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Unaudited condensed consolidated financial results for the nine months ended 30 September 2014
NEW EUROPE PROPERTY INVESTMENTS PLC
(Incorporated and registered in the Isle of Man with registered number 001211V)
(Registered as an external company with limited liability under the laws of South Africa,
Registration number 2009/000025/10)
AIM share code: NEPI JSE share code: NEP BVB share code: NEP
ISIN: IM00B23XCH02
(‘NEPI’, ‘the Group’ or ‘the Company’)
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE NINE MONTHS ENDED 30
SEPTEMBER 2014
The Company is required to publish financial results for the nine months ended 30 September 2014 in terms of the rules of the
Romanian Financial Supervisory Authority (‘RFSA’) and the Rule Book of the Bucharest Stock Exchange (‘BVB’). Accordingly,
this announcement presents the unaudited condensed consolidated financial results of the Group in respect of the financial period
from 1 January 2014 to 30 September 2014 in a form compliant with the requirements of the RFSA and the BVB.
All amounts in € ‘000 unless otherwise stated
CONSOLIDATED STATEMENTS OF INCOME
Pro forma
Pro forma Unaudited Pro forma IFRS IFRS IFRS
Unaudited Unaudited Unaudited Audited Unaudited
30 Sep 31 Dec 30 Sep 30 Sep 31 Dec 30 Sep
2014 2013 2013 2014 2013 2013
Net rental and related income 45 873 45 188 30 918 42 935 41 420 27 997
- Contractual rental income and expense recoveries 64 510 60 927 41 869 60 052 55 322 37 628
- Property operating expenses (18 637) (15 739) (10 951) (17 117) (13 902) (9 631)
Administrative expenses (1 928) (2 452) (1 536) (1 897) (2 180) (1 338)
Acquisition fees (826) (4 986) (2 349) (826) (4 986) (2 349)
Fair value adjustment of investment property – 19 913 – – 19 787 –
Fair value gains of financial investments at fair value
through profit or loss 2 307 970 660 2 307 970 660
Net result on sale of financial investments – 586 586 – 586 586
Dividends received from financial investments 2 417 2 906 1 940 2 417 2 906 1 940
Share-based payment expense (665) (955) (972) (665) (955) (972)
Foreign exchange loss (59) (290) (412) (72) (238) (426)
Gain on acquisition of subsidiaries 1 400 5 547 5 547 1 400 5 547 5 547
Gain on disposal of investment property held for sale – 527 527 – 527 527
Impairment of goodwill – (816) – – (816) –
Profit before net finance (expense)/income 48 519 66 138 34 909 45 599 62 568 32 172
Net finance (expense)/income (4 422) (1 816) (732) (168) 1 784 1 680
- Finance income 2 456 5 300 4 979 5 283 7 514 6 335
- Finance expense (6 878) (7 116) (5 711) (5 451) (5 730) (4 655)
Share of (loss)/profit of joint ventures – – – (1 447) 1 241 261
Profit before tax 44 097 64 322 34 177 43 984 65 593 34 113
Deferred tax (expense)/income (1 840) (7 736) 1 767 (1 727) (9 007) 1 831
Profit after tax 42 257 56 586 35 944 42 257 56 586 35 944
Non-controlling interest 3 097 878 – 3 097 878 –
Profit for the period attributable to equity holders 45 354 57 464 35 944 45 354 57 464 35 944
214 793 163 836 153 884 214 793 163 836 153 884
Weighted average number of shares in issue 968 991 459 968 991 459
219 392 168 827 158 968 219 392 168 827 158 968
Diluted weighted average number of shares in issue 598 400 751 598 400 751
Basic weighted average earnings per share (euro cents) 21.12 35.07 24.05 21.12 35.07 24.05
Diluted weighted average earnings per share (euro
cents) 20.67 34.04 23.08 20.67 34.04 23.08
Distributable earnings per share (euro cents) 21.63 25.79 19.53 21.63 25.79 19.53
Headline earnings per share (euro cents) 20.46 21.58 20.11 20.46 21.58 20.11
Diluted headline earnings per share (euro cents) 20.03 20.94 19.46 20.03 20.94 19.46
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Pro forma Pro forma Pro forma IFRS IFRS
Unaudited Unaudited Unaudited Unaudited Audited IFRS
30 Sep 31 Dec 30 Sep 30 Sep 31 Dec Unaudited
2014 2013 2013 2014 2013 30 Sep 2013
ASSETS
Non-current assets 1 019 856 920 924 797 392 991 708 898 040 773 612
- Investment property 965 779 872 465 736 950 894 219 807 465 674 736
Investment property at fair value 794 355 758 623 609 636 726 396 703 811 555 052
Investment property under development 171 424 113 842 127 314 167 823 103 654 119 684
- Goodwill 16 218 16 218 28 933 16 218 16 218 28 933
- Investments in joint ventures – – – 4 046 5 055 4 075
- Long term loans granted to joint ventures – – – 39 368 37 064 34 362
