Wrap Text
Abridged unaudited financial statements for the three and nine months ended 30 November 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 AND NINE
MONTHS ENDED 30 NOVEMBER 2018
DIRECTORS' COMMENTARY
Earnings
Earnings for the quarter ended 30 November 2018 at 2.22 GBP pence per share were in line with our guidance and marginally up on the
prior year (2.17 GBP pence per share). Whilst the industrial sector of the UK property market continues to be relatively unaffected by the
uncertainty surrounding Brexit, we have adopted a cautious approach to pursuing new investment opportunities resulting in some "cash
drag" on the earnings in the quarter. The Company has received new tenant proposals on both the Haydock (currently vacant) and Brecon
(currently rented at a reduced rate to Homebase, due to a Company Voluntary Arrangement) assets, which are expected to create a
positive uplift in income and valuations in the 2020 financial year should these new leases be successfully concluded.
As part of our plan to extend our debt maturity profile and reduce refinancing risk, the Company has successfully refinanced the HSBC debt
which has resulted in an IFRS 9 fair value loss adjustment of GBP 667,745. The adjustment is approximately the value of the unamortised finance
costs on the old debt. The adjusted headline earnings will exclude this fair value adjustment and the costs will continue to be amortised over
the term of the new loans.
Balance sheet
The refinancing of a large portion of the Company's debt was successfully completed in the quarter under review. The resultant weighted
average cost of funding has increased slightly from 3.30% to 3.53% but the maturity profile is now approximately four years with roughly
75% hedged.
The UK property market is exhibiting different segmental characteristics with the industrial sector remaining active and strong, whilst the
retail and office sectors are experiencing pressure from a tenant stability and valuation perspective. Although our portfolio is biased towards
the industrial sector (70% of our assets), we have been adversely affected by the retail warehousing and office sectors in which we have an exposure
of 10% and 20% by value respectively.
As part of the refinancing of the debt, we have updated the valuations of some of our investment properties. This resulted in a net write-down of
GBP 370,000, which together with other fair value adjustments on the listed portfolio, the debt refinance and the joint venture portfolio have resulted
in a decrease in the Company's net asset value by one GBP pence per share to 1.04 GBP per share. A comprehensive valuation of the Company's investment
properties will be conducted at the year-end.
Outlook
We anticipate that the results for the year ending 28 February 2019 will be slightly ahead of the prior year. The reletting of Haydock and
Brecon will benefit the results in the 2020 financial year.
The redomicile of the Company to Jersey and conversion to a UK REIT are planned to coincide with the commencement of the financial year
on 1 March 2019. Both the redomicile and conversion to a REIT are subject to final regulatory approvals and an announcement will be made
to shareholders once the date has been confirmed.
STATEMENT OF FINANCIAL POSITION
Group Group Group
Unaudited Unaudited Audited
as at as at as at
30-Nov-2018 30-Nov-2017 28-Feb-2018
GBP GBP GBP
ASSETS
Non-current assets 360 137 270 335 567 662 352 475 304
Investment properties 333 020 921 303 494 000 319 404 723
Listed investments 3 542 156 7 097 325 7 154 208
Investment in joint venture 23 410 532 24 826 214 25 766 250
Other receivables 163 661 150 123 150 123
Current assets 9 897 383 11 282 668 10 378 826
Trade and other receivables 3 553 524 4 987 813 3 760 371
Cash and cash equivalents 6 343 859 6 294 855 6 618 455
Total assets 370 034 653 346 850 330 362 854 130
Equity and liabilities
Equity 196 472 500 197 671 106 204 205 734
Share capital 198 498 451 198 484 877 198 467 699
Retained earnings (1 160 303) (9 512) 6 233 714
Cash flow hedge reserve (865 648) (804 259) (495 679)
Liabilities
Non-current liabilities 150 624 647 117 708 953 131 829 657
Interest-bearing borrowings 150 624 647 117 708 953 131 829 657
Current liabilities 22 937 506 31 470 271 26 818 739
Trade and other payables 4 485 648 3 802 836 4 173 237
Current portion of interest-bearing borrowings 16 008 247 14 216 307 21 213 518
Short-term borrowings - 2 406 063 -
Tax payable 1 511 107 1 618 663 -
Dividend payable 8 503 948 589 520
Derivative financial instrument 932 504 922 454 842 464
Total equity and liabilities 370 034 653 346 850 330 362 854 130
