Wrap Text
Summarised unaudited consolidated results for the three months ended 30 November 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 "the Group")
SUMMARISED UNAUDITED CONSOLIDATED RESULTS FOR THE THREE MONTHS ENDED 30 NOVEMBER 2017
The Company was 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").
FINANCIAL RESULTS
The Group's International Financial Reporting Standards ("IFRS") total comprehensive income for the period was a profit of
GBP3.240 million (30 November 2016: GBP4.864 million). The Group produced a recurring profit of GBP2.481 million for the
period (30 November 2016: GBP2.799 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.
BUSINESS REVIEW
During a highly productive quarter the Group has made its first acquisition in Europe, refinanced and extended the GBP108.2 million
HSBC loan and raised additional capital.
Property acquisition
We are pleased to report that the Group's new strategic objective of acquiring European logistics/warehouse properties commenced
with the purchase of unit 1, Stadium Business Park, Ballycoolin, Dublin, Ireland ("the Dublin property") on 31 October 2017. The
purchase price of 8.65 million euros ("EUR") reflects a net initial yield of 8.23%. The property is let to Viking Direct (Ireland)
Limited on a twenty-year full repairing and insuring lease from 24 August 2007 at a rent of EUR743,518 per annum. The purchase
of this Dublin property and similar pipeline acquisitions emphasises the benefit from a greater diversity of earnings in both euro and
sterling.
Refinancing and extension of loan
On 4 December 2017, the Board was pleased to announce that the Company had refinanced and extended the term of the existing
GBP108.2 million loan with HSBC. The multi-jurisdictional loan facility, which is for a term of 5 years at the same interest rate
margin as previously agreed in April 2015, provides funding for the shopping centres in Middlesbrough and Burton upon Trent
together with the recently acquired Dublin property.
Vendor consideration placement
On 18 December 2017, the board of directors ("the Board") announced the listing of an additional 8,160,657 New Frontier shares
pursuant to a vendor consideration placement at an issue price of ZAR17.50 to settle the purchase consideration of the Dublin
property. The additional New Frontier shares were allotted, issued and listed on the JSE on 15 December 2017 and allotted, issued
and listed on the SEM on 19 December 2017. Following the issue of the new shares, the Company has a total of 160,935,407
ordinary shares in issue.
Letting activity and lease renewals
As at 30 November 2017, the centres at Blackpool, Middlesbrough and Burton upon Trent had a combined occupancy of 93.98%
(31 August 2017: 94.51%) by Estimated Rental Value ("ERV") and 92.04% (31 August 2017: 91.93%) by Gross Lettable Area
("GLA").
The Company is undertaking a number of exciting asset management projects within all schemes. At Blackpool, heads of terms
have been agreed for a new IMAX cinema development with ancillary retail. At Burton upon Trent, Next have opened a new 25,052
sq ft store in the old BHS unit and terms have been signed with H&M for the remaining unit on a 15-year lease. At Middlesbrough,
a number of new lettings are being progressed which will strengthen and improve the quality of the centre's tenants further.
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 65 pence per share for the period ended
30 November 2017 compared to 67 pence per share at 31 August 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.
STRATEGY
The Company's business strategy has continued to evolve to take into account changes in the prevailing political and economic
climate in relation to the impact of the European investment property market's reaction to Brexit and the ensuing Article 50
negotiations as to the terms under which the UK will leave the European Union.
New Frontier's strategy continues to retain its retail focus in the UK but has been refined to extend to acquisitions of property (both
retail and non-retail) within mainland Europe, with a preference given to logistics/warehouse assets in the UK, Germany, Austria,
Slovakia, the Czech Republic, Poland, Ireland and the Benelux countries.
PROSPECTS
In line with this new investment strategy, the Company purchased a modern warehouse facility in Ireland which is located in a
strategic logistics position in north-west Dublin. The Company has also explored a number of opportunities in mainland Europe and
is close to executing a logistics transaction in Germany. The purchase of the Dublin property and similar pipeline acquisitions,
provides the Group with exposure to the European logistics/warehouse market enabling the Company to benefit from the increase
in e-retailing activity across Europe as well as broadening its hard currency exposure.
