Wrap Text
Summarised audited financial statements for the year ended 28 February 2018 and declaration of 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 2018 AND DECLARATION OF 4.6 GBP PENCE DIVIDEND
Key Highlights
2017 2018 % change
Total Assets under management (GBP million) 304 352 +16%
Total Revenue (GBP million) 21.3 24.1 +13%
Total Distribution (GBP pence per share) 8.5 9.1 + 7%
DIRECTORS' COMMENTARY
Atlantic Leaf presents its results for the financial year ended 28 February 2018.
The results reflect the continued growth and development that 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,
reflected by the 3rd consecutive year of growth in the distributions to 9.1 GBP pence per share for the 2018
financial year. Our income and hence our distribution, is fully backed by property income from underlying assets
and we aim to continue to grow and enhance this base.
UK Portfolio and Property Environment
The Company has grown its portfolio of industrial and office properties across the UK by 16% 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. We remain confident that there are further good acquisition opportunities and will continue to
seek out transactions that meet our 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 portfolio consists of quality assets which have long-term, mainly 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 GBP352 million (2017: GBP304 million) and the total gross lettable area of the portfolio
now stands at 4.5 million ft2 (416,000 m2), across 59 properties, with an average yield of 7.1% and a weighted
average lease term of approximately 11 years.
In January 2018, we experienced our first tenant default when Palmer & Harvey was placed into administration.
The rent from Palmer & Harvey represented 3% of the total rental revenue. The property is well-located in
Haydock, St Helens. Management has commenced with marketing the property whilst utilising the opportunity to
undertake upgrade and repair works. We are confident of finding a replacement tenant soon and believe that this
should not have a significant impact on the Group's earnings outlook.
LMP Retail Warehouse JV
During the year, the Company entered into a joint venture with LondonMetric Properties Plc to purchase a
portfolio of properties tenanted by DFS Trading Limited. The Company has a 45.02% interest in the joint venture
which holds 10 assets valued at a total of GBP98m (ALP share effectively GBP44m) with gearing of approximately 50%.
The JV delivered an attractive return to Atlantic Leaf which was enhanced by the sale of an asset at above the
carrying value. Atlantic Leaf sees this as an important joint venture and looks forward to growing this relationship
going forward.
Gearing
Atlantic Leaf has a Loan-to-value ("LTV") ratio of 41.6% at the balance sheet date. The Company has a target LTV
ratio of below 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 3.3% per annum. Currently,
75% of Atlantic Leaf's debt has been hedged with interest rate swaps to protect against possible increases in rates.
Earnings and Net Asset Value ("NAV")
The weighted average adjusted headline earnings per share for the period is 9.1 GBP pence per share and in line
with guidance given to the market. Total net income earned from properties, which includes the property income
from the joint venture has increased by 23% to GBP23.8 million (2017: GBP19.4 million). The NAV has remained constant
at GBP 1.08.
Capital
During the year under review, the Company issued 46.3 million new shares, raising almost GBP 47 million in new
equity capital. The equity raised has been fully deployed into income producing assets, including the new
LondonMetric Properties Plc joint venture, the acquisition of the Crewe asset and the Knowsley asset acquired in
March 2018.
DIVIDENDS DECLARED
Following the interim distribution paid to shareholders of 4.5 GBP pence per share, the board of directors of
Atlantic Leaf ("the Board") is pleased to announce a final dividend of 4.6 GBP pence per share for the six months
ended 28 February 2018 bringing the annual distribution to 9.1 GBP pence per share, an increase of 7% over the
2017 distribution of 8.5 GBP pence per share. This distribution is in line with guidance given to the market.
Further information regarding the final dividend, including salient dates and exchange rates, will be announced
separately.
CONVERSION TO UK REAL ESTATE INVESTMENT TRUST ("REIT") AND CHANGE OF JURISDICTION OF
INCORPORATION ("JOI")
Given the growth of the Company's assets under management in the UK and given the changes to the UK tax
legislation affecting non-resident landlords has necessitated a review of the Company's structure and JOI. Advice
has been obtained and consideration is being given to the conversion of the Company to a UK REIT and the transfer
of its JOI from Mauritius to Jersey. The change to a REIT would align the Company with best practice in the market
as well as achieving a more efficient tax structure going forward. Jersey, based on the advice received, would be
a more appropriate JOI for a UK REIT given that it is a British Isles jurisdiction with which UK businesses and
regulators are familiar. Certain provisions will need to be incorporated into the Company's constitutional
documents and the relevant resolutions for all of the above changes requiring shareholder approval will be
included in the agenda of this year's Annual General Meeting scheduled to be held in June 2018.
