. The risk management policies employed by the Group to
manage these risks are discussed below. In the event of a default by an occupational tenant, the Group will suffer a rental shortfall
and incur additional costs, including expenses incurred to try and recover the defaulted amounts and legal expenses in maintaining,
insuring and marketing the property until it is re-let. During the year, the Group monitored the tenants in order to anticipate and
minimise the impact of defaults by occupational tenants, as well as to ensure that the Group has a diversified tenant base.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the
reporting date was:
2018 2017
EUR000 EUR000
Trade receivables 3,899 2,837
Other receivables 5,523 4,470
Cash and cash equivalents 79,605 48,695
89,027 56,002
The ageing of trade receivables at the statement of financial position date was:
Gross Impairment Gross Impairment
2018 2018 2017 2017
EUR000 EUR000 EUR000 EUR000
Past due 0-30 days 5,238 (1,984) 2,784 (1,121)
Past due 31-120 days 437 (298) 1,267 (789)
More than 120 days 2,702 (2,196) 2,928 (2,232)
8,377 (4,478) 6,979 (4,142)
The movement in the allowance for impairment in respect of trade receivables during the year was as follows:
2018 2017
EUR000 EUR000
Balance at 1 April (4,142) (4,332)
Impairment loss (released)/recognised (336) 190
Balance at 31 March (4,478) (4,142)
The allowance account for trade receivables is used to record impairment losses unless the Group believes that no recovery of the
amount owing is possible; at that point the amounts considered irrecoverable are written off against the trade receivables directly.
Most trade receivables are generally due one month in advance. The exception is service charge balancing billing, which is due ten
days after it has been invoiced. Included in the Group's trade receivables are debtors with carrying amounts of EUR3,899,000 (2017:
EUR2,837,000) that are past due at the reporting date for which the Group has not provided as there has not been a significant change
in credit quality and the amounts are still considered recoverable.
Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially
enhances profitability but can also increase the risk of losses. The Group has procedures with the objective of minimising such
losses, such as maintaining sufficient cash and other highly liquid current assets and having available an adequate amount of
committed credit facilities. The Group prepares cash flow forecasts and continually monitors its ongoing commitments compared to
available cash. Cash and cash equivalents are placed with financial institutions on a short-term basis which allows immediate
access. This reflects the Group's desire to maintain a high level of liquidity in order to meet any unexpected liabilities that may arise
due to the current financial position. Similarly, accounts receivable are due either in advance (e.g. rents and recharges) or within
ten days (e.g. service charge reconciliations), further bolstering the Group's liquidity level.
The table below summarises the maturity profile of the Group's financial liabilities as at 31 March 2018, based on contractual
undiscounted payments:
Bank and Derivative Trade
shareholder financial and other
loans instruments payables Total
Year ended 31 March 2018 EUR000 EUR000 EUR000 EUR000
Undiscounted amounts payable in:
Six months or less (8,659) (165) (40,972) (49,796)
Six months to one year (7,851) (163) - (8,014)
One to two years (16,627) (323) - (16,950)
Two to five years (129,888) (549) - (130,437)
Five to ten years (246,970) (231) - (247,201)
(409,995) (1,431) (40,972) (452,398)
Interest 36,940 1,431 - 38,371
(373,055) - (40,972) (414,027)
Bank and Derivative Trade
shareholder financial and other
loans instruments payables Total
Year ended 31 March 2017 EUR000 EUR000 EUR000 EUR000
Undiscounted amounts payable in:
Six months or less (8,085) (82) (33,963) (42,130)
Six months to one year (7,048) (82) - (7,130)
One to two years (15,021) (161) - (15,182)
Two to five years (76,764) (320) - (77,084)
Five to ten years (279,706) - - (279,706)
(386,624) (645) (33,963) (421,232)
Interest 38,046 645 - 38,691
(348,578) - (33,963) (382,541)
Currency risk
There is no significant foreign currency risk as most of the assets and liabilities of the Group are maintained in euros. Small
amounts of UK sterling and South African rand are held to ensure payments made in UK sterling and South African rand can be
achieved at an effective rate.