The Company continues to actively manage its assets in a challenging retail environment, caused in part by a weaker sterling due
to the uncertainty caused by the vote to leave the European Union and a fall in consumer confidence.
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. As a result, no dividend has been declared for the period under review.
BASIS OF PREPARATION
These summarised unaudited consolidated results for the three months ended 30 November 2017 have been prepared in accordance
with IFRS, including IAS 34 – Interim Financial Reporting, the SEM Listing Rules, the Securities Act of Mauritius 2005 and the
JSE Listings Requirements.
ACCOUNTING POLICIES
The accounting policies adopted are consistent with those used to prepare the audited annual financial statements for the year ended
31 August 2017.
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
15 January 2018
NOTES
Copies of this report are available to the public at the registered office of the Company, B45 Twenty-Foot Road, 5th 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, 5th 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
STATEMENTS OF FINANCIAL POSITION AT 30 NOVEMBER 2017
THE GROUP
Unaudited Audited Unaudited
30 November 31 August 30 November
2017 2017 2016
GBP000 GBP000 GBP000
ASSETS
Non-current assets
Property, plant and equipment 17 17 19
Investment property 273,555 264,800 272,588
Derivative financial instrument 1,090 - -
274,662 264,817 272,607
Current assets
Trade and other receivables 6,333 6,091 3,928
Cash and cash equivalents 3,118 5,510 2,298
9,451 11,601 6,226
Total assets 284,113 276,418 278,833
EQUITY
Capital and reserves (attributable to owners of the parent)
Share capital 39,412 39,412 124,412
Hedging reserve (1,821) (3,330) (3,448)
Retained earnings/(Accumulated losses) 60,056 63,678 (13,463)
Total equity 97,647 99,760 107,501
LIABILITIES
Non-current liabilities
Borrowings 164,520 159,112 163,066
Derivative financial instrument - 300 3,448
164,520 159,412 166,514
Current liabilities
Borrowings 15,152 11,738 -
Trade and other payables 6,550 5,508 4,741
Dividend payable 244 - -
Income tax payable - - 77
21,946 17,246 4,818
Total liabilities 186,466 176,658 171,332
Total equity and liabilities 284,113 276,418 278,833
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR PERIOD ENDED 30 NOVEMBER 2017
THE GROUP
Unaudited Audited Unaudited
For the
For the year For the
period ended period
ended 30 31 ended 30
November August November
2017 2017 2016
GBP000 GBP000 GBP000
Rental income 4,531 19,279 5,374
Expenses
Property operating expenses (530) (1,895) (982)
Administrative expenses (319) (1,432) (271)
Other income - - 99 -
Movement in foreign exchange (113) - -
Fair value loss on investment property - (10,046) -
3,569 6,005 4,121
Net finance costs (1,720) (5,847) (1,423)
Profit before tax 1,849 158 2,698
Taxation - 84 -
Profit for the period/year 1,849 242 2,698
Other comprehensive income for the
period/year
Items that may be reclassified subsequently to profit or loss
Fair value gain on derivative financial
instruments 1,391 2,284 2,166
Other comprehensive income for the period/year 1,391 2,284 2,166
Total comprehensive income for the
period/year 3,240 2,526 4,864
Earnings per share
Basic earnings per share (GBP) 0.012 0.002 0.018
Headline earnings per share (GBP) 0.012 0.067 0.018
STATEMENTS OF CHANGES IN EQUITY FOR PERIOD ENDED 30 NOVEMBER 2017
Retained
earnings/
Share Hedging (Accumulated
capital reserve losses) Total
GBP000 GBP000 GBP000 GBP000
THE GROUP
Unaudited for the three months ended 30
November 2017
Balance at 1 September 2017 39,412 (3,330) 63,678 99,760
Profit for the period - - 1,849 1,849
Other comprehensive income for the period - 1,391 - 1,391
Total comprehensive income for the period - 1,391 1,849 3,240
Amortisation of historic cash flow hedge reserve - 118 - 118
Dividends - - (5,499) (5,499)
Waiver of dividends - - 28 28