It is anticipated that the conversion to a REIT and the change in the JOI could take place during the second half of
this financial year, subject to receipt of all the requisite regulatory approvals. Given the proposed changes to UK
tax legislation we expect there to be benefits to shareholders by becoming a REIT.
Following the conversion to a REIT and the change of the JOI, the Company will continue to be listed on the SEM
and JSE.
COMPANY OUTLOOK
The Board believes that a solid, stable foundation is in place and that Atlantic Leaf could add further assets over
the coming year by leveraging off its strong existing networks. Management is also active in extracting additional
value from our current portfolio.
The forecast distribution for the 2018/19 financial year is 9.55 GBP pence per share. The forecast is based on the
current leases and current debt including the portion of interest that has been fixed. It also assumes that a re-gear
of some of the existing debt due for maturity at similar terms and that cash from the re-gear will be deployed in
further acquisitions. This forecast statement and the forecasts underlying such statement are the responsibility of
the Board and have not been reviewed or reported on by the Company's auditors.
POST BALANCE SHEET EVENT
On 23 March 2018, Atlantic Leaf, through its wholly-owned subsidiary Trido Limited, concluded agreements and
simultaneously completed the acquisition of a multi-let industrial and office property known as Deacon Park in
Knowsley, UK. The net purchase consideration (excluding transaction related costs) for the transaction is
GBP 14,911,100, being GBP 15,430,000 less GBP 518,900 representing the principal rent which would have been
payable pursuant to the leases but for the unexpired rent free, concessionary or discounted rent period in these
occupational leases. Estimated transaction costs are expected to be approximately GBP910,000 and the property has
an expected Net Initial Yield of 8.5%. The proforma assets under management post this acquisition would be
GBP 368,153,308.
RESULTS PRESENTATION
Management will be presenting the Full Year results at 11:30 CAT on 20 April 2018 via live webcast and can be
viewed on http://themediaframe.eu/links/atlanticleaf180420.html
Alternatively, the presentation may be accessed via the conference call numbers below:
Johannesburg: 011 535 3600
South Africa (Toll Free): 0800 200 648
UK (Toll Free): 0 808 162 4061
International: +27 11 535 3600
By order of the Board
Intercontinental Trust Limited
Company Secretary
19 April 2018
STATEMENT OF FINANCIAL POSITION
Group Group
Audited Audited
as at as at
28-Feb-2018 28-Feb-2017
GBP GBP
ASSETS
Non-current assets 352 475 304 303 920 316
Investment properties 319 404 723 303 068 000
Listed investments 7 154 208 702 193
Investment in joint venture 25 766 250 -
Other receivables 150 123 150 123
Current assets 10 378 826 14 031 369
Trade and other receivables 3 760 371 1 335 291
Cash and cash equivalents 6 618 455 12 696 078
Total Assets 362 854 130 317 951 685
Equity and Liabilities
Equity 204 205 734 154 796 268
Stated capital 198 467 699 152 772 761
Cash flow hedge reserve (495 679) (1 880 949)
Retained earnings 6 233 714 3 904 456
Liabilities
Non-Current Liabilities 131 829 657 149 574 995
Interest-bearing borrowings 131 829 657 149 574 995
Current liabilities 26 818 739 13 580 422
Trade and other payables 4 173 237 3 662 997
Current portion of interest-bearing borrowings 21 213 518 7 038 750
Derivative financial instrument 589 520 1 991 587
Tax payable 842 464 887 088
Total Equity and Liabilities 362 854 130 317 951 685
Number of shares in issue 188 976 628 142 671 209
Net asset value per share (GBP) 1.08 1.08
Net asset value per share excluding cash flow hedge reserve 1.08 1.10
STATEMENT OF COMPREHENSIVE INCOME
Group Group
Audited Audited
Year ended Year ended
28-Feb-2018 28-Feb-2017
GBP GBP
Rental revenue 21 201 662 20 035 401
Straight-line lease income 2 892 734 1 293 509
Revenue 24 094 396 21 328 910
Property operating expenses (856 597) (862 555)
