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Condensed unaudited consolidated interim financial statements for the three and six months ended 31 March 2017
Greenbay Properties Ltd
Incorporated in the Republic of Mauritius
Reg No C124756 C1/GBL ISIN MU0461N00007
SEM share code: GFP.N0000 and JSE share code: GRP ("Greenbay" or
"the company" or "the group")
www.greenbayprop.mu
Condensed unaudited consolidated interim financial statements for the three
and six months ended 31 March 2017
Directors' commentary
Structure and listing
Greenbay is a Category One Global Business Licence company registered in
Mauritius. The company has primary listings on both the Official Market of the
Stock Exchange of Mauritius Ltd ("SEM") and the Johannesburg Stock Exchange
Limited ("JSE"). Greenbay's AltX listing was migrated to the Main Board of the
JSE on 29 March 2017.
Greenbay invests globally in direct property as well as in listed real estate
and infrastructure securities.
Distributable earnings and commentary on results
Distributable earnings of 0,204 GBP pence per share exceeded guidance
provided in September 2016. The board's dividend policy allows for retaining
distributable earnings and the board has declared a dividend of 0,20 GBP pence
per share for the interim period ended March 2017.
As announced on 13 April 2017, the company's functional, trading and reporting
currency has changed from GBP to EUR effective from April 2017, after the end
of the current reporting period, and accordingly the dividend and these
financial results are reported in GBP.
Subject to final regulatory approvals, shareholders will be given the option
to receive their dividend either in cash or as a scrip dividend. A circular
containing details of this election, accompanied by announcements on the Stock
Exchange News Service of the JSE as well as the website of the SEM, will
be issued in due course.
In a volatile global economy Greenbay increased its net asset value per
share from 4,80 GBP pence at March 2016 to 7,35 GBP pence at March 2017, an
increase of 53,1%. The increase in net asset value since September 2016 was
8,7%. Following the oversubscribed capital raise in March 2017, Greenbay had
a loan-to-value ratio of 6,5% at the interim period end. With the increased
direct property exposure, the board's policy is not to exceed a loan-to-value
ratio of 45%.
Sectoral profile based on fair value of assets
Listed real estate: 44,0%
Listed infrastructure: 43,8%
Direct property: 12,2%
Geographical profile based on fair value of assets
USA: 51,1%
Europe: 30,9%
Canada: 6,4%
UK: 4,9%
Australia: 4,5%
Singapore: 2,2%
The following table indicates the top ten investments by fair value as
at March 2017:
Fair
value
as at
Mar 2017
Investment Sector Jurisdiction (GBP '000)
Planet Koper Direct property Europe 48 140
Unibail-Rodamco SE Listed real estate Europe 25 326
Simon Property Group Inc Listed real estate USA 18 505
Enterprise Products
Partners Listed infrastructure USA 16 935
MPLX LP Listed infrastructure USA 15 381
Nextera Energy Inc Listed infrastructure USA 15 343
Welltower Inc Listed real estate USA 14 728
EQT Midstream Partners LP Listed infrastructure USA 13 060
Enagas SA Listed infrastructure Europe 12 397
Tivoli Projekt Direct property Europe 11 580
Direct property
Greenbay has acquired 50% of the holding company of Forum Coimbra and Forum
Viseu, two retail centres in Portugal, for EUR109,625 million. This represents
a yield of approximately 6%. Greenbay sourced and concluded the transaction
and brought Resilient REIT Limited ("Resilient") in as a 50% partner due to
the size of the investment, to access the retail and development expertise
of Resilient for the centres acquired and in order to be positioned to
access further development opportunities in Portugal. The transaction is
expected to be finalised by the end of May 2017.