Number of shares in issue 188 976 628 188 976 628 188 976 628
Net asset value per share (GBP) 1.04 1.05 1.08
Net asset value per share excluding cash flow hedge reserve 1.04 1.05 1.08
STATEMENT OF COMPREHENSIVE INCOME
Group Group Group Group Group
Unaudited Unaudited Unaudited Unaudited Audited
Three months Nine months Three months Nine months Year
ended ended ended ended ended
30-Nov-2018 30-Nov-2018 30-Nov-2017 30-Nov-2017 28-Feb-2018
GBP GBP GBP GBP GBP
Rental income 6 106 334 17 954 303 5 736 051 17 136 124 21 201 662
Tenant recoveries 326 170 896 851 - - -
Straight-line lease income 263 206 1 291 824 285 892 932 646 2 892 734
Revenue 6 695 710 20 142 978 6 021 943 18 068 770 24 094 396
Property operating (622 481) (1 733 659) (214 319) (646 412) (856 597)
expenses
Net property 6 073 229 18 409 319 5 807 624 17 422 358 23 237 799
income
Other operating (528 780) (2 216 336) (657 825) (1 863 725) (2 615 124)
expenditure
Operating income 5 544 449 16 192 983 5 149 799 15 558 633 20 622 675
Other income 504 39 920 - 14 172 5 243
Investment income 94 932 390 060 77 332 124 439 158 350
Profit on disposal of - 378 068 - - 134 985
investment property
and listed
investments
Profit on foreign 50 899 54 253 8 695 49 220 67 316
exchange
Settlement of swap 80 562 80 562 - - -
Fair value (1 825 685) (3 714 815) (376 963) (1 015 224) 585 784
adjustments
Finance costs (1 382 368) (4 092 591) (1 171 760) (3 649 200) (4 860 164)
Equity accounted 188 049 2 056 894 865 531 865 531 1 805 566
profit
Profit before 2 751 342 11 385 334 4 552 634 11 947 571 18 519 755
taxation
Taxation (471 405) (1 299 013) (257 057) (1 222 729) (1 551 687)
Profit for the period 2 279 937 10 086 321 4 295 577 10 724 842 16 968 068
Other
comprehensive
income
Items that will be
reclassified
subsequently to
profit or loss
Fair value (541 632) (369 969) 754 381 1 076 690 1 385 270
movement on
interest rate swaps
Total 1 738 305 9 716 352 5 049 958 11 801 532 18 353 338
comprehensive
income for the
period
STATEMENT OF CHANGES IN EQUITY
Stated Retained Cash flow
capital earnings hedge 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 period - 10 086 321 - 10 086 321
Dividends - (17 480 338) - (17 480 338)
Issue of shares (net of transaction costs) 30 752 - - 30 752
Other comprehensive income - - (369 969) (369 969)
Balance at 30 November 2018 198 498 451 (1 160 303) (865 648) 196 472 500
STATEMENT OF CASH FLOWS
Group Group Group
Unaudited Unaudited Audited
Nine months Nine months Year
ended ended ended
30-Nov-2018 30-Nov-2017 28-Feb-2018
GBP GBP GBP
Cash generated from operations 15 537 705 20 556 311 15 770 848
Interest received 26 728 30 680 76 121
Finance costs (3 455 871) (3 256 500) (4 291 899)
Tax paid (630 270) (491 154) (1 596 311)
Net cash generated from operating activities 11 478 292 16 839 337 9 958 759
Cash flows from investing activities
Acquisition of investment properties (15 908 675) (426 000) (12 313 853)
Investment in joint venture - (25 660 407) (24 794 876)
Sale of investment property 1 182 724 - -
Acquisition of listed investments - (6 468 648) (7 787 184)
Sale of listed investments 3 345 085 - 925 802
Dividends received 4 669 268 894 906 941 544
Net cash utilised in investing activities (6 711 598) (31 660 149) (43 028 567)
Cash flow from financing activities
Proceeds from issue of shares - 45 712 116 45 694 938
Proceeds from borrowings 17 368 411 2 406 063 2 790 691
Repayment of borrowings (4 872 691) (25 109 000) (6 921 950)
Dividends paid (17 480 338) (14 638 810) (14 638 810)
Net cash (utilised in)/generated from financing activities (4 984 618) 8 370 369 26 924 869
Decrease in cash and cash equivalents (217 924) (6 450 443) (6 144 939)
Cash and cash equivalents at beginning of the year 6 618 455 12 696 078 12 696 078
Effects of exchange difference on cash and cash equivalents (56 672) 49 220 67 316
Cash and cash equivalents at end of period 6 343 859 6 294 855 6 618 455
SEGMENTAL REPORTING - NINE MONTHS ENDED 30 NOVEMBER 2018
Retail
Industrial Office Warehouse Unallocated Total
GBP GBP GBP GBP GBP
Operating income 12 547 077 4 295 508 118 571 (768 173) 16 192 983
Other income - - - 484 234 484 234
Profit on disposal of investments 249 724 - - 128 344 378 068
Settlement of swaps 8 009 72 553 - - 80 562
Fair value adjustments (1 741 405) 131 902 (1 710 000) (395 312) (3 714 815)
Interest expense (3 052 070) (955 566) (73 060) (11 895) (4 092 591)
Equity accounted profit (net of tax) 613 260 - 1 443 633 - 2 056 893
Tax expense (698 315) (325 315) (219 960) (55 423) (1 299 013)
Profit/(loss) for the period 7 926 280 3 219 082 (440 816) (618 225) 10 086 321
Adjustments
Fair value adjustments (including associate and
