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Abridged unaudited financial statements for the year ended 28 February 2015
Atlantic Leaf Properties Limited
(Incorporated in the Republic of Mauritius)
(Registration number: 119492 C1/GBL)
SEM share code: “ALPL.N0000”
JSE share code: “ALP”
ISIN: “MU0422N00009”
www.atlanticleaf.mu
(“Atlantic Leaf” or “the Company”)
ABRIDGED UNAUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2015
DIRECTORS’ COMMENTARY
OVERVIEW OF THE BUSINESS
Atlantic Leaf is a Mauritian public company limited by shares holding a category 1 Global Business
License with the primary objective of investing in quality real estate assets and companies that are
income yielding with the prospect of capital appreciation. The Company has a primary listing on the
Stock Exchange of Mauritius Ltd (“SEM”) and a secondary listing on the Alternative Exchange
(“AltX”) of the Johannesburg Stock Exchange (“JSE”). Since incorporation on 11 November 2013, the
Company has successfully raised GBP35 million by way of various private placements to invited
investors.
COMPANY REVIEW FOR THE YEAR ENDED 28 FEBRUARY 2015
The Company is pleased to present the results for the year ended 28 February 2015, being its first
full year of operations.
The Company has managed to conclude the acquisition of two significant property portfolios (albeit
the second transaction was completed shortly after the financial year end, on 3 March 2015),
resulting in Atlantic Leaf’s gross underlying assets exceeding GBP50 million as at the date of this
announcement. Both portfolio acquisitions were secured with long-term leases in place and at
income yields of 8.3% and 7.3% respectively. Gearing has been incorporated to enhance returns to
shareholders. With gearing targeted at approximately 50% (LTV) against these assets, Atlantic Leaf
anticipates an attractive return to shareholders for the next 12 months.
Our first acquisition, being the 30% share of the Booker portfolio, held in a wholly owned subsidiary
Seahawk Investments Limited (“Seahawk”), has performed in line with expectations. All income has
been collected and we believe there is a key opportunity to restructure the related debt on far more
favourable terms when this debt comes up for renewal in October 2015. This will enhance future
performance on this key asset.
The net rental income earned on Booker is currently retained in the investment vehicle and in terms
of IFRS is reflected in the gain on a financial asset in the Statement of Profit or Loss. This income is
however available for distribution to the shareholders of Atlantic Leaf, if and when needed.
During the period under review, rentals for the Booker portfolio were escalated by 13.1% in terms of
contractual lease agreements. In addition, the UK property market has continued to see reductions
in property yields, in line with downward shifts in the UK yield curve, resulting in increased property
valuations. The combination of rental escalations and yield reductions has contributed to an
unrealised gain on the investment in Seahawk being recognised during the period under review,
bringing the fair value gain from this investment to GBP1.4 million.
As noted above, on 3 March 2015 the Company acquired a portfolio of three commercial properties
in the United Kingdom at a gross property value of GBP23.0 million inclusive of transaction costs. The
properties are located in Brecon, St. Helens and Wombourne, and collectively generate GBP1.7 million
in annual rental income, representing a gross initial yield of 7.3% (post-transaction costs). The net
cash consideration payable by Atlantic Leaf for the properties was approximately GBP11.2 million
including costs, and an expected return on equity of 9.9% could be achieved based on the company
taking over the existing debt facilities. As recorded on the Statement of Financial Position the
purchase price had already been paid to Escrow and is reflected as a non-current asset at year end.
This acquisition is directly in line with Atlantic Leaf’s strategy and in particular provides:
- an attractive forward yield and return to Atlantic Leaf; and
- continued diversification into high quality properties.
The table below summarises the salient features of this transaction:
British Capital
GBPm
Gross assets 23.0
Long term debt 11.8
Net Equity 11.2
Annualised rental 1.7
Expected net income after gearing costs 1.1
During the financial year under review, the Company earned 8.28 pence per share (excluding
once-off costs) based on the weighted average number of shares which translates to a return of
8.1%. Returns were impacted by the ‘cash drag’ associated with holding lower-yielding cash reserves
for longer than anticipated whilst waiting for the property deals to complete. We are pleased with
these results given the challenges of an early stage company. In a ‘normalised’ year, in which capital
is more fully deployed in property assets over the period, it is expected that returns could be higher.
The Directors have decided not to declare a dividend at this date as the company is in an
establishment phase. It is planned that in 2016 financial year dividends will be declared as this is
part of our stated objective.
COMPANY OUTLOOK
Atlantic Leaf plans to grow significantly in the next twelve months and has identified a number of
key acquisitions, which are currently being evaluated. It is anticipated that the Company will execute
on at least two of these in the first half of the 2016 financial year. A key objective of the Company
will be to commence the distribution to shareholders, which management believes is achievable.
Any forecast statement above and the assumptions underlying such statements 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 assumptions, including assumptions that a stable regional, political
and economic environment as well as a stable global macro-economic environment will prevail.
