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Abridged unaudited consolidated financial statements for the three months and nine months ended 31 March 2016
ROCKCASTLE GLOBAL REAL ESTATE COMPANY LIMITED
Incorporated in the Republic of Mauritius
Reg no 108869 C1/GBL
ISIN MU0364N00003
Primary listing SEM (SEM code Rock.N0000) and JSE (JSE code ROC)
(“Rockcastle” or “the Company” or “the Group”)
ABRIDGED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS for the three months and nine months ended 31 March 2016
DIRECTORS’ COMMENTARY
1 STRUCTURE AND LISTING
Rockcastle is a Category One Global Business Licence Company registered in Mauritius. The Company has primary
listings on both the Stock Exchange of Mauritius Ltd (“SEM”) and the JSE Ltd (“JSE”). Its objectives are
investing in direct property in growing economies as well as listed real estate securities globally.
Shareholders were provided with the option of electing to receive shares in lieu of cash for the December
2015 interim dividend. In excess of 93% of shareholders opted to take the scrip dividend resulting in the
issue of 18.5 million new shares.
2 COMMENTARY
Rockcastle’s net asset value per share increased from USD1.56 as at 31 December 2015 to USD1.62 as at 31
March 2016. The Company’s loan-to-value ratio was 38.2% at 31 March 2016 compared to 40.2% at 31 December
2015 (the loan-to value ratio is calculated by dividing net interest-bearing borrowings by total assets).
LISTED SECURITY PORTFOLIO
Global listed property counters delivered robust distribution increases and strong capital growth this
quarter in markets that remain volatile. Rockcastle’s listed security portfolio continues to be weighted
towards the US and the UK with a focus on blue-chip companies with strong balance sheets, proven management
teams and quality assets which are well placed to continue to grow their distributions in challenging
environments.
The threat of a possible UK exit from the European Union has had a negative impact on share prices of all UK
REITs. This has created an opportunity for Rockcastle to increase its investments in UK REITs at attractive
prices.
During 2016, REITs will become a stand-alone sector under the Global Industry Classification System (GICS).
Management believes this will benefit the listed real estate sector as it will raise visibility and likely
lead to new inflows by generalist funds that are currently underweight in the listed property sector.
Rockcastle has entered into a prime brokerage relationship with Goldman Sachs. This has further improved the
Company’s access to funding at attractive rates.
DIRECT PROPERTY
POLAND AND THE CZECH REPUBLIC
The Company continues to target acquisitions of existing retail properties in its core markets of Poland and
the Czech Republic. In addition, progress is being made in extending the existing development pipeline by
purchasing development land and the permitting and planning of extensions to the existing portfolio of
assets.
Despite the obvious once-off benefits of initial yield spreads, Rockcastle has maintained its disciplined
approach to investing in these competitive markets by investing only in properties which have attractive long
term growth prospects. The operational platform in Poland has enabled management to identify additional
development opportunities which will offer significant long-term value creation for shareholders and the bias
towards development acquisitions will continue. The existing retail centres are all trading on budget and the
development projects under construction are on schedule for completion in Q4 2016.
Rockcastle is currently in advanced negotiations on various transactions in Poland and the Czech Republic
which, if successfully concluded, will increase its direct retail property portfolio by in excess of EUR300
million. In addition, Rockcastle is in discussions with New Europe Property Investments plc to set up a joint
management structure for the Czech Republic. A further announcement providing details on acquisitions will be
made in due course.
ZAMBIA
In March 2016, the 26 000m2 GLA Cosmopolitan Mall located in Lusaka, Zambia opened for trading. The mall is
anchored by Game and Shoprite, and includes Ackermans, Edgars, Foschini, Innscor, Jet, Mr Price, Pep,
Truworths and Woolworths. The Company acquired a 50% interest on completion at a yield of 9.5% in US Dollars.
As previously announced, the board concluded that the operational focus in Central and Eastern Europe is a
greater priority strategically and accordingly mandated the sale of this asset.
3 OUTLOOK
The Company’s forecast growth in dividends for the six months to 30 June 2016 remains at the lower end of the
guidance of 8%-10%.
As the Company changed its financial year end from 30 June to 31 December in the current year, forecast
guidance for the six months to 31 December 2016 will be provided at the time of the Company’s June 2016
interim results announcement.
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 Group’s external auditors. The forecast is based on
the assumptions that a stable global macro-economic environment will prevail and no failures of listed REITs
will occur.
