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Abridged audited financial statements for year ended 28 February 2016, declaration of dividend, change to the board
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 AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2016, DECLARATION OF GBP 4 PENCE DIVIDEND
AND CHANGE TO THE BOARD OF DIRECTORS
DIRECTORS' COMMENTARY
Atlantic Leaf presents its results for the year ended 28 FEBRUARY 2016.
The financial year ended 28 FEBRUARY 2016 has been a transformative year for the business, with a
number of important acquisitions taking place during the year under review, including the balance
of the Booker portfolio and the completion of other asset acquisitions where these assets are held
by 100% owned subsidiary companies. As a result of these acquisitions, Atlantic Leaf's results
include consolidated group results for the first time since incorporation.
Capital
During the year under review, the Company issued 89.5 million new shares, raising almost
GBP100 million in new equity capital. This includes 44.2 million new shares which were issued on
16 February 2016, and brings total equity raised since incorporation to GBP134 million. The equity
raised has been fully deployed into income producing assets.
Portfolio
Atlantic Leaf's portfolio consists of quality assets in key secondary nodes in the United Kingdom,
each of which have long-term, single-tenant leases with blue chip occupiers. Total property
assets at year-end stood at GBP196 million (2015: GBP13.6 million) and have grown further to
GBP264 million as a result of the acquisition of a further four properties since year-end. The
total gross lettable area of the portfolio now stands at 3.6 million sq ft (335,000m(2)), across
54 properties, with an average yield of 7.2% and a weighted average unexpired lease term of
approximately 13 years.
Gearing
As announced on the website of the Stock Exchange of Mauritius Ltd ("SEM") and on the SENS
of the Johannesburg Stock Exchange ("JSE") on 9 February 2016, a new debt funding package
has been finalised but debt was only drawn down post year-end. Accordingly gearing at year-end
of 39% (Loan-To-Value) has subsequently increased to 51%. The average cost of debt is 3.4%
(including amortised upfront costs) and a weighted term to maturity of 3.5 years.
The Company has entered into interest rate swaps to protect against adverse movements in
interest rates over the term of each loan. At year-end, there is a mark-to-market movement of
these swaps. As this hedge is effective, this has been posted directly to a cash flow hedge reserve.
This is not expected to impact on cash flows.
Earnings and NAV
The weighted average earnings per share for the period are 8.7 pence per share, which equates to
a yield on Net Asset Value Per Share ("NAVPS") of 8.2% (on an historic basis), which is in line with
management expectations, especially considering that many acquisitions were made during the
year and the fact that valuations are largely reflected at cost. Certain of the assets in the Booker
portfolio were revalued higher mainly due to higher rentals being achieved on those assets.
The Company's NAVPS stands at GBP1.08, after allowing for the proposed final distribution of
4 GBP pence per share and excluding the effect of mark-to-market valuations on interest rate
swaps on the cash flow hedge reserve.
DIVIDENDS DECLARED
Following the interim distribution paid to shareholders of 3 GBP pence per share, the Board is
pleased to announce a final dividend of 4 GBP pence per share for the year ended 28 February 2016.
Subject to final regulatory approvals, shareholders will be given the option to receive their dividend
either in cash or as a scrip dividend at a ratio of 3.704 new shares for every 100 shares held. A cash
dividend will be paid to shareholders unless shareholders elect to receive a scrip dividend.
Further information regarding the final dividend, including salient dates and exchange rates, will
be announced in due course.
CHANGE TO THE BOARD OF DIRECTORS
The Company is pleased to announce that Mr Rudolf Pretorius has been appointed to the Board
of directors of Atlantic Leaf as a non-executive director with effect from Monday, 11 April 2016.
Rudolf has a wealth of experience, most notably in the financial services industry. We welcome
Rudolf to the Board and look forward to his contribution to the Company.
COMPANY OUTLOOK
Management believes that a solid foundation has been laid and that the Company has the ability
to add further assets over the coming year, leveraging off the strong pipeline of opportunities
in place.
The Company remains focused on providing an attractive distribution yield through active asset
management and disciplined acquisitions. All assets held are fully income producing and with debt
in place at attractive rates (approximately 75% of which is fixed), the Company is well positioned
to achieve a growth in the annual distribution for 2016/17. Based on the current leases, the existing
debt structure, including the portion of interest that has been fixed, the Company is targeting an
8.5 GBP pence per share distribution for 2016/17 which would represent a 21% increase on the
2015/16 level. This forecast has not been reviewed or reported on by the Company's auditors.
ASSESSMENT AS AN INVESTMENT ENTITY
IFRS 10 grants companies, classified as an Investment entity, an exemption not to consolidate
subsidiaries and instead to measure them at fair value through profit and loss. Due to the nature
of the initial transaction in the prior year, the Board of directors classified the Company as an
investment entity. During the current year, the Board of directors, have determined that this
classification is no longer appropriate. The Group no longer primarily measures and evaluates
the performance of substantially all of its investments on a fair value basis in the consolidated
financial statements. Instead, investors and management are provided with information about
rental returns and fair values of investment properties. The change in classification has had no
impact on prior year reporting, with comparative figures unchanged. Consolidation of the group
companies will reflect the financial position of the Group more accurately by providing additional
and more relevant real estate information for the investors.