- Other long-term assets 37 519 29 831 29 846 37 517 29 828 29 843
- Financial assets at fair value through profit or loss 340 2 410 1 663 340 2 410 1 663
Current assets 221 189 148 359 148 758 216 368 141 607 142 245
- Trade and other receivables 40 528 31 443 30 254 38 996 28 036 26 949
- Financial investments at fair value through profit or
loss 32 937 61 079 60 554 32 937 61 079 60 554
- Cash and cash equivalents 147 724 55 837 57 950 144 435 52 492 54 742
Investment property held for sale 35 018 1 561 1 076 35 018 1 561 1 076
Total assets 1 276 063 1 070 844 947 226 1 243 094 1 041 208 916 933
EQUITY AND LIABILITIES
Equity attributable to equity holders 944 155 712 236 641 761 944 155 712 236 641 761
- Share capital 2 306 1 947 1 855 2 306 1 947 1 855
- Share premium 797 975 611 949 561 762 797 975 611 949 561 762
- Share-based payment reserve 31 876 23 852 24 297 31 876 23 852 24 297
- Currency translation reserve (1 229) (1 229) (1 229) (1 229) (1 229) (1 229)
- Accumulated profit 117 202 76 595 55 076 117 202 76 595 55 076
- Non-controlling interest (3 975) (878) – (3 975) (878) –
Total liabilities 331 908 358 608 305 465 298 939 328 972 275 172
Non-current liabilities 255 193 244 542 198 416 237 364 232 260 172 037
- Loans and borrowings 190 326 185 624 156 628 173 718 173 568 131 825
- Deferred tax liabilities 52 001 50 160 35 323 52 405 50 678 34 505
- Other long-term liabilities 7 386 4 059 1 609 7 115 4 059 1 609
- Financial liabilities at fair value through profit or
loss 5 480 4 699 4 856 4 126 3 955 4 098
Current liabilities 76 715 114 066 107 049 61 575 96 712 103 135
- Trade and other payables 38 118 29 974 28 899 36 631 28 807 28 044
- Loans and borrowings 36 839 80 512 74 855 23 190 64 466 71 903
- Tenant deposits 1 758 3 580 3 295 1 754 3 439 3 188
Total equity and liabilities 1 276 063 1 070 844 947 226 1 243 094 1 041 208 916 933
Intercapital Invest SA, Razvan Pasol: +40 21 222 8731
RECONCILIATION OF PROFIT FOR THE PERIOD TO DISTRIBUTABLE EARNINGS
Pro forma Pro forma Pro forma IFRS IFRS IFRS
Unaudited Unaudited Unaudited Unaudited Audited Unaudited
30 Sep 31 Dec 30 Sep 30 Sep 31 Dec 30 Sep
2014 2013 2013 2014 2013 2013
Profit for the period attributable to equity holders 45 354 57 464 35 944 45 354 57 464 35 944
- Unrealised foreign exchange loss 37 256 220 37 256 219
- Acquisition fees 826 4 986 2 349 826 4 986 2 349
- Share-based payment expense 665 955 972 665 955 972
- Accrued interest on share-based payments 425 563 424 425 563 424
- Fair value adjustments of investment property – (19 913) – – (19 787) –
- Fair value gains of financial investments at fair value
through profit or loss (2 307) (970) (660) (2 307) (970) (660)
- Fair value adjustment of financial assets and liabilities 2 850 (2 040) (2 635) 2 241 (1 157) (1 766)
- Amortisation of financial assets (550) (476) (306) (550) (476) (306)
- Net result on sale of financial investments – (586) (586) – (586) (586)
- Dividends received from financial investments (2 417) (2 906) (1 940) (2 417) (2 906) (1 940)
- Accrued dividend from financial investments 2 041 4 364 3 755 2 041 4 364 3 755
- Gain on disposal of investment property held for sale – (527) (527) – (527) (527)
- Gain on acquisition of subsidiaries (1 400) (5 547) (5 547) (1 400) (5 547) (5 547)
- Deferred tax expense/(income) 1 840 7 736 (1 767) 1 727 9 007 (1 831)
- Impairment of goodwill – 816 – – 816 –
- Shares issued cum distribution 2 445 3 577 2 497 2 445 3 577 2 497
Adjustments related to joint ventures
- Fair value adjustment of investment property – – – – (126) –
- Fair value adjustment of financial assets and liabilities – – – 609 (883) (869)
- Deferred tax expense/(income) – – – 113 (1 271) 64
- Unrealised foreign exhange loss – – – – – 1
Adjustments related to non-controlling interest
- Fair value adjustments of investment property – 1 – – 1 –
- Deferred tax income – (108) – – (108) –
- Acquisition fees – (275) – – (275) –
Distributable earnings for the period 49 809 47 370 32 193 49 809 47 370 32 193
Distribution from reserves 1 593 1 574 1 692 1 593 1 574 1 692
Less: distribution declared (33 475) (48 944) (20 595) (33 475) (48 944) (20 595)
- Interim distribution (33 475) (20 594) (20 595) (33 475) (20 594) (20 595)
- Final distribution – (28 350) – – (28 350) –
Earnings not distributed 17 927 – 13 290 17 927 – 13 290
240 161 204 544 195 523 240 161 204 544 195 523
Number of shares entitled to distribution 543 236 392 543 236 392
