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Summarised audited financial statements for the fifteen months ended 30 June 2013
ROCKCASTLE GLOBAL REAL ESTATE COMPANY LIMITED
Incorporated in the Republic of Mauritius
Reg no 108869 CI/GBL ISIN MU0364N00003
Primary listing SEM
SEM code Rock.N0000
Secondary listing JSE
JSE code ROC
(“Rockcastle” or “the Company”)
SUMMARISED AUDITED FINANCIAL STATEMENTS
FOR THE FIFTEEN MONTHS ENDED 30 JUNE 2013
DIRECTORS’ COMMENTARY
STRUCTURE AND LISTING OF ROCKCASTLE
Rockcastle was incorporated on 30 March 2012 in Mauritius as a Category
One Global Business License Company with the primary objective of
investing globally in listed real estate assets and direct property in
developed and developing markets. Rockcastle has been listed on the Stock
Exchange of Mauritius Limited (“SEM”) since 5 June 2012 and also listed on
the Alternative Exchange of the Johannesburg Stock Exchange on 26 July
2012. During the fifteen month period since incorporation, the Company has
successfully raised USD 409,8 million of capital through the issue of
350 million shares.
DISTRIBUTABLE EARNINGS
The Company’s portfolio performed in line with guidance and achieved an
annualised yield of 7,9% based on the initial listing price of USD 1,00
per share. The Board has proposed a distribution of 4,00 USD cents per
share for the six months ended June 2013. This distribution will require
approval by shareholders at the Special General Meeting on 13 September
2013. The distribution per share paid for the period ended 31 December
2012 was 4,56 USD cents, accordingly the cumulative distribution for the
15 month period ended June 2013 will be 8,56 USD cents per share.
COMMENTARY
Rockcastle invested in the developed markets of the USA, UK, Canada,
Europe, Singapore, Hong Kong and Australia. The investments were made
through a combination of direct holdings in shares or, where there were
significant gearing and withholding tax benefits, through equity
derivative instruments. Gearing, which is earnings enhancing, has been
employed since listing. Rockcastle’s gearing ratio (defined as total
interest-bearing borrowings divided by the total assets) was 42,4% as at
June 2013.
Rockcastle focused on investments in quality Real Estate Investment Trusts
(“REITs”) offering growth in distributions with well-covered pay out
ratios. In addition, to ensure that the yield target was achieved, the
portfolio included investments in mortgage REITs. The holding of mortgage
REITs comprised 7,0% of the market value of the portfolio at the financial
year end and has since been reduced to 3,5% of the portfolio’s market
value. The portfolio remains well diversified by property type and
jurisdiction. The portfolio is focused on retail properties which
constituted 59,7% of investments at 30 June 2013.
Geographical spread by market value
USA 36,0%
Canada 13,0%
Europe 19,7%
UK 8,4%
Singapore 10,6%
Hong Kong 4,8%
Australia 7,5%
Sectoral spread by market value
Office 4,7%
Retail 59,7%
Industrial 4,5%
Healthcare 3,6%
Hotel 3,6%
Residential 5,5%
Mortgage 7,0%
Other/Diversified 11,4%
The following table indicates the Company’s top 10 investment holdings by
market value as at 30 June 2013:
Market value
June 2013
Name Sector Jurisdiction USD million
Unibail Rodamco Retail Europe 50,0
Simon Property Retail USA 48,2
CapitaMall Trust Retail Singapore 44,0
Avalonbay Communities Residential USA 37,8
The Link REIT Retail Hong Kong 33,4
Hammerson Retail UK 29,7
Ascendas REIT Industrial Singapore 28,9
British Land Other/Diversified UK 28,4
Corio Retail Europe 28,0
Riocan REIT Retail Canada 27,6
In line with Rockcastle’s strategy of acquiring direct property assets,
the Board has agreed to acquire a 50% interest in Kafubu Mall on
completion. This 12 500m2 retail property is located in Ndola, Zambia and
is anchored by Checkers and includes Foschini, Mr Price, Truworths and a
number of other South African retailers. The developer will retain a 50%
interest in the development and will also provide property management
services. The Kafubu Mall is scheduled to open in April 2014.
Rockcastle has in principle agreed to acquire interests in two further
retail developments in Zambia, details of which will be announced once the
agreements have been finalised.
