Wrap Text
Summarised unaudited consolidated results for the three months and nine months ended 31 May 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 "the Group")
SUMMARISED UNAUDITED CONSOLIDATED RESULTS FOR THE THREE MONTHS AND NINE MONTHS
ENDED 31 MAY 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.
REPORTING CURRENCY
The Company's results are reported in pounds sterling ("GBP").
FINANCIAL RESULTS
The Group's International Financial Reporting Standards ("IFRS") profit for the nine-month period ended 31 May 2018 was GBP
4.26 million (31 May 2017: GBP 7.46 million). The recurring profit for the same period was GBP 6.44 million (31 May 2017: GBP
7.68 million) which are in line with forecasts.
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
Due to the continuing uncertain business and political environment in the UK, the Company will continue to focus on managing its
existing assets.
Letting activity and lease renewals
As at 31 May 2018, the centres at Blackpool, Middlesbrough and Burton upon Trent have seen decreases in combined occupancy
to 91.02% (28 February 2018: 93.90%) by Estimated Rental Value ("ERV") and 90.11% (28 February 2018: 92.89%) by Gross
Lettable Area ("GLA").
The Company has completed six new lettings and 19 lease renewals in the three months ended 31 May 2018. On 26 April 2018,
H&M opened a 20,000 sq ft store in Burton upon Trent, taking the remaining space in the former BHS unit alongside the 25,000 sq
ft Next store. At Blackpool, good progress is being made for the new IMAX cinema development with ancillary retail and we hope
to commence development within the next six months.
The Company has made good progress on lettings with a further six units under offer with rent of £538,000 pa which would improve
overall occupancy to 93.7% from the current 91.02%.
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 31 May 2018, being 160,935,407 shares, is 65 pence per share at 31 May
2018 (67 pence per share at 28 February 2018). 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.
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, increased costs and declining
national footfall impacted by a shift in shopping habits.
The Company has not been immune from the spate of Company Voluntary Arrangements ("CVAs") and receiverships which have
affected UK retail. Tenants, including New Look, Shakedog and Select, have reduced rents and closed stores. It is expected that the
challenging conditions will persist with further CVAs, companies going into administration, and, as previously reported, this will
impact the business.
It is likely that, due to the current market conditions, the Company will not be proceeding with the transaction in Hassfurt, Germany
as previously announced.
REBOSIS TO MOTIVATE TO RESTRUCTURE NEW FRONTIER
On 10 May 2018, the Company announced that, at the Rebosis Property Fund Limited ("Rebosis") results presentation held on 8
May 2018, Rebosis informed its shareholders that Rebosis may motivate to restructure New Frontier including, inter alia, to propose
the delisting of New Frontier and/or the internalisation of New Frontier's asset management.
New Frontier has noted the statement issued by Rebosis and is considering a variety of options for the Company.
UK REIT STATUS
The Company has instructed its advisors, BDO, to confirm the Company's UK REIT status with HMRC. It is likely that, due to the
Company's being unable to meet all the requirements for UK REIT status, New Frontier will leave the UK REIT regime. After the
Company has left the UK REIT regime it is likely that the Company will continue to be UK tax resident, but will be liable to pay
UK taxes and future distributions will comprise ordinary dividends rather than property income distributions.
CHANGES TO BOARD OF DIRECTORS ("THE BOARD")
Mr Andile Mazwai resigned as a non-executive director of the Company with effect from 26 April 2018.
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.
As a result, no dividend has been declared for the period under review.
BASIS OF PREPARATION
These summarised unaudited consolidated results for the nine months ended 31 May 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 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
13 July 2018
NOTES
Copies of this report are available to the public at the registered office of the Company, Chemin Vingt Pieds, 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 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 accepts full responsibility for the accuracy of the information in this communiqué.
