ATLANTIC LEAF PROPERTIES LIMITED - Abridged unaudited financial statements for the three months ended 31 May 2018

Release Date: 11/07/2018 14:42
Code(s): ALP
 
Wrap Text
Abridged unaudited financial statements for the three months ended 31 May 2018

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")

ABRIDGED UNAUDITED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 31 MAY 2018

DIRECTORS' COMMENTARY
Atlantic Leaf presents its results for the three months ended 31 May 2018.

QUARTERLY RESULTS
The adjusted headline earnings per share for the quarter of 2.37 GBP pence per share (2017: 2.31 GBP pence per share) is in
line with management's forecast.
During the quarter, as previously reported, the Company completed the acquisition of a multi—let industrial and office property
known as Deacon Park in Knowsley, United Kingdom ("UK"). The Deacon park property acquired in March 2018 is our first
property that is multi—tenanted and Atlantic Leaf pays all utilities on this property. These expenses have been included in
property operating expenses. Atlantic Leaf recovers these costs from the tenants and this income has been included as tenant
recoveries. This acquisition brings the total assets under management to GBP 383 million (including our proportional share of
the London Metric Joint Venture).

Certain debt facilities are due to mature within the next 12 months and as such have been disclosed as current liabilities.
Management is at an advanced stage of refinancing these facilities and is confident that all debt due to mature within the next
12 months will be refinanced. It is expected that once this has been completed, the weighted average maturity of all Company
debt will be approximately four years. Our current gearing at 48% loan to value ("LTV") remains within our target range of
approximately 50% and the average cost of debt remains at 3.3%.

DIVIDENDS PAID
On 14 May 2018 the Company paid the final dividend of 4.6 GBP pence per share for the year ended 28 February 2018, and
the total distribution for the 2018 financial year was 9.1 GBP pence per share.

ANNUAL GENERAL MEETING
The Company held its Annual General Meeting of shareholders on 25 June 2018. All resolutions were passed including the
resolution to allow Atlantic Leaf to convert to a UK Real Estate Investment Trust ("REIT"). The Company is now in the process
of applying for UK REIT status and we anticipate obtaining the necessary regulatory approvals within the next few months.

COMPANY OUTLOOK
The UK property environment remains active and the Company's management team continues to explore new opportunities.
We have a solid base of assets which underpin our income and our debt is well hedged against any adverse moves in interest
rates.

STATEMENT OF FINANCIAL POSITION
                                                                            Group             Group             Group
                                                                        Unaudited         Unaudited           Audited
                                                                            as at             as at             as at
                                                                      31—May—2018       31—May—2017       28—Feb—2018
                                                                              GBP               GBP               GBP

ASSETS
Non—current assets                                                    364 137 159       303 930 421       352 475 304

 Investment properties                                                335 290 021       303 068 000       319 404 723
 Listed investments                                                     4 276 625           712 298         7 154 208
 Investment in joint venture                                           24 420 390                 —        25 766 250
 Other receivables                                                        150 123           150 123           150 123
 Current assets                                                         7 371 544         7 049 002        10 378 826

 Trade and other receivables                                            3 910 336         1 804 643         3 760 371
 Cash and cash equivalents                                              3 461 208         5 244 359         6 618 455

Total Assets                                                          371 508 703       310 979 423       362 854 130

Equity and Liabilities
Equity                                                                199 856 766       152 017 026       204 205 734

 Share capital                                                        198 498 451       152 772 761       198 467 699
 Cash flow hedge reserve                                                (681 830)       (1 825 357)         (495 679)
 Retained earnings                                                      2 040 145         1 069 622         6 233 714
 Liabilities

Non—Current liabilities                                               103 657 449       149 285 417       131 829 657

 Long—term borrowings                                                 103 657 449       149 285 417       131 829 657
 Current liabilities                                                   67 994 488         9 676 980        26 818 739

 Trade and other payables                                               4 210 720         4 208 714         4 173 237
 Current portion of interest—bearing borrowings                        61 650 738         2 170 500        21 213 518
 Derivative financial instruments                                         751 721         1 947 528           589 520
 Tax payable                                                            1 381 309         1 350 238           842 464

Total Equity and Liabilities                                          371 508 703       310 979 423       362 854 130

Number of shares in issue                                             188 976 628       142 671 209       188 976 628
Net asset value per share (GBP)                                              1.06              1.07              1.08
Net asset value per share excluding cash flow hedge reserve                  1.06              1.08              1.08