CAPITAL STRUCTURE
In addition to equity raisings, the Company has obtained debt funding from
Morgan Stanley and Bank of America Merrill Lynch. Subsequent to the
financial year end, interest rate risk has been hedged by way of interest
rate swaps. To further provide a capital and interest rate hedge, the
Company has utilised bond shorts totalling USD 67 million for periods of
between four and ten years. Bond shorts also provide gearing and the
position has increased to USD 141 million after June 2013. The Company has
not hedged its currency positions.
OUTLOOK
The Company is actively pursuing additional direct property acquisitions
in Africa in partnership with established South African property
developers.
Rockcastle has negotiated lower spreads on its facilities due to its
increased size. In addition, Rockcastle has increased focus on assets
which are expected to achieve long-term growth in distributions.
Annualised distributions are forecast to increase by approximately 5% for
the 2014 financial year.
The aforegoing 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 macro-economic environment will prevail
and that no major currency fluctuations or failures of listed REITs will
occur.
By order of the Board
Intercontinental Trust Limited
Company Secretary
14 August 2013
STATEMENT OF FINANCIAL POSITION
Audited
June 2013
USD
ASSETS
Non-current assets 693 644 844
Listed security investments 689 257 356
Rockcastle Management Incentive Scheme loans 4 387 488
Current assets 3 321 011
Investment income receivable 3 126 104
Cash and cash equivalents 194 907
Total assets 696 965 855
EQUITY AND LIABILITIES
Total equity attributable to equity holders 401 361 060
Stated capital 409 771 358
Retained loss (8 410 298)
Total liabilities 295 604 795
Non-current liabilities 66 970 123
Interest-bearing borrowings 66 970 123
Current liabilities 228 634 672
Trade and other payables 51 444
Income tax payable 198 352
Interest-bearing borrowings 228 384 876
Total equity and liabilities 696 965 855
STATEMENT OF COMPREHENSIVE INCOME
Audited
for the 15 months
ended June 2013
USD
Dividends received from listed security investments 17 736 162
Fair value loss on listed security investments (11 055 611)
Foreign exchange loss (8 102 911)
Administrative expenses (552 532)
Listing costs (524 562)
Loss before net finance income (2 499 454)
Net finance income 671 508
Finance income 2 637 481
Interest on Rockcastle Management Incentive Scheme loans 21 565
Fair value gain on bond shorts 2 615 916
Finance costs (1 965 973)
Interest on borrowings (1 965 973)
Loss before income tax expense (1 827 946)
Income tax expense (198 352)
Loss for the period attributable to equity holders (2 026 298)
Total comprehensive loss for the period (2 026 298)
Total shares in issue 350 000 000
Net asset value per share (USD) 1,15
Weighted average number of shares in issue 113 956 558
Basic loss per share (USD cents)* (1,78)
Headline loss per share (USD cents)* (1,78)
*The Company has no dilutionary instruments in issue.
RECONCILIATION OF LOSS FOR THE PERIOD TO HEADLINE LOSS AND DISTRIBUTABLE
EARNINGS
Unaudited
for the 15 months
ended June 2013
USD
Loss for the period attributable to equity holders (2 026 298)
Basic and headline loss for the period^ (2 026 298)
Foreign exchange loss 8 102 911
Fair value gain on bond shorts (2 615 916)
Fair value loss on listed security investments 11 055 611
Dividends received from listed security investments (17 736 162)
Accrued income from listed security investments 15 453 098
Adjustment to taxation for accrued income 95 292
Shares issued cum distribution 8 996 242
Listing costs 524 562
Distributable earnings for the period 21 849 340
Less: (20 384 000)
Interim distribution declared (6 384 000)
Final distribution proposed (14 000 000)
Earnings not distributed 1 465 340
Distributable earnings per share (USD cents) 8,98
Less (per share USD cents): (8,56)
Interim distribution per share declared (USD cents)* (4,56)
Final distribution per share proposed (USD cents) (4,00)
Earnings per share not distributed (USD cents) 0,42
*Based on 140 000 000 shares in issue at 31 December 2012.
^There are no reconciling items between basic and headline loss for the
period.