Interest rate risk
The Group's exposure to interest rate risk relates primarily to the Group's long-term floating rate debt obligations. The Group's
policy is to mitigate interest rate risk by ensuring that a minimum of 80% of its total borrowing is at fixed or capped interest rates by
taking out fixed rate loans or derivative financial instruments to hedge interest rate exposure, or interest rate caps.
A change in interest will only have an impact on the floating loans capped due to the fact that the other loans have a general fixed
interest rate or they are effectively fixed by a swap. An increase in 100bps in interest rate would result in a decreased post tax profit
in the consolidated statement of comprehensive income of EUR381,000 (excluding the movement on derivative financial instruments)
and a decrease in 100bps in interest rate would result in an increased post tax profit in the consolidated statement of
comprehensive income of EUR381,000 (excluding the movement on derivative financial instruments).
Market risk
The Group's activities are within the real estate market, exposing it to very specific industry risks.
The yields available from investments in real estate depend primarily on the amount of revenue earned and capital appreciation
generated by the relevant properties, as well as expenses incurred. If properties do not generate sufficient revenues to meet
operating expenses, including debt service and capital expenditure, the Group's revenue will be adversely affected.
Revenues from properties may be adversely affected by; the general economic climate; local conditions, such as an oversupply of
properties, or a reduction in demand for properties, in the market in which the Group operates; the attractiveness of the properties
to the tenants; the quality of the management; competition from other available properties; and increased operating costs.
In addition, the Group's revenue would be adversely affected if a significant number of tenants were unable to pay rent or its
properties could not be rented on favourable terms. Certain significant expenditures associated with each equity investment in real
estate (such as external financing costs, real estate taxes and maintenance costs) are generally not reduced when circumstances
cause a reduction in revenue from properties. By diversifying in product, risk categories and tenants, the Group expects to lower
the risk profile of the portfolio.
Capital management
The Group seeks to enhance shareholder value both by investing in the business so as to improve the return on investment and by
managing the capital structure.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or
adjust the capital structure, the Group may adjust the dividend payment to shareholders, issue shares or undertake transactions
such as those that occurred with the internalisation of the Asset Management Agreement.
The Company holds 574,892 of its own shares which continue to be held as Treasury Shares. During the year to 31 March 2018
487,166 shares were issued from treasury and no shares were bought back.
The Group monitors capital using a gross debt to property assets ratio, which was 40.8% as at 31 March 2018 (2017: 42.3%).
The Group is not subject to externally imposed capital requirements other than those related to the covenants of the bank loan facilities.
22. Financial instruments
Fair values
Set out below is a comparison by category of carrying amounts and fair values of all of the Group's financial instruments that are
carried in the financial statements:
2018 2017
Carrying Fair Carrying Fair
amount value amount value
EUR000 EUR000 EUR000 EUR000
Financial assets
Cash 79,605 79,605 48,695 48,695
Trade receivables 3,899 3,899 2,837 2,837
Financial liabilities
Trade payables 6,381 6,381 5,865 5,865
Derivative financial instruments 298 298 341 341
Interest-bearing loans and borrowings:
Floating rate borrowings 38,000 38,000 41,438 41,438
Floating rate borrowings - hedged* 47,044 47,044 24,621 24,621
Fixed rate borrowings 288,011 293,547 282,519 288,288
* The Group holds interest rate swap contracts designed to manage the interest rate and liquidity risks of expected cash flows of its borrowings with the variable rate
facilities with Bayerische Landesbank and SEB AG. Please refer to note 20 for details of swap contracts.
Fair value hierarchy
For financial assets or liabilities measured at amortised cost and whose carrying value is a reasonable approximation to fair value
there is no requirement to analyse their value in the fair value hierarchy.
