Wrap Text
Summarised unaudited consolidated results for the three months and nine months ended 31 May 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 NINE MONTHS ENDED 31 MAY 2017
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
(“AltX”) of the Johannesburg Stock Exchange (“JSE”). 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
The Group’s International Financial Reporting Standards (“IFRS”) result for the period was a profit of GBP 7.459 million compared
to the previous period’s result of GBP 5.005 million. The Group produced a recurring profit of GBP 7.684 million for the period
compared to the previous period’s recurring profit of GBP 8.541 million. A reconciliation table of the recurring profit to IFRS total
comprehensive income for the period is provided in the financial section at the end of this report.
Letting activity and lease renewals
The Company has made progress letting vacant units in a challenging retail environment which is facing headwinds from rising
inflation and consumer concerns over the European Union Referendum result and the resultant triggering of Article 50, whereby the
UK served notice to leave the European Union (“Brexit”).
During the period, the Company undertook eight leasing events of which four were long-term core lettings, with an average lease
length of ten years and rent free of six months.
Three core leases have been renewed at an average rent increase of 5.97% above valuation Estimated Rental Value (“ERV”),
accounting for rent of GBP 82,000 p.a.
As at 31 May 2017, the centres had a combined occupancy of 93.53% (28 February 2017: 93.59%) by ERV and 91.54% (28 February
2017: 92.38%) by Gross Lettable Area.
There are a further four units currently under offer on long-term lettings and twelve 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 IFRS net
assets excluding the mark-to-market (“MTM”) on effective cash flow hedges and related debt adjustments, the MTM 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 72 pence per share for the period ended 31 May
2017 compared to 75 pence per share at 28 February 2017. A reconciliation table of the EPRA NAV to the Statement of Financial
Position is provided in the financial section at the end of this report.
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 Brexit.
The Company’s strategy continues to retain its retail focus. However, the Company has refined this 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 refined strategy and has identified a shortlist of properties that meet its
investment criteria including a logistics warehouse in Austria which is currently under offer. The proposed acquisition in 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 acquisition and capital raise 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 its existing centres and broadening its hard currency exposure.
CHANGES TO BOARD OF DIRECTORS
Mr Kameel Keshav has resigned as a non-executive director of the Company with effect from 29 June 2017. It is the Company’s
intention to have three current directors of its major shareholder, Rebosis Property Fund Limited (“Rebosis”) as members of its
Board of directors. Therefore, following the recent resignation of Mr Keshav as CFO of Rebosis, Mr Keshav has resigned from the
Board of New Frontier to allow the Company to maintain the balance of South African and UK directors for UK REIT regulations.
The directors would like to thank Mr Keshav for his valuable contribution and commitment to the Company.
On 5 July 2017 the Company was pleased to announce that Mrs Marelise De Lange, the CFO of Rebosis, was appointed to the
Board as a non-executive director.
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.
As a result, no dividend has been declared for the period under review.
ASSET MANAGEMENT AGREEMENT (“Agreement”)
The Board of the Company has issued a notice dated 27 June 2017 informing the Company’s shareholders that it has proposed to
make certain amendments to the Agreement to incentivise the asset manager, Waypoint New Frontier Limited, to acquire further
assets. This was approved by shareholders on 10 July 2017.
CAPITAL REDUCTION
On 9 June 2017 the Board of the Company issued a notice informing the Company’s shareholders and the public in general that it
has put forward a proposal for the reduction of the Company’s stated capital which was subsequently approved by its shareholders
by special resolution at a special meeting of the Company on 11 July 2017.
