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NEPI ROCKCASTLE PLC - Condensed consolidated financial results for the year ended 31 December 2019

Release Date: 21/02/2020 07:05
Code(s): NRP     PDF:  
Wrap Text
Condensed consolidated financial results for the year ended 31 December 2019

NEPI Rockcastle plc
Incorporated and registered in the Isle of Man
Registered number 014178V
JSE and Euronext share code: NRP
ISIN: IM00BDD7WV31
(“NEPI Rockcastle” or “the Company” or “the Group”)


SHORT-FORM: CONDENSED CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2019


DISTRIBUTABLE EARNINGS

“We are delighted to report that the Group has achieved the targeted results in a competitive market. Twelve
years since inception and three since the successful merger, our assets continue to outperform. Solidly growing
footfall and retail sales are driven by our continued asset management efforts, focused on delivering locally-
optimal tenant mixes and customer experience. The retail portfolio has further increased with the opening of
high-quality developments and remains the largest and most dominant in the CEE. As we maintain a sound
business profile with strong liquidity, we are delivering on our growing development pipeline and are
confident of our ability to take advantage of all attractive opportunities in our markets.” Alex Morar, CEO.

The Group achieved 27.31 eurocents in distributable earnings per share for the second half of 2019, which,
aggregated with the 29.02 eurocents distribution for the six months ended 30 June 2019, resulted in a total
distribution of 56.33 eurocents for the year ended 31 December 2019. The 2019 distribution is 6.6% higher
than 2018’s 52.86 eurocents, and slightly above previously issued guidance. The strong results reflect the solid
performance of assets and management, and the quality of developments completed.

The Board of Directors declares a distribution of 27.31 eurocents per share for the second half of 2019.

Shareholders can elect to receive the distribution either in cash or as an issue of fully-paid shares based on a
ratio between distribution declared and the reference price. The reference price will be calculated based on the
five-day volume-weighted average traded price, less distribution, of NEPI Rockcastle shares on the JSE. The
Group reserves the right to limit the total allocation of shares as a percentage of the total distribution. A circular
containing full details of the election being offered to shareholders, accompanied by announcements on the
Stock Exchange News Service (SENS) of the JSE, A2X and Euronext Amsterdam will be issued in due course.

Distributable earnings per share for 2020 are expected to be approximately 6% higher than the 2019
distribution. This guidance is based on the assumptions that acquisitions are concluded as planned,
developments are delivered as scheduled, a stable macroeconomic environment prevails and no major
corporate failures occur.

KEY FINANCIAL INFORMATION

                                                                                                               %
                                                     31 December 2019          31 December 2018            Change
 Net rental and related income (€ thousand)                       400,738                   346,070         15.80%
 Distributable earnings (€ thousand)                              333,811                   305,413          9.30%
 EPRA Earnings (€ thousand)                                       330,623                   308,704          7.10%
 Distribution per share (€ cents)                                   56.33                     52.86          6.56%
 EPRA Earnings per share (€ cents)                                  55.12                     53.43          3.17%
 Headline earnings per share (€ cents)                              51.42                     20.72        148.15%
 Earnings per share (€ cents)                                       71.09                     38.40         85.13%
 Net asset value (NAV) per share (€)                                 6.83                      6.66          2.55%
 EPRA NAV per share (€)                                              7.32                      7.09          3.24%
 EPRA Net Initial Yield (NIY)                                       6.65%                     6.74%          -1.34%
 EPRA ‘topped-up’ NIY                                               6.71%                     6.82%         -1.68%
 EPRA vacancy rate                                                  2.10%                     2.80%        -25.00%
 EPRA cost ratio                                                    8.00%                     8.80%         -9.09%


EXTERNAL AUDIT AND KEY AUDIT MATTERS

The audit report on the Group’s Consolidated Financial Statements has been issued by
PricewaterhouseCoopers Isle of Man, after having reviewed and obtained the necessary comfort from PwC
local offices in the jurisdictions where the Group operates through its subsidiaries. The local PwC offices audit
the stand alone IFRS financial statements of the respective subsidiaries and issue their interoffice audit reports
to PricewaterhouseCoopers Isle of Man.

The auditors have issued their unmodified audit report on the annual financial statements for the year ended
31 December 2019 and a copy of the audit opinion, together with the underlying audited annual financial
statements is available on the Company’s website.

Key audit matters are those matters that, in the auditor’s professional judgement, were of most significance in
the audit of the financial statements. The only key audit matter identified in relation to the 2019 audit was
Valuation of investment property, which is significant due to its magnitude and because the valuation is
complex and highly dependent on a range of estimates (amongst others, rental value, vacancy rates, non-
recoverable expenses, lease incentives, maintenance costs, discount rates and estimated terminal value). The
directors used external appraisers to support their determination of the individual fair values of the investment
property semi-annually.

PwC’s procedures in relation to the key audit matter included evaluation of the objectivity, independence and
expertise of the external appraisers; assessing the methodologies used and the appropriateness of the key
assumptions based on their knowledge of the property industry; using auditor’s experts in valuation of real
estate to assess the appropriateness of the estimates used; and checking on a sample basis, the appropriateness
of the inputs, by reconciling them to contracts and rent roll data. PwC noted that investment property related
data and the key valuation assumptions were supported by available evidence. PwC also assessed the
appropriateness of the disclosures relating to the assumptions. For more information reference is made to the
full text of the Independent Auditor’s opinion, attached to the 2019 Consolidated financial statements.

SHORT-FORM ANNOUNCEMENT

This short-form announcement is the responsibility of the board of directors of NEPI Rockcastle. This short-form
announcement is only a summary of the information in the full announcement and does not contain complete details.
Any investment decision should be based on consideration of the Consolidated financial statements published on the
Company’s website at:

https://nepirockcastle.com/wp-content/uploads/2020/02/Financial_Statements_2019.pdf

and on the long-form announcement (condensed consolidated financial results) available on the Company’s website at:

https://nepirockcastle.com/wp-content/uploads/2020/02/Condensed_Consolidated_Financial_Results_H2_2019.pdf


and on the JSE website at: https://senspdf.jse.co.za/documents/2020/jse/isse/NRPE/FYRes2019.pdf.

The full announcement is also available for inspection at the registered offices of the Company (2nd Floor,
30 Athol Street Douglas, Isle of Man, IM1 1JB) and at the offices of the JSE sponsor, Java Capital (2nd Floor,
6A Sandown Valley Crescent, Sandown, Sandton, 2196) at no charge during normal business hours from
Thursday, 20 February 2020 to Friday, 28 February 2020.
For further information please contact:

NEPI Rockcastle plc
Alex Morar                               +40 21 232 1398

JSE sponsor
Java Capital                             +2711 722 3050

Euronext Listing Agent
ING Bank                                 +31 20 563 6799

Media relations                          +44 20 7404 5959
Brunswick Group LLP                      nepirockcastle@brunswick.com

20 February 2020

Date: 21-02-2020 07:05:00
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