The table below analyses financial instruments measured at fair value into a fair value hierarchy based on the valuation technique
used to determine fair value:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Level 1 Level 2 Level 3 Total
EUR000 EUR000 EUR000 EUR000
2018
Derivative financial instruments - (298) - (298)
Fixed rate borrowings - 293,547 - 293,547
Floating rate borrowings - 85,044 - 85,044
2017
Derivative financial instruments - (341) - (341)
Fixed rate borrowings - (288,288) - (288,288)
Floating rate borrowings - (66,059) - (66,059)
The interest rate swap contract is reset on a quarterly basis. The Company will settle the difference between the fixed and floating
interest rates on a net basis. The fair value of interest rate swaps is based on broker quotes. Those quotes are tested for
reasonableness by discounting estimated future cash flows based on the terms and maturity of each contract and using market
interest rates for a similar instrument at the measurement date. The average interest rate is based on the outstanding balances at
the end of the reporting period. The interest rate swap is measured at fair value with changes recognised in profit or loss.
Interest rate risk
The following table sets out the carrying amount, by maturity, of the Group's financial instruments that are exposed to interest rate risk:
Within 1 year 1-2 years 2-3 years 3-4 years 4+ years Total
2018 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
SEB AG (760) (760) (760) (760) (34,960) (38,000)
Within 1 year 1-2 years 2-3 years 3-4 years 4 + years Total
2017 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
Berlin Hyp AG/Deutsche
Pfandbriefbank AG (1,063) (1,063) (1,063) (1,063) (37,188) (41,440)
The other financial instruments of the Group that are not included in the above tables are non-interest bearing or have fixed interest
rates and are therefore not subject to interest rate risk.
23. Issued share capital
Share
Number capital
Authorised of shares EUR
Ordinary shares of no par value Unlimited -
As at 31 March 2018 Unlimited -
Share
Number capital
Issued and fully paid of shares EUR
As at 31 March 2016 751,984,887 -
Issued ordinary shares 125,488,040 -
Issued Treasury Shares 313,608 -
As at 31 March 2017 877,786,535 -
Issued ordinary shares 113,055,913 -
Issued Treasury Shares 487,166 -
As at 31 March 2018 991,329,614 -
Holders of the ordinary shares are entitled to receive dividends and other distributions and to attend and vote at any general
meeting. Shares held in treasury are not entitled to receive dividends or to vote at general meetings.
On 7 July 2017, the Company issued 487,166 ordinary shares out of treasury to the Company's two Executive Directors and some
of the Group's Senior Management Team, pursuant to the Company's MSP incentive scheme. This resulted in the Company's
overall issued share capital being 878,848,593 ordinary shares, of which 574,892 were held in treasury. The total number of
ordinary shares with voting rights in the Company at this date was 878,273,701.
Pursuant to an equity raise of EUR25.0 million on 4 August 2017, the Company issued 39,888,185 ordinary shares at an issue price of
GBP0.56, resulting in the Company's overall issued share capital being 918,736,778 ordinary shares, of which 574,892 were held in
treasury. The total number of ordinary shares with voting rights in the Company at this date was 918,161,886. Costs associated
with the equity raise amounted to EUR612,000.
Pursuant to a scrip dividend offering on 18 August 2017, the Company issued 7,991,787 ordinary shares at an issue price of
GBP0.5621, resulting in the Company's overall issued share capital being 926,728,565 ordinary shares, of which 574,892 were held in
treasury. The total number of ordinary shares with voting rights in the Company at this date was 926,153,673.
Pursuant to a scrip dividend offering on 19 January 2018, the Company issued 6,842,608 ordinary shares at an issue price of
GBP0.6198, resulting in the Company's overall issued share capital being 933,571,173 ordinary shares, of which 574,892 were held in
treasury. The total number of ordinary shares with voting rights in the Company at this date was 932,996,281.
Pursuant to an equity raise of EUR40.0 million on 28 March 2018, the Company issued 58,333,333 ordinary shares at an issue price of
GBP0.60, resulting in the Company's overall issued share capital being 991,904,506 ordinary shares, of which 574,892 were held in
treasury. The total number of ordinary shares with voting rights in the Company at this date was 991,329,614. Costs associated
with the equity raise amounted to EUR884,000.
The Company holds 574,892 of its own shares, which are held in treasury (2017: 1,062,058). During the year 487,166 shares were
issued from treasury.
All shares issued in the period were issued under general authority. No shares were bought back in the year.