Forum Coimbra in the city of Coimbra is the dominant regional centre in the
Centro Region of Portugal. This 51 489m2 GLA centre provides a comprehensive
retail and entertainment offering and is fully let to 146 major international
and national tenants including Primark, H&M, C&A, and eight Inditex brands
including Zara, Massimo Dutti and Lefties. The centre's entertainment offering
includes a six-screen cinema, tenpin bowling and a large food court. The
17 700m2 hypermarket, Continente, included in the total GLA is separately
owned. The three-year compound annual growth in turnover was 4,9% and tenant
demand exists for an extension that will be further evaluated in due course.
Forum Viseu is in the city centre of Viseu. This 18 705m2 GLA shopping centre
is let to forty-eight major international and national tenants including Pingo
Doce, Sacoor, Cinema Nos and Inditex brands Zara, Massimo Dutti, Bershka, Pull
& Bear, Lefties, Stradivarius and Oysho. The three-year compound annual growth
in turnover was 4,4%. Forum Viseu's immediate catchment area is approximately
100 000 people.
Portugal's economic outlook is improving with a commitment to fiscal reform.
The budget deficit is at a forty-year low, the economy has been growing for
thirteen straight quarters and unemployment fell below double digits in
March 2017. National retail sales grew by 4,7% year-on-year underpinned by
improving consumer and business confidence. However, risks do remain around
elevated levels of public and corporate sector debt.
Planet Koper in Koper, Slovenia continues to trade well with growth in retail
sales and footfall. Reconfiguration of the mall to introduce new international
brands is scheduled to commence before year end. Plans were submitted for
the Tivoli Projekt d.o.o. in Ljubljana, Slovenia for approval.
Greenbay is currently evaluating further direct property acquisitions
in Europe.
Listed investments
The listed portfolio is well diversified across the real estate and
infrastructure sectors.
Greenbay's strategy of investing in the infrastructure sector has been
successful. The sector is characterised by merger and acquisition activity.
A number of holdings in the portfolio were acquired by larger competitors at
significant premiums. The majority of the infrastructure securities invested
in met or exceeded their guidance and market expectations.
The company remains opportunistic and divested from counters where the
share prices had run ahead of assessed intrinsic values of the underlying
businesses. New investments were made which were considered to have better
growth prospects.
Facilities and interest rate derivatives
A five-year facility of EUR104,5 million at 3-month Euribor plus 2,15% has
been secured against the Portuguese assets. The interest rate on this
facility will be hedged on drawdown.
The company has a EUR27,5 million facility at 2,75% over Euribor secured
against Planet Koper that expires in December 2026. A five-year interest
rate cap at 0,0% was acquired that expires in January 2022.
Summary of financial performance
Mar 2017 Sep 2016 Mar 2016
Dividend per share (GBP pence) 0,20 0,0999 -
Shares in issue 6 302 299 068 4 920 833 333 25 000 000
Net asset value per share
(GBP pence) 7,35 6,76 4,80
Loan-to-value ratio* (%) 6,5 - 18,1
*The loan-to-value ratio is calculated by dividing interest-bearing borrowings
adjusted for cash on hand by the total of investments in property, listed
securities and loans advanced. The calculation furthermore includes the
equity derivative positions on a gross basis.
Outlook
The board is confident that a dividend of approximately 0,236 EUR cents per
share for the second half of the financial year will be declared. This,
together with the interim dividend of 0,20 GBP pence per share, is in line
with the guidance previously provided of 0,40 GBP pence per share for the
2017 financial year. Greenbay expects a further 25% growth in dividends for
the year ending September 2018.
This forecast statement and the forecasts underlying such statement are the
responsibility of the board and have not been reviewed or reported on by
the company's external auditors. The forecast is based on the assumptions
that a stable global macro-economic environment will prevail and no failures
of listed real estate or infrastructure companies will occur.