net of swap realisation) 1 616 402 (204 455) 2 175 222 395 313 3 982 482
Straight-line lease income (858 691) (31 268) - - (889 959)
Adjusted headline earnings 8 683 991 2 983 359 1 734 406 (222 912) 13 178 844
Statement of financial position
Total assets 256 729 003 78 097 193 22 148 475 13 059 982 370 034 653
Total borrowings 122 973 560 40 330 907 2 107 762 1 260 777 166 632 894
SEGMENTAL REPORTING - NINE MONTHS ENDED 30 NOVEMBER 2017
Retail
Industrial Office Warehouse Unallocated Total
GBP GBP GBP GBP GBP
Operating income 11 931 166 4 063 351 271 209 (707 092) 15 558 634
Other income - - - 187 831 187 831
Fair value adjustments (799 441) (128 069) - (87 715) (1 015 225)
Interest expense (2 691 182) (877 199) (75 189) (5 630) (3 649 200)
Equity accounted profit (net of tax) 364 990 - 500 541 - 865 531
Tax expense (883 403) (87 528) (60 945) (190 853) (1 222 729)
Profit/(loss) for the period 7 922 130 2 970 555 635 616 (803 459) 10 724 842
Adjustments
Fair value adjustments (including associate) 603 148 58 744 (229 107) 87 715 520 500
Straight-line lease income (873 903) (58 744) - - (932 647)
Adjusted headline earnings 7 651 375 2 970 555 406 509 (715 744) 10 312 695
Statement of financial position
Total assets 227 201 773 77 321 234 25 479 087 16 848 236 346 850 330
Total borrowings 90 262 039 39 496 296 2 166 925 2 406 063 134 331 323
RECONCILIATION OF BASIC EARNINGS TO DISTRIBUTABLE EARNINGS
Group Group Group Group Group
Unaudited Unaudited Unaudited Unaudited Audited
Three months Nine months Three months Nine months Year
ended ended ended ended ended
30-Nov-2018 30-Nov-2018 30-Nov-2017 30-Nov-2017 28-Feb-2018
GBP GBP GBP GBP GBP
Basic earnings 2 279 937 10 086 321 4 295 577 10 724 842 16 968 068
Less:
Fair value adjustments to investment properties 641 140 2 651 758 285 892 932 646 (1 130 136)
Net profit on disposal of investment properties in - - - - (303 703)
joint venture
Fair value adjustments to properties in joint 463 030 348 229 - - (291 390)
venture
Net profit on disposal of investment properties - (249 724) - - -
Headline earnings 3 384 107 12 836 584 4 581 469 11 657 488 15 242 839
Add back:
Straight-line lease income* (296 653) (889 958) (285 892) (932 646) (1 243 529)
Net profit of disposal of investment properties - 249 724 (494 725) (494 725) 303 703
Fair value adjustments to listed investments 516 800 395 311 91 071 82 578 544 352
IFRS 9 fair value adjustment (net of swap 587 183 587 183 - - -
realisation)
Adjusted headline earnings/distributable 4 191 437 13 178 844 3 891 923 10 312 695 14 847 365
earnings
Weighted average number of shares in issue 188 976 628 188 976 628 179 308 464 154 626 426 163 223 203
Basic and diluted earnings per share (GBP pence) 1.21 5.34 2.40 6.94 10.40
Basic and diluted headline earnings per share
(GBP pence) 1.79 6.79 2.56 7.54 9.34
Adjusted headline earnings per share (GBP
pence) 2.22 6.97 2.17 6.67 9.10
Interim dividend - 8 787 413 - 8 503 948 8 503 948
Final dividend - - - - 8 692 925
Total dividend - 8 787 413 - 8 503 948 17 196 873
Interim dividend per share (GBP pence) - 4.65 - 4.50 4.50
Final dividend per share (GBP pence) - - - - 4.60
Total dividend per share (GBP pence) - 4.65 - 4.50 9.10
*The exclusion of straight-line lease income relates specifically to the contractual rental escalations but does not exclude
straight-line lease income on lease incentives such as the rent-free periods.
RELATED PARTY TRANSACTIONS
Per the Property Services Agreement, fees for the quarter paid to Martial Eagle Limited amounted to GBP 454,175 (2017: GBP 419,157).
NOTES
The Company is required to publish financial results for the three and nine months ended 30 November 2018 in terms of
Listing Rule 12.19 of the Stock Exchange of Mauritius Ltd ("SEM"). The abridged unaudited financial statements for the
three and nine months ended 30 November 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 ("IASB"), interpretations issued by the IFRS Interpretation Committee ("IFRS IC"),
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 of the Company (the "Board") on 11 January 2019.
The financial statements have not been reviewed or reported on by the Company's external auditors.
Copies of these 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 30 November 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 January 2019
JSE sponsor
Java Capital +27 11 722 3050
Company secretary
Intercontinental Trust Limited +230 403 0800
SEM authorised representative and sponsor
Perigeum Capital Limited +230 402 0890
Date: 11/01/2019 05:06:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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