STATEMENT OF COMPREHENSIVE INCOME
                                                                            Group             Group             Group
                                                                        Unaudited         Unaudited           Audited
                                                                          Quarter           Quarter              year
                                                                            ended             ended             ended
                                                                      31—May—2018       31—May—2017       28—Feb—2018
                                                                              GBP               GBP               GBP
Rental income                                                           5 608 813         5 700 504        21 201 662
Tenant recoveries                                                         235 145                 –                 –
Straight—line lease income                                                722 750           323 377         2 892 734
Revenue                                                                 6 566 708         6 023 881        24 094 396
Property operating expenses                                             (526 766)         (221 877)         (856 597)
Net property income                                                     6 039 942         5 802 004        23 237 799
Other operating expenditure                                             (879 107)         (557 567)       (2 615 124)
Operating income                                                        5 160 835         5 244 437        20 622 675
Other income                                                               38 122             9 172             5 243
Investment income                                                         220 993            30 602           158 350
Profit on disposal of listed investments                                  128 344                 –           134 985
Profit on foreign exchange                                                 39 217            39 646            67 316
Fair value adjustments                                                  (383 593)         (313 272)           585 784
Finance costs                                                         (1 342 980)       (1 244 935)       (4 860 164)
Equity accounted profit                                                 1 217 779                 –         1 805 566
Profit before taxation                                                  5 078 717         3 765 650        18 519 755
Taxation                                                                (579 361)         (465 622)       (1 551 687)
Profit for the period                                                   4 499 356         3 300 028        16 968 068

Other comprehensive income
Items that will be reclassified subsequently to profit
or loss
Fair value movement on interest rate swaps                              (186 151)            55 592         1 385 270

Total comprehensive income for the period                               4 313 205         3 355 620        18 353 338

STATEMENT OF CHANGES IN EQUITY
                                                                                         Cash flow
                                                       Stated           Retained             hedge
                                                      Capital           Earnings           reserve              Total
                                                          GBP                GBP               GBP                GBP
Balance at 1 March 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
Profit for the year                                         –          4 499 356                 –          4 499 356
Dividends                                                   –        (8 692 925)                 –        (8 692 925)
Issue of shares (net of transaction costs)             30 752                  –                 –             30 752
Other comprehensive income                                  –                  –         (186 151)          (186 151)
Balance at 31 May 2018                            198 498 451          2 040 145         (681 830)        199 856 766

STATEMENT OF CASH FLOWS 
                                                                           Group             Group              Group
                                                                       Unaudited         Unaudited            Audited
                                                                         Quarter           Quarter               Year
                                                                           ended             ended              ended
                                                                     31—May—2018       31—May—2017        28—Feb—2018
                                                                             GBP               GBP                GBP

Cash generated from operations                                         4 310 197         4 994 481         15 770 848
Interest received                                                         14 518             6 930             76 121
Finance costs                                                        (1 103 132)       (1 079 074)        (4 291 899)
Tax paid                                                                (40 515)           (2 473)        (1 596 311)
Net cash from operating activities                                     3 181 068         3 919 864          9 958 759

Cash flows from investing activities
Acquisition of investment properties                                (15 885 297)                 –       (12 313 853)
Investment in joint venture                                                    –                 –       (24 794 876)
Acquisition of listed investments                                              –                 –        (7 787 184)
Sale of listed investments                                             3 345 085             9 063            925 802
Dividends received                                                     2 742 446            12 570            941 544
Loan to Atlantic Property Investments Limited                                  –                 –                  –
Net cash (utilised in)/from investing activities                     (9 797 766)            21 633       (43 028 567)

Cash flow from financing activities                                                                         
Proceeds from issue of shares                                            (1 648)                 –         45 694 938
Proceeds from borrowings                                              14 521 815                 –          2 790 691
Repayment of borrowings                                              (2 407 008)       (5 298 000)        (6 921 950)
Dividends paid                                                       (8 692 925)       (6 134 862)       (14 638 810)
Net cash from/(utilised in) financing activities                       3 420 234      (11 432 862)         26 924 869

Decrease in cash and cash equivalents                                (3 196 464)       (7 491 365)        (6 144 939)
Cash and cash equivalents at beginning of the period                   6 618 455        12 696 078         12 696 078
Effects of exchange difference on cash and cash equivalents               39 217            39 646             67 316
Cash and cash equivalents at end of period                             3 461 208         5 244 359          6 618 455

SEGMENTAL REPORTING – THREE MONTHS ENDED 31 MAY 2018
                                                                                            Retail
                                                 Industrial              Office         Warehouse        Unallocated              Total
                                                        GBP                 GBP               GBP                GBP                GBP
Statement of profit or loss                                                                                                        
Revenue                                            4 911 857           1 549 651           105 200                  –          6 566 708
Equity accounted profit                              436 177                   –           781 602                  –          1 217 779
Profit on disposal of listed investments                   —                   –                 –            128 344            128 344
Fair value adjustments                             (458 313)           (264 437)                 –            339 157          (383 593)
Interest expense                                 (1 002 047)           (310 758)          (24 610)            (5 565)        (1 342 980)
Income tax                                         (250 051)           (169 234)         (119 561)           (40 515)          (579 361)