Distributable earnings per share (euro cents) 21.63 25.79 18.67 21.63 25.79 18.67
Distribution from reserves per share (euro cents) 0.71 1.00 1.06 0.71 1.00 1.06
Less: distribution declared per share (euro cents) (14.87) (26.79) (12.93) (14.87) (26.79) (12.93)
- Interim distribution per share (euro cents) (14.87) (12.93) (12.93) (14.87) (12.93) (12.93)
- Final distribution per share (euro cents) – (13.86) – – (13.86) –
Earnings per share not distributed (euro cents) 7.46 – 6.80 7.46 – 6.80
RECONCILIATION OF NET ASSET VALUE TO ADJUSTED NET ASSET VALUE
Pro forma Pro forma IFRS IFRS IFRS
Pro forma Unaudited Unaudited Unaudited Audited Unaudited
Unaudited 31 Dec 30 Sep 30 Sep 31 Dec 30 Sep
30 Sep 2014 2013 2013 2014 2013 2013
- Net asset value per the statement of financial position 944 155 712 236 641 761 944 155 712 236 641 761
- Loans in respect of the Initial Share Scheme 9 132 11 574 11 599 9 132 11 574 11 599
- Deferred tax liabilities 52 001 50 160 35 323 52 405 50 678 34 506
- Goodwill (16 218) (16 218) (28 933) (16 218) (16 218) (28 933)
- Deferred tax (asset)/liabilities for joint ventures – – – (404) (518) 817
Adjusted net asset value 989 070 757 752 659 750 989 070 757 752 659 750
Net asset value per share (euro) 3.99 3.56 3.36 3.99 3.56 3.36
Adjusted net asset value per share (euro) 4.12 3.70 3.37 4.12 3.70 3.37
199 836 190 804 236 549 199 836 190 804
Number of shares for net asset value per share purposes 236 549 491 882 302 491 882 302
Number of shares for adjusted net asset value per share 204 544 195 523 240 161 204 544 195 523
purposes 240 161 543 236 392 543 236 392
KEY PERFORMANCE INDICATORS
Pro forma IFRS Pro forma
Unaudited Unaudited Unaudited
30 Sep 2014 30 Sep 2014 30 Sep 2013
Current liquidity ratio 3.34 4.08 1.40
Gearing ratio (long term debt to equity) 20% 18% 24%
Tenant’s receivable turnover 5.31 days 4.96 days 15.46 days
Return on investment property 7.7% per annum 7.9% per annum 7% per annum
BASIS OF PREPARATION
These unaudited condensed consolidated financial results (the ‘IFRS Statements’) for the nine months ended 30 September 2014
have been prepared in accordance with the recognition and measurement criteria of the International Financial Reporting
Standards (‘IFRS’) and its interpretations adopted by the International Accounting Board (‘IASB’). The accounting policies which
have been applied are consistent with those used in the preparation of the annual financial statements for the year ended 31
December 2013.
As the Group is focusing on being consistent on those areas of reporting that are seen to be of most relevance to investors and on
providing a meaningful basis of comparison for users of the financial information, it has prepared an unaudited pro
forma statement of financial position and an unaudited pro forma statement of income (the ‘pro forma statements’). The main
difference between the pro forma statements and the IFRS statements is that the pro forma statements are prepared using the
proportionate consolidation method for the investments in joint ventures, while the IFRS statements use the equity method for
accounting for these investments (as a result of the adoption of IFRS 11 ‘Joint Arrangements’ effective 1 January 2013).
The unaudited pro forma statement of financial position and the unaudited pro forma statement of income have been prepared by
and are the responsibility of the directors of NEPI. Due to their nature, the unaudited pro forma statements of financial position
and income may not fairly reflect the financial position and results of the Group after the differences set out above.
The condensed consolidated financial results prepared in accordance with IFRS, the pro forma statement of financial position and
the pro forma statement of income have not been reviewed or reported on by the Group’s external auditors.
By order of the Board of Directors,
Martin Slabbert (Chief Executive Officer), Victor Semionov (Finance Director)
For further information please contact:
New Europe Property Investments plc
Martin Slabbert +40 74 432 8882
Nominated Adviser and Broker
Smith & Williamson Corporate Finance Limited
Azhic Basirov +44 20 7131 4000
JSE sponsor
Java Capital +27 11 283 0042
Romanian advisor
SSIF Intercapital Invest SA
Razvan Pasol +40 21 222 8731
14 November 2014
Date: 14/11/2014 05:44:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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