By order of the Board
Intercontinental Trust Limited
Company Secretary
Mauritius – 4 May 2016
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited Audited Unaudited
as at as at as at
31 Mar 2016 30 Jun 2015 31 Mar 2015
USD’000 USD’000 USD’000
Assets
Non-current assets 2 445 669 2 295 139 2 250 178
Investment property 349 455 59 123 59 523
Investment property under development 38 122 7 436 8 048
Listed security investments 2 000 126 2 161 724 2 146 323
Property, plant and equipment 154 - -
Investment in and loans to joint ventures 31 597 41 727 11 193
Rockcastle management incentive loans 26 215 25 129 25 091
Current assets 25 402 31 366 18 288
Investment income receivable - 7 589 -
Cash and cash equivalents 19 114 3 035 1 079
Trade and other receivables 6 288 15 410 803
Loans to development partners - 5 332 16 406
Total assets 2 471 071 2 326 505 2 268 466
EQUITY AND LIABILITIES
Total equity attributable to
equity holders 1 503 968 1 241 128 1 254 512
Stated capital 1 351 387 1 180 670 1 017 378
Retained income 330 897 183 601 358 602
Non-distributable reserves (171 612) (123 947) (121 468)
Currency translation reserve (6 704) 804 –
Minority interest 5 - -
Total equity 1 503 973 1 241 128 1 254 512
Total liabilities 967 098 1 085 377 1 013 954
Non-current liabilities 55 066 16 614 5 000
Interest-bearing borrowings 55 066 16 614 5 000
Current liabilities 912 032 1 068 763 1 008 954
Trade and other payables 22 941 4 966 4 906
Interest-bearing borrowings 888 328 1 063 777 1 003 635
Income tax payable 763 20 413
Total equity and liabilities 2 471 071 2 326 505 2 268 466
Total number of shares in issue 930 994 319 847 862 018 784 369 955
Net asset value per share (USD) 1,62 1,46 1,60
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited Unaudited Unaudited Unaudited
for the nine for the nine for the three for the three
months ended months ended months ended months ended
31 Mar 2016 31 Mar 2015 31 Mar 2016 31 Mar 2015
USD’000 USD’000 USD’000 USD’000
Net rental and
related revenue 10 337 252 5 718 236
Dividends received
from listed
security investments 49 998 50 284 17 268 19 469
Income/(loss) from
joint ventures 609 756 - (807)
Fair value gain on
investment property
and listed security
investments 153 971 252 004 90 895 126 775
Foreign exchange
gain/(loss) 7 317 (79 561) 6 092 (35 397)
Operating expenses (2 306) (1 565) (1 001) (697)
Profit before net
finance costs 219 926 222 170 118 972 109 579
Net finance costs (39 523) (34 145) (20 879) (10 307)
Finance income 2 014 1 893 612 311
Interest received 2 014 1 893 612 311
Finance costs (41 537) (36 038) (21 491) (10 618)
Interest on
borrowings (14 975) (12 634) (4 681) (2 700)
Capitalised interest 478 - (46) -
Fair value adjustment
on interest rate
derivatives (27 040) (11 992) (16 764) (5 344)
Fair value
adjustment on
bond shorts - (11 412) - (2 574)
Profit before income
tax expense 180 403 188 025 98 093 99 272
Income tax expense (770) (413) (491) (150)
Profit for
the period 179 633 187 612 97 602 99 122
OTHER COMPREHENSIVE
INCOME NET OF TAX
Items that may be
reclassified
subsequently to
profit or loss
Exchange differences
on translation of
foreign operations (7 508) - (10 581) -
Total comprehensive
Income for
the period 172 125 187 612 87 021 99 122
Profit for the period
attributable to:
Equity holders of
the company 179 640 187 612 97 609 99 122
Minority interest (7) - (7) –
179 633 187 612 97 602 99 122
Total comprehensive
Income for the
period attributable to:
Equity holders of
the company 172 146 187 612 87 042 99 122
Minority interest (21) - (21) –
172 125 187 612 87 021 99 122
Weighted average
number of shares
in issue 896 142 308 768 942 172 917 204 356 770 337 824
Basic earnings
per share*
from continuing
operations
(USD cents) 20,05 24,40 10,64 12,92
Headline earnings
per share*
from continuing
operations
(USD cents) 20,12 24,40 10,64 12,92
*Rockcastle has no dilutionary instruments in issue.
