TIDMRUS
RNS Number : 3639I
Raven Russia Limited
30 August 2016
30 August 2016
Raven Russia Limited ("Raven Russia" or the "Company")
2016 Interim Results
Raven Russia today announces its unaudited results for the six
months ended 30 June 2016.
Highlights
-- IFRS earnings after tax $8.8 million (30 June 2015: loss of $20.6 million);
-- Underlying earnings after tax $31.5 million (30 June 2015: $34.5 million);
-- Basic underlying earnings per share 4.8 cents (30 June 2015: 5.0 cents);
-- Adjusted diluted net asset value per share 70 cents (31 December 2015: 70 cents);
-- Investment portfolio stable at 82% let;
-- Issue of new convertible preference shares completed on 7 July 2016 raising GBP109 million;
-- Cash balance today of $331 million; and
-- Proposed distribution of 0.5p by way of tender offer buy back of 1 in 80 shares at 40p.
Glyn Hirsch CEO said, "We are getting used to the new business
conditions and the market is adapting and stabilising too. With our
considerably strengthened balance sheet we feel well placed for the
next phase for the Group."
Enquiries
Raven Russia Limited Tel: + 44 (0) 1481 712955
Anton Bilton
Glyn Hirsch
Novella Communications Tel: +44 (0) 203 151 7008
Tim Robertson
Toby Andrews
N+1 Singer Tel: +44 (0) 20 7496 3000
Corporate Finance - James Maxwell / Liz Yong
Sales - Alan Geeves / James Waterlow
Barclays Bank Plc Tel: +44 (0) 20 7623 2323
Tom Boardman / Tom Macdonald
Ravenscroft Tel: +44 (0) 1481 729100
David McGall
This announcement contains forward-looking statements that
involve risk and uncertainties. The Group's actual results could
differ materially from those estimated or anticipated in the
forward-looking statements as a result of many factors. Information
contained in this announcement relating to the Company should not
be relied upon as a guide to future performance.
About Raven Russia
Raven Russia was founded in 2005 to invest in class A warehouse
complexes in Russia and lease to Russian and International tenants.
Its Ordinary Shares, Preference Shares and Warrants are listed on
the Main Market of the London Stock Exchange and admitted to the
official list of the Channel Islands Securities Exchange Authority
Limited ("CISEA"). Its Convertible Preference Shares are admitted
to the CISEA Official List and trading on the SETSqx market of the
London Stock Exchange. The Company operates out of offices in
Guernsey, Moscow and Cyprus and has to date completed a portfolio
of circa 1.5 million square metres of Grade "A" warehouses in
Moscow, St Petersburg, Rostov-on-Don and Novosibirsk. For further
information visit the Company's website: www.ravenrussia.com
Financial Summary
Income Statement for the 6 months ended: 30 June 30 June 2015
2016
------------------------------------------ -------- -------------
Net Rental and Related Income ($m) 77.0 95.5
------------------------------------------ -------- -------------
Revaluation deficit ($m) (8.5) (50.8)
------------------------------------------ -------- -------------
IFRS Earnings/ (Loss) after tax ($m) 8.8 (20.6)
------------------------------------------ -------- -------------
Underlying Earnings after tax ($m) 31.5 34.5
------------------------------------------ -------- -------------
IFRS Basic EPS (cents) 1.4 (3.0)
------------------------------------------ -------- -------------
Underlying Basic EPS (cents) 4.8 5.0
------------------------------------------ -------- -------------
Distribution per share (pence) 0.5 1.0
------------------------------------------ -------- -------------
Balance Sheet at: 30 June 31 December
2016 2015
------------------------------------------ -------- -------------
Investment property Market Value ($m) 1,352 1,357
------------------------------------------ -------- -------------
Adjusted diluted NAV per share (cents) 70 70
------------------------------------------ -------- -------------
IFRS diluted NAV per share (cents) 72 70
------------------------------------------ -------- -------------
Letting Summary
The completed logistics portfolio of 1.5 million sqm is 82% let.
The table below shows the maturity profile at the period end and
how that has changed in the six months to 30 June 2016.
Maturities, '000 2016 2017 2018 2019 2020-2027 Total
sqm
-------------------------- ----- ----- ----- ----- ---------- ------
Maturity profile
at 1 January 2016 228 210 131 225 429 1,223
-------------------------- ----- ----- ----- ----- ---------- ------
Renegotiated and
extended (82) (25) 0 (12) 0 (119)
-------------------------- ----- ----- ----- ----- ---------- ------
Effect of renegotiations 0 45 33 11 30 119
-------------------------- ----- ----- ----- ----- ---------- ------
Vacated/terminated (78) (6) (3) 0 0 (87)
-------------------------- ----- ----- ----- ----- ---------- ------
New lettings 7 3 34 12 29 85
-------------------------- ----- ----- ----- ----- ---------- ------
Maturity profile
at 30 June 2016 75 227 195 236 488 1,221
-------------------------- ----- ----- ----- ----- ---------- ------
In addition, 25,000sqm of pre let agreements ("PLAs") and
letters of intent ("LOIs") had been signed at 30 June 2016.
Chairman's Message
I am pleased to say that since my last message in March this
year there has been a period of relative stability in the Russian
market and we have been busy taking some positive steps to recover
lost ground.
Business models have adapted to the new market fundamentals
following the various macro economic events of the past two years
and investment decisions are coming back onto the agenda. Our
occupancy levels have stabilised at 82% and we have active
discussions on vacant space on most of our projects. Similarly,
property valuations have remained relatively flat over the six
months with a small deficit of $8.5 million at 30 June 2016
(deficit of $257 million in 12 months to 31 December 2015).
New leases are Rouble denominated and as a result we will
continue to have a drop off in US Dollar denominated income as
existing US Dollar pegged leases mature. But we now have greater
clarity on where that may lead us. The underlying tenant base is
strong with the weaker covenants having now vacated and the
integrity of our leases, where tested in various court and
arbitration procedures, has proved robust.
Following the release of our 2015 Annual Report and with the
spectre of a continuing reduction in our net operating income as
leases re-align with current market rental levels it became obvious
that we should restructure our balance sheet to counter the
effects. In a very short window and thanks to the foresight of
Anton, our Deputy Chairman, Glyn, our CEO and a supportive
shareholder base, we raised GBP109 million through the issue of new
convertible preference shares in early July. This has allowed us to
start the process of changing the weighting of our secured,
amortising debt, reducing it to levels that meet ongoing covenant
requirements, extending the maturity periods and significantly
reducing the annual amortisation exposure. The effect of this
should begin to be seen in 2017, when our cash break even point
will fall to a level commensurate with our reduced net operating
income.
We still have significant cash resources over and above the new
fund raising and following this strengthening of our balance sheet
we will look to start rebuilding our top line as acquisition or
development opportunities arise.
Although it is our intention to distribute the equivalent of
0.5p per ordinary share (30 June 2015: 1p per ordinary share) by
way of a tender offer buy back of 1 in 80 shares at 40p per share,
we remain cognisant of how quickly external events can impact on
our market and will continue with caution, albeit with a stronger
balance sheet.
Richard Jewson
Chairman
29 August 2016
Chief Executive's Review
Results
Results for the first six months of the year have met our
expectations. Our net operating and related income continues to
reduce to a level commensurate with current market rents, $77
million for the half year compared to $95.5 million in the six
months to 30 June 2015.
Underlying earnings after tax for the period remain healthy,
given the reduced income, at $31.5 million (30 June 2015: $34.5
million). This is driven mainly by foreign exchange profits through
the income statement and reduced administrative expenses.