Other operating expenditure (2 615 124) (2 401 771)
Operating income 20 622 675 18 064 584
Other income 5 243 1 935
Investment income 158 350 196 770
Profit on disposal of investment property - 1 062 312
Profit on disposal of listed investments 134 985 -
Profit on foreign exchange 67 316 256 986
Fair value adjustments 585 784 (4 518 202)
Finance costs (4 860 164) (4 483 354)
Equity accounted profit (net of taxation) 1 805 566 -
Profit before taxation 18 519 755 10 581 031
Taxation (1 551 687) (1 496 520)
Profit for the year 16 968 068 9 084 511
Other comprehensive income
Items that will be reclassified subsequently to profit or loss
Fair value movement on interest rate swaps 1 385 270 (97 316)
Total comprehensive income for the year 18 353 338 8 987 195
STATEMENT OF CHANGES IN EQUITY
Stated Retained Cash flow
Capital Earnings hedge reserve Total
GBP GBP GBP GBP
Balance at 1 March 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 loss - - (97 316) (97 316)
Balance at 28 February 2017 152 772 761 3 904 456 (1 880 949) 154 796 268
Profit for the year - 16 968 068 - 16 968 068
Dividends - (14 638 810) - (14 638 810)
Issue of shares (net of transaction costs) 45 694 938 - - 45 694 938
Other comprehensive income - - 1 385 270 1 385 270
Balance at 28 February 2018 198 467 699 6 233 714 (495 679) 204 205 734
STATEMENT OF CASH FLOWS
Group Group
Audited Audited
Year ended Year ended
28-Feb-2018 28-Feb-2017
GBP GBP
Cash generated from operations 15 770 848 17 162 555
Interest received 76 121 204 980
Finance costs (4 291 899) (4 182 627)
Tax paid (1 596 311) (906 750)
Net cash from operating activities 9 958 759 12 278 158
Cash flows from investing activities
Acquisition of investment properties (12 313 853) (114 685 033)
Investment in joint venture (24 794 876) -
Sale of investment property - 11 300 000
Acquisition of listed investments (7 787 184) -
Sale of listed investments 925 802 -
Dividends received 941 544 23 643
Loan to Atlantic Property Investments Limited - 6 733 730
Net cash utilised in investing activities (43 028 567) (96 627 660)
Cash flow from financing activities
Proceeds from issue of shares 45 694 938 19 430 385
Proceeds from borrowings 2 790 691 88 499 186
Repayment of borrowings (6 921 950) (7 713 000)
Dividends paid (14 638 810) (9 651 269)
Net cash utilised from financing activities 26 924 869 90 565 302
(Decrease)/increase in cash and cash equivalents (6 144 939) 6 215 800
Cash and cash equivalents at beginning of the year 12 696 078 6 223 292
Effects of exchange difference on cash and cash equivalents 67 316 256 986
Cash and cash equivalents at end of year 6 618 455 12 696 078
SEGMENTAL REPORTING - 2018
Retail
Industrial Office Warehouse Unallocated Total
GBP GBP GBP GBP GBP
Statement of profit or loss
Revenue 17 928 916 5 744 680 420 800 - 24 094 396
Equity accounted profit (net of taxation) 509 867 - 1 295 699 - 1 805 566
Profit on disposal of listed investments - - - 134 985 134 985
Fair value adjustments 3 259 727 (2 129 591) - (544 352) 585 784
Interest expense (3 579 160) (1 169 958) (99 499) (11 547) (4 860 164)
Income tax (1 223 848) (183 047) (127 172) (17 620) (1 551 687)
Adjusted headline earnings 10 285 610 3 895 610 1 364 571 (698 426) 14 847 365
Statement of financial position
Additions to investment property 12 313 853 - - - 12 313 853
Total assets 243 705 456 75 552 938 26 274 245 17 321 491 362 854 130
Total borrowings 107 243 484 40 856 866 2 152 134 2 790 691 153 043 175
SEGMENTAL REPORTING - 2017
Retail
Industrial Office Warehouse Unallocated Total
GBP GBP GBP GBP GBP
Statement of profit or loss
Revenue 16 787 127 4 097 374 444 409 - 21 328 910
Profit on disposal of investment property 1 062 312 - - - 1 062 312
Fair value adjustments (2 279 041) (2 174 968) (94 000) 29 807 (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
RELATED PARTY TRANSACTIONS
The related party transactions are detailed below:
- Per the Property Services Agreement, fees for the full year paid to Martial Eagle Limited amounted to GBP
1 823 940 (2017: GBP 1 841 886).
