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NEW EUROPE PROPERTY INVESTMENTS PLC - Unaudited condensed consolidated financial results for the nine months ended 30 September 2013

Release Date: 14/11/2013 17:00
Code(s): NEP     PDF:  
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Unaudited condensed consolidated financial results for the nine months ended 30 September 2013

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” or “the Group” or “the Company”)



UNAUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE NINE MONTHS ENDED 30
SEPTEMBER 2013


The Company is required to publish financial results for the nine months ended 30 September 2013 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 2013 to 30 September 2013 in a form compliant with the requirements of the RFSA and the BVB.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
                                                 Pro forma     IFRS Reported    IFRS Reported           IFRS IFRS Restated IFRS Restated
                                                 Unaudited           Audited        Unaudited      Unaudited     Unaudited     Unaudited
                                               30 Sep 2013       31 Dec 2012      30 Sep 2012    30 Sep 2013   31 Dec 2012   30 Sep 2012
                                                         €                 €                €              €             €             €
ASSETS
Non-current assets                             797 392 182       444 666 197      446 150 035    773 611 559   418 853 914   429 573 598
  Investment property                          736 950 075       416 674 175      418 385 813    674 736 143   356 732 724   374 721 508
   Investment property at fair value           609 635 525       393 966 226      387 672 978    555 052 079   339 851 226   361 026 154
   Investment property under
                                               127 314 550        22 707 949       30 712 835    119 684 064    16 881 498    13 695 354
   development
  Goodwill                                      28 933 146        13 188 795       13 912 760     28 933 146    13 134 609    13 858 629
  Investments in joint ventures                         --                 –                –      4 074 706     3 546 212   (1 437 606)
  Long-term loans granted to joint
                                                        –-                 –                –     34 361 557    30 368 931    29 127 907
  ventures
  Other long-term assets                        29 845 532        14 727 635       13 703 706     29 842 578    14 995 846    13 155 404
  Financial assets at fair value
  through                                        1 663 429            75 592          147 756      1 663 429        75 592       147 756
  profit or loss


Current assets                                 148 758 457       185 176 059       98 168 464    142 245 362   176 894 494    90 149 031
  Trade and other receivables                   30 254 573        15 798 975       11 479 924     26 949 110     9 748 620     7 644 189
  Financial investments at fair
                                                60 554 270        81 865 443       54 850 042     60 554 270    81 865 443    54 850 042
  value through profit or loss
  Cash and cash equivalents                     57 949 614        87 511 641       31 838 498     54 741 982    85 280 431    27 654 800
Investment property held for sale                1 075 509        28 665 158                –      1 075 509    28 665 158            –
Total assets                                   947 226 148       658 507 414      544 318 499    916 932 430   624 413 566   519 722 629


EQUITY AND LIABILITIES
Equity attributable to equity
                                               641 760 646       393 622 378      318 322 499    641 760 646   393 622 378   318 322 499
holders

  Share capital                                  1 855 188         1 352 629        1 199 308      1 855 188     1 352 629     1 199 308
  Share premium                                561 761 838       355 026 520      293 287 953    561 761 838   355 026 520   293 287 953
  Share-based payment reserve                   24 296 603        15 491 810       13 946 514     24 296 603    15 491 810    13 946 514
  Currency translation reserve                 (1 228 783)       (1 228 783)          136 392    (1 228 783)   (1 228 783)       136 392
  Accumulated profit                            55 075 800        22 980 202        9 752 332     55 075 800    22 980 202     9 752 332


Total liabilities                              305 465 502       264 885 036       225 996 000   275 171 784   230 791 188   201 400 130

Non-current liabilities                        198 416 151       147 151 095       204 827 698   172 036 776   120 605 636   185 720 584
  Loans and borrowings                         156 627 887       117 100 152       178 712 888   131 824 679    92 935 525   161 518 487
  Deferred tax liabilities                      35 323 328        22 321 189        19 205 561    34 505 568    21 567 836    18 452 208
  Other long-term liabilities                    1 608 904                 –                –      1 608 904             –             –
  Financial liabilities at fair value
  through                                        4 856 032         7 729 754         6 909 249     4 097 625     6 102 275     5 749 889
  profit or loss


Current liabilities                            107 049 351       117 733 941        21 168 302   103 135 008   110 185 552    15 679 546
  Trade and other payables                      28 899 479        12 985 200         6 721 971    28 043 949     9 773 420     3 257 038
  Loans and borrowings                          74 854 458       102 048 042        11 709 194    71 902 831    97 781 406     9 728 738
  Tenant deposits                                3 295 414         2 700 699         2 737 137     3 188 228     2 630 726     2 693 770

Total equity and liabilities                   947 226 148       658 507 414       544 318 499   916 932 430   624 413 566   519 722 629

