Wrap Text
Summarised reviewed consolidated results for the three months and six months ended 28 February 2019
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 REVIEWED CONSOLIDATED RESULTS FOR THE THREE MONTHS AND SIX MONTHS ENDED 28 FEBRUARY 2019
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.
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 6 month period ended 28 February 2019 was a
loss of GBP 11.00 million (2018: profit of GBP 2.79 million).
BUSINESS REVIEW
Letting activity and lease renewals
As at 28 February 2019, the centres at Blackpool, Middlesbrough and Burton upon Trent had, as expected, a marginal fall in
combined occupancy, following the closure of a number seasonal temporary stores to 92.60% (30 November 2018: 93.46%) by
Estimated Rental Value ("ERV") and 90.63% (30 November 2018: 91.56%) by Gross Lettable Area ("GLA").
The Company is focused on letting and lease renewal activity and completed 9 lease renewals of which 6 were core tenants and one
new letting during the period. Unfortunately, there were two administrations; Patisserie Valerie and Fivepoundworld during the
period.
BANKING
As previously announced the reduction in valuation of the Group's properties at 31 August 2018 resulted in the Group's loan to
value ("LTV") covenants being exceeded.
Both lenders continue to engage with the Group at this time. However, both lenders have trapped the free rental cashflow, although
they have agreed to release funds for the Group's operating expenses and capital expenditure to support letting activity at the
shopping centres. Meanwhile, surplus funds will be used to repay the outstanding loans. Whilst the Group has the support of its
funders, its loan terms are effectively repayable on demand.
The board of directors of New Frontier ("Board") considers that so long as the Group has the support of its lenders it can service
its obligations in the normal course of business and will continue as a going concern.
STRATEGY
The Group is actively managing its assets, focussing on improving its net operating income and reducing its debt exposure though
the sale of assets where it can do so for the benefit of all its stakeholders. This is exemplified by the steps already taken by the Group
to dispose of its property in Dublin.
Furthermore, the Group is seeking long-term solutions to reduce the cost base with the support of its major shareholder and
positioning its assets to take advantage of any improvement in the UK retail sector. This includes investigating a possible delisting
of the Company from the JSE and SEM.
PROSPECTS
The Company continues to actively manage its assets in a challenging retail environment. It is seeking ways of reducing the level
of its debt and working with all stakeholders to protect the value of its assets and the business.
The UK economy continues to weaken as politicians try to find a solution to Brexit and until a long-term solution is found the retail
sector is likely to continue to suffer.
CHANGES TO BOARD AND COROPRATE GOVERNANCE
At the Company's annual general meeting held on 26 February 2019 Mr Richard Thomas and Mr William Heaney were not re-elected to the
Board of the Company effective from the conclusion of that meeting.
The Board wishes to thank both Mr Thomas and Mr Heaney for their invaluable contributions to the Company.
Mr Tinesh Ramprusad has been appointed to the Audit and Risk Committee and Mr Robert Becker has been appointed to the Corporate Governance
and Remuneration Committee as Chairman.
DIVIDEND
The Board is not recommending the payment of a dividend.
BASIS OF PREPARATION AND ACCOUNTING POLICIES
These summarised reviewed consolidated results for the six month period ended 28 February 2019 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. The accounting policies are consistent with those applied in the annual financial statements for the year
ended 31 August 2018.
The key judgements used in preparing these financial statements has been the valuation of the Group's investment property and the
assessment of the Group’s ability to continue to trade as a going concern.
The directors have concluded that there remains a fundamental uncertainty in the UK shopping centre investment market owing to
a lack of willing buyers and sellers. In order to preserve the Group's resources for the benefit of its shareholders and lenders, an
external valuation of the Group's UK shopping centres has not been undertaken. The Board has used the MSCI UK in town shopping
centre index for the period from July 2018 to December 2018 as a proxy for changes in capital values since the last external valuation,
which took place as at 31 August 2018. During the six months to December 2018 the index declined by 6.43% and this figure has
been applied to those external valuations to determine valuations as at 28 February 2019.
In relation to the assessment of going concern, the position has not changed since the Group last reported for the 3 months ended
30 November 2018. The Group continues to be in breach of the LTV covenants on its loans and its lenders are trapping all of the
income. The lenders are supportive of the Group and are releasing funds to meet its operational and corporate expenses. The Board
believes that so long as the Group's lenders continue to release funds to the Group to meet its commitments the business continues
to be a going concern and these financial statements have been prepared on that basis.