Administrative expenses benefitted from a recovery in the bad
debt charge (a credit of $0.7million in the period compared to a
charge of $2.5 million in 2015) and reduced discretionary employee
bonuses. The latter is offset by an increased charge for share
based payments and other long term incentives following the
approval of the new incentive scheme at the AGM on 15 June
2016.
Basic underlying earnings per share are 4.8 cents (30 June 2015:
5.0 cents).
IFRS earnings after tax recovered to $8.8 million (30 June 2015:
loss of $20.6 million) with property values remaining relatively
stable, generating an unrealised loss on revaluation of $8.5
million in the half year (30 June 2015: loss of $50.8 million).
Fully diluted adjusted net asset value per share remained at 70
cents (31 December 2015: 70 cents). Cash balances at 30 June 2016
were $183 million (31 December 2015: $202 million) increasing to
$331 million today following the issue of new convertible
preference shares in July.
Occupancy levels have remained at 82% over the period (31
December 2015: 82%). At 30 June 2016, 73% of our let warehouse
space had US Dollar denominated leases with an average warehouse
rental level of $124 per sqm and a weighted average term to
maturity of 3.4 years. Rouble denominated or capped leases account
for 27% of our let space with an average warehouse rent of Roubles
5,000 per sqm and a weighted average term to maturity of 2 years.
Rouble leases have an average minimum annual indexation of 7%.
The majority of 2016 lease maturities have now been dealt with.
This has resulted in 78,000sqm of vacancies in the first six months
with a further 62,000sqm of space expected to be vacated in the
second half of the year. Letting interest has picked up
significantly since the year end and 85,000sqm of vacant space had
been re let by 30 June 2016 with a further 25,000sqm of pre let
agreements and letters of intent signed.
Financing
On 7 July 2016 the Company completed the placing of new
convertible preference shares, raising GBP109 million at a
subscription price of GBP1 per share. The convertible preference
shares have a 10 year term, a cumulative preference dividend of
6.5p per annum and are redeemable on maturity at GBP1.35. The
holders have the right to convert to ordinary shares at the
equivalent to approximately 55p per ordinary share (subject to
certain adjustments) prior to maturity. The shares were listed on
the Channel Islands Securities Exchange and trade on the SETSqx
platform of the London Stock Exchange.
This fund raising allows us to restructure our balance sheet by
reducing secured, amortising debt facilities, extend the terms of
that debt and reduce our annual amortisation. We have agreed terms
on 7 of our facilities and expect to pre pay $100 million of debt
on these facilities by the end of the current quarter. The two
largest near term maturities of $232 million will be extended to
2021 as part of this exercise.
We have commenced discussion on the majority of the remaining
facilities to extend terms and reduce amortisation and these are
progressing positively. We hope to have all formal arrangements in
place on these by the end of the year.
As explained in note 9 to the interim financial statements, a
cash sweep mechanism continues on the facility secured on the
office block in St Petersburg.
Foreign exchange
Foreign exchange movements in the period have been positive,
profit in the income statement of $10.3 million being a factor of
the Sterling functional currency of the holding company and its US
Dollar cash reserves. Weak Sterling also gave a boost to reserves,
reducing the US Dollar value of our Sterling preference shares.
Cash flow
Cash flows in the period show the effect of reduced operating
income, dropping $19.9 million to $49.9 million compared to the
previous year. Debt amortisation, interest and preference share
coupon totalled $76.2 million (30 June 2015: $71.9 million).
Distributions to ordinary shareholders for the period were $5.8
million (30 June 2015: $32 million). We did benefit by the sale of
ordinary shares held by an Employee Benefit Trust ("EBT"), raising
$14.7 million but this is simply a timing difference as the
majority of those funds were then used by the EBT in subscribing
for new convertible preference shares in early July. Cash outflows
for the period before foreign exchange movements were $21.2
million.
Tender offer
The investment world is desperately short of income and despite
the issues we have faced our portfolio still generated a healthy
operating profit.
Although far from the 6p we have achieved historically, we
propose a distribution of the equivalent of 0.5p per ordinary share
by way of tender offer buy back of 1 in 80 shares at 40p (30 June
2015: 1p by way of an offer of 1 in 47 shares at 47p).
The distribution demonstrates the resilience of our business and
our commitment to providing income for our shareholders.
Outlook
It may not be the bottom of the market but it certainly feels as
though things have stopped deteriorating.
We are getting used to the new business conditions and the
market is adapting and stabilising too. With our considerably
strengthened balance sheet we feel well placed for the next phase
for the Group. Significant progress has been made in restructuring
our bank loans and we are actively engaged in finding attractive
income producing acquisitions which will further enhance cash flow
and returns.
In the short to medium term, the stabilising Russian economy may
have a positive impact. Inflation is generally forecast to fall to
around 5% and interest rates below 7% in the next few years.
What price a warehouse currently yielding 12% in Roubles with
annual indexed increases in that scenario? Something to look
forward to I hope, as well as the upside potential of any future
strengthening of the Rouble against the Dollar.
Glyn Hirsch
Chief Executive Officer
29 August 2016
Corporate Governance
Principal risks and uncertainties
Internal controls and an effective risk management regime are
integral to the Group's continued operation. The assessment of
risks faced by the Group is set out in the Risk Report on pages 35
to 38 of the Group's 2015 Annual Report. The principal risks and
uncertainties to which the Group is subject have remained
consistent with those at the 2015 year end.
A summary of the principal risks and uncertainties are as
follows:
Financial Risks
Oil Price and Foreign Exchange
The current oil price and Rouble/US Dollar exchange rate levels
remain or deteriorate further in the long term, reducing the
Group's US Dollar denominated earnings.
Bank Financing and Costs
Reduced access to funding and potential increases in funding
costs hinders the Group's ability to refinance maturing facilities.
Reduced income and asset values driven by a weak Rouble increases
the risk of covenant breaches.
Russian Domestic Risk
Legal and Taxation Frameworks
The Russian legal and taxation frameworks are still developing
with large volumes of new legislation being open to interpretation
and abuse.
Personnel Risks
Key personnel
The risk of failing to retain key personnel has increased with
the downturn in the Russian market. A new incentive scheme was
presented to shareholders and approved at the AGM on 15 June
2016.
Political Risk
Ukraine
The situation in Ukraine escalates resulting in increased
isolation of Russia from international markets and increased
sanctions which exacerbate the slow down in the Russian
economy.
Going concern
The financial position of the Group, its cash flows, liquidity
and borrowings are described in the Chief Executive's Review and
the accompanying financial statements and related notes. During the
period the Group had, and continues to hold, substantial cash and
short term deposits and is generating underlying profits. Since the
half year, additional funds have been raised through the issue of
new convertible preference shares. As a consequence, the Directors
believe the Group is well placed to manage its business risks.
After making enquiries and examining major areas that could give
rise to significant financial exposure, the Board has a reasonable
expectation that the Company and the Group have adequate resources
to continue its operations for the foreseeable future. Accordingly,
the Group continues to adopt the going concern basis in the
preparation of the accompanying interim financial statements.
Directors' Responsibility Statement
The Board confirms to the best of its knowledge:
The condensed financial statements have been prepared in
accordance with IAS 34 as adopted by the European Union, and that
the half year report includes a fair review of the information
required by DTR 4.2.7R and DTR 4.2.8R.
The names and functions of the Directors of Raven Russia Limited
are disclosed in the 2015 Annual Report of the Group.