CONSOLIDATED STATEMENTS OF INCOME
                                                                                        IFRS                                              IFRS
                                                  Pro forma    IFRS Reported                             IFRS      IFRS Restated
                                                                                    Reported                                          Restated
                                                  Unaudited          Audited                        Unaudited          Unaudited
                                                                                   Unaudited                                         Unaudited
                                                30 Sep 2013      31 Dec 2012                       30 Sep 2013       31 Dec 2012
                                                                                 30 Sep 2012                                       30 Sep 2012
                                                          €                €               €                 €                 €             €
Net rental and related income                    30 918 059       30 432 771      22 252 206        27 997 207        28 344 410    20 907 479
  Contractual rental income and expense
                                                 41 869 346       40 176 801      28 813 628        37 628 001        37 312 436    26 970 868
  recoveries
  Property operating expenses                  (10 951 287)      (9 744 030)     (6 561 422)       (9 630 794)       (8 968 026)   (6 063 389)
  Administrative expenses                       (1 536 597)      (2 211 006)     (1 413 143)       (1 338 642)       (2 103 006)   (1 388 409)
  Acquisition fees                              (2 348 747)      (1 594 393)       (963 436)       (2 348 747)         (915 212)     (509 752)
  Fair value adjustments of investment
                                                          –        6 450 485               –                 –         1 063 940             –
  property
  Fair value gains of financial
  investments at fair value through profit          660 054       10 287 980       6 391 471           660 054        10 287 980     6 391 471
  or loss
  Net result on sale of listed securities
                                                    586 421           26 280          26 250           586 421            26 280        26 250
  investments
  Dividends received from listed
                                                  1 940 223          796 411         308 692         1 940 223           796 411       308 692
  securities investments
  Share-based payment expense                     (972 544)        (996 909)       (877 193)         (972 544)         (996 909)     (877 193)
  Foreign exchange -loss                          (411 778)      (2 529 495)     (4 736 641)         (426 131)       (2 352 634)   (4 493 137)
  Gain on acquisition of subsidiaries             5 546 854                –               –         5 546 854                 –             –
  Gain on disposal of investment
                                                    527 258                –               –           527 258                 –             –
  property held for sale
  Other operating income                                  –       10 264 266      10 264 266                 –        10 264 266    10 264 266
Profit before net finance income                 34 909 203       50 926 390      31 252 472        32 171 953        44 415 526    30 629 667


Net finance (expense)/income                      (732 149)     (12 574 251)     (9 939 362)         1 679 559       (9 537 659)   (8 323 281)
  Finance income                                  4 978 627        1 853 838       1 578 966         6 335 191         4 098 704     3 120 878
  Finance expense                               (5 710 776)     (14 428 089)    (11 518 328)       (4 655 632)      (13 636 363)  (11 444 159)


Share of profit / (loss) of joint ventures                –                –              –            261 135        2 720 919    (1 746 629)


Profit before tax                                34 177 054       38 352 139     21 313 110         34 112 647       37 598 786     20 559 757
Deferred tax income / (expense)                   1 767 225      (5 248 690)    (1 409 097)          1 831 632       (4 495 337)     (655 744)


Profit for the period attributable to
                                                 35 944 279       33 103 449     19 904 013         35 944 279       33 103 449    19 904 013
equity holders

RECONCILIATION OF PROFIT FOR THE PERIOD TO DISTRIBUTABLE EARNINGS
                                                                      Pro forma     IFRS Reported         IFRS Reported             IFRS
                                                                      Unaudited           Audited             Unaudited        Unaudited
                                                                     30 Sep 2013      31 Dec 2012           30 Sep 2012      30 Sep 2013
                                                                                €               €                     €                €
Profit for the period attributable to equity holders                  35 944 279        33 103 449           19 904 013       35 944 279
  Unrealised foreign exchange loss                                       220 238         2 529 495            4 736 641          219 067
  Acquisition fees                                                     2 348 747         1 594 393              963 436        2 348 747
  Share-based payment expense                                            972 544           996 909              877 193          972 544
  Accrued interest on share-based payments                               424 152           569 597              434 156          424 152
  Fair value adjustments of investment property                               –-       (6 450 485)                    –                –
  Fair value gains of financial investments at fair value
                                                                        (660 054)     (10 287 980)            (938 264)         (660 054)
  through profit or loss
  Financial assets at fair value                                      (2 635 310)        6 328 495                    –       (1 766 238)
  Amortisation of financial assets                                      (306 270)        (572 063)            (572 063)         (306 270)
  Net result on sale of listed securities investments                   (586 421)         (26 280)                    –         (586 421)
  Dividends received from listed securities investments               (1 940 223)        (796 411)                    –       (1 940 223)
  Accrued income from financial investments at fair value
                                                                        3 755 076        3 092 147            1 329 538        3 755 076
  through profit or loss
  Gain on disposal of investment property held for sale                 (527 258)                –                    –         (527 258)
  Gain on acquisition of subsidiaries                                 (5 546 854)                –                    –       (5 546 854)
  Deferred tax (income) / expense                                     (1 767 225)        5 248 690            1 409 097       (1 831 633)
  Shares issued cum distribution                                        2 497 976        3 156 648            1 778 338        2 497 976
  Non-distributable portion of the vendor settlement income                     –      (3 144 561)          (3 144 561)                –