SUMMARISED STATEMENT OF CASH FLOWS
Audited
for the 15 months
ended June 2013
USD
Cash inflow from operating activities 5 256 000
Cash outflow from investing activities (712 803 366)
Cash inflow from financing activities 707 742 273
Net increase in cash and cash equivalents 194 907
Cash and cash equivalents at the beginning of the period –
Cash and cash equivalents at the end of the period 194 907
STATEMENT OF CHANGES IN EQUITY
Stated Retained
capital loss Total
Audited USD USD USD
Balance at 30 March 2012* – – –
Transactions with equity holders 409 771 358 (6 384 000) 403 387 358
– Issue of 1 000 shares on
30 March 2012 1 000 1 000
– Issue of 6 200 000 shares on
5 June 2012 6 200 000 6 200 000
– Issue of 10 000 000 shares on
26 July 2012 9 916 450 9 916 450
– Issue of 101 799 000 shares on
24 August 2012 104 852 970 104 852 970
– Issue of 22 000 000 shares on
6 December 2012 23 859 859 23 859 859
– Issue of 80 000 000 shares on
11 March 2013 95 972 819 95 972 819
– Issue of 130 000 000 shares on
20 June 2013 168 968 260 168 968 260
– Dividend declared (interim) (6 384 000) (6 384 000)
Total comprehensive loss for
the period (2 026 298) (2 026 298)
Balance at 30 June 2013 409 771 358 (8 410 298) 401 361 060
NOTES
1 PREPARATION, ACCOUNTING POLICIES AND AUDIT OPINION
The summarised audited financial statements for the fifteen months ended
30 June 2013 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,
the Mauritian Securities Act 2005, and the requirements of the Mauritian
Companies Act 2001.
The Company is required to publish financial results for the fifteen
months ended 30 June 2013 in terms of the Listing Rule 12.14 of the SEM.
This report was compiled under the supervision of Stephen Delport, the
financial director.
This communiqué is issued pursuant to SEM Listing Rule 12.14 and section
88 of the Mauritian Securities Act 2005. The Board accepts full
responsibility for the accuracy of the information contained in these
summarised audited financial statements. The Directors are not aware of
any matters or circumstances arising subsequent to the period ended 30
June 2013 that require any additional disclosure or adjustment to the
summarised audited financial statements. Comparative information is not
included as this is the first period of Rockcastle’s operations.
These summarised audited financial statements were approved by the Board
on 14 August 2013.
BDO & Co Ltd have issued their unmodified audit opinion on the financial
statements for the fifteen months ended 30 June 2013. These summarised
financial statements have been derived from the Company financial
statements and are, in all material respects, consistent with the Company
financial statements. A copy of their audit report is available for
inspection at Rockcastle’s registered office.
Copies of the summarised audited financial statements and the Statement of
direct and indirect interests of each senior officer of the Company,
pursuant to rule 7(d) of the Securities (Disclosure Obligations of
Reporting Issuers) Rules of Mauritius 2007, are available free of charge,
upon request at the Registered Office of the Company at Level 3, Alexander
House, 35 Cybercity, Ebene, Mauritius.
Contact person: Mr Kesaven Moothoosamy
2 SEGMENTAL ANALYSIS
Audited
June 2013
USD
Net assets
Australia 52 823 234
Canada 90 125 017
Europe 135 868 935
Hong Kong 33 866 673
Singapore 72 900 220
UK 58 106 445
USA 248 887 843
Corporate 4 387 488
Total 696 965 855
Audited
for the 15 months
ended June 2013
USD
Loss before income tax expense
Australia 3 991 640
Canada (3 608 808)
Europe 2 214 882
Hong Kong 327 965
Singapore (855 967)
UK 1 217 106
USA 4 043 676
Corporate and foreign exchange loss (9 158 440)
Total (1 827 946)
3 FINAL DISTRIBUTION DETAILS
The Board has proposed a final distribution of 4,00 USD cents per share,
being number 2 for Rockcastle, in respect of the period from
1 January 2013 to 30 June 2013. This distribution requires approval by
shareholders at the Special General Meeting on 13 September 2013. Further
details and salient dates pertaining to the final distribution will be
published in due course.
Directors
Mark Olivier (chairman), Craig Hallowes*, Stephen Delport*, Andries de
Lange, Rory Kirk, Alexandru Morar, Yan Ng, Guilleaume Pretorius*
(*executive director)
Company secretary
Intercontinental Trust Limited
Registered address
Level 3, Alexander House, 35 Cybercity, Ebene, Mauritius
Transfer secretaries
Link Market Services South Africa Proprietary Limited
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein, 2001
JSE sponsor
Java Capital
SEM sponsor
Capital Market Brokers Limited
14 August 2013
Date: 14/08/2013 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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