NEW FRONTIER PROPERTIES LIMITED - Summarised unaudited consolidated results for the three months and six months ended 28 February 2017

Release Date: 13/04/2017 11:01
Code(s): NFP
 
Wrap Text
Summarised unaudited consolidated results for the three months and six months ended 28 February 2017

New Frontier Properties Ltd
(Incorporated in the Republic of Mauritius on 5 June 2014)
(Registration number 123368C1/GBL)
SEM share code: NFP.N000
JSE share code: NFP
ISIN: MU0453N00004
("New Frontier" or "the Company" or "Group") 

SUMMARISED UNAUDITED CONSOLIDATED RESULTS FOR THE THREE MONTHS AND SIX MONTHS ENDED 28 FEBRUARY 2017

RENTAL INCOME
UP GBP 10.30m (GBP 10.06m February 2016)

RECURRING PROFIT
UP GBP 5.71m (GBP 5.50m February 2016)

INTERIM DIVIDEND
- GBP 3.60p per share (GBP 3.60p per share February 2016)

STATEMENTS OF FINANCIAL POSITION AT 28 FEBRUARY 2017
                                                                                                     THE GROUP               
                                                                                       Unaudited     Unaudited     Audited   
                                                                                     28 February   29 February   31 August   
                                                                                            2017          2016        2016   
                                                                                          GBP000        GBP000      GBP000   
ASSETS                                                                                                                       
Non-current assets                                                                                                           
Property, plant and equipment                                                                527            14          19   
Investment property                                                                      272,588       280,976     272,588   
                                                                                         273,115       280,990     272,607   
Current assets                                                                                                               
Trade and other receivables                                                                4,367         5,121       5,846   
Cash and cash equivalents                                                                  3,117         5,278       3,639   
                                                                                           7,484        10,399       9,485   
Total assets                                                                             280,599       291,389     282,092   
EQUITY                                                                                                                       
Capital and reserves (attributable to owners of
the parent)
Share capital                                                                            124,412       124,412     124,412   
Hedging reserve                                                                          (3,914)            -      (5,614)   
Accumulated losses                                                                      (10,571)       (5,904)    (10,051)   
Total equity                                                                             109,927       118,508     108,747   
LIABILITIES                                                                                                                  
Non-current liabilities                                                                                                      
Borrowings                                                                               163,212       162,741     162,935   
Derivative financial instrument                                                            3,914            26       5,614   
                                                                                         167,126       162,767     168,549   
Current liabilities                                                                                                          
Trade and other payables                                                                   3,546         9,882       4,719   
Income tax payable                                                                            -            232          77   
                                                                                           3,546        10,114       4,796   
Total liabilities                                                                        170,672       172,881     173,345   
Total equity and liabilities                                                             280,599       291,389     282,092   


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR QUARTER AND HALF YEAR ENDED 28 FEBRUARY 2017

                                                                                      THE GROUP
                                                              Unaudited        Unaudited       Unaudited         Unaudited
                                                                For the          For the         For the           For the
                                                               3 months         3 months        6 months          6 months
                                                                  ended            ended           ended             ended
                                                            28 February      29 February     28 February       29 February   
                                                                   2017             2016            2017              2016   
                                                                 GBP000           GBP000          GBP000            GBP000   
Rental income                                                     4,934            5,717          10,308            10,059   
Expenses                                                                                                                     
Property operating expenses                                       (442)            (758)         (1,424)           (1,424)   
Administrative expenses                                           (316)            (550)           (587)             (805)   
Acquisition related costs                                             -            (120)               -           (2,563)   
Other income                                                         72                -              72                 -    
                                                                  4,248            4,289           8,369             5,267   
Net finance costs                                               (1,439)          (1,434)         (2,862)           (2,692)   
Profit before tax                                                 2,809            2,855           5,507             2,575   
Taxation                                                             84             (68)              84             (301)   
Profit for the period                                             2,893            2,787           5,591             2,274   
Other comprehensive income for the period                                                                                    
Items that may be reclassified subsequently to
profit or loss                                                                             
Fair value (loss)/gain on financial derivatives                   (466)          (4,282)           1,700           (4,384)   
Other comprehensive income for the period                         (466)          (4,282)           1,700           (4,384)   
Total comprehensive income for the period                         2,427            1,495           7,291           (2,110)   
Basic earnings per share (GBP)                                    0.019            0.019           0.037             0.015   
Headline earnings per share (GBP)                                 0.019            0.019           0.037             0.015   



