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Summarised financial statements for the year ended 28 February 2017 and declaration of 4.3 GPB pence dividend
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")
SUMMARISED AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 28 FEBRUARY 2017 AND DECLARATION OF 4.3 GBP PENCE DIVIDEND
KEY HIGHLIGHTS
Total Assets GBP318m UP 46%
Total Rental Revenue GBP20m UP 136%
Adjusted HEPS 9 GBP pence per share UP 25%
Total Distribution 8.5 GBP pence per share UP 21%
DIRECTORS' COMMENTARY
Atlantic Leaf Properties Limited presents its results for the year ended 28 February 2017.
The results reflect the substantial growth and development the Company has achieved over the past financial
year. The Company has substantially met its aim to establish itself as a property investment company with
a focus on the United Kingdom ("UK") industrial market providing attractive and growing distributions to
its shareholders.
UK Portfolio and Property Environment
The Company has grown its portfolio of industrial and office properties across the UK by 51% over the past
year. The market in which the Company operates has been strong and to date largely unaffected by the
uncertainty caused by Brexit. The Company remains confident that there are good acquisition opportunities
and will continue to seek out transactions that meet the Company's overall objectives.
Interest rates in the UK remain low and through being able to leverage acquisitions at these low rates, the
Company can meet its objective of delivering a highly attractive GBP return to its shareholders.
The Company's portfolio consists of quality assets which have long-term, single-tenant leases with
multi-national or national occupiers in key regional nodes in the UK. The Company has enjoyed a successful
year in which assets under management increased to GBP304 million (2016: GBP196 million) and the total gross
lettable area of the portfolio now stands at 4.3 million ft2 (457,000 m2), across 48 properties, with an average
yield of 7.3% and a weighted average unexpired lease term of approximately 12 years.
Gearing
Atlantic Leaf has a target Loan-to-value ("LTV") ratio of 50% and given the long-term nature of the leases it
has in place, management is comfortable with the LTV level combined with the benefit of the overall cost of
debt of approximately 3.2% per annum. Currently, 74% of Atlantic Leaf's debt has been hedged with interest
rate swaps.
Earnings and NAV
The weighted average adjusted headline earnings per share for the period is 9.0 GBP pence per share, an
increase of 25% over the previous year and in line with management's expectations. Total income earned from
properties has increased by 136% to GBP20 million (2016: GBP8.5 million) for the full year.
As per IFRS, acquisition costs are capitalised to the property on acquisition which is consistent with our
existing accounting policy. The Company has capitalised costs of GBP6.5 million in its portfolio, the largest
component of which is stamp duty on acquisitions. At year end, IFRS requires properties during the year
under review to be held at fair value which is defined as the net price at which the properties can be sold.
Given the fact that we have held many properties over a short period and that the market has not appreciated
significantly, values have not increased sufficiently to absorb all acquisition costs. Accordingly, accounting for
investment properties at fair value at year end has resulted in a downward revaluation of GBP3.1 million.
Importantly Atlantic Leaf directors remain satisfied that the investment case on which asset acquisitions were
based are still valid and that the assets continue to perform in line with or better than expected. The directors
of the Company are also satisfied with the overall value of the investment properties at year-end.
DIVIDENDS DECLARED
Following the interim distribution paid to shareholders of 4.2 GBP pence per share, the board of directors of
Atlantic Leaf ("the Board") is pleased to announce a final dividend of 4.3 GBP pence per share for the year
ended 28 February 2017 bringing the annual distribution to 8.5 GBP pence per share, an increase of 21% over
the 2016 distribution of 7 GBP pence per share. This distribution is in line with the forecast given at the time of
migrating the listing of Atlantic Leaf to the Main Board of the JSE Limited ("JSE").
Further information regarding the final dividend, including salient dates and exchange rates, will be announced
separately.
COMPANY OUTLOOK
The Board believes that a solid foundation has been laid and that Atlantic Leaf has the ability to add further
assets over the coming year, leveraging off its strong foundation and pipeline of opportunities in place.
On the migration of its listing to the Main Board of the JSE, the Group forecast earnings of 8.9 GBP pence
per share for the 2017/18 financial year based on a static balance sheet which assumed no new purchases
or disposals of assets. Taking into account transactions completed after migrating to the Main Board of the
JSE, the forecast has been revised to 9.0 GBP pence per share for the 2017/18 financial year on a static basis.
The forecast is based on the current leases and the existing debt structure, including the portion of interest
that has been fixed. We remain of the view that the forecast is achievable in the year ahead which would see
further growth of at least 6% in our distribution for the 2017/18 year. This forecast has not been reviewed or
reported on by the Company's auditors.
Management is also active in extracting additional value from our current portfolio and there are a number of
specific acquisition opportunities under consideration that meet our criteria in terms of asset quality, location,
covenant and yield.
OTHER
Atlantic Leaf has primary listings both on the Stock Exchange of Mauritius Ltd ("SEM") and on the JSE.