24. Other reserves
Other distributable reserve
The other distributable reserve was created for the payment of dividends, share-based payment transactions and for the buyback of
shares and is EUR519,320,000 in total at 31 March 2018 (2017: EUR470,318,000).
25. Dividends
On 4 July 2017, the Company announced a dividend of 1.53c per share, with a record date of 14 July 2017 for UK and South
African shareholders and payable on 18 August 2017. On the record date, 878,848,593 shares were in issue, of which 574,892
were held in treasury and 878,273,701 were entitled to participate in the dividend. Holders of 329,660,344 shares elected to receive
the dividend in ordinary shares under the Scrip Dividend Alternative, representing a dividend of EUR5,044,000, while holders of
548,613,357 shares opted for a cash dividend with a value of EUR8,378,000. The total dividend was EUR13,422,000.
On 27 November 2017, the Company announced a dividend of 1.56c per share, with a record date of 15 December 2017 for UK
and South African shareholders and payable on 19 January 2018. On the record date, 926,728,565 shares were in issue, of which
574,892 were held in treasury and 926,153,673 were entitled to participate in the dividend. Holders of 313,136,432 shares elected
to receive the dividend in ordinary shares under the Scrip Dividend Alternative, representing a dividend of EUR4,885,000, while
holders of 613,017,241 shares opted for a cash dividend with a value of EUR9,646,000. The total dividend was EUR14,531,000.
The Group's profit attributable to the equity holders of the Company for the year was EUR81.3 million (2017: EUR66.9 million). The Board
has declared a final dividend of 1.60c per share for the year ended 31 March 2018 representing a continuation of the temporary
increase in the pay-out ratio of 75% of FFO* introduced in the first half of the year. It is expected that the ex-dividend date will be on
or around 11 July 2018 for shareholders on the South African register and on or around 12 July 2018 for shareholders on the UK
register. It is further expected that the record date will be on or around 13 July 2018 for shareholders on the South African and UK
registers and the dividend will be paid on or around 17 August 2018 for shareholders on both registers.
The dividend paid per the statement of changes in equity is the value of the cash dividend.
* Adjusted profit before tax adjusted for depreciation, amortisation of financing fees and current tax receivable/incurred.
The dividend per share was calculated as follows:
31 March 31 March
2018 2017
EUR million EUR million
Reported profit before tax 89.6 76.4
Adjustments for:
Surplus on revaluation (63.5) (49.8)
Loss/(gain) of disposals 2.5 (0.1)
Other adjusting items* 8.1 8.9
Change in fair value of financial derivatives - (0.1)
Adjusted profit before tax 36.7 35.3
Adjustments for:
Depreciation 1.1 0.9
Amortisation of financing fees 1.2 1.2
Current taxes incurred (see note 10) (3.4) (0.6)
Add back current tax relating to disposals and prior year adjustments 2.8 0.3
Funds from Operations, year ended 31 March 38.4 37.1
Funds from Operations, six months ended 30 September 18.5 17.1
Funds from Operations, six months ended 31 March 19.9 20.0
Dividend pool, six months ended 30 September 14.4 11.7
Dividend pool, six months ended 31 March** 15.9 13.4
Dividend per share, six months ended 30 September 1.56c 1.39c
Dividend per share, six months ended 31 March 1.60c 1.53c
* Includes the net effect of refinancing costs, management LTIP and SIP awards excluding the change in deferred tax assets and expected selling costs associated
with assets held for sale. See note 11 for details.
** Calculated as 75% of FFO of 2.13c per share (31 March 2017: 2.38c per share using 65% of FFO) based on average number of shares outstanding of 930,142,690
(31 March 2017: 846,641,989).
26. Related parties
Key management personnel compensation
Fees paid to people or entities considered to be key management personnel of the Group during the year include:
2018 2017
EUR000 EUR000
Directors' fees 336 231
Salary and employee benefits 3,034 2,759
Share-based payments 3,550 3,926
Total 6,920 6,916
The share-based payments relating to key management personnel for the year ended 31 March 2018 include an accrued expense
of EUR3,550,000 (2017: EUR3,404,000) for the granting of shares under the LTIP (see note 8).
Information on Directors' emoluments is given in the remuneration report within the Annual Report.