RECONCILIATION OF BASIC EARNINGS TO DISTRIBUTABLE EARNINGS
Group Group
Audited Audited
Year ended Year ended
28-Feb-2018 28-Feb-2017
GBP GBP
Basic earnings 16 968 068 9 084 511
Less:
Fair value adjustments to investment properties (1 130 136) 4 384 351
Profit on disposal of investment property - (1 062 312)
Net profit on disposal of investment properties in joint venture (303 703) -
Fair value adjustments to properties in joint venture (291 390) -
Headline earnings 15 242 839 12 406 550
Add back:
Straight line lease income adjustments* (1 243 529) (1 293 509)
Net profit on disposal of investment properties in joint venture 303 703 -
Fair value adjustments to listed investments 544 352 -
Adjusted for once-off costs
Transaction costs - 365 725
Fair value loss on cash flow hedges transferred - 163 658
Adjusted headline earnings/Distributable earnings 14 847 365 11 642 424
Weighted average number of shares in issue 163 223 203 129 548 965
Basic and diluted earnings per share (GBP pence) 10.40 7.01
Basic and diluted headline earnings per share (GBP pence) 9.34 9.58
Adjusted headline earnings per share (GBP pence) 9.10 9.00
Interim dividend 8 503 948 5 203 078
Final dividend 8 692 925 6 134 862
Total dividend 17 196 873 11 337 940
Interim dividend per share (GBP pence) 4.50 4.20
Final dividend per share (GBP pence) 4.60 4.30
Total dividend per share (GBP pence) 9.10 8.50
*The add back for straight line lease adjustments relate specifically to the contractual rental escalations but excludes
straight-line lease adjustments on lease incentives such as the rent-free periods.
NOTES
The Company is required to publish financial results for the year ended 28 February 2018 in terms of Listing Rule 12.14
of the SEM and paragraph 3.16 of the JSE Listing Requirements. The summarised audited financial statements for the
year ended 28 February 2018 ("financial statements") have been prepared in accordance with the framework concepts
and the measurement and recognition requirements of International Financial Reporting Standards ("IFRS") as issued
by the International Accounting Standards Board ("IASB"), interpretations issued by the IFRS Interpretation Committee
("IFRS IC"), the requirements of the SAICA Financial Reporting Guides and the Pronouncements as issued by the Financial
Reporting Standards Council, the Mauritian Companies Act 2001, the Mauritian Financial Reporting Act 2004, the
Mauritian Securities Act 2005, the SEM Listing Rules and the JSE Listings Requirements.
The accounting policies and methods of computation adopted in the preparation of these financial statements are in
terms of IFRS and consistent with those applied in the preparation of the audited financial statements for the year ended
28 February 2017.
These financial statements were approved by the Board on 19 April 2018. Mazars Mauritius and Mazars South Africa
have issued their unmodified audit opinion on the Company's financial statements. These summarised audited financial
statements have been derived from the Company's audited financial statements for the year ended 28 February 2018
("audited financial statements").
Copies of the audited financial statements, the unmodified audit opinion 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-Bissonauth.
This communique is issued pursuant to SEM Listing Rules 11.3 and 12.14 and section 88 of the Mauritian Securities Act
2005. The Board accepts full responsibility for the accuracy of the information contained in these financial statements
and this announcement. The Board has disclosed all matters or circumstances arising subsequent to the year ended
28 February 2018 that require any additional disclosure or adjustment to the financial statements.
JSE sponsor
Java Capital +27 11 722 3050
Company secretary
Intercontinental Trust Limited +230 403 0800
SEM authorised representative and sponsor
Perigeum Capital Ltd +230 402 0890
Date: 19/04/2018 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.
Sharenet Sites 