There have been no changes to the Board since the release of the unaudited financial statements for the nine
months ended 30 November 2016.
By order of the Board
Intercontinental Trust Limited
Company Secretary
18 April 2017
STATEMENT OF CASH FLOWS
Group Group
Audited Audited
Year ended Year ended
28-Feb-2017 28-Feb-2016
GBP GBP
Cash generated from operations 17 162 555 2 491 953
Interest received 204 980 146 722
Finance costs (4 182 627) (2 252 143)
Tax paid (906 750) (517 159)
Net cash from/(utilised in) operating activities 12 278 158 (130 627)
Cash flows from investing activities
Payment for business combinations – (27 885 537)
Acquisition of investment properties (114 685 033) (62 329 516)
Sale of investment property 11 300 000 –
Sale of listed investments – 432 369
Deposit paid for acquisition of properties – (6 000 000)
Dividends received 23 643 33 821
Loan to APIL 6 733 730 (4 943 411)
Net cash utilised in investing activities (96 627 660) (100 692 274)
Cash flow from financing activities
Proceeds from issue of shares 19 430 385 97 701 063
Proceeds from borrowings 88 499 186 57 954 878
Repayment of borrowings (7 713 000) (56 615 443)
Dividends paid (9 651 269) (1 464 784)
Net cash utilised from financing activities 90 565 302 97 575 714
Increase in cash and cash equivalents 6 215 800 (3 247 187)
Cash and cash equivalents at beginning of the year 6 223 292 9 686 551
Effects of exchange difference on cash and cash equivalents 256 986 (216 072)
Cash and cash equivalents at end of year 12 696 078 6 223 292
SEGMENTAL REPORTING – 2017
Retail
Industrial Office Warehouse Unallocated Total
GBP GBP GBP GBP GBP
Statement of profit or loss
Revenue 15 602 230 3 988 762 444 409 1 293 509 21 328 910
Profit on disposal of
investment property 1 062 312 – – – 1 062 312
Fair value adjustments (1 094 144) (2 066 356) (94 000) (1 263 702) (4 518 202)
Interest expense (3 569 778) (792 722) (120 854) – (4 483 354)
Income tax (1 101 926) (362 568) (28 212) (3 214) (1 496 520)
Adjusted headline earnings 9 046 873 2 547 441 236 883 (188 773) 11 642 424
Statement of financial position
Additions to investment property 81 810 332 39 149 394 – – 120 959 726
Total assets 221 514 361 76 111 378 5 810 000 14 515 946 317 951 685
Total borrowings 112 066 212 42 336 235 2 211 298 – 156 613 745
SEGMENTAL REPORTING – 2016
Retail
Industrial Office Warehouse Unallocated Total
GBP GBP GBP GBP GBP
Statement of profit or loss
Revenue 8 068 174 27 207 394 353 683 562 9 173 296
Fair value adjustments 2 587 489 – (372 493) (445 532) 1 769 464
Interest expense (2 370 137) – (157 857) – (2 527 994)
Income tax (493 063) (3 907) (17 347) (6 525) (520 842)
Adjusted headline earnings 4 701 096 23 299 215 016 (446 791) 4 492 620
Statement of financial position
Additions to investment property 147 989 665 38 871 962 6 272 493 – 193 134 120
Total assets 150 930 704 38 871 962 5 900 000 21 570 052 217 272 718
Total borrowings 72 151 398 – 3 182 867 – 75 334 265
RELATED PARTY TRANSACTIONS
The related party transactions are detailed below:
- Per the Property Services Agreement ("PSA"), fees for the full year paid to Martial Eagle Limited amounted
to GBP 1 841 886 (2016: GBP 967 478).
- During the current year, advisory fees of GBP 870 251 (2016: GBP 650 693) were paid to Leaf Capital
Proprietary Limited as per each Corporate Finance Mandate approved by the Board.
- The loan receivable from Atlantic Properties Investments Limited of GBP 6 775 883 was repaid during
the year.