This responsibility statement was approved by the Board of
Directors on the 29 August 2016 and is signed on its behalf by
Mark Sinclair Colin Smith
Chief Financial Officer Chief Operating Officer
Independent review report to Raven Russia Limited
We have been engaged by the Company to review the condensed set
of financial statements in the Interim Results financial report for
the six months ended 30 June 2016 which comprises the Condensed
Unaudited Group Income Statement, the Condensed Unaudited Group
Statement of Comprehensive Income, the Condensed Unaudited Group
Statement of Changes in Equity, the Condensed Unaudited Group
Balance Sheet, the Condensed Unaudited Group Cash Flow Statement
and the related notes 1 to 18. We have read the other information
contained in the Interim Results report and considered whether it
contains any apparent misstatements or material inconsistencies
with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company, for our work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The Interim Results financial report is the responsibility of,
and has been approved by, the directors. The directors are
responsible for preparing the Interim Results financial report in
accordance with the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34, 'Interim
Financial Reporting', as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the Interim Results
report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements 2410 (UK and Ireland) 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity' issued by the Auditing Practices Board for use in
the United Kingdom.
A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the Interim Results report for the six months ended 30 June 2016
is not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European
Union and the Disclosure and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Ernst & Young LLP
London
29 August 2016
Condensed Unaudited Group
Income Statement
For the six months
ended 30 June 2016
Six months ended 30 Six months ended 30
June 2016 June 2015
Underlying Capital Underlying Capital
Notes earnings and other Total earnings and other Total
$'000 $'000 $'000 $'000 $'000 $'000
--------------------- ------ ----------- ----------- --------- ----------- ----------- ---------
Gross revenue 2 97,705 - 97,705 118,289 - 118,289
Property operating
expenditure
and cost of
sales (20,701) - (20,701) (22,838) - (22,838)
----------- --------- ----------- ----------- ---------
Net rental and
related income 2 77,004 - 77,004 95,451 - 95,451
----------- ----------- --------- ----------- ----------- ---------
Administrative
expenses 3 (10,471) (544) (11,015) (17,567) (17) (17,584)
Share-based
payments and
other long term
incentives 15e (2,231) (4,669) (6,900) - (3,280) (3,280)
Foreign currency
profits 10,283 - 10,283 1,974 - 1,974
----------- ----------- --------- ----------- ----------- ---------
Operating expenditure (2,419) (5,213) (7,632) (15,593) (3,297) (18,890)
Share of profits
of joint ventures 697 - 697 717 - 717
Operating profit /
(loss) before profits
and losses on investment
property 75,282 (5,213) 70,069 80,575 (3,297) 77,278
----------- ----------- --------- ----------- ----------- ---------
Unrealised loss
on revaluation
of investment
property 6 - (6,534) (6,534) - (51,901) (51,901)
Unrealised (loss)
/ profit on
revaluation
of investment
property under
construction 7 - (1,931) (1,931) - 1,128 1,128
----------- ----------- --------- ----------- ----------- ---------
Operating profit
/ (loss) 2 75,282 (13,678) 61,604 80,575 (54,070) 26,505
----------- ----------- --------- ----------- ----------- ---------
Finance income 4 1,405 1,776 3,181 1,636 1,965 3,601
Finance expense 4 (41,944) (6,326) (48,270) (42,280) (5,904) (48,184)
Profit / (loss)
before tax 34,743 (18,228) 16,515 39,931 (58,009) (18,078)
----------- ----------- --------- ----------- ----------- ---------
Tax (3,252) (4,495) (7,747) (5,448) 2,919 (2,529)
-----------
Profit / (loss)
for the period 31,491 (22,723) 8,768 34,483 (55,090) (20,607)
=========== =========== ========= =========== =========== =========
Earnings per
share: 5
Basic (cents) 1.35 (3.01)
Diluted (cents) 1.34 (3.01)
Underlying earnings
per share: 5
Basic (cents) 4.84 5.04
Diluted (cents) 4.76 4.90
=========== ===========
The total column of this statement represents the Group's
Income Statement, prepared in accordance with IFRS as adopted
by the EU. The "underlying earnings" and "capital and other"
columns are both supplied as supplementary information permitted
by IFRS as adopted by the EU. Further details of the allocation
of items between the supplementary columns are given in note
5.
All items in the above statement
derive from continuing operations.
All income is attributable to the equity holders of
the parent company. There are no non-controlling interests.
The accompanying notes are an integral
part of this statement.
Condensed Unaudited Group Statement Of Comprehensive
Income
For the six months ended
30 June 2016
Six months Six months
ended ended
30 June
30 June 2016 2015
$'000 $'000
Profit / (loss) for the
period 8,768 (20,607)
Items to be reclassified to profit
or loss in subsequent periods:
Foreign currency translation
on consolidation 4,499 (953)
Total comprehensive income for
the period, net of tax 13,267 (21,560)
============== ===========
All income is attributable to the equity holders of the
parent company. There are no non-controlling interests.
The accompanying notes are an integral part
of this statement.
Condensed Unaudited Group Balance
Sheet
As at 30 June 2016
30 June 31 December
2016 2015
Notes $'000 $'000
Non-current assets
Investment property 6 1,330,441 1,333,987
Investment property under construction 7 39,775 39,129
Plant and equipment 3,176 3,141
Goodwill 2,036 2,245
Investment in joint ventures 13,579 14,968
Other receivables 7,354 6,145
Derivative financial instruments 1,402 5,585
Deferred tax assets 26,630 25,523
1,424,393 1,430,723
========== ============
Current assets
Inventory 1,258 1,381
Trade and other receivables 54,457 50,264
Derivative financial instruments 82 233
Cash and short term deposits 182,995 202,291
238,792 254,169
========== ============
Total assets 1,663,185 1,684,892
========== ============
Current liabilities
Trade and other payables 54,112 53,384
Derivative financial instruments 1,451 2,097
Interest bearing loans and borrowings 9 201,702 104,724
257,265 160,205
========== ============
Non-current liabilities
Interest bearing loans and borrowings 9 684,164 814,021
Preference shares 10 141,897 156,558
Other payables 29,095 31,653
Derivative financial instruments 618 1,794
Deferred tax liabilities 61,527 55,619
917,301 1,059,645
========== ============
Total liabilities 1,174,566 1,219,850
========== ============
Net assets 488,619 465,042
========== ============
Equity
Share capital 11 12,631 12,776
Share premium 219,049 224,735
Warrants 12 1,166 1,167
Own shares held 13 (7,947) (52,101)
Capital reserve (218,362) (210,176)
Translation reserve (183,642) (188,141)
Retained earnings 665,724 676,782
Total equity 488,619 465,042
========== ============
Net asset value per share (cents): 14
Basic 73 72
Diluted 72 70
Adjusted net asset value per
share (cents): 14
Basic 72 72
Diluted 70 70
========== ============
The accompanying notes are an integral part
of this statement.
Condensed Unaudited Group Statement
Of Changes In Equity
For the six months ended
30 June 2016
Own
Share Share Shares Capital Translation Retained
Capital Premium Warrants Held Reserve Reserve Earnings Total
Notes $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
At 1 January
2015 13,623 267,992 1,195 (63,649) 16,597 (186,388) 647,919 697,289
Loss for the
period - - - - - - (20,607) (20,607)
Other comprehensive
income - - - - - (953) - (953)
Total comprehensive
income for the
period - - - - - (953) (20,607) (21,560)
-------- --------- --------- --------- ---------- ------------ --------- ---------
Warrants exercised 1 15 (2) - - - - 14
Own shares
acquired - - - (76) - - - (76)
Ordinary shares
cancelled (626) (32,660) - 2,746 - - - (30,540)
Own shares
allocated - - - 7,056 - - (8,424) (1,368)
Share-based
payments - - - - - - 3,280 3,280
Transfer in respect
of capital losses - - - - (44,852) - 44,852 -
At 30 June
2015 12,998 235,347 1,193 (53,923) (28,255) (187,341) 667,020 647,039
======== ========= ========= ========= ========== ============ ========= =========
At 1 January
2016 12,776 224,735 1,167 (52,101) (210,176) (188,141) 676,782 465,042
Profit for
the period - - - - - - 8,768 8,768
Other comprehensive
income - - - - - 4,499 - 4,499
Total comprehensive
income for the
period - - - - - 4,499 8,768 13,267
-------- --------- --------- --------- ---------- ------------ --------- ---------
11
/
Warrants exercised 12 - 5 (1) - - - - 4
11
Ordinary shares /
cancelled 13 (145) (5,691) - 48 - - - (5,788)
Own shares
disposed 13 - - - 43,161 - - (28,505) 14,656
Own shares
allocated 13 - - - 945 - - (1,003) (58)
Share-based
payments 15e - - - - - - 1,496 1,496
Transfer in respect
of capital losses - - - - (8,186) - 8,186 -
At 30 June
2016 12,631 219,049 1,166 (7,947) (218,362) (183,642) 665,724 488,619
======== ========= ========= ========= ========== ============ ========= =========
The accompanying notes are an
integral part of this statement.