27. Capital and other commitments
The Group's commitments derived from office rental contracts are as follows:
2018 2017
EUR000 EUR000
Less than one year* 6,984 528
Between one and five years* 21,909 1,959
More than five years 529 245
29,422 2,732
* Includes commitments relating to the operating and management contract for the Rupert Mayer Strasse asset which was disposed of during the year
As at 31 March 2018, the Group had contracted capital expenditure on existing properties of EUR8,745,000 (2017: EUR5,951,000).
These were committed but not yet provided for in the financial statements.
28. Operating lease arrangements
Group as lessor
All properties leased by the Group are under operating leases and the future minimum lease payments receivable under non-
cancellable leases are as follows:
2018 2017
EUR000 EUR000
Less than one year 67,982 63,375
Between one and five years 114,675 102,176
More than five years 23,869 23,140
206,526 188,691
The Group leases out its investment properties under operating leases. Most operating leases are for terms of one to ten years.
29. List of subsidiary undertakings
The Group consists of 86 subsidiary companies. All subsidiaries are consolidated in full in accordance with IFRS.
Ownership at Ownership at
Country 31 March 2018 31 March 2017
Company name of incorporation % %
Curris Facilities & Utilities Management GmbH Germany 100.00 100.00
DDS Aspen B.V. Netherlands 100.00 100.00
DDS Bagnut B.V. Netherlands 100.00 100.00
DDS Bramble B.V. Netherlands n/a 100.00
DDS Business Centers B.V. Netherlands 100.00 100.00
DDS Conferencing & Catering GmbH Germany 100.00 100.00
DDS Edelweiss B.V. Netherlands 100.00 100.00
DDS Elm B.V. Netherlands 100.00 100.00
DDS Fir B.V. Netherlands 100.00 100.00
DDS Hawthorn B.V. Netherlands 100.00 100.00
DDS Hazel B.V. Netherlands 100.00 100.00
DDS Hyacinth B.V. Netherlands 100.00 100.00
DDS Lark B.V. Netherlands 100.00 100.00
DDS Lime B.V. Netherlands 100.00 100.00
DDS Maple B.V. Netherlands 100.00 100.00
DDS Mulberry B.V. Netherlands 100.00 100.00
DDS Rose B.V. Netherlands 100.00 100.00
DDS Walnut B.V. Netherlands 100.00 100.00
DDS Yew B.V. Netherlands 100.00 100.00
LB² Catering and Services GmbH Germany 100.00 100.00
Marba Daffodil B.V. Netherlands 100.00 n/a
Marba Holland B.V. Netherlands 100.00 100.00
Marba Lavender B.V. Netherlands 100.00 n/a
Marba Olive B.V. Netherlands 100.00 n/a
Marba Violin B.V. Netherlands 100.00 n/a
Marba Willstätt B.V. Netherlands 100.00 100.00
SFG NOVA Construction and Services GmbH Germany 100.00 100.00
Sirius Acerola GmbH & Co. KG Germany 100.00 n/a
Sirius Alder B.V. Netherlands 100.00 100.00
Sirius Almond GmbH & Co. KG Germany 100.00 n/a
Sirius Aloe GmbH & Co. KG Germany 100.00 n/a
Sirius Ash B.V. Netherlands 100.00 100.00
Sirius Aster GmbH & Co. KG K Germany 100.00 n/a
Sirius Beech B.V. Netherlands 100.00 100.00
Sirius Bluebell GmbH & Co. KG Germany 100.00 n/a
Sirius Coöperatief U.A. Netherlands 100.00 100.00
Sirius Corporate Services B.V. Netherlands 100.00 100.00
Sirius Facilities (UK) Limited UK 100.00 100.00
Sirius Facilities GmbH Germany 100.00 100.00
Sirius Finance (Guernsey) Ltd. Guernsey 100.00 100.00
Sirius Four B.V. Netherlands 100.00 100.00
Sirius Frankfurt Erste GmbH & Co. KG Germany 100.00 n/a
Sirius Gum B.V. Netherlands 100.00 100.00
Sirius Ivy B.V. Netherlands 100.00 100.00
Sirius Juniper B.V. Netherlands 100.00 100.00