STATEMENT OF FINANCIAL POSITION
Group Group
Audited Audited
as at as at
28 Feb 2017 28 Feb 2016
GBP GBP
ASSETS
Non-current assets 303 920 316 208 797 385
Investment properties 303 068 000 195 349 116
Listed investments 702 193 672 386
Loan receivable – 6 775 883
Other receivables 150 123 –
Deposit paid for acquisition of properties – 6 000 000
Current assets 14 031 369 8 475 333
Trade and other receivables 1 335 291 2 252 041
Cash and cash equivalents 12 696 078 6 223 292
Total assets 317 951 685 217 272 718
Equity and liabilities
Equity 154 796 268 136 029 957
Stated capital 152 772 761 132 854 283
Cash flow hedge reserve (1 880 949) (1 783 633)
Retained earnings 3 904 456 4 959 307
Liabilities
Non-current liabilities 149 574 995 74 096 765
Interest-bearing borrowings 149 574 995 74 096 765
Current liabilities 13 580 422 7 145 996
Trade and other payables 3 662 997 3 762 654
Current portion of interest-bearing borrowings 7 038 750 1 237 500
Derivative financial instrument 1 991 587 1 848 524
Tax payable 887 088 297 318
Total equity and liabilities 317 951 685 217 272 718
Number of shares in issue 142 671 209 123 407 090
Net asset value per share (GBP) 1.08 1.10
Net asset value per share excluding cash flow hedge reserve 1.10 1.12
STATEMENT OF COMPREHENSIVE INCOME
Group Group
Audited Audited
Year ended Year ended
28 Feb 2017 28 Feb 2016
GBP GBP
Rental revenue 20 035 401 8 489 734
Straight-line lease income adjustment 1 293 509 683 562
Revenue 21 328 910 9 173 296
Property operating expenses (862 555) (513 091)
Other operating expenditure (2 401 771) (2 018 193)
Operating income/(loss) 18 064 584 6 642 012
Other income 1 935 73 368
Investment income 196 770 222 696
Profit on disposal of investment property 1 062 312
Profit/(loss) on foreign exchange 256 986 (216 072)
Fair value adjustments (4 518 202) 1 769 464
Finance costs (4 483 354) (2 527 994)
Profit before taxation 10 581 031 5 963 474
Taxation (1 496 520) (520 842)
Profit for the year 9 084 511 5 442 632
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
Fair value movement on interest rate swaps (97 316) (1 783 633)
Total comprehensive income for the year 8 987 195 3 658 999
STATEMENT OF CHANGES IN EQUITY
Cash flow
Stated Retained hedge
capital earnings reserve Total
GBP GBP GBP GBP
Balance at 1 March 2015 34 770 873 1 363 806 – 36 134 679
Profit for the year – 5 442 632 – 5 442 632
Dividends – (1 847 131) – (1 847 131)
Issue of shares (net of transaction costs) 98 083 410 – – 93 083 410
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
Profit for the year – 9 084 511 – 9 084 511
Dividends – (10 139 362) – (10 139 362)
Issue of shares (net of transaction costs) 19 918 478 – – 19 918 478
Other comprehensive income – – (97 316) (97 316)
Balance at 28 February 2017 152 772 761 3 904 456 (1 880 949) 154 796 268
RECONCILIATION OF BASIC EARNINGS TO DISTRIBUTABLE EARNINGS
Group Group
Audited Audited
Year ended Year ended
28 Feb 2017 28 Feb 2016
GBP GBP
Basic earnings 9 084 511 5 442 632
Less:
Fair value adjustments to investment properties 4 384 351 (1 531 434)
Profit on disposal of investment property (1 062 312) -
Gain on bargain purchase - (42 500)
Headline earnings 12 406 550 3 868 698
Add back:
Straight line lease adjustments (1 293 509) (683 562)
Gain on bargain purchase - 42 500
Adjusted for once-off costs
Transaction costs 365 725 1 011 871
Fair value loss on cash flow hedges transferred 163 658 -
Foreign exchange loss on equity raised - 253 113
Adjusted headline earnings/Distributable earnings 11 642 424 4 492 620
Weighted average number of shares in issue 129 548 965 62 491 061
Basic and diluted earnings per share (GBP pence) 7.01 8.71
Basic and diluted headline earnings per share (GBP pence) 9.58 6.19
Adjusted headline earnings per share (GBP pence) 9.00 7.19
Interim dividend 5 203 078 -
Final dividend 6 134 862 4 936 284
Total dividend 11 337 940 4 936 284
Interim dividend per share (GBP pence) 4.20 3.00
Final dividend per share (GBP pence) 4.30 4.00
Total dividend per share (GBP pence) 8.50 7.00
NOTES
The Company is required to publish financial results for the year ended 28 February 2017 in terms of Listing
Rule 12.14 of the SEM. The summarised audited financial statements for the year ended 28 February 2017
("financial statements") have been prepared in accordance with the framework concepts and the
measurement and recognition requirements of International Financial Reporting Standards, the requirements
of the SAICA Financial Reporting Guides as issued by the Accounting Practice Committee, the SEM Listing
Rules, the Securities Act of Mauritius 2005, the JSE Listings Requirements and contains the information
required by IAS 34 Interim Financial Reporting.
The accounting policies and methods of computation adopted in the preparation of these financial statements
are in terms of International Financial Reporting Standards and consistent with those applied in the preparation
of the audited financial statements for the year ended 28 February 2016.
These summarised audited financial statements were approved by the Board on 17 April 2017. Mazars Mauritius
and Mazars South Africa have issued their unmodified audit opinion on the Company's financial statements
for the year ended 28 February 2017. 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 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 of Mauritius, 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:
Mrs. Smitha Algoo.
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 and this announcement. The directors of Atlantic Leaf have disclosed all matters or
circumstances arising subsequent to the year ended 28 February 2017 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
SEM authorised representative and sponsor
Perigeum Capital Ltd +230 402 0890
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