Condensed Unaudited Group
Cash Flow Statement
For the six months ended
30 June 2016
Six months Six months
ended ended
30 June 30 June
2016 2015
Notes $'000 $'000
Cash flows from operating
activities
Profit / (loss) before tax 16,515 (18,078)
Adjustments for:
Depreciation 3 544 946
Provision for bad debts 3 (712) 2,486
Share of profits of joint
ventures (697) (717)
Finance income 4 (3,181) (3,601)
Finance expense 4 48,270 48,184
Loss on revaluation of investment
property 6 6,534 51,901
Loss / (profit) on revaluation
of investment property under construction 7 1,931 (1,128)
Foreign exchange profits (10,283) (1,974)
Share-based payments and
other long term incentives 15e 4,669 3,280
----------- -----------
63,590 81,299
Increase in operating receivables (2,571) (436)
Increase in other operating
current assets (2) (16)
Decrease in operating payables (8,644) (9,269)
----------- -----------
52,373 71,578
Receipts from joint ventures 694 1,349
Tax paid (3,186) (3,194)
Net cash generated from operating
activities 49,881 69,733
=========== ===========
Cash flows from investing
activities
Payment for investment property
and investment property under construction (4,369) (12,260)
Refunds of VAT on construction 172 5,058
Release of restricted cash - 25,392
Purchase of plant and equipment (294) (531)
Loans repaid 227 290
Interest received 1,405 1,636
Net cash (used in) / generated
from investing activities (2,859) 19,585
=========== ===========
Cash flows from financing
activities
Proceeds from long term borrowings - 65,944
Repayment of long term borrowings (33,698) (28,006)
Bank borrowing costs paid (34,639) (34,934)
Exercise of warrants 4 14
Ordinary shares purchased (5,846) (31,984)
Ordinary shares disposed 14,656 -
Dividends paid on preference
shares (7,906) (8,938)
Purchase of preference shares (780) -
Settlement of derivative
financial instruments - (3,999)
Premium paid for derivative
financial instruments - (855)
Net cash used in financing
activities (68,209) (42,758)
=========== ===========
Net (decrease) / increase in cash
and cash equivalents (21,187) 46,560
=========== ===========
Opening cash and cash equivalents 202,291 171,383
Effect of foreign exchange
rate changes 1,891 2,969
Closing cash and cash equivalents 182,995 220,912
=========== ===========
The accompanying notes are an integral
part of this statement.
Notes to the Condensed Unaudited Group Financial
Statements
For the six months ended
30 June 2016
1. Basis of accounting
Basis of preparation
The condensed unaudited financial statements have been prepared
using accounting policies consistent with International Financial
Reporting Standards adopted for use in the European Union
("IFRS") and have been prepared in accordance with International
Accounting Standard 34 "Interim Financial Reporting".
The condensed financial statements do not include all the
information and disclosures required in annual financial
statements and should be read in conjunction with the Group's
financial statements for the year ended 31 December 2015.
Significant accounting policies
The accounting policies adopted in the preparation of the
condensed financial statements are consistent with those
followed in the preparation of the Group's financial statements
for the year ended 31 December 2015.
The Group has adopted new and amended IFRS and IFRIC interpretations
as of 1 January 2016, which did not have any effect on the
financial performance, financial position or disclosures
in the financial statements of the Group.
The Group has not adopted early any standard, interpretation
or amendment that has been issued but is not yet effective.
Going concern
The financial position of the Group, its cash flows, liquidity
position and borrowings are described in the Chief Executive's
Review and the notes to these interim financial statements.
After making appropriate enquiries and examining sensitivities
that could give rise to financial exposure, the Board has
a reasonable expectation that the Group has adequate resources
to continue operations for the foreseeable future. Accordingly,
the Group continues to adopt the going concern basis in the
preparation of these interim financial statements.
2. Segmental information
The Group has three operating segments, which are managed
and report independently to the Board of Directors. These
comprise:
Property investment - acquire, develop and lease commercial
property in Russia;
Roslogistics - provision of warehousing, transport, customs
brokerage and related services in Russia; and
Raven Mount - sale of residential property in the UK.
(a) Segmental information for the six
months ended and as at 30 June 2016
For the six
months
ended 30 June
2016 Property Raven Segment Central
Investment Roslogistics Mount Total Overhead Total
$'000 $'000 $'000 $'000 $'000 $'000
Gross revenue 89,614 7,910 181 97,705 - 97,705
Operating costs
/ cost of sales (17,306) (3,398) 3 (20,701) - (20,701)
Net operating
income 72,308 4,512 184 77,004 - 77,004
----------- ------------- ----------- ------------- ------------ ------------
Administrative
expenses
Running general
& administration
expenses (5,763) (660) (620) (7,043) (3,428) (10,471)
Depreciation (424) (120) - (544) - (544)
Share-based
payments
and other long
term incentives (2,447) - - (2,447) (4,453) (6,900)
Foreign currency
profits 10,276 7 - 10,283 - 10,283
----------- ------------- ----------- ------------- ------------ ------------
73,950 3,739 (436) 77,253 (7,881) 69,372
Unrealised loss
on revaluation
of investment
property (6,534) - - (6,534) - (6,534)
Unrealised loss
on revaluation
of investment
property
under
construction (1,931) - - (1,931) - (1,931)
Share of profits
of joint
ventures - - 697 697 - 697
----------- ------------- ----------- ------------- ------------ ------------
Segment profit
/ (loss) 65,485 3,739 261 69,485 (7,881) 61,604
=========== ============= =========== ============= ============ ============
Finance income 3,181
Finance expense (48,270)
Profit before
tax 16,515
============
As at 30
June 2016 Property Raven
Investment Roslogistics Mount Total
$'000 $'000 $'000 $'000
Assets
Investment
property 1,330,441 - - 1,330,441
Investment property under
construction 39,775 - - 39,775
Investment in
joint
ventures - - 13,579 13,579
Inventory - - 1,258 1,258
Cash and short
term deposits 177,947 1,378 3,670 182,995
----------- ------------- ------------
Segment assets 1,548,163 1,378 18,507 1,568,048
=========== ============= ============ ============
Other non-current
assets 40,598
Other current
assets 54,539
Total assets 1,663,185
============
Segment
liabilities
Interest bearing loans
and borrowings 885,866 - - 885,866
=========== ============= ============ ============
Capital
expenditure
Payments for investment property
and investment property under
construction 4,369 - - 4,369
=========== ============= ============ ============
(b) Segmental information for the six months
ended 30 June 2015
Property Raven Segment Central
Investment Roslogistics Mount Total Overhead Total
$'000 $'000 $'000 $'000 $'000 $'000
Gross revenue 109,905 7,699 685 118,289 - 118,289
Operating costs
/ cost of sales (19,876) (2,928) (34) (22,838) - (22,838)
Net operating
income 90,029 4,771 651 95,451 - 95,451
----------- ------------- ----------- ------------- ------------ ------------
Administrative
expenses
Running general
& administration
expenses (13,781) (699) (601) (15,081) (2,486) (17,567)
Other acquisition
/ abortive
project
costs 929 - - 929 - 929
Depreciation (812) (132) (2) (946) - (946)
Share-based
payments
and other long
term incentives (1,979) - - (1,979) (1,301) (3,280)
Foreign currency
profits 1,797 177 - 1,974 - 1,974
----------- ------------- ----------- ------------- ------------
76,183 4,117 48 80,348 (3,787) 76,561
Unrealised loss
on revaluation
of investment
property (51,901) - - (51,901) - (51,901)
Unrealised profit
on revaluation
of investment
property
under
construction 1,128 - - 1,128 - 1,128
Share of profits
