Wrap Text
Summarised unaudited consolidated results for the three months and six months ended 28 February 2018
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 2018
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.
In March 2018, New Frontier received the PwC Corporate Reporting Award for listed Global Business Companies in
recognition of the presentation and content of its 2017 Integrated Annual Report.
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 6 month period ended
28 February 2018 was a profit of GBP4.62 million (28 February 2017: GBP7.29 million). The Group produced a recurring
profit of GBP4.83 million for the period (28 February 2017: GBP5.71 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
At its half year end, the Company has completed its first acquisition in Europe as well as exchanging contracts to
purchase a second logistics asset in Germany. The Company also refinanced and extended its existing GBP108.2 million
HSBC loan facility and raised additional capital.
Given the tough and uncertain business and political environment in the UK, the Company has continued exploring a number
of opportunities in mainland Europe and has exchanged contracts on the purchase of a logistics property in Hassfurt,
Germany which is due to complete by 31 July 2018 for a consideration of EUR13.75 million.
The purchase of the Dublin property last year, proposed purchase of the Hassfurt property and similar pipeline
acquisitions, provides the Group with exposure to the European logistics/warehouse market enabling the Company to
capitalise on the rapid acceleration of e-retailing in mainland Europe and resulting logistics demand.
Letting activity and lease renewals
As at 28 February 2018, the centres at Blackpool, Middlesbrough and Burton upon Trent had a stable combined occupancy of
93.90% (30 November 2017: 93.98%) by Estimated Rental Value ("ERV") and 92.89% (30 November 2017: 92.04%) 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 H&M have taken occupation and will open on 26 April 2018 having taken
the remaining 19,800 sq ft 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 number of shares in issue at 28 February 2018, being 160,935,407 shares, is 67 pence per share at
28 February 2018 (up from 65 pence per share at 30 November 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
Following the Brexit vote, the Company broadened its focus from UK retail to include non-retail assets
in mainland Europe. Preference is given to logistics/warehouse assets (big box) and urban locations (last-mile) in
Germany, Austria, Slovakia, the Czech Republic, Poland, Ireland and the Benelux countries. This investment strategy:
- recognises the demand-supply imbalance in European logistics;
- targets long-term income; and
- diversifies the Company's exposure to hard currencies.
The Company maintains a proactive asset management approach to its assets and is committed to spend over GBP21 million
to enhance its schemes by improving the tenant mix, creating leisure experiences and upsizing successful tenants.
PROSPECTS
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, a fall in consumer confidence and rising
interest rates impacting consumer spending.
However, the Company has not been immune from the spate of Company Voluntary Arrangements ("CVAs") which have affected
UK retail. Our tenants New Look, Select and Prezzo have reduced rents with New Look closing their second store in Burton
upon Trent after only opening it last year. The impact of the CVAs for this financial year will be GBP450,000 prior to
the proactive leasing of the affected unit (which is already underway and will further mitigate the potential rental
impact). The resultant CVAs and tenant defaults will most likely adversely impact our business in the next six months.
CHANGE TO BOARD OF DIRECTORS ("THE BOARD")
Mr Daniel Romburgh, a Mauritian resident, resigned as a non-executive director of the Company and as chairperson of the
audit and risk committee with effect from 14 February 2018, following his resignation from New Frontier's company
secretary.
Shareholders are further advised that Mr George Titan, a Mauritian resident, was appointed to the Board as a
non-executive director of the Company and as chairperson of the audit and risk committee with effect from 26 February
2018.
The Board wishes to thank Mr Romburgh for his invaluable contribution to the Company and is pleased to welcome Mr Titan
to the Board.
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 pence
per share (approximately GBP4.83 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 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 2018 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.
ACCOUNTING POLICIES
The accounting policies adopted are consistent with those used to prepare the audited annual financial statements for
the year ended 31 August 2018.
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 2018
NOTES
Copies of this report are available to the public at the registered office of the Company, Chemin Vingt Pieds, 5(th)
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 Chemin Vingt Pieds, 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 28 FEBRUARY 2018
THE GROUP
Unaudited Unaudited Audited
28 February 28 February 31 August
2018 2017 2017
GBP 000 GBP 000 GBP 000
ASSETS
Non-current assets
Property, plant and equipment 17 527 17
Investment property 4,538 272,588 264,800
Derivative financial instrument 1.529 - -
276,084 273,115 264,817
Current assets
Trade and other receivables 5,199 4,367 6,091
Cash and cash equivalents 5,108 3,117 5,510
10 307 7,484 11,601
Total assets 286,391 280,599 276,418
EQUITY
Capital and reserves (attributable to owners of the parent)
Share capital 47,136 124,412 39,412
Hedging reserve (1,083) (3,914) (3,330)
Retained earnings accumulated losses 60,991 (10,571) 63,678
Total equity 107,044 109,927 99,760
LIABILITIES
Non-current liabilities
Borrowings 163,358 163,212 159,112
Derivative financial instrument - 3,914 300
163,358 162,767 159,412
Current liabilities
Trade and other payables 5,084 3,546 5,508
Borrowings 10,905 - 11,738
15,989 3,546 17,246
Total liabilities 179,347 170,672 176,658
Total equity and liabilities 286,391 280,599 276,418
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR QUARTER AND HALF YEAR ENDED 28 FEBRUARY 2018
THE GROUP
Unaudited Unaudited Unaudited Unaudited
For the three For the three For the six For the six
months ended months ended months ended months ended
28 February 28 February 28 February 28 February
2018 2017 2018 2017
GBP 000 GBP 000 GBP 000 GBP 000
Rental income 4,464 4,934 8,995 10,308
Expenses
Property operating expenses (1,458) (442) (1,988) (1,424)
Administrative expenses (427) (316) (746) (587)
Other income - 72 - 72
Movement in foreign exchange 49 - (64) -
2,628 4,289 6,197 8,369
Net finance costs (1,692) (1,434) (3,412) (2,862)
Profit before tax 936 2,809 2,785 5,507
Taxation - 84 - 84
Profit for the period 936 2,893 2,785 5,591
Other comprehensive income for the period
Items that may be reclassified subsequently to profit or loss
Fair value gain/(loss) on derivatives financial instruments 439 (466) 1,830 1,700
Other comprehensive income for the period 439 (466) 1,830 1,700
Total comprehensive income for the period 1,375 2,427 4,615 7,291
Earnings per share
Basic earnings per share (GBP) 0.006 0.019 0.018 0.037
Headline earnings per share (GBP) 0.006 0.019 0.018 0.037
The Company does not have any dilutionary instruments in issue.
