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Abridged unaudited financial statements for the 3 & 6 months ended 31 August 2017, declaration of 4.5 GBP 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
ABRIDGED UNAUDITED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED 31 AUGUST 2017 AND DECLARATION
OF 4.5 GBP PENCE DIVIDEND
DIRECTORS’ COMMENTARY
The Company’s results for the six months ended 31 August 2017 are in line with the guidance given to shareholders at
the time of the announcement relating to the DFS transaction released on 12 September 2017 and as further detailed
below. Adjusted headline earnings per share of 2.19 GBP pence per share (2016: 2.24 GBP pence) was similar to the
prior period due to limited lease escalations during the review period. The Company however has declared an interim
dividend of 4.5 GBP pence per share (2016: 4.2 GBP pence), up 7% from the previous year. The results are reflective
of the stable environment in which the Company operates. Our properties remain 100% occupied and the leases are
backed by tenants with strong covenants. The results for the six months ended 31 August 2017 as compared with the
six months ending 31 August 2016 can be summarised as follows:
31—Aug—2016 31—Aug—2017
Assets Under Management (GBP million) 264 304 + 15%
Total Rental Revenue (GBP million) 10 12 + 20%
Adjusted HEPS (GBP pence per share) 4.57 4.51 —1%
Total Distribution (GBP pence per share) 4.20 4.50 + 7%
GEARING
Atlantic Leaf has a target Loan—to—value ("LTV") ratio of 50% with LTV at 31 August 2017 of 50.3% 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, 76% of Atlantic Leaf’s debt has been hedged
with interest rate swaps.
DIVIDENDS DECLARED
The Board of Atlantic Leaf is pleased to announce an interim dividend of 4.5 GBP pence per share for the six months
ended 31 August 2017. Further information regarding the interim dividend, including salient dates and exchange rates,
will be announced in due course on or around 31 October 2017.
PROSPECTS
As announced on 12 September 2017, the Company is expecting to achieve the forecasted full year distribution of 9.1
GBP pence per share, which would represent a 7.1% increase on the prior year. This forecast is based on the current
portfolio, the investment of the surplus cash and no material change in market conditions. This forecast has not been
reviewed by the external auditors.
The UK commercial property sector remains very active despite the uncertainty around BREXIT. Demand is strong
and the Company is confident that it will be successful in continuing to grow its property assets under management
which now exceed GBP 350 million (2016: GBP 264 million).
The strong forward property yield of 7.3% on our portfolio is underpinned by high quality commercial and industrial
properties in excellent regional locations throughout the United Kingdom with long term leases from high quality
tenants.
SUBSEQUENT EVENTS
Post the reporting period and as announced on 12 September 2017, the Company entered into an agreement to
acquire 45% of a portfolio of eleven properties tenanted by DFS Trading Limited, in a joint venture with LMP Retail
Warehouse JV Holdings Limited. The equity contribution of the Company of GBP 24.8 million including acquisition
costs was financed by a very successful accelerated book build on 20 September 2017 in which the Company issued
46 305 419 new shares, raising GBP 47 million.
Management is evaluating further acquisition opportunities that meet the Company’s investment criteria and it is
expected that the balance of the cash will be deployed in the short to medium term. The Company has also invested
in a portfolio of listed REIT’s which provide good dividend income.
On 20 September 2017, Vukile Property Fund Limited ("Vukile") informed the Board of Atlantic Leaf that, as a
consequence of its participation in the accelerated book build, its shareholding in the company had exceeded 30%
of the Company’s enlarged share capital, which in terms of the Mauritian Securities (Takeover Rules) 2010 requires
Vukile to make a mandatory offer to the remaining shareholders of the Company at a cash consideration of ZAR
17.60 per share. Vukile has confirmed its intention to proceed with the mandatory offer and has confirmed they
obtained irrevocable undertakings from shareholders representing 57.7% of the Company’s share capital prior to the
accelerated book build confirming their intention not accept the mandatory offer.