Balance at 30 November 2017 39,412 (1,821) 60,056 97,647
Balance at 1 September 2016 (Audited) 124,412 (5,614) (10,051) 108,747
Profit for the year - - 242 242
Other comprehensive income for the year - 2,284 - 2,284
Total comprehensive income for the year - 2,284 242 2,526
Capital reduction (85,000) - 85,000 -
Dividends - - (11,611) (11,611)
Waiver of dividends - - 98 98
Total transactions with owners of the parent (85,000) - 73,487 (11,513)
Balance at 31 August 2017 (Audited) 39,412 (3,330) 63,678 99,760
Balance at 01 September 2016 124,412 (5,614) (10,051) 108,747
Profit for the period - - 2,698 2,698
Other comprehensive income for the period - 2,166 - 2,166
Total comprehensive income for the year - 2,166 2,698 4,864
Dividends - - (6,110) (6,110)
Total transactions with owners of the parent - - (6,110) (6,110)
Balance at 30 November 2016 124,412 (3,448) (13,463) 107,501
STATEMENTS OF CASH FLOWS FOR PERIOD
ENDED 30 NOVEMBER 2017
THE GROUP
Unaudited Audited Unaudited
For the period For the year For the period
ended ended ended
30 November 31 August 30 November
2017 2017 2016
GBP000 GBP000 GBP000
Cash flows from operating activities
Cash generated from operations 3,388 16,375 4,908
Tax refunded - 217 -
Interest paid (1,306) (5,411) (1,360)
Net cash (used in)/generated from operating
activities 2,082 11,181 3,548
Cash flows from investing activities
Capital improvements to investment property (658) (2,258) -
Purchase of investment property (7,944) - -
Interest received - 5 -
Net cash used in investing activities (8,602) (2,253) -
Cash flows from financing activities
Proceeds from borrowings 8,500 7,500 -
Premium paid to reset interest rate swap - (3,030) -
Payment on borrowing costs - (14) -
Dividend payment (4,372) (11,513) (4,889)
Net cash from/(used in) financing activities 4,128 (7,057) (4,889)
Net (decrease)/increase in cash and cash
equivalents for the period/year (2,392) 1,871 (1,341)
Cash and cash equivalents at the beginning of the
period/year 5,510 3,639 3,639
At 30 November 2017/31 August 2017/30
November 2016 3,118 5,510 2,298
RECONCILIATION OF PROFIT FOR PERIOD ENDED 30 NOVEMBER 2017 TO HEADLINE EARNINGS
THE GROUP
Basic and headline earnings per share
For the For the
period For the year period
ended ended ended
30 November 31 August 30 November
2017 2017 2016
GBP000 GBP000 GBP000
Basic earnings attributable to equity
holders of the Company 1,849 242 2,698
Fair value movement on investment
properties - 10,046 -
Headline earnings attributable to equity
holders of the Company 1,849 10,288 2,698
Number of shares/weighted average
number of shares 152,774,750 152,774,750 152,774,750
Earnings per share
Basic earnings per share (GBP) 0.012 0.002 0.018
Headline earnings per share (GBP) 0.012 0.067 0.018
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 year Unaudited for the period
period ended ended ended
30 November 2017 31 August 2017 30 November 2016
GBP000 GBP000 GBP000
Total comprehensive income for the period 3,240 2,526 4,864
Fair value gain on financial derivatives (1,391) (2,284) (2,166)
Basic earnings 1,849 242 2,698
Fair value movement on investment property - 10,046 -
Amortised and other loan costs 329 451 101
Taxation - (84) -
Movement in foreign exchange 114 - -
Administrative expenses 70 352 -
Amortisation of costs in relation to recoupon
of derivatives 119 - -
Recurring profit 2,481 11,007 2,799
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 Audited as at Unaudited as at
30 November 2017 31 August 2017 30 November 2016
GBP000 GBP000 GBP000
Total equity 97,647 99,760 107,501
Adjusted for;
MTM of financial derivatives 1,821 3,330 3,448
EPRA NAV 99,468 103,090 110,949
No. of shares 152,774,750 152,774,750 152,774,750
NAV per share (GBP) 0.65 0.67 0.73
EPRA NAV excludes MTM of financial derivatives.
Date: 15/01/2018 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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