of joint
ventures - - 717 717 - 717
Segment profit
/ (loss) 25,410 4,117 765 30,292 (3,787) 26,505
=========== ============= =========== ============= ============ ============
Finance income 3,601
Finance expense (48,184)
Loss before
tax (18,078)
============
(c) Segmental information as
at 31 December 2015
Property Raven
Investment Roslogistics Mount Total
$'000 $'000 $'000 $'000
Assets
Investment
property 1,333,987 - - 1,333,987
Investment property under
construction 39,129 - - 39,129
Investment in
joint
ventures - - 14,968 14,968
Inventory - - 1,381 1,381
Cash and short
term deposits 196,861 691 4,739 202,291
Segment assets 1,569,977 691 21,088 1,591,756
=========== ============= ============ ============
Other non-current
assets 42,639
Other current
assets 50,497
Total assets 1,684,892
============
Segment
liabilities
Interest bearing loans
and borrowings 918,745 - - 918,745
=========== ============= ============ ============
Capital
expenditure
Payments for investment property
under construction 20,028 - - 20,028
=========== ============= ============ ============
3. Administrative expenses
Six
Six months months
ended ended
30 June 30 June
2016 2015
$'000 $'000
Employment
costs 5,521 9,154
Directors'
remuneration 1,788 1,760
Bad
debts (712) 2,486
Office running
costs and
insurance 1,691 2,139
Travel costs 799 901
Auditors'
remuneration 335 343
Abortive project
costs - (929)
Legal and
professional 754 560
Depreciation 544 946
Registrar costs and other
administrative expenses 295 224
11,015 17,584
============ ============
4. Finance income and
expense
Six
Six months months
ended ended
30 June 30 June
2016 2015
Finance income $'000 $'000
Total interest income on financial assets
not at fair value through profit or loss
Income from cash and short term
deposits 1,405 1,636
Other finance
income
Change in fair value of open interest
rate derivative financial instruments 177 557
Change in fair value of foreign
currency embedded derivatives 1,599 1,408
Finance income 3,181 3,601
============ ============
Finance expense
Interest expense on loans and borrowings
measured at amortised cost 35,378 35,085
Interest expense on preference
shares 8,759 9,278
------------ ------------
Total interest expense on financial liabilities
not at fair value through profit or loss 44,137 44,363
Change in fair value of open forward
currency derivative financial instruments 1,676 848
Change in fair value of open interest
rate derivative financial instruments 2,457 2,973
Finance expense 48,270 48,184
============ ============
5. Earnings
measures
In addition to reporting IFRS earnings the Group adopts the
European Public Real Estate Association ("EPRA") earnings
measure, as set out in their Best Practice Policy Recommendations
document issued in December 2014 and also reports its own
underlying earnings measure.
EPRA earnings
The EPRA earnings measure excludes investment property revaluations
and gains or losses on disposal of investment property, intangible
asset movements, gains and losses on derivative financial
instruments and related taxation.
Underlying earnings
Underlying earnings consist of the EPRA earnings measure,
with additional group adjustments. Adjustments include share-based
payments and other long term incentives, the accretion of
premiums payable on redemption of preference shares, material
non-recurring items, depreciation and amortisation of loan
origination costs.
Six
Six months months
ended ended
30 June 30 June
The calculation of basic and diluted
earnings per share is based on the following
data: 2016 2015
$'000 $'000
Earnings
Earnings for the purposes of basic and diluted
earnings per share being the
profit / (loss) for the period prepared
under IFRS 8,768 (20,607)
Adjustments to arrive at EPRA earnings:
Unrealised loss on revaluation of investment
property 6,534 51,901
Unrealised loss / (profit) on revaluation of
investment property under construction 1,931 (1,128)
Change in fair value of open forward currency
derivative financial instruments 1,676 848
Change in fair value of open interest rate derivative
financial instruments 2,280 2,416
Change in fair value of foreign currency
embedded derivatives (1,599) (1,408)
Movement on deferred tax thereon 2,033 (3,054)
EPRA earnings 21,623 28,968
Abortive project
costs - (929)
Share-based payments and other
long term incentives 4,669 3,280
Premium on redemption of preference shares
and amortisation of issue costs 278 317
Depreciation 544 946
Amortisation of loan origination
costs 1,915 1,766
Tax charge on unrealised foreign exchange
movements in loans 2,462 135
Underlying
earnings 31,491 34,483
============ ============
30 June 30 June
2016 2015
Number Number
Number of shares '000 '000
Weighted average number of ordinary shares for
the purpose of basic EPS (excluding own shares
held) 650,946 683,750
Effect of dilutive potential
ordinary shares:
Warrants 6,351 12,310
ERS 43 298
LTIP 1,111 2,566
CBLTIS 2012 - 3,885
CBLTIS 2015 2,231 -
Weighted average number of ordinary shares for
the purposes of diluted EPS (excluding own shares
held) 660,682 702,809
============ ============
Six
Six months months
ended ended
30 June 30 June
2016 2015
Cents Cents
EPS
basic 1.35 (3.01)
Effect of dilutive potential
ordinary shares:
Warrants (0.01) -
ERS - -
LTIP - -
CBLTIS 2012 - -
CBLTIS 2015 - -
Diluted EPS 1.34 (3.01)
------------ ------------
EPRA EPS basic 3.32 4.24
Effect of dilutive potential
ordinary shares:
Warrants (0.03) (0.08)
ERS - -
LTIP (0.01) (0.02)
CBLTIS 2012 - (0.02)
CBLTIS 2015 (0.01) -
EPRA diluted EPS 3.27 4.12
------------ ------------
Underlying EPS
basic 4.84 5.04
Effect of dilutive potential
ordinary shares:
Warrants (0.05) (0.09)
ERS - -
LTIP (0.01) (0.02)
CBLTIS 2012 - (0.03)
CBLTIS 2015 (0.02) -
Underlying
diluted
EPS 4.76 4.90
------------ ------------
6. Investment
property
Asset
class Logistics Logistics Logistics Office 30 June
St St
Location Moscow Petersburg Regions Petersburg 2016
Fair value
hierarchy Level Level Level Level
* 3 3 3 3 Total
$'000 $'000 $'000 $'000 $'000
Market value at
1 January 2016 1,043,952 139,106 148,649 25,140 1,356,847
Property improvements
and movement in completion
provisions 3,174 203 54 (85) 3,346
Unrealised (loss) / profit
on revaluation (1,943) (2,279) (3,882) 151 (7,953)
------------- ----------- ------------- ------------ ------------
Market value at
30 June 2016 1,045,183 137,030 144,821 25,206 1,352,240
Tenant incentives and
contracted rent uplift
balances (16,305) (5,320) (1,176) (371) (23,172)
Head lease
obligations 1,373 - - - 1,373
-------------
Carrying value at 30 June
2016 1,030,251 131,710 143,645 24,835 1,330,441
------------- ----------- ------------- ------------ ------------
Revaluation movement in the period
ended 30 June 2016
Gross revaluation (1,943) (2,279) (3,882) 151 (7,953)
Effect of tenant incentives
and contracted rent uplift
balances 242 12 142 1,023 1,419
Revaluation reported in
the Income Statement (1,701) (2,267) (3,740) 1,174 (6,534)
------------- ----------- ------------- ------------ ------------
Asset
class Logistics Logistics Logistics Office 31 December
St St
Location Moscow Petersburg Regions Petersburg 2015
Fair value
hierarchy Level Level Level Level
* 3 3 3 3 Total
$'000 $'000 $'000 $'000 $'000
Market value at 1 January
2015 1,222,101 170,074 191,576 28,852 1,612,603
Property improvements
and movement in completion
provisions (2,768) (1,194) 114 (266) (4,114)
Unrealised loss on revaluation (175,381) (29,774) (43,041) (3,446) (251,642)
------------- ----------- ------------- ------------ ------------
Market value at 31 December
2015 1,043,952 139,106 148,649 25,140 1,356,847
Tenant incentives and
contracted rent uplift
balances (16,547) (5,332) (1,318) (1,394) (24,591)
Head lease
obligations 1,731 - - - 1,731
Carrying value at 31 December
2015 1,029,136 133,774 147,331 23,746 1,333,987
------------- ----------- ------------- ------------ ------------
*Classified in accordance with the fair value hierarchy.