Vukile will be circulating an offer document to the shareholders of the Company which the Board of Atlantic Leaf will
respond to after it has been sent.
By order of the Board
Intercontinental Trust Limited
Company Secretary
12 October 2017
STATEMENT OF FINANCIAL POSITION
Group Group Group
Unaudited Unaudited Audited
as at as at as at
31—Aug—2017 31—Aug—2016 28—Feb—2017
GBP GBP GBP
ASSETS
Non—current assets 303 928 809 271 075 831 303 920 316
Investment properties 303 068 000 263 683 137 303 068 000
Listed investments 710 686 703 358 702 193
Loan receivable – 6 689 336 –
Other receivable 150 123 – 150 123
Current assets 9 458 970 5 369 549 14 031 369
Trade and other receivables 2 253 918 258 295 1 335 291
Cash and cash equivalents 7 205 052 5 111 254 12 696 078
Total Assets 313 387 779 276 445 380 317 951 685
Equity and Liabilities
Equity 155 412 980 135 282 393 154 796 268
Share capital 152 772 761 132 944 725 152 772 761
Cash flow hedge reserve (1 558 640) (2 932 593) (1 880 949)
Retained earnings 4 198 859 5 270 261 3 904 456
Liabilities
Non—Current liabilities 146 462 782 127 680 213 149 574 995
Long—term borrowings 146 462 782 127 680 213 149 574 995
Current liabilities 11 512 017 13 482 774 13 580 422
Trade and other payables 3 633 747 3 224 829 3 662 997
Current portion of long—term borrowings 4 820 306 6 435 000 7 038 750
Tax payable 1 369 271 790 764 887 088
Derivative financial instruments 1 688 693 3 032 181 1 991 587
Total Equity and Liabilities 313 387 779 276 445 380 317 951 685
Number of shares in issue 142 671 209 123 882 814 142 671 209
Net asset value per share (GBP) 1.09 1.09 1.08
Net asset value per share excluding cash flow hedge reserve (GBP) 1.10 1.12 1.10
STATEMENT OF CASH FLOWS
Group Group Group
Unaudited Unaudited Audited
Six Months Six Months Year
ended ended ended
31—Aug—2017 31—Aug—2016 28—Feb—2017
GBP GBP GBP
Cash generated from operations 8 805 384 8 859 144 17 162 555
Interest received 26 574 105 346 204 980
Finance costs (2 161 494) (1 732 335) (4 182 627)
Tax paid (483 490) (209 737) (906 750)
Net cash from operating activities 6 186 974 7 022 418 12 278 158
Cash flows from investing activities
Acquisition of investment properties — (68 334 019) (114 685 033)
Sale of investment property — – 11 300 000
Deposit paid for acquisition of properties — 6 000 000
Sale of rights of listed investments 9 063 – –
Dividends received 18 274 14 766 23 643
Loan to APIL – 122 733 6 733 730
Net cash from/(utilised in) investing activities 27 337 (62 196 520) (96 627 660)
Cash flow from financing activities
Proceeds from issue of shares – 90 442 19 430 385
Proceeds from borrowings – 59 315 618 88 499 186
Repayment of borrowings (5 611 000) (462 500) (7 713 000)
Dividends paid (6 134 862) (4 936 284) (9 651 269)
Net cash (utilised in)/ from financing activities (11 745 862) 54 007 276 90 565 302
(Decrease)/increase in cash and cash equivalents (5 531 551) (1 166 826) 6 215 800
Cash and cash equivalents at beginning of the year 12 696 078 6 223 292 6 223 292
Effects of exchange difference on cash and cash equivalents 40 525 54 788 256 986
Cash and cash equivalents 7 205 052 5 111 254 12 696 078
STATEMENT OF CHANGES IN EQUITY
Cash flow
Stated Retained hedge
Capital Earnings reserve Total
GBP GBP GBP GBP
Balance at 1 March 2016 132 854 283 4 959 307 (1 783 633) 136 029 957
Profit – 5 247 232 – 5 247 232
Dividends – (4 936 278) – (4 936 278)