STATEMENTS OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 28 FEBRUARY 2017
                                                                                                 (Accumulated                
                                                                                                     losses)/                
                                                                                     Hedging         Retained                
                                                                   Share capital     reserve         earnings        Total   
                                                                          GBP000      GBP000           GBP000       GBP000   
THE GROUP                                                                                                                    
Balance at 1 September 2016                                              124,412     (5,614)         (10,051)      108,747   
Profit for the period                                                          -           -            5,591        5,591   
Other comprehensive income for the period                                      -       1,700                -        1,700   
Dividends                                                                      -           -          (6,111)      (6,111)   
Balance at 28 February 2017                                              124,412     (3,914)         (10,571)      109,927   
Balance at 1 September 2015                                               80,511           -              834       81,345   
Issue of shares                                                           44,693           -                -       44,693   
Issue costs                                                                (792)           -                -        (792)   
Profit for the period                                                          -           -            2,274        2,274   
Other comprehensive loss for the period                                        -           -          (4,384)      (4,384)   
Dividends                                                                      -           -          (4,628)      (4,628)   
Balance at 29 February 2016                                              124,412           -          (5,904)      118,508   
Balance at 1 September 2015                                               80,511           -              834       81,345   
Issue of shares                                                           44,693           -                -       44,693   
Issue costs                                                                (792)           -                -        (792)   
Loss for the year                                                              -           -            (757)        (757)   
Other comprehensive income for the year                                        -     (5,614)                -      (5,614)   
Other comprehensive income for the period                                      -           -                -            -    
Dividends                                                                      -           -         (10,128)     (10,128)   
Balance at 31 August 2016 (Audited)                                      124,412     (5,614)         (10,051)      108,747   


STATEMENTS OF CASH FLOWS FOR HALF YEAR ENDED 28 FEBRUARY 2017
                                                                                                       THE GROUP   
                                                                                                Unaudited        Unaudited   
                                                                                              28 February      29 February   
                                                                                                     2017             2016   
                                                                                                   GBP000           GBP000   
Cash flows from operating activities                                                                                         
Cash generated from operations                                                                      8,832            1,027
Interest paid                                                                                     (2,727)          (1,765)   
Net cash generated from/(used in) operating activities                                              6,105            (738)   
Cash flows from investing activities                                                                                         
Acquisitions of subsidiaries, net of cash acquired                                                      -         (45,836)   
Addition to property, plant and equipment                                                           (516)             (14)   
Net cash used in investing activities                                                               (516)         (45,850)   
Cash flows from financing activities                                                                                         
Proceeds from borrowings                                                                                -            7,608   
Proceeds from issue of share capital                                                                    -           44,693
Payments for share issuance costs                                                                       -            (792)   
Dividend payment                                                                                  (6,111)          (4,628)   
Net cash (used in)/generated from financing activities                                            (6,111)           46,881   
Net (decrease)/increase in cash and cash equivalents for the period                                 (522)              293   
Cash and cash equivalents at the beginning of the period                                            3,639            4,985   
At 28/29 February                                                                                   3,117            5,278   


RECONCILIATION OF PROFIT FOR HALF YEAR TO HEADLINE EARNINGS
                                                                                          THE GROUP
                                                                     For the         For the         For the       For the
                                                                    3 months        3 months        6 months      6 months
                                                                       ended           ended           ended         ended
                                                                 28 February     29 February     28 February   29 February
                                                                        2017            2016            2017          2016
Basic and headline earnings per share                                 GBP000          GBP000         GBP000         GBP000
Basic earnings from continuing operations                                                                 0               
attributable to equity holders of the Company                          2,893           2,787          5,591          2,274
Headline earnings from continuing operations                                                              0               
attributable to equity holders of the Company                          2,893           2,787          5,591          2,274
Number of shares/weighted average number of shares               152,774,750     148,255,284    152,774,750    148,255,284
Basic earnings per share (GBP)                                         0.019           0.019          0.037          0.015
Headline earnings per share (GBP)                                      0.019           0.019          0.037          0.015

Note: There are no dilutionary instruments in issue

The Company has been established in Mauritius as a public company limited by shares holding a Category 1 Global
Business Licence. The Company has primary listings on the Stock Exchange of Mauritius Ltd ("SEM'') and the Alternative
Exchange of the Johannesburg Stock Exchange ("AltX"). The primary objective of the Company is to acquire good quality,
income-generating retail and logistics/warehouse property assets in the United Kingdom ("UK") and mainland Europe.
The Company's property investments are held by a number of wholly owned subsidiaries. 

REPORTING CURRENCY
The Company's results are reported in Pounds Sterling ("GBP").

BUSINESS REVIEW
We are pleased to report that the Group produced a recurring profit of GBP5.71 million for the period which is slightly ahead
of the previous year's recurring profit of GBP5.50 million. The Group's IFRS result for the period was a profit of GBP5.59 million
compared to the previous year's result of GBP2.27 million.

Letting activity and lease renewals
During the period, the Company undertook fifteen leasing events of which seven were long term core lettings, with an
average lease length of seven years and rent-free of six months.

Nine core leases have been renewed at an average rent increase of 1.65% above valuation Estimated Rental Value ("ERV"),
accounting for rent of GBP735,650 per annum.