OVERVIEW OF THE BUSINESS
Atlantic Leaf is a Mauritian registered company, regulated by the Mauritius Financial Services
Commission and holds a Category One Global Business Licence. The primary objective of the
Company is to provide investors with consistent income and growth by investing in quality real
estate assets which generate appropriate income yields and have potential of capital appreciation.
The Company has a primary listing on the SEM and a secondary listing on the AltX of the JSE.
By order of the Board
Intercontinental Trust Limited
Company Secretary
12 April 2016
STATEMENT OF FINANCIAL POSITION
Group and
Group Company Company
Audited Audited Audited
as at as at as at
28 Feb 2016 28 Feb 2016 28 Feb 2015
GBP GBP GBP
ASSETS
Non-current assets 208 797 385 131 293 301 26 255 997
Investment properties 195 349 116 – –
Interest in subsidiaries – 117 845 032 10 972 604
Listed investments 672 386 672 386 1 234 919
Loan receivable 6 775 883 6 775 883 1 790 319
Loans to subsidiaries – – 1 444 688
Deposit paid for acquisition of properties
acquisition 6 000 000 6 000 000 10 813 467
Current assets 8 475 333 6 850 625 10 007 685
Trade and other receivables 2 252 041 1 896 899 321 134
Cash and cash equivalents 6 223 292 4 953 726 9 686 551
Total assets 217 272 718 138 143 926 36 263 682
Equity and liabilities
Equity 136 029 957 137 813 522 36 134 679
Share capital 132 854 283 132 854 283 34 770 873
Cash flow hedge reserve (1 783 633) – –
Retained earnings 4 959 307 4 959 239 1 363 806
Liabilities
Non-current liabilities 74 096 765 – –
Long-term borrowings 74 096 765 – –
Current liabilities 7 145 996 330 404 129 003
Trade and other payables 3 762 654 330 404 129 003
Current portion of long-term borrowings 1 237 500 – –
Tax payable 297 318 – –
Derivative financial instruments 1 848 524 – –
Total equity and liabilities 217 272 718 138 143 926 36 263 682
Number of shares in issue 123 407 090 123 407 090 33 941 306
Net asset value per share 1.10 1.12 1.06
Net asset value per share
ex cash flow hedge reserve 1.12 1.12 1.06
STATEMENT OF COMPREHENSIVE INCOME
Group and
Group Company Company
Audited Audited Audited
Year ended Year ended Year ended
28 Feb 2016 28 Feb 2016 28 Feb 2015
GBP GBP GBP
Rental revenue 8 489 734 – –
Straight-line lease income adjustment 683 562 – –
Revenue 9 173 296 – –
Property operating expenses (513 091) – –
Net property income 8 660 205 – –
Other operating expenditure (2 018 193) (1 665 268) (491 440)
Net property income/(loss) 6 642 012 (1 665 268) (491 440)
Investment income 222 696 217 014 55 107
Profit on disposal of listed investments 73 368 73 368 –
(Loss)/profit on foreign exchange (216 072) (216 072) 118 150
Fair value adjustments 1 769 464 7 040 047 1 691 031
Finance costs (2 527 994) – –
Profit before taxation 5 963 474 5 449 089 1 372 848
Taxation (520 842) (6 525) (9 042)
Profit for the year 5 442 632 5 442 564 1 363 806
Fair value movement on cash flow hedge (1 783 633) – –
Total comprehensive income for the year 3 658 999 5 442 564 1 363 806
Add back:
Fair value movement on cash flow hedge (1 783 633) – –
Basic earnings 5 442 632 5 442 564 1 363 806
Less:
Fair value adjustments to investment properties (1 531 434) – (1 691 031)
Gain on bargain purchase (42 500) – –
Headline earnings 3 868 698 5 442 564 (327 225)
Add back:
Fair value adjustments to investment properties 1 531 434 – 1 691 031
Gain on bargain purchase 42 500 – –
Adjusted for once off costs
Listing and advisory fees – – 47 722
Transaction costs 1 011 871 – 140 151
Foreign exchange loss on equity raised 253 113 – 16 392
Adjusted headline earnings 6 707 616 5 442 564 1 568 071
Weighted average number of shares in issue 62 491 061
Basic and diluted earnings per share
(GBP pence) 8.71
Basic and diluted headline earnings per share
(GBP pence) 6.19
Adjusted headline earnings per share
(GBP pence) 10.73
Interim dividend per share (GBP pence) 3.0
Final dividend per share (GBP pence) 4.0
Total dividend per share (GBP pence) 7.0
STATEMENT OF CHANGES IN EQUITY – Group
Stated Retained Cash flow
capital earnings hedge reserve Total
GBP GBP GBP GBP
Balance at 1 March 2014 1 000 – – 1 000
Total comprehensive income
for the year
Profit for the year – 1 363 806 – 1 363 806
Issue of shares
(net of transaction costs) 34 769 873 – – 34 769 873
Balance at 28 February 2015 34 770 873 1 363 806 – 36 134 679
Total comprehensive income
for the year
Profit for the year 5 442 632 5 442 632