Adjustments related to joint ventures
  Unrealised foreign exchange loss                                              –                –                    –             1 171
  Financial assets at fair value                                                –                –                    –         (869 072)
  Deferred tax expense                                                          –                –                    –            64 408

Distributable earnings for the period                                  32 193 397       35 342 043           26,777,524        32 193 397
Distribution from reserves                                              1 691 799                –                    –         1 691 799
Less: distribution declared                                          (20 594 618)     (31 497 562)         (14,101,923)      (20 594 618)
  Interim distribution                                               (20 594 618)     (14 101 923)         (14,101,923)      (20 594 618)
  Final distribution                                                            –     (17 395 639)                    –                 –

Earnings not distributed                                               13 290 578        3 844 481           12 675 601        13 290 578

Number of shares entitled to distribution                             195 523 392      144 362 152          128,686,411       195 523 392

Distributable earnings per share (euro cents)                               18.67            25.95                21.09             18.67
Distribution from reserves per share (euro cents)                            1.06                –                    –              1.06
Less: distribution declared per share (euro cents)                        (12.93)          (23.29)              (11.24)           (12.93)
  Interim distribution per share (euro cents)                             (12.93)          (11.24)              (11.24)           (12.93)
  Final distribution per share (euro cents)                                     –          (12.05)                    –                 –

Earnings per share not distributed (euro cents)                              6.80             2.66                 9.85             6.80

RECONCILIATION OF NET ASSET VALUE TO ADJUSTED NET ASSET VALUE
                                                          Pro forma                                IFRS Reported    IFRS Reported
                                                          Unaudited                                      Audited        Unaudited
                                                         30 Sep 2013                                 31 Dec 2012      30 Sep 2012
                                                                                             €                €                 €
Adjusted net asset value                                                           659 749 479       415 243 794      336 120 813
  Net asset value per the Statement of financial position                          641 760 646       393 622 378      318 322 499
  Loans in respect of the Initial Share Scheme                                      11 598 651        12 489 022       12 505 513
  Deferred tax liabilities                                                          35 323 328        22 321 189       19 205 561
  Goodwill                                                                         (28 933 146)     (13 188 795)     (13 912 760)


Net asset value per share                                                                 3.36              2.83             2.58
Adjusted net asset value per share                                                        3.37              2.88             2.61


Number of shares for net asset value per share purposes                            190 804 302       139 258 914      123 576 781
Number of shares for adjusted net asset value per share purposes                   195 523 392       144 362 152      128 686 411

KEY PERFORMANCE INDICATORS
                                                                                    Pro forma    IFRS Reported    IFRS Reported
                                                                                    Unaudited          Audited        Unaudited
                                                                                  30 Sep 2013      31 Dec 2012      30 Sep 2012
  Current liquidity ratio                                                                1.40             1.82             2.05
  Gearing ratio (debt to equity)                                                       2.4:10           3.0:10           5.6:10
  Tenant’s receivable turnover                                                     15.46 days       10.02 days         5.5 days
  Return on investment property                                                  7% per annum     8% per annum     8% per annum
BASIS OF PREPARATION

These unaudited condensed consolidated financial results for the nine months ended 30 September 2013 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 2012, with the following exceptions:

-   As a result of the adoption of IFRS 11 “Joint Arrangements” effective 1 January 2013, the Group is now accounting for its
    investments in joint ventures under the equity method. The Group has restated the presentation of the Statement of Financial
    Position and Statement of Income starting 1 January 2012, which previously included joint ventures accounted for under the
    proportionate consolidation method.

-   The Group has changed the functional currency to Euro effective 1 January 2013. According to IFRS, previously issued financial
    statements are not restated in this respect.

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 main difference between the unaudited pro forma statements and the unaudited condensed consolidated financial results for the
nine months ended 30 September 2013 prepared in accordance with IFRS is that the unaudited pro forma statements are prepared
using the proportionate consolidation method for the investments in joint ventures, consistent with financial statements prepared in
accordance with IFRS reported in prior periods. 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 its 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 difference set out above.

The condensed consolidated financial results for the nine months ended 30 September 2013 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.

14 November 2013

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/Siobhan Sergeant                                                     +44 20 7131 4000

JSE sponsor
Java Capital                                                                       +27 11 283 0042

Romanian advisor
SSIF Intercapital Invest SA
Razvan Pasol                                                                       +40 21 222 8731

Registered office: 2nd Floor, Anglo International House, Lord Street, Douglas, Isle of Man, IM1 4LN

Date: 14/11/2013 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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