| Fri 6 Aug 2010, 16:30 | | NEP - New Europe Property Investments Plc - Condensed consolidated unaudited |
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NEP
NEP
NEP - New Europe Property Investments Plc - Condensed consolidated unaudited
financial statements for the six months ended 30 June 2010
NEW EUROPE PROPERTY INVESTMENTS PLC
(Incorporated and registered in the Isle of Man with registered number
001211V)
(Registered as an external company with limited liability under the laws of
South Africa. Reg No 2009/000025/10)
AIM share code: NEPI
JSE share code: NEP
ISIN Code: IM00B23XCH02
("NEPI", "the Group" or "the Company")
CONDENSED CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED
30 JUNE 2010
Directors` commentary
1 Distributable earnings
The Group has achieved consolidated distributable earnings of 8.35 EUR cents
per share and, accordingly, the Board declared an interim dividend of 8.35 EUR
cents per share in respect of the six month period ended 30 June 2010. This
strong performance represents a 9.0% increase over the 7.66 EUR cents per
share distributed for the comparable prior period.
2 Internalisation
During the period the Company internalised its investment advisor through the
acquisition of all of the issued shares of NEPI Investment Management Limited
("NEPM"). The net purchase price of EUR5 881 943 was accounted for as an
intangible asset in the consolidated statement of financial position. The
Board expects that the management of the Group`s property portfolio going
forward will be achieved more efficiently and cost effectively with the
management team of NEPM being employed and incentivised directly by the
Company. The internalisation is expected to result in better returns to NEPI
shareholders and enhanced distributable earnings per share.
3 JSE Main Board listing
On 4 August 2010 the Company completed the transfer of its listing from the
Alternative Exchange ("AltX") of the JSE Limited ("JSE") to the Main Board of
the JSE in South Africa, which combined with the wider placement of shares
completed during the period is expected to further extend the shareholder base
and further improve liquidity in the trading of the Company`s shares.
The Company currently also holds a listing on the AIM market of the London
Stock Exchange.
4 Property acquisitions and development
The Group continued expanding its retail asset base in Romania through the
acquisition of a retail park located in Pitesti, Romania ("Retail Park Auchan
Pitesti") leased to Auchan and Bricostore.
The Company continues to pursue further investment opportunities in line with
its investment strategy. The Group is also in discussions for the acquisition
of a small but well located logistics facility in Bucharest. In view of
existing market opportunities and the Group`s growing foothold in Romania, the
Group has also pursued development opportunities through joint ventures with
strong partners. One of these opportunities led to an agreement in relation to
the development of a shopping centre in Bucharest. This project is currently
in due diligence.
5 Debt
In June 2010 the Group successfully refinanced a loan facility in relation to
Retail Park Auchan Pitesti with a more favorable new loan facility from
Unicredit Bank and Banca Romaneasca. The new loan facility of EUR28 813 000
matures in December 2014 and carries an interest rate of 1 month Euribor plus
4.0%. Further, the Group took advantage of the low interest rate environment
and capped the Euribor at 2.25% in relation to the new loan facility and
reduced the cap strike levels to 2.25% on all the other outstanding variable
interest rate loans, while the caps in relation to the NEPI Bucharest One and
NEPI Bucharest Two loans were extended up to December 2014 which is beyond the
respective loan facilities` maturities.
6 Prospects
Despite continued macroeconomic weakness in Romania, NEPI`s property portfolio
continues to perform well supported by the predominance of long-term leases
and tenants with strong corporate covenants. The Company established a solid
property portfolio and investment pipeline in Romania and is well positioned
to continue expanding its retail asset base in Romania.