There were no transfers between fair value hierarchy in 2015
or 2016.
At 30 June 2016 the Group has pledged investment property
with a value of $1,340 million (31 December 2015: $1,348
million) to secure banking facilities granted to the Group
(note 9).
7. Investment property under
construction
Assets under
Asset class construction Land Bank 30 June
Location Moscow Regions Moscow St Petersburg Regions 2016
Fair value hierarchy Level Level Level Level Level
* 3 3 Sub-total 3 3 3 Sub-total Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Market value at
1 January 2016 27,700 7,300 35,000 - 413 2,714 3,127 38,127
Costs incurred 124 12 136 - 474 160 634 770
Effect of foreign
exchange rate
changes 1,181 714 1,895 - 54 395 449 2,344
Unrealised loss
on revaluation (1,305) (626) (1,931) - - - - (1,931)
-------- -------- ---------- ------- -------------- -------- ---------- ------------
Market value at
30 June 2016 27,700 7,400 35,100 - 941 3,269 4,210 39,310
Head lease
obligations 465 - 465 - - - - 465
-------- ---------- ------- -------------- -------- ----------
Carrying value
at 30 June 2016 28,165 7,400 35,565 - 941 3,269 4,210 39,775
-------- -------- ---------- ------- -------------- -------- ---------- ------------
Assets under
Asset class construction Land Bank 31 December
Location Moscow Regions Moscow St Petersburg Regions 2015
Fair value hierarchy Level Level Level Level Level
* 3 3 Sub-total 3 3 3 Sub-total Total
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
Market value at
1 January 2015 34,000 9,500 43,500 - - 3,216 3,216 46,716
Costs incurred 789 - 789 - 413 283 696 1,485
Effect of foreign
exchange rate
changes (2,369) (1,570) (3,939) - - (785) (785) (4,724)
Unrealised loss
on revaluation (4,720) (630) (5,350) - - - - (5,350)
-------- -------- ---------- ------- -------- ---------- ------------
Market value at
31 December 2015 27,700 7,300 35,000 - 413 2,714 3,127 38,127
Head lease
obligations 1,002 - 1,002 - - - - 1,002
-------- -------- ---------- ------- -------------- -------- ---------- ------------
Carrying value
at 31 December
2015 28,702 7,300 36,002 - 413 2,714 3,127 39,129
-------- -------- ---------- ------- -------------- -------- ---------- ------------
*Classified in accordance with the fair value hierarchy
Six
months Six months
ended ended
30 June 30 June
2016 2015
$'000 $'000
Revaluation movement
in the period
Unrealised (loss) / profit on revaluation
of assets carried at external valuations (1,931) 1,128
Unrealised loss on revaluation
of assets carried at directors'
valuation - -
-------- ------------------------
(1,931) 1,128
-------- ------------------------
No borrowing costs were capitalised in the period (31 December
2015: $nil).
At 30 June 2016 the Group has pledged investment property
under construction with a value of $35.1 million (31 December
2015: $35.0 million) to secure banking facilities granted
to the Group (note 9).
8. Valuation assumptions
and key inputs
Class of
property Carrying amount Range
30
June 31 December 30 June 31 December
Valuation
2016 2015 technique Input 2016 2015
$'000 $'000
Completed investment
property
Long term
Moscow - ERV per sqm
Logistics 1,030,251 1,029,136 Income for
$90 to $90 to
capitalisation existing tenants $110 $110
Short term
ERV per sqm
for vacant
space Rub4,300 Rub4,500
Initial 2.18% 11.2%
yield to 15.1% to 14.9%
Equivalent 10.9% 10.8%
yield to 12.5% to 12.7%
Vacancy 6% to 13.9%
rate 77% to 100.0%
Passing rent $70 to $62 to
per sqm $158 $158
Passing rent Rub3,500 Rub4,500
per sqm to Rub6,744 to Rub6,300
Long term
St Petersburg ERV per sqm
- Logistics 131,710 133,774 Income for
capitalisation existing tenants $75 $75
Short term
ERV per sqm
for vacant
space Rub3,800 Rub4,000
Initial 12.3% 13.3%
yield to 13.5% to 14.1%
Equivalent 12.3% 12.7%
yield to 12.6% to 13.3%
Vacancy 2% to 11.7%
rate 19% to 40.0%
Passing rent $105 $80 to
per sqm to $136 $133
Passing rent Rub3,500 Rub3,060
per sqm to Rub4,968 to Rub4,600
Long term
Regional ERV per sqm
- Logistics 143,645 147,331 Income for
capitalisation existing tenants $74 $75
Short term
ERV per sqm
for vacant
space Rub3,800 Rub4,000
Initial 12.9% 12.2%
yield to 13.9% to 13.1%
Equivalent
yield 12.5% 12.7%
Vacancy 17% to 13.0%
rate 21% to 21.0%
Passing rent $101 $101 to
per sqm to $129 $128
Passing rent Rub3,900 Rub3,060
per sqm to Rub6,547 to Rub4,600
St Petersburg ERV per
- Office 24,835 23,746 Income sqm $235 $235
Initial
capitalisation yield 17.9% 15.8%
Equivalent
yield 13.0% 13.0%
Vacancy
rate 0% 0%
Passing rent
per sqm $293 $294
Range
Other key information Description 30 June 31 December
2016 2015
Moscow - 34% - 31% -
Logistics Land plot ratio 65% 65%
1 to 1 to 11
Age of building 12 years years
Outstanding costs
(US$'000) 5,873 6,931
St Petersburg 51% - 51% -
- Logistics Land plot ratio 57% 57%
2 to 1 to 7
Age of building 8 years years
Outstanding costs
(US$'000) 1,092 743
Regional 48% - 48% -
- Logistics Land plot ratio 61% 61%
Age of building 7 years 6 years
Outstanding costs
(US$'000) 487 81
St Petersburg
- Office Land plot ratio 320% 320%
Age of building 10 years 9 years
Outstanding costs
(US$'000) - 53
Carrying amount Range
30 June 31 December 30 June 31 December
Investment property Valuation
under construction 2016 2015 technique Input 2016 2015
$'000 $'000
Value
per
Moscow - ha $0.30 $0.29
Logistics 28,165 28,702 Comparable ($m) - $0.62 - $0.61
Value
per
Regional ha
- Logistics 7,400 7,300 Comparable ($m) $0.29 $0.29
In preparing their valuations at 30 June 2016, JLL have
again made reference to the uncertainty caused in the market
by the low oil price, weak rouble and continuing sanctions.