BASIS OF PREPARATION
These summarised unaudited consolidated results for the nine months ended 31 May 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
14 July 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
NEW FRONTIER PROPERTIES LTD
STATEMENTS OF FINANCIAL POSITION AT 31 MAY 2017
THE GROUP
Restated
Unaudited Unaudited Audited
31 May 31-May 31 August
2017 2016 2016
£000 £000 £000
ASSETS
Non-current assets
Property,plant and equipment 849 20 19
Investment property 272,588 280,976 272,588
273,437 280,996 272,607
Current assets
Trade and other receivables 4,507 4,816 5,846
Cash and cash equivalents 4,720 2,765 3,639
9,227 7,581 9,485
Total assets 282,664 288,577 282,092
EQUITY
Capital and reserves (attributable to owners of the parent)
Share capital 124,412 124,412 124,412
Hedging reserve (3,768) (2,899) (5,614)
Accumulated losses (14,105) (4,289) (10,051)
Total equity 106,539 117,224 108,747
LIABILITIES
Non-current liabilities
Borrowings 166,862 162,838 162,935
Derivative financial instrument 3,768 2,899 5,614
170,630 165,737 168,549
Current liabilities
Trade and other payables 4,403 5,383 4,719
Income tax payable 1,092 233 77
5,495 5,616 4,796
Total liabilities 176,125 171,353 173,345
Total equity and liabilities 282,664 288,577 282,092
Restatement
As at 31 May 2016 the accounting entries for the MTM movements on the derivatives were incorrectly accounted for through
retained earnings rather than the hedging reserve. The Statement of Financial Position as at 31 May 2016 has been restated
to show the MTM through the hedging reserve. The adjustments for the restated Statement of Financial Position are contained
in the table at the end of this document.
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR QUARTER AND NINE MONTHS ENDED 31 MAY 2017
THE GROUP
Unaudited Unaudited Unaudited Unaudited
For the For the For the 9
quarter quarter months For the 9
ended 31 ended 31 ended 31 months ended
May 2017 May 2016 May 2017 31 May 2016
£000 £000 £000 £000
Rental income 4,727 5,143 15,035 15,202
Expenses
Property operating expenses (1,075) (720) (2,499) (2,144)
Administrative expenses (332) (461) (919) (1,268)
Acquisition related costs - - - (2,562)
Other income - - 72 -
3,320 3,962 11,689 9,228
Net finance
costs (1,452) (1,221) (4,314) (3,912)
Profit before
tax 1,868 2,741 7,375 5,316
Taxation - (10) 84 (311)
Profit for the
period 1,868 2,731 7,459 5,005
Other comprehensive income for the period
Items that may be reclassified subsequently to profit or loss
Fair value gain/(loss) on financial derivatives 146 1,485 1,846 (2,899)
Other comprehensive income for the period 146 1,485 1,846 (2,899)
Total comprehensive income/(loss) for the period 2,014 4,216 9,305 2,106
Basic earnings per share (GBP) 0.0122 0.0179 0.0488 0.0334
Headline earnings per share (GBP) 0.0122 0.0179 0.0488 0.0334
STATEMENTS OF CHANGES IN EQUITY FOR THE NINE MONTHS ENDED 31 MAY 2017
Share Hedging Accumulated
capital reserve losses Total
£000 £000 £000 £000
THE GROUP
Balance at 01 September 2016 124,412 (5,614) (10,051) 108,747
Profit for the period - - 7,459 7,459
Other comprehensive income for the period - 1,846 - 1,846
Dividends - - (11,611) (11,611)
Waiver of dividend - - 98 98
Balance at 31 May 2017 124,412 (3,768) (14,105) 106,539
Balance at 01 September 2015 80,511 - 834 81,345
Issue of shares 44,693 - - 44,693
Issue costs (792) - - (792)
Profit for the period - - 5,005 5,005
Other comprehensive loss for the period - - (2,899) (2,899)
Dividends - - (10,128) (10,128)
Balance at 31 May 2016 124,412 - (7,188) 117,224
Balance at 01 September 2015 80,511 - 834 81,345
Issue of shares 44,693 - - 44,693
Issue costs (792) - - (792)
Profit for the period - - 5,005 5,005
Other comprehensive loss for the period - (2,899) - (2,899)
Dividends - - (10,128) (10,128)
Balance at 31 May 2016 (Restated) 124,412 (2,899) (4,289) 117,224
Balance at 01 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)
Dividends - - (10,128) (10,128)
Balance at 31 August 2016 (Audited) 124,412 (5,614) (10,051) 108,747
STATEMENTS OF CASH FLOWS FOR NINE MONTHS ENDED 31 MAY 2017
THE GROUP
Restated
Unaudited Unaudited Audited
31 May 31 May 31 August
2017 2016 2016
£000 £000 £000