STATEMENTS OF CHANGES IN EQUITY
FOR THE HALF YEAR ENDED 28 FEBRUARY 2018
(Accumulated
losses)/
Hedging Retained
Share capital reserve earnings Total
GBP 000 GBP 000 GBP 000 GBP 000
THE GROUP
Balance at 1 September 2017 39,412 (3,330) 63,678 99,760
Profit for the period - - 2,785 2,785
Other comprehensive income for the period - 1,830 - 1,830
Total comprehensive income for the period - 1,830 2,785 4,615
Issue of shares 7,724 - - 7,724
Amortisation of historic cash flow hedge reserve - 417 - 417
Dividends - - (5,500) (5,500)
Waiver of dividends - - 28 28
Balance at 29 February 2018 47,136 (1,083) 60,991 107,044
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
Total comprehensive income for the year - 1,700 5,591 7,291
Dividends - - (6,111) (6,111)
Total transactions with owners of the parent - - (6,111) (6,111)
Balance at 28 February 2017 124,412 (3,914) (10,571) 109,907
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
STATEMENTS OF CASH FLOWS
FOR HALF YEAR ENDED 28 FEBRUARY 2018
THE GROUP
Unaudited Unaudited Audited
For the period ended For the period ended For the year ended
28 February 2018 28 February 2017 31 August 2017
GBP 000 GBP 000 GBP 000
Cash flows from operating activities
Cash generated from operations 6,137 8,832 16,375
Tax refunded 146 - 217
Interest paid (2,138) (2,727) (5,411)
Net cash generated from operating activities 4,145 6,105 11,181
Cash flows from investing activities
Capital improvements to investment property (1,312) (516) (2,258)
Purchase of investment property (8,455) - -
Interest received - - 5
Net cash used in investing activities (9,767) (516) (45,850)
Cash flows from financing activities
Proceeds from loans 11,996 - 7,500
Amortisation of loans (588) - -
Payments of borrowing costs (701) - (14)
Premium paid to reset interest rate swap - - (3,030)
Dividend payment (5,472) (6,111) (11,513)
Net cash from/(used in) financing activities 5,235 (6,111) (7,057)
Net (decrease)/increase in cash and cash equivalents for the period/year (387) (522) 1,871
Exchange difference (15) - -
Cash and cash equivalents at the beginning of the period/year 5,510 3,639 3,639
At 28 February 2018/28 February 2017/31 August 2017 5,108 3,117 5,510
RECONCILIATION OF PROFIT
FOR HALF YEAR ENDED 28 FEBRUARY 2018 TO HEADLINE EARNINGS
THE GROUP
For the For the For the For the
three months three months six months six months
ended ended ended ended
28 February 28 February 28 February 29 February
2018 2017 2018 2017
Basic and headline earnings per share GBP 000 GBP 000 GBP 000 GBP 000
Basic earnings attributable to
equity holders of the Company 936 2,893 2,785 5,591
Headline earnings attributable to
equity holders of the Company 936 2,893 2,785 5,591
Weighted average number of
shares/number of shares 159,665,971 152,774,750 156,201,324 152,774,750
Earnings per share
Basic earnings per share (GBP) 0.006 0.019 0.018 0.037
Headline earnings per share (GBP) 0.006 0.019 0.018 0.037
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 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 they have 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
period ended period ended year ended
28 February 2018 28 February 2017 31 August 2017
GBP 000 GBP 000 GBP 000
Total comprehensive income for the period 4,615 7,291 2,526
Fair value gain on financial derivatives (1,830) (1,700) (2,284)
Basic earnings 2,785 5,591 242
Fair value movement on investment property - - 10,046
Amortised and other loan costs 431 - 451
Taxation - (84) (84)
Amortisation of loan arrangement fees 197 202 -
Legal and professional fees 239 - -
Administrative expenses - - 352
Movement in foreign exchange translation 64 - -
Amortisation of costs in relation to recoupon of derivatives 417 - -
Asset management fees written off 700 - -
Recurring profit 4,833 5,709 11,007
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 Audited as at
28 February 2018 28 February 2017 31 August 2017
GBP 000 GBP 000 GBP 000
Total equity 107,044 109,927 99,76
Adjusted for
MTM of financial derivatives 1,083 3,914 3,330
EPRA NAV 108,127 113,841 103,090
Number of shares 160,935,407 152,774,750 152,774,750
NAV per share (GBP) 0.67 0.75 0.67
EPRA NAV excludes MTM of financial derivatives
Date: 13/04/2018 02:00:00 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.