The Board has instigated the process of selling its property in Dublin and this asset has been transferred to current assets in the
financial statements. As this disposal represents the discontinuance of the European warehouse segment it has been disclosed separately
in the statement of comprehensive income and cash flow statement in accordance with IFRS 5.
These financial information have been reviewed by the Company’s external auditors, BDO & Co. This review report does not necessarily report
on all of the information contained in these financial results.
AUDITORS' REPORT
The Company's external auditor, BDO & Co, has reviewed the financial information contained in this announcement in accordance with the
International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Auditor of the Entity".
Based on that review BDO & Co has confirmed that nothing has come to their attention that causes them to believe that the condensed
consolidated financial statements for the six months ended 28 February 2019 have not been prepared, in all material respects, in accordance
with International Financial Reporting Standards.
The Group is in default of the LTV covenant on both of its loan facilities which are therefore repayable on demand. As a result, BDO & Co
has drawn attention to the existence of material uncertainty on the Group's ability to continue as a going concern and therefore that the
Group may be unable to realise their assets and discharge their liabilities in the normal course of business.
A copy of the auditor's ISRE 2410 review report is available for inspection at the Company's registered office.
The directors take full responsibility for the preparation and fair presentation of these interim financial results.
SEGMENTAL INFORMATION
The Group derives its revenue from the single business activity of property investment and is active in the UK shopping centres but
has decided to discontinue its European warehouse investment business.
INVESTOR PRESENTATION
Further to these reviewed interim results for the three and six months ended 28 February 2019, shareholders are advised that New
Frontier Properties will host an investor update conference call on Tuesday, 16 April 2019 at 11:00 (South African time).
Dial-in details are as follows:
Johannesburg (Telkom) 010 201 6800
Johannesburg (Neotel) 011 535 3600
USA and Canada 1 508 924 4326
UK 0333 300 1418
Australia (Toll Free) 1 800 350 100
Participants should ask to be joined to the New Frontier Properties call.
A presentation of the results, which will be discussed during the conference call, will be available for download on the Company's
website from 9:00 onwards (South Africa time) on Tuesday, 16 April 2019 at:
http://newfrontierprop.com/wp-content/uploads/2019/02/New-Frontier-Properties-Ltd-Q2-2019-FINAL.pdf
By order of the Board
Osiris Corporate Solutions (Mauritius) Limited
Company secretary
15 April 2019
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 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
NEW FRONTIER PROPERTIES LTD
STATEMENTS OF FINANCIAL POSITION AT 28 FEBRUARY 2018
THE GROUP
Unaudited Unaudited Audited
28 February 2019 28 February 2018 31 August 2018
GBP 000 GBP 000 GBP 000
ASSETS
Non-current assets
Property, plant and equipment 14 17 15
Investment property 172,977 274,538 193,288
Derivative financial instrument 688 1,529 1,103
173,679 276,084 194,406
Current assets
Non-current Assets held for sale 7,873 - -
Trade and other receivables 4,958 5,199 5,179
Cash and cash equivalents 4,299 5,108 3,471
17,130 10,307 8,650
Total assets 190,809 286,391 203,056
EQUITY
Share capital 47,136 47,136 47,136
Hedging reserve (734) (1,083) (915)
Retained earnings/(Accumulated losses) (34,105) 60,991 (23,102)
Total equity 12,297 107,044 23,119
LIABILITIES
Non-current liabilities
Borrowings 10,751 163,358 143,581
Current liabilities
Trade and other payables 4,033 5,084 5,000
Borrowings 163,728 10,905 31,356
167,761 15,989 36,356
Total liabilities 178,512 179,347 179,937
Total equity and liabilities 190,809 286,391 203,056
NEW FRONTIER PROPERTIES LTD
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR QUARTER AND HALF YEAR ENDED 28 FEBRUARY 2019
THE GROUP
Unaudited Unaudited Unaudited Unaudited
For the 6 For the 6 For the 3 For the 3
months ended months ended months ended months ended
28 February 2019 28 February 2018 28 February 2019 28 February 2019
GBP 000 GBP 000 GBP 000 GBP 000
Rental income 7,623 8,778 4,042 4,301
Expenses
Property operating expenses (2,044) (1,980) (930) (1,451)
Administrative expenses (1) (632) (253) (343)
Other income 2 - 2 -
Movement in foreign exchange - - 6 -
Fair value loss on investment property (12,518) - (12,520) -
(6,938) 6,166 (9,653) 2,507
Net finance costs (3,855) (3,412) (1,988) (1,692)
Profit before tax (10,793) 2,754 (11,641) 815
Taxation (358) - (196) -
Profit for the period – continuing operations (11,151) 2,754 (11,837) 815
Net income/ (loss) from discontinued operations 148 31 (40) 121
Profit for the period – all operations (11,003) 2,785 (11,877) 936
Other comprehensive income for the period
Fair value (loss)/ gain on derivative financial
instruments (415) 1,830 (282) 440
Other comprehensive income for the period (415) 1,830 (282) 440
Total comprehensive income for the period (11,418) 4,615 (12,159) 1,376
Earnings per share
Basic earnings per share (GBP) (0.068) 0.018 (0.074) 0.006
Headline earnings per share (GBP) 0.010 0.018 0.001 0.006
The Company does not have any dilutionary instruments in issue.
