| Thu 3 Nov 2011, 15:00 | | MSP - Mas Plc - Interim consolidated unaudited financial statements for the six |
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MSP
MSP
MSP - Mas Plc - Interim consolidated unaudited financial statements for the six
months ended 31 August 2011
MAS PLC
(Incorporated in the Isle of Man)
(Registration number 2893V)
(Registered as an external company in the Republic of South Africa)
(Registration number 2010/000338/10)
JSE share code: MSP
ISIN: IM00B4LFGH00
("MAS" or "the company")
Interim consolidated unaudited financial statements for the six months ended 31
August 2011
Highlights
- Metchley Hall student residential development completed
- Aldi portfolio and DPD property continue delivering strong income
- September capital raising attracts Euro22,0 million
- Euro510 000 core income generated
MAS plc is a real estate investment company with a portfolio of commercial
properties in Western Europe. Its objective is to provide investors with a
sustainable, high dividend yield on their investment. The company`s current
investment focus is on Germany, Switzerland and the United Kingdom.
Listed on Luxembourg`s Euro-MTF exchange (primary listing) and the JSE`s Alt-X
(secondary listing), MAS plc now has a fully paid-up share capital of Euro42,2
million.
Reporting currency
The company`s results are reported in euros.
Market update
Due to the continuing global economic crisis, the Eurozone`s lending market
remained tight, with volumes at very low levels. GDP forecasts across Europe are
being adjusted downwards while outside the Eurozone, the Swiss economy continues
to struggle because of the strength of the Swiss franc.
The UK, too, increasingly felt the effects of the government`s austerity
measures. As a result, real-estate transaction volumes remained muted except in
the case of very prime assets, and the yield recovery seen in 2010 was not
sustained in the reporting period. Tight lending has constricted especially the
sub-prime end of the property market.
However, market dislocations such as these create unique investment
opportunities and MAS plc is well placed to continue taking advantage of such
opportunities when they present themselves. Recent market research provided
strong evidence that investors with cash and the ability to follow through on
transactions find themselves in a very favourable position. Immediately after
the capital raise in early September, MAS plc had Euro23,8 million in cash.
Overview of the portfolio
Gross
property Gross Property Net
by value rentals equity rentals
(refer 1 (After
below) interest)
Euro Euro Euro Euro
Aldi/Germany 29% 41% 11% 32%
DPD/Switzerland 54% 59% 51% 68%
Metchley Hall/UK 18% 0% 39% 0%
(1) Property equity is the property value, less the amount of bank debt borrowed
against the property.
Property valuations at 28 February 2011
Currency Valuation (local) Valuation (EUR)
Aldi portfolio EUR 10 060 000 10 060 000
DPD property CHF 21 750 000 18 750 675
Metchley Hall (refer 2 below) GBP 5 494 641 6 208 945
Total 35 019 620
(2) Investment property under construction is carried at the latest valuation
plus additional development expenses incurred since that date.
Core income for the six months to 31 August 2011 of Euro510 261(six months to
August 2010: Euro397 902) confirmed the soundness of the investment strategies
adopted in the various markets. The directors expect to build on this income
using the additional investment capital raised in September. Core income, the
effective net income from the underlying properties, is a key performance metric
and a focus of the company.
The Aldi portfolio in Germany`s Baden-Wurttemberg and DPD logistics and office
centre outside Zurich continued to perform well. Being single-tenanted with long
leases (20 and 15 years respectively) and substantially fixed or capped debt,
they provide good visibility of income for many years into the future. Indeed,
the strong Swiss franc has led to healthy gains in the net asset value of the
DPD property. Both Aldi and DPD continue to trade strongly in their respective
countries.
Metchley Hall, the student residential development in Birmingham, was completed
on schedule and in time for the autumn intake of students at an all-in
development cost of Euro5,1 million. The property started generating income from
September 2011, with a guaranteed gross annual rental of Euro675 000.In terms of
the nomination agreement with the University of Birmingham, occupancy levels are
underwritten at 97%. The independent valuer Savills estimated the value of the
completed property to be Euro8,3 million. The impact of this uplift will be
brought to account when the entire portfolio is revalued at year-end.
Interest rate hedges
The commercial benefit of the interest rate hedges is substantial, as highly
visible positive yield spreads are locked in over the life of the investment.