Adjusted headline earnings                         2 780 661             949 815           796 283           (55 264)          4 471 495
Statement of financial position                                                                                                 
Additions to investment property                  13 953 653           1 931 644                 –                  –         15 885 297
Total assets                                     258 165 180          77 527 088        24 657 132         11 159 303        371 508 703
Total borrowings                                 119 984 983          41 888 002         2 137 343          1 297 859        165 308 187


SEGMENTAL REPORTING – THREE MONTHS ENDED 31 MAY 2017

                                                                                           Retail
                                                  Industrial             Office          Warehouse        Unallocated              Total
                                                        GBP                GBP                GBP                GBP                GBP
Statement of profit or loss                                                                                                        
Revenue                                            4 477 646          1 441 035            105 200                  –          6 023 881
Fair value adjustments                                     –                  –                  –          (313 272)          (313 272)
Interest expense                                   (926 521)          (293 091)           (25 323)                  –        (1 244 935)
Income tax                                         (340 756)           (92 674)           (17 441)           (14 751)          (465 622)

Adjusted headline earnings                         2 428 093            923 084             54 122          (105 271)          3 300 028
Statement of financial position                                                                                                   
Additions to investment property                           –                  –                  –                  –                  –
Total assets                                     221 555 198         76 552 079          5 810 000          7 062 146        310 979 423
Total borrowings                                 108 524 247         40 735 163          2 196 507                  –        151 455 917


RELATED PARTY TRANSACTIONS
Per the Property Services Agreement, fees for the quarter paid to Martial Eagle Limited amounted to GBP 538 490 (2017: GBP 379 714)

RECONCILIATION OF BASIC EARNINGS TO DISTRIBUTABLE EARNINGS
                                                                                       Unaudited          Unaudited            Audited
                                                                                         Quarter            Quarter               Year
                                                                                            ended              ended              ended
                                                                                     31—May—2018        31—May—2017        28—Feb—2018
                                                                                             GBP                GBP                GBP
Basic earnings                                                                          4 499 356          3 300 028         16 968 068
Less:                                                                                                                          
Fair value adjustments to investment properties                                           722 750            323 377        (1 130 136)
Net profit on disposal of investment properties in joint venture                                —                  —          (303 703)
Fair value adjustments to properties in joint venture                                   (114 801)                  —          (291 390)
Headline earnings                                                                       5 107 305          3 623 405         15 242 839
Add back:                                                                                                                      
Straight line lease income adjustments*                                                 (296 653)          (323 377)        (1 243 529)
Net profit on disposal of investment properties in joint venture                                —                  —            303 703 
Fair value adjustments to listed investments                                            (339 157)                  —            544 352
Adjusted headline earnings/Distributable earnings                                       4 471 495          3 300 028         14 847 365
Weighted average number of shares in issue                                            188 976 628        142 671 209        163 223 203
Basic and diluted earnings per share (GBP pence)                                             2.38               2.31              10.40
Basic and diluted headline earnings per share (GBP pence)                                    2.70               2.54               9.34
Adjusted headline earnings per share (GBP pence)                                             2.37               2.31               9.10
Interim dividend                                                                                —                  —          8 503 948
Final dividend                                                                                  —                  —          8 692 925
Total dividend                                                                                  —                  —         17 196 873
Interim dividend per share (GBP pence)                                                          —                  —               4.50
Final dividend per share (GBP pence)                                                            —                  —               4.60
Total dividend per share (GBP pence)                                                            —                  —               9.10

*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 three months ended 31 May 2018 in terms of Listing Rule 12.19 of the Stock Exchange of
Mauritius Ltd ("SEM"). The abridged unaudited financial statements for the three months ended 31 May 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, interpretations issued by the IFRS Interpretation Committee, 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 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 IFRS and consistent with
those applied in the preparation of the audited financial statements for the year ended 28 February 2018.

These financial statements were approved by the board of directors ("Board" or "Directors") on 11 July 2018. These financial statements have not been
reviewed or reported on by the Company's external auditors.

Copies of the 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—Bissonauth.

This communique is issued pursuant to SEM Listing Rules 11.3 and 12.20 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 Directors have disclosed all matters
or circumstances arising subsequent to the period ended 31 May 2018 that require any additional disclosure or adjustment to the financial statements.

Atlantic Leaf has primary listings both on the Official Market of the SEM and on the Main Board of the JSE Limited.

By order of the Board
11 July 2018

JSE sponsor                                                            SEM authorised representative and sponsor                                        
Java Capital                              +27 11 722 3050               Perigeum Capital Ltd                                          +230 402 0890
Company secretary                                     
Intercontinental Trust Limited            +230 403 0800



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