RECONCILIATION OF PROFIT FOR THE PERIOD TO HEADLINE EARNINGS
Unaudited for the Unaudited for the
nine months ended nine months ended
31 Mar 2016 31 Mar 2015
USD’000 USD’000
Basic earnings - profit for the
period attributable
to equity holders 179 640 187 612
Adjusted for:
- fair value adjustment on sale of interest
in joint ventures 706 -
Headline earnings 180 346 187 612
Headline earnings per share (USD cents) 20,12 24,40
Directors Mark Olivier (chairman); Spiro Noussis (CEO)*; Nick Matulovich*; Barry Stuhler; Rory Kirk;
Andre van der Veer; Yan Ng; Karen Bodenstein* (*executive director)
Company secretary Intercontinental Trust Limited
Registered address c/o Intercontinental Trust Limited, Level 3, Alexander House, 35 Cybercity, Ebene, 72201,
Mauritius
Transfer secretary in South Africa Link Market Services South Africa Proprietary Limited
JSE sponsor Java Capital
SEM sponsor Capital Markets Brokers Limited
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Equity
Attri- Non- Currency
butable distri- trans-
Stated to equity Minority butable lation
Capital holders interest reserves reserve Total
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Audited for
the
year ended
30 June 2015
Opening
balance 871 154 131 714 - (19 684) - 983 184
Issue of
shares 113 950 113 950
Dividends
declared 32 274 (62 508) (30 234)
Profit for the
period 187 612 187 612
Transfer to
non-distri-
butable
reserves 101 784 (101 784) -
Balance at
31 March
2015 1 017 378 358 602 - (121 468) - 1 254 512
Issue of
shares 163 292 163 292
Loss for
the period (177 480) (177 480)
Transfer to non-
distributable
reserves 2 479 (2 479) -
Exchange differences on
translation of foreign
operations 804 804
Balance at
30
June 2015 1 180 670 183 601 - (123 947) 804 1 241 128
Unaudited
for the nine
months ended
31 March 2016
Opening
balance 1 180 670 183 601 - (123 947) 804 1 241 128
Profit/(loss)
for the period 179 640 (7) 179 633
Equity contributed by
minorities 12 12
Shares issued and cum
distribution portion
on issue during the
period 94 783 3 378 98 161
Dividends
declared 75 934 (81 730) (5 796)
Transfer to non-
distributable
reserves 47 665 (47 665) -
Reclassification of
exchange differences
on joint ventures on
sale of investments (1 657) (1 657)
Exchange differences
on translation of
foreign operations (7 508) (7 508)
Balance at
31
March
2016 1 351 387 330 897 5 (171 612) (6 704) 1 503 973
CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited for the Unaudited for the
nine months ended nine months ended
31 Mar 2016 31 Mar 2015
USD’000 USD’000
Cash inflow from operating activities 46 859 43 890
Cash inflow/(outflow) from 13 824 (519 695)
investing activities
Cash (outflow)/inflow from (44 604) 476 398
financing activities
Increase in cash and cash equivalents 16 079 593
Cash and cash equivalents at beginning
of period 3 035 486
Cash and cash equivalents at end of
period 19 114 1 079
Cash and cash equivalents consist of:
Current accounts 19 114 1 079
NOTES
1 PREPARATION, ACCOUNTING POLICIES AND AUDIT OPINION
The Group is required to publish financial results for the three months and the nine months ended 31 March
2016 in terms of the Listing Rule 12.19 of the SEM. Accordingly, this announcement presents the financial
results of the Group in respect of the period from 1 January 2016 to 31 March 2016, the period from 1 July
2015 to 31 March 2016, as well as the comparative results from the prior period.
The accounting policies which have been applied are consistent with those used in the preparation of the
audited financial statements for the year ended 30 June 2015. Non-distributable reserves arise from any
accumulated losses pertaining to changes in the fair value of the assets and liabilities in the Group on a US
Dollar basis. The Group does not consider such reserves to be distributable.
The abridged unaudited consolidated financial statements for the three months and the nine months ended 31
March 2016 (“financial statements”) 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 and the Securities Act of Mauritius 2005.
The financial statements have not been reviewed or reported on by the Group’s external auditors.
These financial statements were approved by the Board on 4 May 2016.
Copies of the financial statements and the Statement of direct and indirect interests of each officer of the
Group, pursuant to rule 8(2)(m) of the Securities (Disclosure Obligations of Reporting Issuers) Rules of
Mauritius 2007, are available free of charge, upon request at Rockcastle’s registered address. Contact
person: Mr Darren Chinasamy.
This communiqué is issued pursuant to SEM Listing Rule 12.20 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 are not aware of any matters or circumstances arising subsequent to the
period ended 31 March 2016 that require any additional disclosure or adjustment to the financial statements.
2 SEGMENTAL ANALYSIS
Unaudited for the Unaudited for the
nine months ended nine months ended
31 Mar 2016 31 Mar 2015
USD’000 USD’000
Profit before income tax expense
Australia 7 566 37 347
Canada (3 278) 7 222
Europe 5 539 41 054
UK (22 930) 39 309
Hong Kong (3 796) 14 538
Singapore (9 973) 26 538
USA 182 728 100 494
Zambia 609 756
Corporate 23 938 (79 233)
180 403 188 025
Unaudited Audited Unaudited
as at as at as at
31 Mar 2016 30 Jun 2015 31 Mar 2015
USD’000 USD’000 USD’000
Total assets
Australia 51 482 69 835 85 534
Canada - 105 231 141 779
Europe 588 823 276 235 292 527
UK 443 975 376 507 313 032
Hong Kong - 91 756 99 659
Singapore 40 602 199 308 198 099
USA 1 283 914 1 135 445 1 084 722
Zambia 31 591 41 727 11 193
Corporate 30 684 30 461 41 921
2 471 071 2 326 505 2 268 466
www.rockcastleglobal.com
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