For further information please contact:
JSE designated advisor
Java Capital +27 11 722 3050
Company secretary
Osiris Corporate Solutions (Mauritius) Limited +230 650 4030
NEW FRONTIER PROPERTIES LTD
STATEMENTS OF FINANCIAL POSITION
AT 31 MAY 2018
THE GROUP
Unaudited Unaudited Audited
31 May 31 May 31 August
2018 2017 2017
GBP 000 GBP 000 GBP 000
ASSETS
Non-current assets
Property, plant and equipment 17 849 17
Investment property 274,723 272,588 264,800
Derivative financial instrument 908 - -
275,648 273,437 264,817
Current assets
Trade and other receivables 4,451 4,507 6,091
Cash and cash equivalents 2,650 4,720 5,510
7,101 9,227 11,601
Total assets 282,749 282,664 276,418
EQUITY
Capital and reserves (attributable to owners of the parent)
Share capital 47,136 124,412 39,412
Hedging reserve (1,407) (3,768) (3,330)
Retained earnings/(Accumulated losses) 57,642 (14,105) 63,678
Total equity 103,371 106,539 99,760
LIABILITIES
Non-current liabilities
Borrowings 165,256 166,862 159,112
Derivative financial instrument - 3,768 300
165,256 170,630 159,412
Current liabilities
Trade and other payables 5,311 4,403 5,508
Borrowings 8,811 1,092 11,738
14,122 5,495 17,246
Total liabilities 179,378 176,125 176,658
Total equity and liabilities 282,749 282,664 276,418
NEW FRONTIER PROPERTIES LTD
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR QUARTER AND NINE MONTHS ENDED 31 MAY 2018
THE GROUP
Unaudited Unaudited Unaudited Unaudited
For the For the For the 9 For the 9
quarter quarter months months
ended ended ended ended
31 May 31 May 31 May 31 May
2018 2017 2018 2017
GBP 000 GBP 000 GBP 000 GBP 000
Rental income 4,573 4,727 13,568 15,035
Expenses
Property operating expenses (861) (1,075) (2,849) (2,499)
Administrative expenses (309) (332) (1,055) (919)
Other income - - - 72
Movement in foreign exchange (65) - (129) -
3,338 3,320 9,535 11,689
Net finance costs (1,847) (1,452) (5,259) (4,314)
Profit before tax 1,491 1,868 4,276 7,375
Taxation (12) - (12) 84
Profit for the period 1,479 1,868 4,264 7,459
Other comprehensive income for the period
Items that may be reclassified subsequently to profit or loss
Fair value gain/(loss) on derivative financial
instruments (621) 146 1,209 1,846
Other comprehensive income for the period (621) 146 1,209 1,846
Total comprehensive income for the period 858 2,014 5,473 9,305
Earnings per share
Basic earnings per share (GBP) 0.009 0.012 0.027 0.049
0.018 0.018 0.018
Headline earnings per share (GBP) 0.009 0.012 0.027 0.049
The Company does not have any dilutionary instruments in issue
NEW FRONTIER PROPERTIES LTD
STATEMENTS OF CHANGES IN EQUITY
FOR THE NINE MONTHS ENDED 31 MAY 2018
Retained
Earnings/
Share Hedging
(Accumulated
capital reserve Losses) 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 - - 4,264 4,264
Other comprehensive income for the period - 1,209 - 1,209
Total comprehensive income for the period - 1,209 4,264 5,473
Issue of shares 7,724 - - 7,724
Amortisation of historic cash flow hedge
reserve - 714 - 714
Dividends - - (10,328) (10,328)
Waiver of dividends - - 28 28
Balance at 31 May 2018 47,136 (1,407) 57,642 103,371
Balance at 1 September 2016 124,412 (5,614) (10,051) 108,747
Profit for the period - - 7,459 7,459
Other comprehensive income for the period - 1,846 - 1,846
Total comprehensive income for the period 124,412 (3,768) (2,592) 118,052
Dividends - - (11,611) (11,611)
Waiver of dividend - - 98 98
Balance at 31 May 2017 124,412 (3,768) (14,105) 106,539
Balance at 1 September 2016 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 39,412 (3,330) 63,678 99,760
NEW FRONTIER PROPERTIES LTD
STATEMENTS OF CASH FLOWS
FOR NINE MONTHS ENDED 31 MAY 2018
THE GROUP
Unaudited Unaudited Audited
For the period For the period For the year