As at 28 February 2017, the centres had a combined occupancy of 93.59% (30 November 2016: 93.34%) by ERV and 92.38%
(30 November 2016: 91.54%) by Gross Lettable Area.

There are a further seven units currently under offer on long term lettings and thirteen core lease renewals ongoing which
will result in a further improvement to the overall occupancy of the centres.

A number of asset management initiatives are under way within all schemes which will allow the Company to improve the
quality of space that is offered to tenants, allowing them the opportunity to upsize and improve their profitability.

Net asset value ("NAV")
The European Public Real Estate Association ("EPRA") NAV is a proportionally consolidated measure representing the
International Financial Reporting Standards ("IFRS") net assets excluding the mark-to-market on effective cash flow hedges
and related debt adjustments, the mark-to-market on convertible bonds as well as deferred taxation on property and
derivative valuations.

EPRA NAV, based on the shares in issue throughout the period of 152,774,750, is 75 pence per share, up from 73 pence per
share at 30 November 2016.

PROSPECTS
During this period, the Company's business strategy has continued to evolve to take into account changes in the prevailing
political and economic climate. In particular, in relation to the European investment property market's reaction to the
European Union Referendum result and the resultant triggering of Article 50, whereby the UK served notice to leave the
European Union.

The Company's strategy continues to retain its retail focus with a refined strategy to also acquire:

a.  retail property within mainland Europe and the UK; and
b.  non-retail assets within mainland Europe and the UK.

Preference will be given to dominant retail assets and logistics/warehouse properties let to tenants in the UK, Germany,
Austria, Slovakia, Czech Republic, Poland, Ireland, and Benelux.

The Company has since been working hard to execute the strategy and have identified a shortlist of properties that meet
its investment criteria including a logistics warehouse in Austria and a logistics and distribution centre in Slovakia which are
currently under offer for approximately EUR33 million at a NIY of over 7%. The proposed acquisitions in Slovakia and Austria
will provide exposure to the logistics/warehouse market enabling the Company to benefit from the increase of e-retail
activity across Europe. Should the proposed acquisitions be successfully implemented, New Frontier will publish a further
announcement in this regard.

This approach will enable the Company to exploit a much wider range of opportunities, reducing its overall risk profile whilst
continuing to benefit from the profits contributed by our existing centres and broadening our hard currency exposure.

CHANGE IN FUNCTION OF DIRECTORS
Richard Thomas, an independent non-executive director of the Company, has with effect from 11 January 2017 been appointed
as the lead independent non-executive director.

Mr Andile Mazwai, formerly an independent non-executive director of the Company, will now be categorised as a
non-independent non-executive director of the Company, due to his recent appointment as an executive director and the
chief operating officer of Rebosis Property Fund Limited, the Company's controlling shareholder.

DIVIDEND
The Company's dividend policy is to consider declarations of dividends on a six-monthly basis in line with its year-end and
half-year which are August and February respectively. The Board is pleased to announce that a dividend of 3.6 pence per
share (approximately GBP5.50 million) has been declared for the period under review. An  announcement, containing
details of this dividend, will be made on the Stock Exchange News Service of the Johannesburg Stock Exchange ("JSE") as
well as the website of the SEM and will be issued separately.

BASIS OF PREPARATION
These summarised unaudited consolidated results for the six months ended 28 February 2017 have been prepared in
accordance with IFRS, including IAS34 - Interim Financial Reporting, the SEM Listing Rules, the Securities Act of Mauritius
2005 and the JSE Listings Requirements to the extent required.

ACCOUNTING POLICIES
The accounting policies adopted are consistent with those used to prepare the audited annual financial statements for the
year ended 31 August 2016.

These financial statements have not been reviewed or reported on by the Company's external auditors.

SEGMENTAL INFORMATION
The Group derives its revenue from a single business activity, the property sector, which it considers as its only segment.

By order of the Board

Osiris Corporate Solutions (Mauritius) Limited
Company secretary

13 April 2017

NOTES
Copies of this report are available to the public at the registered office of the Company, B45 Twenty-Foot Road, 3rd Floor, La Croisette, Grand Baie, Mauritius.

Copies of the statement of direct or indirect interest of the Senior Officers of the Company pursuant to rule 8(2)(m) of the Securities (Disclosure of Obligations 
of Reporting Issuers) Rules 2007 are available to the public upon request to the Company Secretary at the Registered Office of the Company at B45 Twenty-Foot Road, 
3rd Floor, La Croisette, Grand Baie, Mauritius.

This communiqué is issued pursuant to Listing Rules 12.20 and 12.21 and Section 88 of the Securities Act of Mauritius 2005. The Board of New Frontier Properties Ltd 
accepts full responsibility for the accuracy of the information in this communiqué.

For further information please contact:

JSE sponsor
Java Capital +27 11 722 3050

Company secretary
Osiris Corporate Solutions (Mauritius) Limited +230 650 4030



Date: 13/04/2017 11:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

Email this JSE Sens Item to a Friend.

Share This Story