By order of the board
Intercontinental Trust Limited
Company secretary
Mauritius - 12 May 2017
Consolidated statement of financial position
Unaudited Audited Unaudited
Mar 2017 Sep 2016 Mar 2016
GBP GBP GBP
Assets
Non-current assets 62 590 227 65 550 167 1 574 322
Investment property 48 138 970 49 150 653 1 175 000
Straight-lining of
rental revenue
adjustment 949 1 281 -
Greenbay management
incentive loans 891 593 2 208 060 -
Investments 1 979 154 2 681 076 399 322
Investment property
under development 11 579 561 11 509 097 -
Current assets 426 040 919 268 535 063 559 939
Equity derivative margin 154 473 240 74 679 340 -
Trade and other receivables 7 488 724 6 525 350 28 215
Cash and cash equivalents 264 078 955 187 330 373 531 724
Total assets 488 631 146 334 085 230 2 134 261
Equity and liabilities
Total equity attributable
to equity holders 463 220 583 332 493 118 1 200 961
Stated capital 428 076 161 297 973 130 1 562 410
Non-distributable reserve 12 819 240 17 590 747 (405 733)
Currency translation reserve (481) 2 695 -
Retained earnings 22 325 663 16 926 546 44 284
Total liabilities 25 410 563 1 592 112 933 300
Non-current liabilities 21 931 414 - 771 271
Interest-bearing borrowings 21 931 414 - 771 271
Current liabilities 3 479 149 1 592 112 162 029
Interest-bearing borrowings 1 166 712 - 46 000
Trade and other payables 1 944 576 1 477 809 116 029
Income tax payable 367 861 114 303 -
Total equity and liabilities 488 631 146 334 085 230 2 134 261
Total number of shares
in issue 6 302 299 068 4 920 833 333 25 000 000
Net asset value per
share (GBP pence) 7,35 6,76 4,80
Consolidated statement of comprehensive income
Unaudited Unaudited Unaudited Unaudited
for the for the for the for the
six months six months three months three months
ended ended ended ended
Mar 2017 Mar 2016 Mar 2017 Mar 2016
GBP GBP GBP GBP
Income statement
Net rental and related
revenue 1 990 642 41 238 986 253 20 608
Recoveries and
contractual rental
revenue 2 577 236 69 377 1 279 755 22 577
Straight-lining of rental
revenue adjustment 962 - (302) -
Rental revenue 2 578 198 69 377 1 279 453 22 577
Property operating
expenses (587 556) (28 139) (293 200) (1 969)
Income from equity
derivatives 9 484 868 - 5 620 385 -
Income from investments 31 463 - 31 463 -
Fair value (loss)/gain on
investment property,
investments and equity
derivatives (833 839) - 7 653 125 -
Adjustment resulting from
straight-lining
of rental revenue (962) - 302 -
Fair value gain on
investments 263 777 - 27 774 -
Fair value (loss)/gain
on equity derivatives (1 096 654) - 7 625 049 -
Operating expenses (663 595) (304 959) (391 157) (42 734)
Foreign exchange loss (4 771 507) (74 711) (4 958 706) (78 284)
Operating profit/(loss 5 238 032 (338 432) 8 941 363 (100 410
Net finance income/(costs) 740 456 (18 091) 438 487 (8 841)
Finance income 969 873 5 970 621 164 2 993
Interest on Greenbay
management incentive loan 35 483 - 10 869 -
Interest received 934 390 5 970 610 295 2 993
Finance costs (229 417) (23 989) (182 677) (11 834)
Interest on borrowings (229 417) (23 989) (182 677) (11 834)
Profit/(loss) before
income tax 5 978 488 (356 451) 9 379 850 (109 251)
Income tax (434 966) - (260 472) -
Profit/(loss) for the
period attributable
to equity holders
of the company 5 543 522 (356 451) 9 119 378 (109 251)
Other comprehensive
(loss)/income net of tax
Items that may subsequently
be reclassified to profit
or loss
Exchange differences on
translation of foreign
operations (3 176) - 7 082 -
Listed security investments
fair value adjustment - (93 702) - (59 238)
(3 176) (93 702) 7 082 (59 238)
Total comprehensive
income/(loss)for the
period attributable to
equity holders of the
company 5 540 346 (450 153) 9 126 460 (168 489)
Basic earnings per share