The yield spread is the difference between what is earned through rentals, less
the fixed or capped interest expense on debt funding. However, extremely long
leases, and hence very long interest rate hedges, result in unusually
substantial non-cash mark-to-market valuations for the hedging instruments. The
directors remain focused on the cash generation within the business, and not the
volatility arising from the revaluation of long-term financial hedging
instruments.
Prospects
The business continues to progress well and substantial headway has been made
with securing investment opportunities for the capital which was raised in
September 2011.
Dividend
As announced with the first-quarter results, a dividend for the five months to
July 2011 was declared and paid immediately prior to the September capital
raising. Accordingly, the company shall look to pay the next dividend in respect
of the seven months to February 2012. It is the intention of the company to
continue paying dividends twice a year.
Basis of preparation and accounting policies
These interim consolidated unaudited financial statements have been prepared in
accordance with the measurement and recognition requirements of International
Financial Reporting Standards (IFRS), the principles of IAS 34: Interim
Financial Reporting, and the JSE Listings Requirements. The accounting policies
adopted in the preparation of the interim consolidated unaudited financial
statements are consistent with those applied in the financial statements for the
year ended 28 February 2011. The interim consolidated financial statements have
not been reviewed or reported on by the company`s auditors.
The directors are not aware of any matters or circumstances arising subsequent
to the interim period that require any additional disclosure or adjustment to
the interim consolidated unaudited financial statements.
By order of the board
Ron Spencer Lukas Nakos
Chairman Chief executive
Douglas, Isle of Man
Thursday 3 November 2011
Abridged consolidated statement of comprehensive income
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Aug 11 31 Aug 10 28 Feb 11
Euro Euro Euro
Income
Rental income 902 461 843 488 1 710 966
Finance income 372 200 101 045 329 918
Expenses
Investment adviser fees (147 990) (110 149) (235 417)
Operating expenses (600 575) (333 686) (689 291)
Fair value adjustments (818 377) (1 375 639) 1 929 864
Exchange differences 82 658 96 333 276 148
Results from operating activities (209 623) (778 608) 3 322 188
Net interest expense (339 787) (350 620) (686 023)
(Loss)/ profit before taxation (549 410) (1 129 228) 2 636 165
Taxation - (75 000) (4 679)
(Loss)/ profit before taxation (549 410) (1 204 228) 2 631 486
Other comprehensive income
Foreign currency translation
differences 353 144 714 280 419 907
Total comprehensive (loss)
/income for the period (196 266) (489 948) 3 051 393
(Loss)/earnings per share (euro cents)* (2.75) (6.94) 14.10
Headline (loss)/earnings per share
(euro cents)* (2.75) (6.94) 3.40
Weighted average number of
ordinary shares in issue 19 955 783 17 351 091 18 665 728
Core income 510 261 397 902 812 782
*The company has no dilutionary instruments in issue
Abridged consolidated statement of financial position
Unaudited Unaudited Audited
As at As at As at
31 Aug 11 31 Aug 10 28 Feb 11
Euro Euro Euro
Non-current assets
Investment Property 35 019 620 28 120 531 30 202 039
Current assets
Short-term loans receivable 3 421 272 3 187 818 2 275 139
Trade and other receivables 504 850 121 368 233 425
Cash and cash equivalents 11 469 566 5 751 276 6 611 798
Total current assets 15 395 688 9 060 462 9 120 362
Total assets 50 415 308 37 180 993 39 322 401
Equity
Share capital 20 173 271 19 388 947 19 762 959
Retained earnings (1 847 306) (3 890 841) (451 170)
Foreign currency translation reserve 773 051 714 280 419 907
Shareholder equity 19 099 016 16 212 386 19 731 696
Non-current liabilities
Long-term loans 18 413 305 17 887 360 17 689 032
Financial instruments 1 721 300 2 164 760 852 667
Total non-current liabilities 20 134 605 20 052 120 18 541 699