Cash flows from operating activities
Cash generated from operations 13,773 8,064 11,617
Tax received/(paid) 217 (671) (1,119)
Interest paid (4,052) (3,492) (5,723)
Net cash generated from operating activities 9,938 3,901 4,775
Cash flows from investing activities
Acquisitions of subsidiaries, net of cash acquired - (11,553) (11,553)
Addition to investment property - (358) (358)
Addition to property, plant and equipment (831) (20) (20)
Interest received 1 - 1
Net cash used in investing activities (830) (11,931) (11,930)
Cash flows from financing activities
Repayments on long-term borrowings - (27,827) (27,827)
Proceeds from loans 3,500 500 500
Payment on borrowing costs (14) (637) (637)
Proceeds from issue of share capital - 44,694 44,693
Payments for share issuance costs - (792) (792)
Dividend payment (11,513) (10,128) (10,128)
Net cash (used in)/generated from financing activities (8,027) 5,810 5,809
Net increase/(decrease) in cash and cash equivalents for the
1,081 (2,220) (1,346)
period
Cash and cash equivalents at the beginning of the period 3,639 4,985 4,985
At 31 May 2017/2016 4,720 2,765 3,639
Restatement
The acquisition of the Blackpool shopping centre was for a cash purchase consideration of GBP 13.4 million less cash acquired of
GBP 1.8 million, effectively a purchase consideration of GBP 11.6 million. The statement of cash flows for the nine months ended
31 May 2016 and six months ended 28 February 2016 misallocated the repayments on long-term borrowings, proceeds from loans and
payments on borrowing costs to the acquisition of subsidiaries net of cash acquired line item in the statement of cash flows.
The adjustments for the restated statement of cash flows are contained in the table at the end of this document.
RECONCILIATION OF PROFIT FOR NINE MONTHS TO HEADLINE EARNINGS
THE GROUP
Basic and headline earnings per share
Unaudited Unaudited Unaudited Unaudited
For the 3 For the 3 For the 9 For the 9
months months months months
ended ended ended ended
31 May 31 May 31 May 31 May
2017 2016 2017 2016
£000 £000 £000 £000
Basic earnings from continuing operations
attributable to equity holders of the Company 1,868 2,731 7,459 5,005
Headline earnings from continuing operations
attributable to equity holders of the Company 1,868 2,731 7,459 5,005
Number of shares/weighted average number of
shares 152,774,750 152,774,750 152,774,750 149,772,769
Basic earnings per share (GBP) 0.0122 0.0179 0.0488 0.0334
Headline earnings per share (GBP) 0.0122 0.0179 0.0488 0.0334
Note: There are no dilutionary instruments in issue
Reconciliation of IFRS total comprehensive income to recurring profit
Basis of preparation
In order to provide information of relevance to investors and a meaningful basis of comparison, unaudited management accounts
have been prepared and are presented below. The directors consider that the management accounts are more meaningful in
interpreting the performance of the Company. The management accounts diverge from IFRS as they make adjustments to total
comprehensive income to determine recurring profit and EPRA NAV.
The preparation of the management accounts is the sole responsibility of the directors and has been prepared in accordance with
the basis decided for illustrative purposes only. Due to their nature, the management accounts may not fairly present the results of
the Company.
Unaudited for the Unaudited for the Unaudited for the Unaudited for the Audited for the
9 months ended 9 months ended 6 months ended 3 months ended year ended
31 May 2017 31 May 2016 28 Feb 2017 30 Nov 2016 31 Aug 2016
£000 £000 £000 £000 £000
Total 9,305 2,106 7,291 4,864 (6,371)
comprehensive
income for the
period
Fair value (1,846) 2,899 (1,700) (2,166) 5,614
(gain)/loss on
financial
derivatives
Basic 7,459 5,005 5,591 2,698 (757)
earnings/(loss)
Fair value - - - - 8,745
movement on
investment
property
Amortised loan 309 318 202 101 419
costs
Taxation (84) 311 (84) - (52)
Acquisition - 2,562 - - 2,563
related fees
Administrative - 345 - - 761
expenses
Recurring profit 7,684 8,541 5,709 2,799 11,679
EPRA has issued recommended bases for the calculation of NAV per share (see the table below). Commentary on NAV per share
is provided in the business review.