Issue of shares
(net of transaction costs) 98 083 410 – – 98 083 410
Dividends – (1 847 131) (1 847 131)
Other comprehensive income – – (1 783 633) (1 783 633)
Balance at 28 FEBRUARY 2016 132 854 283 4 959 307 (1 783 633) 136 029 957
STATEMENT OF CHANGES IN EQUITY – Company
Stated Retained
capital earnings Reserves Total
GBP GBP GBP GBP
Balance at 1 March 2014 1 000 – – 1 000
Total comprehensive income
for the year
Profit for the year – 1 363 806 – 1 363 806
Issue of shares (net of
transaction costs) 34 769 873 – – 34 769 873
Balance at 28 February 2015 34 770 873 1 363 806 – 36 134 679
Issue of shares (net of
transaction costs) 98 083 410 – – 98 083 410
Profit for the year 5 442 564 5 442 564
Dividends – (1 847 131) (1 847 131)
Balance at 28 FEBRUARY 2016 132 854 283 4 959 239 – 137 813 522
STATEMENT OF CASH FLOWS
Group and
Group Company Company
Audited Audited Audited
Year ended Year ended Year ended
28 Feb 2016 28 Feb 2016 28 Feb 2015
GBP GBP GBP
Net cash from operating activities (130 624) (2 905 113) (671 015)
Net cash utilised in investing activities (100 692 277) (97 847 919) (24 531 457)
Net cash generated by financing activities 97 575 714 96 236 279 34 769 873
(Decrease)/increase in cash and cash equivalents (3 247 187) (4 516 753) 9 567 401
Cash and cash equivalents at beginning
of the year 9 686 551 9 686 551 1 000
Effects of exchange difference on cash
and cash equivalents (216 072) (216 072) 118 150
Cash and cash equivalents at end of year 6 223 292 4 953 726 9 686 551
POST-BALANCE SHEET EVENTS
On 17 March 2016, the Company concluded the purchase of four additional properties for an
aggregate purchase consideration of GBP65 million.
Purchase price
Location Tenant (GBPm)
St. Helens Palmer & Harvey McLane Limited 10.8
Nuneaton Booker Limited 10.3
Redditch Halfords Limited 28.8
Coventry E.ON UK Plc 15.1
65.0
The purchase price was financed through bank funding, the existing deposit and cash resources.
A pro forma balance sheet, reflecting the indicative balance sheet of the Company as if the acquisition
had taken place on 28 February 2016 is provided below. The pro forma balance sheet is for illustrative
purposes only and has not been reviewed or commented on by the Company's auditors.
Pro forma
28 Feb 2016
GBP
ASSETS
Non-current assets 271 066 950
Investment properties 263 618 681
Other non-current assets 7 448 269
Current assets 5 533 860
Total assets 276 600 810
Equity and liabilities 136 029 957
Liabilities
Long-term borrowings 133 424 857
Current liabilities 7 145 996
Total equity and liabilities 276 600 810
NOTES
The Company is required to publish financial results for the year ended 28 FEBRUARY 2016 in
terms of the Listing Rule 12.14 of the SEM. The abridged audited financial statements for the year
ended 28 FEBRUARY 2016 ("financial statements") have been prepared in accordance with the
measurement and recognition requirements of IFRS, the SEM Listing Rules and the Securities Act
of Mauritius 2005 and the JSE Listings Requirements.
Other than the change in classification of Atlantic Leaf Properties Limited as an investment entity,
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 year ended
28 February 2015.
These abridged audited financial statements were approved by the Board on 11 April 2016. Mazars
Mauritius have issued their unmodified audit opinion on the Company's financial statements for
the year ended 28 FEBRUARY 2016. These summarised audited financial statements have been
derived from the Company's financial statements and are consistent with the audited financial
statements subsequently issued to shareholders.
Copies of the audited financial statements, the audit opinion 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 Level 3, Alexander House, 35 Cybercity,
Ebene 72201, Mauritius. Contact person: Mr Kesaven Moothoosamy.
This communique is issued pursuant to SEM Listing Rules 11.3 and 12.14 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 have disclosed all matters or
circumstances arising subsequent to the year ended 28 FEBRUARY 2016 that require any additional
disclosure or adjustment to the financial statements.
JSE sponsor
Java Capital +27 11 722 3050
South African corporate advisor
Leaf Capital +27 21 657 1180
Corporate secretary
Intercontinental Trust Limited +230 403 0800
Date: 12/04/2016 12:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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