By order of the Board
Martin Slabbert
Chief Executive Officer
Victor Semionov
Financial Director
6 August 2010
Consolidated statement of financial position
Group Group Group
Unaudited Audited Unaudited
30 Jun 10 31 Dec 09 30 Jun 09
EUR EUR EUR
ASSETS
Non-current assets 211 084 981 151 470 854 87 794 134
Investment property 196 914 767 145 965 096 85 280 283
Investment property at fair value 189 752 881 139 222 255 78 676 715
Investment property under
Development 7 161 886 6 742 841 6 603 568
Intangible assets 5 881 943 - -
Goodwill 6 908 608 4 414 804 2 386 463
Financial assets at fair value
through profit or loss 1 379 663 1 090 954 127 388
Current assets 27 932 073 15 673 022 11 997 776
Trade and other receivables 4 465 634 3 396 479 2 313 505
Cash and cash equivalents 23 466 439 12 276 543 9 684 271
Total assets 239 017 054 167 143 876 99 791 910
EQUITY AND LIABILITIES
Total equity attributable
to equity holders 114 862 261 72 719 463 49 815 481
Share capital 562 686 386 247 267 950
Share premium 119 042 233 76 731 744 52 487 190
Share based payment reserve 542 246 234 900 152 665
Currency translation reserve (3 318 045) (2 650 069) (2 591 223)
Accumulated loss (1 966 859) (1 983 359) (501 101)
Non-current liabilities 116 257 774 86 440 422 45 281 792
Loans and borrowings 105 223 417 77 970 398 40 283 172
Financial liabilities at fair value
through profit or loss 1 081 710 1 081 710 934 866
Deferred tax liabilities 9 952 647 7 388 314 4 063 754
Current liabilities 7 879 019 7 983 991 4 694 637
Trade and other payables 6 335 216 6 027 605 3 057 850
Loans and borrowings 1 561 803 1 956 386 1 636 787
Total equity and liabilities 239 017 054 167 143 876 99 791 910
Net asset value per share 2.04 1.88 1.86
Adjusted net asset value
per share 2.03 1.97 1.93
Consolidated statement of comprehensive income
Group Group Group
Unaudited Audited Unaudited
30 Jun 10 31 Dec 09 30 Jun 09
EUR EUR EUR
Net rental and related income 7 797 115 8 270 884 3 520 962
Contractual rental income and
expense recoveries 10 126 772 10 708 873 4 323 488
Property operating expenses (2 329 657) (2 437 989) (802 526)
Share based payments (307 346) (153 059) (70 824)
Investment advisory fees (679 627) (670 725) (275 574)
Administrative expenses (461 517) (1 543 992) (274 508)
Foreign exchange gain 421 927 1 811 011 1 723 780
Fair value adjustment on
investment property - 575 253 -
Profit before net finance
expense 6 770 552 8 289 372 4 623 836
Finance income 196 896 261 512 134 523
Finance expense (4 023 933) (3 707 436) (2 286 056)
Net finance expense (3 827 037) (3 445 924) (2 151 533)
Profit before tax 2 943 515 4 843 448 2 472 303
Tax (9 813) (2 121 193) (342 729)
Profit for the period attributable
to equity holders 2 933 702 2 722 255 2 129 574
Weighted average number of
shares in issue 47 255 904 29 397 896 26 795 000
Diluted weighted average number
of shares in issue 49 444 271 30 877 071 28 150 000
Basic weighted average earnings
per share (EUR cents) 6.21 9.26 7.95
Diluted weighted average earnings
per share (EUR cents) 5.93 8.82 7.57
Distributable earnings
per share (EUR cents) 8.35 15.77 7.66
Headline earnings per share
(EUR cents) 7.62 13.74 14.79
Diluted headline earnings
per share (EUR cents) 7.28 13.08 14.08
Statement of other comprehensive income
Group Group Group
Unaudited Audited Unaudited
30 Jun 10 31 Dec 09 30 Jun 09
EUR EUR EUR
Profit for the year attributable
to equity holders 2 933 702 2 722 255 2 129 574
Other comprehensive income (667 976) (1 892 383) (1 833 537)
- currency translation differences (667 976) (1 892 383) (1 833 537)
Total comprehensive income
for the period 2 265 726 829 872 296 037
Statement of changes in equity
Share
based
Share Share payments
capital premium reserve
Group unaudited EUR EUR EUR
Opening balance 1 January 2009 267 950 52 487 190 81 841
Transactions with owners - - 70 824
- issue of shares - - -
- issue cost recognised to equity - - -
- share based payment reserve - - 70 824
- dividend distribution - - -
Total comprehensive income - - -
- other comprehensive income - - -
- profit for the period - - -
Balance at 30 June 2009 267 950 52 487 190 152 665
Opening balance 1 July 2009 267 950 52 487 190 152 665