Issue of shares (net of transaction costs) 90 442 – – 90 442
Other comprehensive income – – (1 148 960) (1 148 960)
Balance at 31 August 2016 132 944 725 5 270 261 (2 932 593) 135 282 393
Profit – 3 837 279 – 3 837 279
Dividends – (5 203 084) – (5 203 084)
Issue of shares (net of transaction costs) 19 828 036 – – 19 828 036
Other comprehensive income – – 1 051 644 1 051 644
Balance at 28 February 2017 152 772 761 3 904 456 (1 880 949) 154 796 268
Profit — 6 429 265 — 6 429 265
Dividends — (6 134 862) — (6 134 862)
Issue of shares (net of transaction costs) — — — —
Other comprehensive income — — 322 309 322 309
Balance at 31 August 2017 152 772 761 4 198 859 (1 558 640) 155 412 980
STATEMENT OF COMPREHENSIVE INCOME
Group Group Group Group Group
Unaudited Unaudited Unaudited Unaudited Audited
Three months Six months Three months Six months Year
ended ended ended ended ended
31—Aug—2017 31—Aug—2017 31—Aug—2016 31—Aug—2016 28—Feb—2017
GBP GBP GBP GBP GBP
Rental revenue 5 699 569 11 400 073 4 871 817 9 685 443 20 035 401
Straight—line lease income adjustment 323 377 646 754 378 562 646 755 1 293 509
Revenue 6 022 946 12 046 827 5 250 379 10 332 198 21 328 910
Property operating expenses (210 216) (432 093) (215 472) (435 441) (862 555)
Other operating expenditure (648 333) (1 205 900) (507 338) ( 1 374 160) (2 401 771)
Operating income 5 164 397 10 408 834 4 527 569 8 522 597 18 064 584
Other income 5 000 14 172 — 1 355 1 935
Investment income 16 505 47 107 75 668 160 341 196 770
Profit on disposal of investment property — — — — 1 062 312
Profit on foreign exchange 879 40 525 8 579 54 788 256 986
Fair value adjustments (324 989) (638 261) (406 665) (615 782) (4 518 202)
Finance costs (1 232 505) (2 477 440) (1 120 413) (2 172 883) (4 483 354)
Profit before taxation 3 629 287 7 394 937 3 084 738 5 950 416 10 581 031
Taxation (500 050) (965 672) (308 093) (703 184) (1 496 520)
Profit 3 129 237 6 429 265 2 776 645 5 247 232 9 084 511
Other comprehensive income
Items that will be reclassified subsequently
to profit or loss
Fair value movement on interest rate swaps 266 717 322 309 (1 617 202) (1 148 960) (97 316)
Total comprehensive income 3 395 954 6 751 574 1 159 443 4 098 272 8 987 195
RECONCILIATION OF BASIC EARNINGS TO DISTRIBUTABLE EARNINGS
Group Group Group Group Group
Unaudited Unaudited Unaudited Unaudited Audited
Three months Six months Three months Six months Year
ended ended ended ended ended
31—Aug—2017 31—Aug—2017 31—Aug—2016 31—Aug—2016 28—Feb—2017
GBP GBP GBP GBP GBP
Basic earnings 3 129 237 6 429 265 2 776 645 5 247 232 9 084 511
Less:
Fair value adjustments to
investment properties 323 377 646 754 378 562 646 755 4 384 351
Profit on disposal of investment property — — — — (1 062 312)
Headline earnings 3 452 614 7 076 019 3 155 207 5 893 987 12 406 550
Add back:
Straight line lease adjustments (323 377) (646 754) (378 562) (646 755) (1 293 509)
Adjusted for once—off costs
Transaction costs — — — 406 030 365 725
Fair value loss on cash flow
hedges transferred — — — — 163 658
Adjusted
headline earnings/Distributable 3 129 237 6 429 265 2 776 645 5 653 262 11 642 424
Weighted average number of shares
in issue 142 671 209 142 671 209 123 882 814 123 686 319 129 548 965
Basic and diluted earnings per share
(GBP pence) 2.19 4.51 2.24 4.24 7.01
Basic and diluted headline earnings per
share (GBP pence) 2.42 4.96 2.55 4.77 9.58
Adjusted headline earnings per share
(GBP pence) 2.19 4.51 2.24 4.57 9.00