This was the case at 31 December 2015 and the impact of
this on the valuation process is set out more fully in note
13 of the 2015 Annual Report.
9. Interest bearing loans and
borrowings 30 June 31 December
2016 2015
$'000 $'000
Loans due for settlement within
12 months 201,702 104,724
Loans due for settlement after
12 months 684,164 814,021
------------- -------------
885,866 918,745
============= =============
The Group's borrowings have the
following maturity profile:
On demand or within one
year 201,702 104,724
In the second
year 158,597 162,222
In the third to fifth
years 411,371 527,861
After five
years 114,196 123,938
-------------
885,866 918,745
============= =============
The amounts above include unamortised loan origination costs
of $9.7 million (31 December 2015: $11.3 million) and interest
accruals of $1.6 million (31 December 2015: $2.3 million).
The principal terms of the Group's interest bearing loans
and borrowings on a weighted average basis are summarised
below:
As at 30
June 2016 Interest Maturity
Rate (years) $'000
Secured on investment property and
investment property under construction 7.1% 3.5 864,616
Unsecured facility of
the Company 8.6% 4.2 21,250
885,866
-------------
As at 31 December 2015
Secured on investment property and
investment property under construction 7.2% 4.0 894,995
Unsecured facility of
the Company 8.5% 4.7 23,750
918,745
-------------
The interest rates shown above are the weighted
average cost, including US LIBOR, as at the Balance
Sheet dates.
As previously disclosed, the facility secured on the office
block in St Petersburg continued to be in technical breach
of its debt service covenant ratio and thus the cash sweep
has also continued. In accordance with accounting standards,
the amount outstanding of $32 million has been included
in loans due for settlement within 12 months.
10. Preference
shares 30 June 31 December
2016 2015
$'000 $'000
Authorised share capital:
400,000,000 preference
shares of 1p each 5,981 5,981
============= =============
30 June 31 December
2016 2015
Issued share
capital: Number Number
At 1 January 98,328,017 98,012,427
Purchased in the period
/ year (450,000) -
Scrip dividends 202,877 315,590
At 30 June / 31 December 98,080,894 98,328,017
============= =============
Shares in
issue 98,567,943 98,365,066
Held by the Company's
Employee Benefit Trusts (487,049) (37,049)
At 30 June / 31 December 98,080,894 98,328,017
============= =============
30 June 31 December
2016 2015
Issued share
capital $'000 $'000
At 1 January 156,558 164,300
Purchased in the period
/ year (780) -
Premium on redemption of preference
shares and amortisation of issue costs 278 614
Scrip dividends 335 643
Effect of foreign exchange
rate changes (14,494) (8,999)
At 30 June / 31 December 141,897 156,558
============= =============
11. Share
capital 30 June 31 December
2016 2015
$'000 $'000
Authorised share
capital:
1,500,000,000 ordinary
shares of 1p each 27,469 27,469
============= =============
30 June 31 December
2016 2015
Issued share
capital: $'000 $'000
At 1 January 12,776 13,623
Issued in the period / year
for cash on warrant exercises - 7
Repurchased and cancelled
in the period / year (145) (854)
At 30 June / 31 December 12,631 12,776
============= =============
30 June 31 December
2016 2015
Issued share
capital: Number Number
At 1 January 682,560,376 737,598,353
Issued in the period / year
for cash on warrant exercises 12,165 457,589
Repurchased and cancelled
in the period / year (10,236,175) (55,495,566)
At 30 June / 31 December 672,336,366 682,560,376
============= =============
Of the authorised ordinary share capital at 30 June 2016,
25.0 million (31 December 2015: 25.0 million) ordinary shares
are reserved for warrants.
Details of own shares held
are given in note 13.
12. Warrants 30 June 31 December
2016 2015
Number Number
At 1 January 25,008,823 25,466,412
Exercised in the period
/ year (12,165) (457,589)
At 30 June /
31 December 24,996,658 25,008,823
============= =============
30 June 31 December
2016 2015
$'000 $'000
At 1 January 1,167 1,195
Exercised in the period
/ year (1) (28)
At 30 June /
31 December 1,166 1,167
============= =============
13. Own shares
held 30 June 31 December
2016 2015
Number Number
At 1 January 38,456,594 49,048,873
Acquisition - 98,040
Disposal (30,937,631) -
Cancelled (40,047) (3,395,130)
Allocation to satisfy
ERS options exercised
(note 15a) (62,755) (237,146)
Allocation to satisfy
LTIP options exercised
(note 15a) - (828,515)
Allocation to satisfy CBLTIS
2012 awards vesting (note 15b) - (6,229,528)
Allocation to satisfy CBLTIS
2015 awards vesting (note 15c) (729,608) -
At 30 June / 31 December 6,686,553 38,456,594
============= =============
30 June 31 December
2016 2015
$'000 $'000
At 1 January (52,101) (63,649)
Acquisition - (76)
Disposal 43,161 -
Cancelled 48 3,692
Allocation to satisfy
ERS options exercised
(note 15a) 68 258
Allocation to satisfy LTIP
options exercised (note 15a) - 901
Allocation to satisfy CBLTIS
2012 awards vesting (note 15b) - 6,773
Allocation to satisfy CBLTIS
2015 awards vesting (note 15c) 877 -
At 30 June / 31 December (7,947) (52,101)
============= =============
Allocations are transfers by the Company's Employee Benefit
Trusts to satisfy ERS and LTIP options exercised in the
period and the vesting of CBLTIS 2012 and CBLTIS 2015 awards.
The amounts shown for share movements are net of the Trustees'
participation in tender offers during the period from grant
to exercise. Details of outstanding ERS and LTIP options,
which are vested but unexercised, are given in note 15a.
14. Net asset value per
share 30 June 31 December
2016 2015
$'000 $'000
Net asset
value 488,619 465,042
Goodwill (2,036) (2,245)
Goodwill in
joint venture (4,656) (5,134)
Unrealised foreign exchange
(profits) / losses on preference
shares (9,538) 4,956
Excess liabilities over assets
on non-recourse secured debt 7,050 -
Fair value of interest rate
derivative financial instruments (10) (2,289)
Fair value of embedded
derivatives 1,633 3,231
Fair value of foreign exchange
derivative financial instruments (1,038) (2,869)
Adjusted net
asset value 480,024 460,692
Assuming exercise of all potential
ordinary shares
- Warrants
(note 12) 8,354 9,215
- ERS (note
15) - -
- LTIP (note
15) 1,461 1,611
- CBLTIS 2015 (note 15) - -
Adjusted fully diluted
net asset value 489,839 471,518
============= =============
30 June 31 December
2016 2015
Number Number
Number of ordinary shares
(note 11) 672,336,366 682,560,376
Less own shares held (note
13) (6,686,553) (38,456,594)
665,649,813 644,103,782
Assuming exercise of all potential
ordinary shares
- Warrants
(note 12) 24,996,658 25,008,823
- ERS (note
15) - 75,000
- LTIP (note
15) 4,372,973 4,372,973
- CBLTIS 2015
(note 15) - 2,993,670
Number of ordinary shares assuming
exercise of all potential ordinary
shares 695,019,444 676,554,248
============= =============
30 June 31 December
2016 2015
Cents Cents
Net asset value
per share 73 72
Diluted net asset value
per share 72 70
Adjusted net asset value
per share 72 72
Adjusted diluted net asset
value per share 70 70
============= =============
Where the quantum of non-recourse secured debt exceeds the
value of the relevant assets upon which it is secured, the
excess will be added back to arrive at the Group's adjusted
net asset value. This is to reflect that the Group does
not have an obligation to make good this shortfall to the
relevant lender.