Transactions with owners 118 297 24 244 554 82 235
- issue of shares 118 297 24 263 927 -
- issue cost recognised to equity - (19 373) -
- share based payment reserve - - 82 235
- dividend distribution - - -
Total comprehensive income - - -
- other comprehensive income - - -
- profit for the period - - -
Balance at 31 December 2009 386 247 76 731 744 234 900
Opening balance 1 January 2010 386 247 76 731 744 234 900
Transactions with owners 176 439 42 310 489 307 346
- issue of 9 310 823 shares on
12/03/2010 93 109 20 856 243 -
- issue of 5 882 352 shares on
01/04/2010 58 823 15 377 960 -
- issue of 2 450 748 shares on
30/06/2010 24 507 6 298 422 -
- issue cost recognised to equity - (222 136) -
- share based payment reserve - - 307 346
- dividend distribution - - -
Total comprehensive income - - -
- foreign exchange loss - - -
- profit for the period - - -
Closing balance 30 June 2010 562 686 119 042 233 542 246
Statement of changes in equity (continued)
Currency
translation Accumulated
reserve loss Total
Group unaudited EUR EUR EUR
Opening balance 1 January 2009 (757 686) (681 386) 51 397 909
Transactions with owners - (1 949 289) (1 878 465)
- issue of shares - - -
- issue cost recognised to equity - - -
- share based payment reserve - - 70 824
- dividend distribution - (1 949 289) (1 949 289)
Total comprehensive income (1 833 537) 2 129 574 296 037
- other comprehensive income (1 833 537) - (1 833 537)
- profit for the period - 2 129 574 2 129 574
Balance at 30 June 2009 (2 591 223) (501 101) 49 815 481
Opening balance 1 July 2009 (2 591 223) (501 101) 49 815 481
Transactions with owners - (2 074 939) 22 370 147
- issue of shares - - 24 382 224
- issue cost recognised to equity - - (19 373)
- share based payment reserve - - 82 235
- dividend distribution - (2 074 939) (2 074 939)
Total comprehensive income (58 846) 592 681 533 835
- other comprehensive income (58 846) - (58 846)
- profit for the period - 592 681 592 681
Balance at 31 December 2009 (2 650 069) (1 983 359) 72 719 463
Opening balance 1 January 2010 (2 650 069) (1 983 359) 72 719 463
Transactions with owners - (2 917 202) 39 877 072
- issue of 9 310 823 shares on
12/03/2010 - - 20 949 352
- issue of 5 882 352 shares on
01/04/2010 - - 15 436 783
- issue of 2 450 748 shares on
30/06/2010 - - 6 322 929
- issue cost recognised to equity - - (222 136)
- share based payment reserve - - 307 346
- dividend distribution - (2 917 202) (2 917 202)
Total comprehensive income (667 976) 2 933 702 2 265 726
- foreign exchange loss (667 976) - (667 976)
- profit for the period - 2 933 702 2 933 702
Closing balance 30 June 2010 (3 318 045) (1 966 859) 114 862 261
Abridged consolidated statement of cash flows
Group Group Group
Unaudited Audited Unaudited
30 Jun 10 31 Dec 09 30 Jun 09
EUR EUR EUR
Cash flows from operating
activities* 1 872 019 2 612 814 1 336 854
Cash flows from financing
activities 18 346 688 12 537 009 4 323 247
Cash flows from investing
activities (8 697 486) (7 055 693) (138 113)
Net increase in cash and
cash equivalents 11 521 221 8 094 130 5 521 988
Cash and cash equivalents
brought forward 12 276 543 4 418 847 4 418 847
Translation effect on cash and
cash equivalents (331 325) (236 434) (256 564)
Cash and cash equivalents
carried forward 23 466 439 12 276 543 9 684 271
*Includes interest paid on bank borrowings amounting to EUR2 989 403 for
the six months ended 30 June 2010, EUR2 240 009 for the year ended
31 December 2009 and EUR1 014 619 for the six months ended 30 June 2009
Notes to the condensed consolidated unaudited interim financial statements
Basis of preparation
The condensed consolidated unaudited interim financial statements have been
prepared in accordance with applicable Isle of Man law, International
Financial Reporting Standards (IFRS), specifically IAS 34 Interim Financial
Reporting, and the JSE Listings Requirements. The interim financial statements
do not include all of the information required for full annual financial
statements, and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2009. The accounting
policies are consistent with those applied for the prior periods except for
the adoption of the revised IAS1.