Interim dividend 8 503 948 8 503 948 4 936 284 4 936 284 5 203 084
Final dividend — — — — 6 134 862
Total dividend 8 503 948 8 503 948 4 936 284 4 936 284 11 337 940
Interim dividend per share (GBP pence) 4.50 4.50 4.20 4.20 4.20
Final dividend per share (GBP pence) — — — — 4.30
Total dividend per share (GBP pence) 4.50 4.50 4.20 4.20 8.50
SEGMENTAL REPORTING – 31 AUGUST 2017
Retail
Industrial Office Warehouse Unallocated Total
GBP GBP GBP GBP GBP
Statement of profit or loss
Revenue 8 358 880 2 830 793 210 400 646 754 12 046 827
Profit on disposal of investments – – – – –
Fair value adjustments – – – (638 261) (638 261)
Interest expense (1 839 142) (587 833) (50 465) – (2 477 440)
Income tax (634 310) (186 548) (21 582) (123 232) (965 672)
Adjusted headline earnings 4 923 626 1 847 934 121 505 (463 800) 6 429 265
Statement of financial position
Additions to investment property – – – – –
Total assets 221 566 573 76 992 780 5 810 000 9 018 426 313 387 779
Total borrowings 108 325 643 40 775 729 2 181 716 – 151 283 088
SEGMENTAL REPORTING – 31 AUGUST 2016
Retail
Industrial Office Warehouse Unallocated Total
GBP GBP GBP GBP GBP
Statement of profit or loss
Revenue 7 588 412 1 886 631 210 400 646 755 10 332 198
Profit on disposal of investments – – – – –
Fair value adjustments – – – (615 782) (615 782)
Interest expense (1 743 050) (364 501) (65 332) – (2 172 883)
Income tax (477 374) (183 313) (10 574) (31 923) (703 184)
Adjusted headline earnings 4 260 202 1 217 530 108 016 67 514 5 653 262
Statement of financial position
Additions to investment property 52 365 731 15 968 289 – – 68 334 020
Total assets 203 178 310 54 840 250 5 900 000 12 526 820 276 445 380
Total borrowings 101 596 652 29 365 276 3 153 285 – 134 115 213
RELATED PARTY TRANSACTIONS
The related party transactions are detailed below:
Per the Property Services Agreement ("PSA"), fees for the quarter paid to Martial Eagle Limited amounted to
GBP 363 387 (2016: GBP 337 905).
NOTES
The Company is required to publish financial results for the three and six months ended 31 August 2017 in terms of Listing
Rule 12.19 of the Stock Exchange of Mauritius ("SEM") and the JSE Listings Requirements. The abridged unaudited financial
statements for the three and six months ended 31 August 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 2017.
These abridged unaudited financial statements were approved by the Board on 12 October 2017. The financial statements have not
been reviewed or reported on by the Company’s external auditors.
Copies of the abridged unaudited 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 12.20 and Section 88 of the Securities Act of Mauritius 2005.
The Board accepts full responsibility for the accuracy of the information contained in this announcement. The Directors of
the Company have disclosed all matters or circumstances arising subsequent to the period ended 31 August 2017 that require any
additional disclosure or adjustment to the financial statements.
Atlantic Leaf has primary listings both on the Official Market of the Stock Exchange of Mauritius Ltd ("SEM") and on the
Main Board of the JSE Limited.
JSE sponsor Corporate secretary South African corporate advisor
Java Capital +27 11 722 3050 Intercontinental Trust Limited +230 403 0800 Leaf Capital +27 21 657 1180
SEM authorised representative and sponsor
Perigeum Capital Ltd +230 402 0890
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