Sirius Krefeld Erste GmbH & Co. KG Germany 100.00 n/a
Sirius Laburnum B.V. Netherlands 100.00 100.00
Sirius Lily B.V. Netherlands 100.00 100.00
Sirius Management One GmbH Germany 100.00 100.00
Sirius Management Two GmbH Germany 100.00 100.00
Sirius Management Three GmbH Germany 100.00 n/a
Sirius Management Four GmbH Germany 100.00 n/a
Sirius Management Five GmbH Germany 100.00 n/a
Sirius Management Six GmbH Germany 100.00 n/a
Sirius Mannheim B.V. Netherlands 100.00 100.00
Sirius Oak B.V. Netherlands 100.00 100.00
Sirius One B.V. Netherlands 100.00 100.00
Sirius Orange B.V. Netherlands 100.00 n/a
Sirius Orchid B.V. Netherlands 100.00 100.00
Sirius Pine B.V. Netherlands 100.00 100.00
Sirius Tamarack B.V. Netherlands 100.00 100.00
Sirius Three B.V. Netherlands 100.00 100.00
Sirius Tulip B.V. Netherlands 100.00 n/a
Sirius Two B.V. Netherlands 100.00 100.00
Sirius Willow B.V. Netherlands 100.00 100.00
Marba Bonn B.V. Netherlands 99.73 99.73
Marba Bremen B.V. Netherlands 99.73 99.73
Marba Brinkmann B.V. Netherlands 99.73 99.73
Marba Catalpa B.V. Netherlands 99.73 99.73
Marba Cedarwood B.V. Netherlands 99.73 99.73
Marba Chestnut B.V. Netherlands 99.73 99.73
Marba Dandelion B.V. Netherlands 99.73 99.73
Marba Dutch Holdings B.V. Netherlands 99.73 99.73
Marba Foxglove B.V. Netherlands 99.73 99.73
Marba HAG B.V. Netherlands 99.73 99.73
Marba Hornbeam B.V. Netherlands 99.73 99.73
Marba Königswinter B.V. Netherlands 99.73 99.73
Marba Maintal B.V. Netherlands 99.73 99.73
Marba Marigold B.V. Netherlands 99.73 99.73
Marba Merseburg B.V. Netherlands 99.73 99.73
Marba Mimosa B.V. Netherlands 99.73 99.73
Marba Regensburg B.V. Netherlands 99.73 99.73
Marba Saffron B.V. Netherlands 99.73 99.73
Marba Troisdorf B.V. Netherlands 99.73 99.73
Sirius Administration One GmbH & Co KG Germany 94.80 94.80
Sirius Administration Two GmbH & Co KG Germany 94.80 94.80
Verwaltungsgesellschaft Gewerbepark Bilderstöckchen GmbH Germany 94.15 94.15
30. Post balance sheet events
On 1 April 2018, the Group completed the acquisition of a business park in Saarbrücken. Total acquisition costs are expected to be
EUR28.1m. The property is a single building comprising office and conferencing space and has a net lettable area of 47,000sqm. The
property is 65% occupied and let to 12 tenants, producing EUR3.1 million of annual income and having a weighted average remaining
lease term of 5.9 years.
On 1 April 2018, the Group completed the acquisition of a second business park located in Düsseldorf. Total acquisition costs are
expected to be EUR8.1 million. The property comprises two buildings of warehouse and office space with a net lettable area of
9,000sqm. The property is 80% occupied and let to three tenants producing EUR0.6 million annual income and having a weighted
average remaining lease term of 4.3 years.
On 19 of April 2018, the Group notarised the acquisition of a property located in Friedrichsdorf, near Frankfurt am Main. Total
acquisition costs are expected to be EUR17.8 million. The property is a mixed use business park and has a net lettable area of c.
17,300 sqm. The property is 91.8% occupied and let to 18 tenants, producing an annual income of EUR1.4 million and having a
remaining weighted average lease term of 2.3 years. Expected handover is August 2018.
On 30 April 2018, the Group completed the sale of the non-core Bremen Brinkman asset for EUR15.5 million in line with book value.