The condensed consolidated interim financial statements have not been reviewed
or reported on by the Company`s auditor.
Investment property
Investment properties are those held either to earn rental income or for
capital appreciation or both. After initial recognition investment properties
are measured at fair value. It is the Group`s policy to revalue investment
properties in December.
Loans and borrowings as at 30 June 2010
Available
Facility Outstanding for
Amount amount drawdown Interest
Borrower EUR EUR EUR rate Hedge
Nepi 1M Euribor
Bucharest 1M Euribor capped at
One SRL 7 300 000 6 240 000 1 060 000 +4.5% 2.25%
Nepi 1M Euribor
Bucharest 1M Euribor capped at
Two SRL 6 824 800 5 800 000 1 024 800 +1.9% 2.25%
General
Investment Fixed at
SRL 15 000 000 11 864 281 - 6.23% -
Premium Fixed at
Portfolio 13 995 000 13 800 491 - 5.17% -
ERP Braila 3M Euribor
3M Euribor capped at
40 000 000 40 000 000 - +3.0% 2.25%
Retail Park 1M Euribor
Auchan 1M Euribor capped at
Pitesti 28 813 000 28 813 000 - +4.0% 2.25%
Loans repayment profile
2010 2011 2012 2013
Year EUR EUR EUR EUR
Nepi Bucharest One SRL - - - 6 240 000
Nepi Bucharest Two SRL - 5 800 000 - -
General Investment SRL 475 414 1 005 008 1 064 641 1 137 283
Premium Portfolio 110 495 239 173 240 192 333 284
ERP Braila - - 2 155 653 2 155 653
Retail Park Auchan Pitesti - 216 098 2 139 365 1 899 257
Total 585 909 7 260 279 5 599 851 11 765 477
Loans repayment profile (continued)
2014 2015 Total
Year EUR EUR EUR
Nepi Bucharest One SRL - - 6 240 000
Nepi Bucharest Two SRL - - 5 800 000
General Investment SRL 8 181 935 - 11 864 281
Premium Portfolio 175 460 12 701 887 13 800 491
ERP Braila 35 688 694 - 40 000 000
Retail Park Auchan Pitesti 1 450 254 23 108 026 28 813 000
Total 45 496 343 35 809 913 106 517 772
Reconciliation of profit for the period to distributable earnings
Group Group Group
30 Jun 10 31 Dec 09 30 Jun 09
EUR EUR EUR
Profit for the period attributable
to equity holders 2 933 702 2 722 255 2 129 574
Unrealised foreign exchange gain (421 927) (1 811 011) (1 723 780)
Realised foreign exchange losses - (87 000) -
Listing expenses - 905 048 905 048
Acquisition fees 332 839 286 211 -
Share based payment fair value 307 346 153 059 70 824
Accrued interest on share based
payments 133 639 170 721 81 045
Fair value adjustment - (575 253) -
Financial assets at fair value 701 291 855 754 392 176
Amortisation of the financial
assets (159 600) (117 288) (39 777)
Deferred tax expense - 2 114 061 341 180
Share issue cum distribution 1 042 706 547 821 -
Distributable earnings for
the period 4 869 996 5 164 378 2 156 290
Number of shares entitled
to distribution 58 346 586* 37 070 515* 28 150 000
*(Total shares in issue less
3 587 148 vendor shares subject
to lock in arrangements since
20 October 2009)
Distributable earnings per share
for the period (EUR cents) 8.35 15.77 7.66
Interim (EUR cents) 8.35 7.66 7.66
Final (EUR cents) - 8.11 -
Reconciliation of profit for the period to headline earnings Group
Group Group Group
30 Jun 10 31 Dec 09 30 Jun 09
EUR EUR EUR
Profit for the period attributable
to equity holders 2 933 702 2 722 255 2 129 574
Changes in currency translation
reserve of foreign subsidiaries 667 976 1 892 382 1 833 537
Fair value adjustment of investment
property - (575 253) -
Headline earnings 3 601 678 4 039 384 3 963 111
Group Group Group
30 Jun 10 31 Dec 09 30 Jun 09