(GBP pence) 0,11 (1,62) 0,18 (0,44)
Consolidated statement of cash flows
Unaudited Unaudited
for the for the
six months six months
ended ended
Mar 2017 Mar 2016
GBP GBP
Operating activities
Cash generated from/(utilised in) operations 6 586 317 (336 847)
Interest received 934 390 5 970
Interest on borrowings (229 417) (23 989)
Income tax paid (181 408) -
Dividends paid (238 120) -
Cash inflow/(outflow) from operating
activities 6 871 762 (354 866)
Investing activities
Greenbay management incentive loans settled 1 351 950 -
Proceeds on disposal of listed security
investments 965 699 -
Development of investment property (70 464) -
Cash flow on equity derivatives (80 893 730) -
Cash outflow from investing activities (78 646 545) -
Financing activities
Increase/(decrease) in interest-bearing
borrowings 23 098 126 (21 428)
Raising of equity capital 125 425 239 633 116
Cash inflow from financing activities 148 523 365 611 688
Increase in cash and cash equivalents 76 748 582 256 822
Cash and cash equivalents at beginning
of the period 187 330 373 274 902
Cash and cash equivalents at end of
the period 264 078 955 531 724
Cash and cash equivalents consist of:
Current accounts 264 078 955 531 724
Consolidated statement of changes in equity
Non- Currency
distri- trans-
Stated butable lation Retained Total
capital reserve reserve earnings equity
GBP GBP GBP GBP GBP
Balance at Sep 2015 882 457 22 215 - 66 489 971 161
Issue of shares
- 9 765 210 shares
on 27 Nov 2015 679 953 679 953
Listed security
investments fair
value adjustment (93 702) (93 702)
Loss for the period (356 451) (356 451)
Transfer to non-
distributable
reserves (334 246) 334 246 -
Balance at
Mar 2016 1 562 410 (405 733) - 44 284 1 200 961
Issue of shares:
- 3 333 333 333
shares on
8 Jun 2016 173 089 006 173 089 006
- 1 562 500 000
shares on
29 Sep 2016 123 321 714 123 321 714
Exchange
differences
on translation
of foreign
operations 2 695 2 695
Listed security
investments fair
value adjustment 93 702 93 702
Profit for the period 34 785 040 34 785 040
Transfer to non-
distributable reserve 17 924 993 (17 924 993) -
Other comprehensive
income realised
through profit
or loss (22 215) 22 215 -
Balance at
Sep 2016 297 973 130 17 590 747 2 695 16 926 546 332 493 118
Issue of shares:
- 1 324 503 311
shares on
27 Mar 2017 125 425 239 125 425 239
Exchange
differences on
translation of
foreign operations (3 176) (3 176)
Profit for
the period 5 543 522 5 543 522
Dividend paid 4 677 792 (4 915 912) (238 120)
- scrip issue
- 56 962 424 shares 4 677 792 (4 677 792) -
- cash (238 120) (238 120)
Tranfer from non-
distributable
reserves (4 771 507) 4 771 507 -
Balance at
Mar 2017 428 076 161 12 819 240 (481) 22 325 663 463 220 583
Notes
1. Preparation and accounting policies
The condensed unaudited consolidated interim financial statements for the three
and six months ended 31 March 2017 ("financial statements") have been prepared
in accordance with the measurement and recognition requirements of IFRS, the
requirements of IAS 34: Interim Financial Reporting, the JSE Listings
Requirements, the SEM Listing Rules and the Securities Act of Mauritius 2005.
The company is required to publish financial results for the three and six
months ended 31 March 2017 in terms of Listing Rule 12.19 of the SEM.
Accordingly, this announcement presents the financial results of the group
in respect of the period from 1 January 2017 to 31 March 2017 as well as
the comparative results.
The accounting policies which have been applied are consistent with those
used in the preparation of the audited financial statements for the year
ended 30 September 2016.
This report was compiled under the supervision of Paul May CA(SA), the
chief financial officer.