By order of the Board
Intercontinental Trust Limited
Company Secretary
20 April 2015
STATEMENT OF FINANCIAL POSITION
Unaudited Audited
as at as at
8 February 2015 28 February 2014
GBP GBP
Assets
Non-current assets 26 255 997 -
Financial assets at fair value through profit or loss 13 652 211 -
Escrow account – held for investment acquisition 10 813 467
Loans Receivable 1 790 319
Current Assets 10 007 685 1 000
Cash and cash equivalents 9 686 551 1 000
Trade and other receivables 321 134 -
Total Assets 36 263 682 1 000
Equity and Liabilities
Equity 36 134 679 1 000
Share capital 34 770 873 1 000
Retained earnings 1 363 806 -
Liabilities
Current Liabilities 129 003 -
Trade and other payables 129 003 -
Total Equity and Liabilities 36 263 682 1 000
Number of shares in issue 33 941 306 1 000
Net asset value per share (GBP) 1.06 1.00
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
Unaudited Audited
for the year ended for the period ended
28 February 2015 28 February 2014
GBP GBP
INCOME
Net gain on financial assets at fair value through profit and loss 1 691 031 -
Foreign exchange gain 118 150 -
Dividend Income 33 509 -
Interest Income 21 598 -
1 864 288 -
EXPENSES
Operating expenses (272 580) -
Property service fee (182 099) -
Audit fees (10 928) -
Directors fees (25 833) -
(491 440) -
Profit before taxation 1 372 848 -
Taxation (9 042) -
Total comprehensive income for the year/ period 1 363 806 -
Weighted average number of shares in issue for the year/
period 18 930 998 1 000
Basic and headline earnings per share (GBP pence) 7.20 -
Adjusted headline earnings per share (GBP pence) 8.28 -
There are no reconciling items between basic earnings and headline earnings
Atlantic Leaf has no dilutionary instruments in issue
RECONCILIATION OF ADJUSTED HEADLINE EARNINGS PER SHARE
Unaudited Audited
for the year ended for the period ended
28 February 2015 28 February 2014
GBP GBP
Total comprehensive income for the period 1 363 806 -
Adjusted for once-off costs: -
Listing and advisory fees 47 722 -
Seahawk transaction costs 140 151 -
Foreign exchange loss specifically relating to once-off costs 16 392 -
Adjusted headline earnings 1 568 071 -
STATEMENT OF CHANGES IN EQUITY for the year ended 28 February 2015
Retained
Stated Capital Earnings Total
GBP GBP GBP
At 11 November 2013 - - -
Issue of shares 1 000 - 1000
Total comprehensive income/ (loss) for the period - - -
At 28 February 2014 1 000 - 1 000
Issue of shares 34 769 873 - 34 769 873
Total comprehensive income for the year - 1 363 806 1 363 806
At 28 February 2015 34 770 873 1 363 806 36 134 679
STATEMENT OF CASH FLOWS for the year ended 28 February 2015
Unaudited Audited
year ended period ended
28 February 2015 28 February 2014
GBP GBP
Net cash utilised in operating activities (575 660) -
Cash flow utilised in investing activities (24 508 662) -
Cash flow from financing activities 34 769 873 1 000
Increase in cash and cash equivalents 9 685 551 1 000
Cash and cash equivalents at beginning of the year/period 1 000 -
Cash and cash equivalents at end of year/period 9 686 551 1 000
ABRIDGED SEGMENTAL ANALYSIS
Unaudited Audited
as at as at
28 February 2015 28 February 2014
GBP GBP
Total Assets – of the investment portfolio
Retail Warehouse 12 417 292 -
Others 1 234 919 -
13 652 211 -
NOTES
The abridged unaudited financial statements for the year ended 28 February 2015 (“financial statements”)
have been prepared in accordance with the measurement and recognition requirements of IFRS, the
requirements of IAS 34: Interim Financial Reporting, the SEM Listing Rules and the Securities Act of Mauritius
2005.
The accounting policies adopted in the preparation of these financial statements are consistent with those
applied in the preparation of the audited financial statements for the period ended 28 February 2014.
In line with the Listing Rule 12.14 of the SEM, the Company will release its abridged audited financial
statements for the year ended 28 February 2015 once the audit of the financial statements is complete.
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 the Registered Office of the Company at c/o Intercontinental
Trust Limited, Level 3, Alexander House, 35 Cybercity, Ebene 72201, Mauritius. Contact person: Mr Kesaven
Moothoosamy.
This communique is issued pursuant to SEM Listing Rule 11.3 and Rule 5(1) of the Securities (Disclosure
Obligations of Reporting Issuers) Rules 2007. The Board accepts full responsibility for the accuracy of the
information contained in these financial statements. The Directors have disclosed all matters or circumstances
arising subsequent to the year ended 28 February 2015 that require any additional disclosure or adjustment to
the financial statements.
South African corporate advisor
Leaf Capital +27 21 657 1180
South African JSE Sponsor
Java Capital +27 11 722 3050
Company secretary
Intercontinental Trust Limited +230 403 0800
Date: 20/04/2015 08:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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