Current liabilities
(amounts falling within one year)
Short-term loans payable 517 260 466 164 467 909
Trade and other payables 10 664 427 450 323 581 097
Total current liabilities 11 181 687 916 487 1 049 006
Total liabilities 31 316 292 20 968 607 19 590 705
Total equity and liabilities 50 415 308 37 180 993 39 322 401
Actual number of ordinary
shares in issue 20 173 271 19 388 947 19 762 959
Net asset value per share
(euro cents) 94.7 83.6 99.8
Abridged consolidated statement of cash flows
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Aug 11 31 Aug 10 28 Feb 11
Euro Euro Euro
Cash generated from
operating activities 10 097 809 544 476 1 566 800
Cash (used in) investing activities (4 061 796) (4 505 376) (3 337 173)
Cash (used in)/generated from
financing activities (1 034 831) 8 241 414 7 409 537
Cash and equivalents at the
beginning of the period 6 611 800 1 528 307 1 528 306
Effect of exchange rate fluctuations (143 416) (57 545) (555 670)
Cash and equivalents at
the end of the period 11 469 566 5 751 276 6 611 800
Abridged consolidated statement of changes in equity
Foreign
Share Retained currency Total
capital income translation
reserve
Euro Euro Euro Euro
Opening balance at
28 February 2010 (audited) 9 309 821 (2 686 613) - 6 623 208
Loss for period to
31 August 2010 - (1 204 228) - (1 204 228)
Other comprehensive income - - 714 280 714 280
Total comprehensive income - (1 204 228) 714 280 (489 948)
Issue of shares 10 079 126 - - 10 079 126
Closing balance at
31 August 2010
(unaudited) 19 388 947 (3 890 841) 714 280 16 212 386
Profit for the period
to 28 February 2011 - 3 835 714 - 3 835 714
Other comprehensive income - - (294 373) (294 373)
Total comprehensive income - 3 835 714 (294 373) 3 541 341
Issue of shares 374 012 - - 374 012
Dividends paid - (396 043) - (396 043)
Closing balance as at
28 February 2011
(audited) 19 762 959 (451 170) 419 907 19 731 696
Loss for the six months
to 31 August 2011 - (549 410) - (549 410)
Other comprehensive income - - 353 144 353 144
Total comprehensive income - (549 410) 353 144 (196 266)
Issue of shares 410 312 - - 410 312
Dividends paid - (846 726) - (846 726)
Closing balance as at
31 August 2011(unaudited) 20 173 271 (1 847 306) 773 051 19 099 016
Reconciliation of (loss)/profit for the period to headline (loss)/earnings
Unaudited Unaudited Audited
Six Months Six Months Year
ended ended ended
31 Aug 11 31 Aug 10 28 Feb 11
Euro Euro Euro
(Loss)/profit for the period (549 410) (1 204 228) 2 631 486
Adjusted for:
Revaluation of investment property - - (1 993 602)
Headline (loss)/earnings (549 410) (1 204 228) 637 884
Headline (loss)/earnings per share is based on a weighted average number of
shares in issue of 19 955 783 (year ended 28 February 2011: 18 665 728; six
months ended 31 August 2010: 17 351 091).
Supplementary information
Reconciliation of profit to core income - unaudited
Six months Six months Year
ended ended ended
31 Aug 11 31 Aug 10 28 Feb 11
Euro Euro Euro
Loss for the period (549 410) (1 204 228) 2 631 486
Adjusted for:
Movement in fair value adjustments 818 377 1 375 639 (1 929 864)
Exchange differences (82 658) - (238 808)
Capital raising fees and
structure costs 323 952 144 771 268 248
Non-distributable interest expense - 81 720 81 720
Core income 510 261 397 902 812 782
Registered office
Isle of Man South Africa
25 Athol Street Emwil House West
Douglas 15 Pony Street
Isle of Man Tiger Vallei Office Park
IM1 1LB Silver Lakes, 0081
CREST Registrar and paying agent Transfer secretary
Computershare Investor Services (IOM) Limited Computershare Investor
International House, Castle Hill Services (Proprietary)
Victoria Road Limited
Douglas Ground Floor
Isle of Man, IM2 4RB 70 Marshall Street
Johannesburg, 2001
South Africa
Directors
Jaco Jansen Gideon Oosthuisen
Malcolm Levy (chief financial officer) Ron Spencer (chairman)
Lukas Nakos (chief executive)
Company secretary
Helen Cullen
South African sponsor
Java Capital
Date: 03/11/2011 15:00:01 Produced by the JSE SENS Department.
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