The financial statements have not been reviewed or reported on by the
group's external auditors.
These financial statements were approved by the board on 11 May 2017.
This communique is issued pursuant to SEM Listing Rules 11.3 and 12.20
and section 88 of the Securities Act of Mauritius 2005. The board accepts
full responsibility for the accuracy of the information contained in these
financial statements. The directors are not aware of any matters or
circumstances arising subsequent to 31 March 2017 that require any additional
disclosure or adjustment to the financial statements.
Copies of the financial statements and the statement of direct and indirect
interests of each officer of the company, pursuant to rule 8(2)(m) of the
Securities (Disclosure Obligations of Reporting Issuers) Rules 2007, are
available free of charge, upon request at Greenbay's registered address.
Contact person: Ms Smitha Algoo.
2. Equity derivative positions
Greenbay utilises equity derivatives to obtain exposure to listed real estate
and infrastructure securities. The equity derivative margin of GBP154 473 240
(Sep 2016: GBP74 679 340) included in current assets provided the group
with exposure to investments of GBP427 477 210 at March 2017 (Sep 2016:
GBP260 520 579). The fair value loss on equity derivatives of GBP1 096 654
(Sep 2016: GBP13 012 925 gain) includes interest of GBP2 157 835
(Sep 2016: GBP697 373) on the implied interest-bearing borrowings of
GBP273 003 970 (Sep 2016: GBP185 841 239).
3. Segmental analysis
Unaudited Audited Unaudited
Mar 2017 Sep 2016 Mar 2016
GBP GBP GBP
Total assets
UK 121 924 142 202 111 466 1 871 010
USA 108 601 906 59 419 479 -
Canada 557 125 794 609 -
Singapore 595 470 86 846 -
Europe 254 241 349 66 176 192 -
Australia 947 465 (90 863) -
Corporate 1 763 689 5 587 501 263 251
488 631 146 334 085 230 2 134 261
Unaudited Unaudited
for the for the
six months six months
ended ended
Mar 2017 Mar 2016
Profit/(loss) for the period GBP GBP
UK (572 648) 40 088
USA 7 994 895 -
Canada 544 295 -
Singapore (197 367) -
Europe 1 057 049 -
Australia 2 022 229 -
Corporate (5 304 931) (396 539)
5 543 522 (356 451)
Reconciliation of profit/(loss) for the period to headline earnings
Unaudited Unaudited
for the for the
six months six months
ended ended
Mar 2017 Mar 2016
GBP GBP
Basic earnings - profit/(loss) for the period 5 543 522 (356 451)
Headline earnings 5 543 522 (356 451)
Weighted average shares in issue 4 993 526 508 21 958 377
Headline earnings per share (GBP pence) 0,11 (1,62)
Greenbay has no dilutionary instruments in issue.
Reconciliation of profit for the period to dividend declared
Unaudited
for the
six months
ended
Mar 2017
GBP
Profit for the period 5 543 522
Foreign exchange loss 4 771 507
Fair value loss on equity derivatives 1 096 654
Fair value gain on investments (263 777)
Interest on equity derivatives (2 157 835)
Dividends accrued 1 167 522
Antecedent dividend 2 701 571
Distributable earnings for the period 12 859 164
Interim dividend declared (12 604 598)
Distributable earnings retained 254 566
Directors Terry Warren (chairman); Stephen Delport (CEO)*; Paul May*;
Jan Wandrag*; Karen Bodenstein; Teddy Lo Seen Chong; Ronnie Porter;
Mark Olivier (*executive director)
There have been no changes to the board during the period.
Company secretary Intercontinental Trust Limited
Registered address c/o Intercontinental Trust Limited, Level 3,
Alexander House, 35 Cybercity, Ebene, 72201, Mauritius
Transfer secretary in South Africa Link Market Services South Africa
Proprietary Limited
JSE sponsor Java Capital
SEM authorised representative and sponsor Perigeum Capital Limited
Date: 12/05/2017 08:27:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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