NEW FRONTIER PROPERTIES LTD
STATEMENTS OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 28 FEBRUARY 2019
Share Hedging Retained
capital reserve Earnings/(Accumulated Losses) Total
GBP 000 GBP 000 GBP 000 GBP 000
THE GROUP
Balance at 1 September 2018 47,136 (915) (23,102) 23,119
Profit for the period - - (11,003) (11,003)
Other comprehensive income for the period - (415) - (415)
Total comprehensive income for the period - (415) (11,003) (11,418)
Amortisation of historic cash flow hedge reserve - 596 - 596
Balance at 28 February 2019 47,136 (734) (34,105) 12,297
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
Dividends - - (5,500) (5,500)
Waiver of dividends - - 28 28
Amortisation of historic cash flow hedge reserve - 417 - 417
Balance at 28 February 2018 47,136 (1,083) 60,991 107,044
Balance at 1 September 2017 (Audited) 39,412 (3,330) 63,678 99,760
Loss for the year - - (76,481) (76,481)
Other comprehensive income for the year - 1,404 - 1,404
Total comprehensive income for the year - 1,404 (76,481) (75,077)
Issue of shares 7,724 - - 7,724
Dividends - - (10,327) (10,327)
Waiver of dividends - - 28 28
Amortisation of historic cash flow hedge reserve - 1,011 - 1,011
Balance at 31 August 2018 (Audited) 47,136 (915) (23,102) 23,119
NEW FRONTIER PROPERTIES LTD
STATEMENTS OF CASH FLOWS FOR HALF YEAR ENDED 28 FEBRUARY 2019
THE GROUP
Unaudited Unaudited Audited
For the period For the period For the year
ended ended ended
28 February 28 February 31 August
2019 2018 2018
GBP 000 GBP 000 GBP 000
Cash flows from operating activities
Cash generated from operations
Continuing operations 4,165 6,203 11,870
Discontinued operations 233 (66) (33)
Tax (paid)/ refunded (7) 146 146
Interest paid (2,013) (2,138) (4,755)
Net cash generated from operating activities 2,378 4,145 7,228
Cash flows from investing activities
Capital improvements to investment property (178) (1,312) (1,132)
Purchase of investment property - (8,455) (8,150)
Net cash (used in)/ generated from investing activities (178) (9,767) 9,282
Cash flows from financing activities
Proceeds from loans - 11,996 12,800
Repayment of borrowings (1,381) (588) (1,783)
Payment of borrowing costs - (701) (695)
Dividend payment - (5,472) (10,299)
Net cash (used in)/from financing activities (1,381) 5,235 23
Net increase/(decrease in cash and cash equivalents for
the period/year 819 (387) (2,031)
Exchange difference 9 (15) (8)
Cash and cash equivalents at the beginning of the
3,471 5,510 5,510
period/year
At end of period/ year 4,299 5,108 3,471
NEW FRONTIER PROPERTIES LTD
RECONCILIATION OF PROFIT FOR HALF YEAR ENDED 28 FEBRUARY 2019
TO HEADLINE EARNINGS
THE GROUP
For the For the For the For the
6 months ended 6 months ended 3 months ended 3 months ended
28 February 2019 28 February 2018 28 February 2019 28 February 2018
Basic and headline earnings per share GBP 000 GBP 000 GBP 000 GBP 000
Basic earnings attributable to equity
holders of the Company (11,003) 2,785 (12,265) 936
Fair value movement on investment
properties 12,616 - 12,445 -
Headline earnings attributable to
equity holders of the Company 1,613 2,785 180 936
Weighted average number of shares 160,935,407 156,201,234 160,935,407 159,665,971
Earnings per share
Basic earnings per share (GBP) (0.068) 0.018 (0.076) 0.006
Headline earnings per share (GBP) 0.010 0.018 0.001 0.006
Date: 15/04/2019 02:40:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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