The asset is a former tobacco manufacturing facility and, at time of sale, generated EUR0.9 million of net operating income and
contained 48,700sqm of vacant space which due to the costs and complexity involved has limited the potential for investment to
reconfigure the space.
On the 1 June 2018 the Group completed the sale of a vacant residential apartment block in Markgröningen for EUR0.625 million. The
proceeds from the sale will be reinvested into the site.
On the 1 June 2018 the Group completed the sale of a 22,000sqm piece of non-income producing land located in Rostock for EUR1.2
million. The proceeds of the sale will be used to fund ongoing capex investment programmes.
Glossary of terms
Adjusted NAV is the assets attributable to the equity holders of the Company adjusted for deferred tax and derivative financial instruments
Annualised rental income is the contracted rental income of a property at a specific reporting date expressed in annual terms
Capital value is the market value of a property divided by the total sqm of a property
EPRA net yield is the net operating income generated by a property expressed as a percentage of its value plus purchase costs
Funds from operations is reported profit before tax adjusted for property revaluation, gain/loss on disposals, change in the fair
value of derivative financial instruments, adjusting items, depreciation, amortisation of financing fees and current tax
receivable/incurred
Geared IRR is an estimate of the rate of return taking into consideration debt
Gross loan to value ratio is the ratio of principle value of total debt to the aggregated value of investment property
Gross yield is the annualised rental income generated by a property expressed as a percentage of its value
Like for like refers to the manner in which metrics are subject to adjustment in order to make them directly comparable. Like for
like adjustments are made in relation to annualised rental income, rate and occupancy and eliminate the effect of asset acquisitions
and disposals that occur in the reporting period
Net loan to value ratio is the ratio of principle value of total debt less cash, excluding that which is restricted, to the aggregate
value of investment property
Net operating income is the income generated by a property less directly attributable costs
Net yield is the net operating income generated by a property expressed as a percentage of its value
Occupancy is the percentage of total lettable space occupied as at reporting date
Operating cash flow on investment (geared) is an estimate of the rate of return based on operating cash flows and taking into
consideration debt
Operating cash flow on investment (ungeared) is an estimate of the rate of return based on operating cash flows cashflow
Rate is rental income per sqm expressed on a monthly basis as at a specific reporting date
Total debt is the aggregate amount of the Company's interest bearing loans and borrowings
Total shareholder return based on adjusted NAV is the return obtained by a shareholder calculated by combining both
movements in adjusted NAV per share plus dividends paid
Total return is the return for a set period of time combining valuation movement and income generated
Ungeared IRR is an estimate of the rate of return
Weighted average cost of debt is the weighted effective rate of interest of loan facilities expressed as a percentage
Weighted average debt expiry is the weighted average time to repayment of loan facilities expressed in years
Business analysis
Non-IFRS measures
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
Reported profit for the year 81,363 66,936
Surplus on revaluation of investment properties (63,452) (49,782)
Loss/(gain) on disposal of properties (including tax) 4,423 (79)
Change in fair value of derivative financial instruments (43) (133)
Deferred tax in respect of EPRA adjustments 5,492 9,246
EPRA earnings 27,783 26,188
Deduct non-controlling interest (91) (25)