EUR EUR EUR
Adjusted net asset value 125 772 793 80 070 467 54 446 673
Net asset value per the
statement of financial position 114 862 261 72 719 463 49 815 481
Issued value of the shares in
respect of the share incentive
scheme 13 748 436 4 377 494 2 953 900
Deferred tax 9 952 647 7 388 314 4 063 754
Goodwill and intangible assets (12 790 551) (4 414 804) (2 386 462)
Net asset value per share 2.04 1.88 1.86
Adjusted net asset value
per share 2.03 1.97 1.93
Number of shares for net assets
value per share purposes 56 268 704 38 624 771 26 795 000
Number of shares for adjusted net
assets value per share purposes 61 933 734 40 657 663 28 150 000
Lease expiry profile
Based on Based on
rental income rented area
Year
2010 0.1% 0.0%
2011 2.6% 3.4%
2012 3.9% 4.8%
2013 8.0% 3.9%
2014 18.6% 16.8%
2015 6.9% 9.9%
2016 14.8% 7.3%
2017 0.7% 0.3%
2018 2.5% 0.8%
2019 1.6% 1.3%
>= 2020 40.3% 51.5%
Segmental analysis
Group Group Group
30 Jun 10 31 Dec 09 30 Jun 09
EUR EUR EUR
Rental income
Retail 7 108 561 4 807 694 1 362 511
Industrial 594 417 1 191 587 593 914
Office 2 423 794 4 709 592 2 367 062
Total 10 126 772 10 708 873 4 323 487
Profit before net finance expense
Retail 5 317 544 6 652 814 587 801
Industrial 474 707 179 460 685 768
Office 1 815 713 3 032 304 3 624 775
Corporate (837 412) (1 575 206) (274 508)
Total 6 770 552 8 289 372 4 623 836
Payment of interim dividend
The board has approved and notice is hereby given of an interim dividend per
share of 8.35 EUR cents for the six months ended 30 June 2010.
The salient dates for the dividend are set out below:
Last day to trade (JSE) Friday, 27 August 2010
Ex-dividend date (JSE) Monday, 30 August 2010
Ex-dividend date (AIM) Wednesday, 1 September 2010
Record date Friday, 3 September 2010
Payment date Thursday, 9 September 2010
No dematerialisation or rematerialisation of share certificates, nor transfer
of shares between registers in the Isle of Man and South Africa will take
place between Monday, 30 August 2010 and Friday, 3 September 2010, both dates
inclusive.
Shareholders on the South African sub-register will receive dividends in South
African Rand, based on the exchange rate to be obtained by the Company on 20
August 2010. A further announcement in this respect will be made on or before
20 August 2010.
Registered office
Falcon Cliff, Palace Road, Douglas, Isle of Man IM2 4LB, British Isles (PO Box
75, Douglas, Isle of Man, IM99 1EP, British Isles)
Transfer secretaries and settlement agent
Computershare Investor Services (Proprietary) Limited, 70 Marshall Street
Johannesburg 2001 South Africa
(PO Box 61051 Marshalltown 2107 South Africa)
Computershare Investor Services (Jersey) Limited, 2nd Floor, Queensway House,
Hilgrove Street, St Helier, JE1 1ES, Jersey
Directors
Dan Pascariu (Chairman)*, Desmond de Beer#, Michael Mills*, Steven Van Den
Bossche*, Dewald Joubert*, Victor Semionov (Financial Director), Martin
Slabbert (Chief Executive Officer), Jeffrey Zidel#
*Independent non-executive director #Non-executive director
For further information please contact
New Europe Property Investments plc
+40 74 432 8882
Martin Slabbert
Smith & Williamson
Corporate Finance Limited
+44 20 7131 4000
Azhic Basirov/Charles Combe
South African sponsor
Java Capital
+27 11 283 0042
Date: 06/08/2010 16:30:01 Produced by the JSE SENS Department.
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