Unaudited as at Unaudited as at Unaudited as at Unaudited as at Unaudited as at
31 May 2017 31 May 2016 28 Feb 2017 30 Nov 2016 31 Aug 2016
£000 £000 £000 £000 £000
Total equity 106,539 117,224 109,927 107,501 108,747
Adjusted for;
MTM of financial 3,768 2,899 3,914 3,448 5,614
derivatives
EPRA NAV 110,307 120,123 113,841 110,949 114,361
No. of shares 152,774,750 152,774,750 152,774,750 152,774,750 152,774,750
NAV per share 0.72 0.79 0.75 0.73 0.75
(GBP)
EPRA NAV excludes MTM of financial derivatives.
Reconciliation of restatement of the balance sheet at 31 May 2016
THE GROUP
Restated
Unaudited Adjustment Unaudited
31 May 31 May
2016 2016
£000 £000 £000
ASSETS
Non-current assets
Property,plant and equipment 20 20
Investment property 280,976 280,976
280,996 - 280,996
Current assets
Trade and other receivables 4,816 4,816
Cash and cash equivalents 2,765 2,765
7,581 - 7,581
Total assets 288,577 - 288,577
EQUITY
Capital and reserves (attributable to owners of the parent)
Share capital 124,412 124,412
Hedging reserve - (2,899) (2,899)
Accumulated losses (7,188) 2,899 (4,289)
Total equity 117,224 - 117,224
LIABILITIES
Non-current liabilities
Borrowings 162,838 162,838
Derivative financial instrument 26 2,873 2,899
162,864 - 165,737
Current liabilities
Trade and other payables 8,256 (2,873) 5,383
Income tax payable 233 233
8,489 - 5,616
Total liabilities 171,353 - 171,353
Total equity and liabilities 288,577 - 288,577
Reconciliation of restatement of cash flows for nine months ended 31 May 2016 and six months ended 29 February 2016
THE GROUP
Unaudited Restated Unaudited Restated
31 May Adjustment 31 May 29-Feb Adjustment 29-Feb
2016 2016 2016 2016
£000 £000 £000 £000
Cash flows from operating activities
Cash generated from operations 8,064 - 8,064 1,027 - 1,027
Tax received/(paid) (755) 84 (671) - 84 84
Interest paid (3,492) - (3,492) (1,765) - (1,765)
Net cash generated from operating activities 3,817 84 3,901 (738) 84 (654)
Cash flows from investing activities
Acquisitions of subsidiaries, net of cash acquired (45,836) 34,283 (11,553) (45,836) 34,283 (11,553)
Addition to investment property - (358) (358) - (358) (358)
Addition to property, plant and equipment (20) - (20) (14) - (14)
Net cash used in investing activities (45,856) 33,925 (11,931) (45,850) 33,925 (11,925)
Cash flows from financing activities
Repayments on long-term borrowings - (27,827) (27,827) - (27,827) (27,827)
Proceeds from loans 6,045 (5,545) 500 7,608 (5,545) 2,063
Payment on borrowing costs - (637) (637) - (637) (637)
Proceeds from issue of share capital 44,694 - 44,694 44,693 - 44,693
Payments for share issuance costs (792) - (792) (792) - (792)
Dividend payment (10,128) - (10,128) (4,628) - (4,628)
Net cash (used in)/generated from financing
activities 39,819 (34,009) 5,810 46,881 (34,009) 12,872
Net increase/(decrease) in cash and cash
(2,220) (2,220) 293 293
equivalents for the period
Cash and cash equivalents at the beginning of the
period 4,985 4,985 4,985 4,985
At 31 May 2016 / 29 February 2016 2,765 2,765 5,278 5,278
Date: 14/07/2017 02:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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