Six months
15. Share-based payments and other ended Six months ended
long term incentives 30 June 2016 30 June 2015
Weighted Weighted
(a) Movements in Executive Share
Option Schemes average No of average
exercise options exercise
No of
options price price
Outstanding at the beginning
of the period 4,447,973 25p 5,708,784 24p
Exercised during
the period
- ERS (75,000) 0p (75,000) 0p
- LTIP - 25p (200,000) 25p
Outstanding at the end
of the period 4,372,973 25p 5,433,784 24p
========== ========= ============= =============
Represented
by:
- ERS - 250,000
- LTIP 4,372,973 5,183,784
4,372,973 5,433,784
========== =============
Exercisable at the end
of the period 4,372,973 25p 5,433,784 24p
========== ========= ============= =============
(b) Movements in Combined Bonus and Long Term Incentive
Scheme 2012 Awards ("CBLTIS 2012")
Six months Six months
ended ended
30 June 30 June
2016 2015
No. of No. of
award award
shares shares
Awards of Ordinary shares:
Outstanding at the beginning
of the period - 7,401,158
- Vested during the period - (7,401,158)
Outstanding at the end
of the period - -
============= =============
(c) Movements in Combined Bonus and Long Term Incentive
Scheme 2015 Awards ("CBLTIS 2015")
Six months Six months
ended ended
30 June 30 June
2016 2015
No of No of
award award
shares shares
Awards of Ordinary shares:
Outstanding at the beginning
of the period 34,800,000 -
- Granted during the period - 34,800,000
- Waived during the period (20,900,625) -
- Vested during the period (791,435) -
- Lapsed during the period (6,207,940) -
- Cancelled during the
period (6,900,000) -
Outstanding at the end
of the period - 34,800,000
============= =============
(d) 2016 Retention Scheme
Awards
During the period the Group terminated the CBLTIS 2015 and
the Company's shareholders approved the introduction of
the 2016 Retention Scheme. Awards under the scheme have
been made to the executive directors of the Company and
two senior managers of the Group. The awards entitle the
participants to three equal payments each equivalent to
150% of their basic salary. The first instalment was payable
upon approval of the scheme and the second and third instalments
will be payable on 31 December 2017 and 31 March 2019. The
sole condition for each instalment being paid is the continuing
employment of the participant at the relevant payment date.
Participants will receive payment of an instalment in a
combination of the Company's listed securities and cash.
The number of listed securities to be issued to satisfy
such payments will be calculated with reference to the average
price of the relevant security prior to the payment date.
On 13 July 2016 an employment benefit trust of the Company
transferred 2,148,375 convertible preference shares (see
note 18) to participants of the scheme in satisfaction of
the first instalment. It is intended that convertible preference
shares held by an employment benefit trust will also be
used to satisfy the proportion of the second and third instalments
that are to be settled in listed securities.
Six months Six months
ended ended
(e) Income statement charge 30 June 30 June
for the period 2016 2015
$'000 $'000
CBLTIS 2015 1,496 3,320
CBLTIS 2012 - (40)
2016 Retention
Scheme 5,404 -
6,900 3,280
============= =============
To be satisfied by allocation
of:
Ordinary shares (IFRS
2 expense) 1,496 3,280
Convertible preference
shares (IFRS 2 expense) 3,173 -
Cash 2,231 -
6,900 3,280
============= =============
16. Ordinary dividends
The Company did not declare a final dividend for the year
ended 31 December 2015 (2014: none) and instead implemented
a tender offer buy back for ordinary shares on the basis
of 1 in every 40 shares held and a tender price of 40 pence
per share, the equivalent of a final dividend of 1 pence
per share. (2014: 1 in every 15 shares at 52p per share
the equivalent of 3.5p per share).
17. Financial instruments
Set out below is a comparison of the carrying amounts and
fair value of the Group's financial instruments as at the
balance sheet date:
30 June 2016 31 December 2015
Carrying Fair Carrying Fair
Value Value Value Value
$'000 $'000 $'000 $'000
Non-current
assets
Loans receivable 349 296 606 567
Security
deposits 4,000 4,000 2,391 2,391
Derivative financial instruments 1,402 1,402 5,585 5,585
Current assets
Trade receivables 41,471 41,471 38,683 38,683
Security
deposits 2,393 2,393 2,041 2,041
Other current receivables 264 264 202 202
Derivative financial instruments 82 82 233 233
Cash and short term deposits 182,995 182,995 202,291 202,291
Non-current liabilities
Interest bearing loans
and borrowings 684,164 549,314 814,021 623,340
Preference
shares 141,897 166,024 156,558 184,705
Derivative financial instruments 618 618 1,794 1,794
Rent deposits 27,264 20,775 28,932 21,999
Other payables 1,831 1,831 2,721 2,721
Current liabilities
Interest bearing loans
and borrowings 201,702 201,702 104,724 104,724
Derivative financial instruments 1,451 1,451 2,097 2,097
Rent deposits 8,324 8,324 6,827 6,827
Other payables 8,029 8,029 6,090 6,090
Fair value
hierarchy
The following table shows an analysis of the fair values
of financial instruments recognised in the balance sheet
by level of the fair value hierarchy*:
Total
Fair
Level Level Level Value
1 2 3
As at 30
June 2016 $'000 $'000 $'000 $'000
Assets measured at fair
value
Investment
property - - 1,330,441 1,330,441
Investment property under
construction - - 39,775 39,775
Derivative financial instruments - 1,484 - 1,484
Liabilities measured at
fair value
Derivative financial instruments - 2,069 - 2,069
As at 31 December 2015
Assets measured at fair
value
Investment
property - - 1,333,987 1,333,987
Investment property under
construction - - 39,129 39,129
Derivative financial instruments - 5,818 - 5,818
Liabilities measured at
fair value
Derivative financial instruments - 3,891 - 3,891
*Explanation of fair value
hierarchy
Level 1 - Quoted prices in active markets for identical
assets or liabilities that can be accessed at the balance
sheet date.
Level 2 - Use of a model with inputs that are directly or
indirectly observable market data.
Level 3 - Use of a model with inputs that are not based
on observable market data.
The Group's foreign currency derivative financial instruments
are call options and are measured based on spot exchange
rates, the yield curves of the respective currencies as
well as the currency basis spreads between the respective
currencies. The Group's interest rate derivative financial
instruments comprise swap contracts and interest rate caps.
These contracts are valued using a discounted cash flow
model and where not cash collateralised consideration is
given to the Group's own credit risk.
18. Placing of Convertible Preference Shares
On 7 July 2016 the Company created and issued 108,689,501
convertible preference shares at a subscription price of
GBP1 per share. The convertible preference shares entitle
the holders to a cumulative annual dividend of 6.5 pence
per share and are redeemable by the Company on 6 July 2026
at GBP1.35 per share. The convertible preference shares
are convertible to ordinary shares at the holder's request
at any time prior to redemption at a rate of 1.818 ordinary
shares for each convertible preference share.
One of the Company's employee benefit trusts subscribed
for 8,000,000 convertible preference shares and has subsequently
transferred 2,148,375 to participants of the 2016 Retention
Scheme (see note 15d).
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR AKCDDBBKBAFB
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August 30, 2016 02:01 ET (06:01 GMT)
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