ended ended ended
31 May 2018 31 May 2017 31 August 2017
GBP 000 GBP 000 GBP 000
Cash flows from operating activities
Cash generated from operations 9,950 13,773 16,375
Tax refunded 146 217 217
Interest paid (3,218) (4,052) (5,411)
Net cash generated from operating
activities 6,878 9,938 11,181
Cash flows from investing activities
Capital improvements to investment
property (1,390) - (2,258)
Purchase of investment property (8,643) - -
Addition to property, plant and
equipment - (831) -
Interest received - 1 5
Net cash used in investing activities (10,033) (830) (2,253)
Cash flows from financing activities
Proceeds from loans 11,311 3,500 7,500
Payment of borrowing costs (701) (14) (14)
Premium paid to reset interest rate swap - - (3,030)
Dividend payment (10,299) (11,513) (11,513)
Net cash from/(used in) financing
activities 311 (8,027) (7,057)
Net (decrease)/increase in cash and
cash equivalents for the period/year (2,844) 1,081 1,871
Exchange difference (16) - -
Cash and cash equivalents at the
beginning of the period/year 5,510 3,639 3,639
At 31 May 2018/31 May 2017/31
August 2017 2,650 4,720 5,510
NEW FRONTIER PROPERTIES LTD
RECONCILIATION OF PROFIT
FOR NINE MONTHS ENDED 31 MAY 2018 TO HEADLINE EARNINGS
THE GROUP
For the For the 9 For the 9
quarter For quarter months months
ended ended ended ended
31 May 31 May 31 May 31 May
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 1,479 1,868 4,264 7,459
Fair value movement on investment
properties - - - -
Headline earnings attributable to equity
holders of the Company 1,479 1,868 4,264 7,459
Number of shares/weighted average
number of shares 160,307,664 152,774,750 157,796,693 152,774,750
Earnings per share
Basic earnings per share (GBP) 0.009 0.012 0.027 0.0488
Headline earnings per share (GBP) 0.009 0.012 0.027 0.0488
NEW FRONTIER PROPERTIES LTD
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 for the three months and nine months ended 31 May 2018.
Unaudited for the Unaudited for the Unaudited for the
9 month period 9 month period year
ended ended ended
31-May-18 31-May-17 31-Aug-17
GBP 000 GBP 000 GBP 000
Total comprehensive income for the period 5,473 9,305 2,526
Fair value gain on financial derivatives (1,209) (1,846) (2,284)
Basic earnings 4,264 7,459 242
Fair value movement on investment property - - 10,046
Amortised & other loan costs 1,029 309 451
Taxation (84) (84)
Administrative expenses 301 - 352
Movement in foreign exchange translation 129 - -
Amortisation of costs in relation to recoupon of derivatives 714 - -
Recurring profit 6,437 7,684 11,007
Recurring profit 6,437 7,684 11,007
Included in the IFRS profit of £4.26 million reflects a change in the basis of asset management fees charged to New Frontier. In
the year ended 31 August 2017 the Company's asset manager agreed to charge half of the asset management fee based on new
acquisitions rather than on enterprise value. However, as the level of acquisitions has been less than anticipated it has been
agreed that the original fee basis should be re-instated. As a result there has been a charge in the current year of £1.1 million of
which £0.7 million would have been charged in the prior period but for the change in fee basis.
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
31-May-18 31-May-17 31-Aug-17
GBP 000 GBP 000 GBP 000
Total equity 103,371 106,539 99,760
Adjusted for;
MTM of financial derivatives 1,407 3,768 3,330
EPRA NAV 104,778 110,307 103,090
Number of shares 160,935,407 152,774,750 152,774,750
NAV per share (GBP) 0.65 0.72 0.67
EPRA NAV excludes MTM of financial derivatives.
Date: 13/07/2018 02:04:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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