Add change in deferred tax relating to derivative financial instruments 20 23
Add change in fair value of derivative financial instruments 43 133
Headline earnings after tax 27,755 26,319
Add/deduct change in fair value of derivative financial instruments net of related tax (63) (156)
Add adjusting items*, net of related tax 8,349 8,801
Adjusted earnings after tax 36,041 34,964
* See note 11 of the Annual Report
Year ended Year ended
31 March 2018 31 March 2017
EUR000 EUR000
EPRA earnings 27,783 26,188
Weighted average number of ordinary shares 914,479,339 822,957,685
EPRA earnings per share (cents) 3.04 3.18
Headline earnings after tax 27,755 26,319
Weighted average number of ordinary shares 914,479,339 822,957,685
Headline earnings per share (cents) 3.04 3.20
Adjusted earnings after tax 36,041 34,964
Weighted average number of ordinary shares 914,479,339 822,957,685
Adjusted earnings per share (cents) 3.94 4.25
2018
EUR000
Total investment properties at book value as at 1 April* 823,295
Additions 127,799
Capital expenditure 20,662
Disposals** (104,040)
Surplus on revaluation above capex 58,971
Adjustment in respect of lease incentives (487)
Movement in Directors' discretionary impairment of non-core assets 4,968
Total investment properties at book value as at 31 March* 931,168
Additions completed 1 April 2018 (Saarbrücken and Düsseldorf II)*** 36,149
Adjusted investment properties at book value as at 31 March* 967,317
* Including assets held for sale
** Including disposals relating to assets held for sale
*** Using expected total acquisition costs
Property analysis
No. Of Annualised % of Portfolio
Mar-18 Properties Total sqm'000 Occupancy Rate psm EUR Rent EURm By Rent Value EURm*** Gross Yield WALE (rent) WALE (sqm)
Frankfurt 12 286 86.7% 5.89 17.6 22% 210.4 8.3% 2.2 2.2
Berlin 6 204 93.6% 5.57 12.7 16% 156.7 8.1% 2.6 2.8
Stuttgart 6 232 85.8% 4.41 10.5 13% 119.2 8.8% 3.0 3.2
Cologne 7 128 89.0% 6.83 9.3 12% 113.1 8.3% 2.3 2.3
Munich 2 105 74.1% 6.06 5.7 7% 101.5 5.6% 3.9 4.6
Düsseldorf* 8 103 77.7% 5.77 5.5 7% 74.2 7.5% 2.6 2.5
Hamburg 2 51 58.1% 4.15 1.5 2% 23.7 6.2% 2.3 2.3
Non-core 2 169 43.0% 2.67 2.3 3% 19.3 12.1% 1.5 1.1
Other** 9 254 79.5% 5.92 14.3 18% 151.7 9.4% 3.6 3.3
Total 54 1,532 79.2% 5.46 79.5 100% 969.8 8.2% 2.8 2.8
* Including Düsseldorf II completed 1st April 2018
** Including Saarbrücken completed 1st April 2018
*** Cushman & Wakefield valuation with Düsseldorf II and Saarbrücken included at cost
Usage analysis
% of % of
Occupied annualised
Usage sqm rental income Vacant sqm Rate psm EUR
Office 27% 37% 93,265 7.16
Storage 32% 22% 130,724 3.80
Production 27% 21% 31,477 4.12
Other* 8% 13% 18,780 8.47
Smartspace 5% 7% 25,515 7.19
Total 100% 100% 299,761 5.37
* Other includes: Catering, Other Usage, Residential, Retail, Technical Space, Land & Car Parking
Announcement date:
4 June 2018
Corporate directory
Registered office Guernsey solicitors
Carey Olsen
Trafalgar Court PO Box 98
2nd Floor 7 New Street
East Wing St. Peter Port
Admiral Park Guernsey GY1 4BZ
St Peter Port Channel Islands
Guernsey GY1 3EL
Channel Islands
Registered number
Incorporated in Guernsey under the Companies (Guernsey)
Law, 2008, as amended, under number 46442
Company Secretary
A L Bennett
Sirius Real Estate Limited
Trafalgar Court
2nd Floor
East Wing
Admiral Park
St Peter Port
Guernsey GY1 3EL
Channel Islands
UK solicitors
Norton Rose Fulbright LLP
3 More London Riverside
London SE1 2AQ
Financial PR
Novella Communications
1a Garrick House
Carrington Street
London W1J 7AF
JSE sponsor
PSG Capital Proprietary Limited
1st Floor, Ou Kollege
35 Kerk Street
Stellenbosch
7600
South Africa
Joint broker
Peel Hunt LLP
120 London Wall
London EC2Y 5ET
Joint broker
Berenberg
60 Threadneedle Street
London EC2R 8HP
Property valuer
Cushman & Wakefield LLP
Rathenauplatz 1
60313 Frankfurt am Main
Germany
Independent auditors
KPMG LLP
15 Canada Square
London
E14 5GL
Date: 04/06/2018 08:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
