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NEW FRONTIER PROPERTIES LIMITED - CANCELLATION OF S398286 Summarised unaudited consolidated results for the three months and six months ended 28 February 2018

Release Date: 13/04/2018 16:43
Code(s): NFP     PDF:  
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CANCELLATION OF S398286 Summarised unaudited consolidated results for the three months and six months ended 28 February 2018

New Frontier Properties Ltd 
(Incorporated in the Republic of Mauritius on 5 June 2014)
(Registration number 123368C1/GBL)
SEM share code: NFP.N000
JSE share code: NFP
ISIN: MU0453N00004
("New Frontier" or "the Company" or "Group") 

SUMMARISED UNAUDITED CONSOLIDATED RESULTS

FOR THE THREE MONTHS AND SIX MONTHS ENDED 28 FEBRUARY 2018 

The Company was established in Mauritius as a public company limited by shares holding a Category 1 Global Business
Licence. The Company has primary listings on the Stock Exchange of Mauritius Ltd ("SEM") and the Alternative Exchange
("AltX") of the Johannesburg Stock Exchange ("JSE"). The primary objective of the Company is to acquire good quality,
income-generating retail and logistics/warehouse property assets in the United Kingdom ("UK") and mainland Europe. The
Company's property investments are held by a number of wholly-owned subsidiaries. 

In March 2018, New Frontier received the PwC Corporate Reporting Award for listed Global Business Companies in
recognition of the presentation and content of its 2017 Integrated Annual Report.

REPORTING CURRENCY 

The Company's results are reported in Pounds Sterling ("GBP"). 

FINANCIAL RESULTS

The Group's International Financial Reporting Standards ("IFRS") total comprehensive income for the 6 month period ended
28 February 2018 was a profit of GBP4.62 million (28 February 2017: GBP7.29 million). The Group produced a recurring
profit of GBP4.83 million for the period (28 February 2017: GBP5.71 million). A reconciliation table of the recurring
profit to IFRS total comprehensive income for the period is provided in the financial section at the end of this report.

BUSINESS REVIEW 

At its half year end, the Company has completed its first acquisition in Europe as well as exchanging contracts to
purchase a second logistics asset in Germany. The Company also refinanced and extended its existing GBP108.2 million
HSBC loan facility and raised additional capital.

Given the tough and uncertain business and political environment in the UK, the Company has continued exploring a number
of opportunities in mainland Europe and has exchanged contracts on the purchase of a logistics property in Hassfurt,
Germany which is due to complete by 31 July 2018 for a consideration of EUR13.75 million.

The purchase of the Dublin property last year, proposed purchase of the Hassfurt property and similar pipeline
acquisitions, provides the Group with exposure to the European logistics/warehouse market enabling the Company to
capitalise on the rapid acceleration of e-retailing in mainland Europe and resulting logistics demand.

Letting activity and lease renewals

As at 28 February 2018, the centres at Blackpool, Middlesbrough and Burton upon Trent had a stable combined occupancy of
93.90% (30 November 2017: 93.98%) by Estimated Rental Value ("ERV") and 92.89% (30 November 2017: 92.04%) by Gross
Lettable Area ("GLA"). 

The Company is undertaking a number of exciting asset management projects within all schemes.  At Blackpool, heads of
terms have been agreed for a new IMAX cinema development with ancillary retail.  At Burton upon Trent, Next have opened
a new 25,052 sq ft store in the old BHS unit and H&M have taken occupation and will open on 26 April 2018 having taken
the remaining 19,800 sq ft unit on a 15 year lease. At Middlesbrough, a number of new lettings are being progressed
which will strengthen and improve the quality of the centre's tenants further. 

Net asset value ("NAV")

The European Public Real Estate Association ("EPRA") NAV is a proportionally consolidated measure representing the IFRS
net assets excluding the mark-to-market ("MTM") on effective cash flow hedges and related debt adjustments, the MTM on
convertible bonds as well as deferred taxation on property and derivative valuations. 

EPRA NAV, based on the number of shares in issue at 28 February 2018, being 160,935,407 shares, is 67 pence per share at
28 February 2018 (up from 65 pence per share at 30 November 2017). A reconciliation table of the EPRA NAV to the
Statement of Financial Position is provided in the financial section at the end of this report.

STRATEGY

Following the Brexit vote, the Company broadened its focus from UK retail to include non-retail assets
in mainland Europe. Preference is given to logistics/warehouse assets (big box) and urban locations (last-mile) in
Germany, Austria, Slovakia, the Czech Republic, Poland, Ireland and the Benelux countries. This investment strategy:

     - recognises the demand-supply imbalance in European logistics; 
     - targets long-term income; and
     - diversifies the Company's exposure to hard currencies. 

The Company maintains a proactive asset management approach to its assets and is committed to spend over GBP21 million
to enhance its schemes by improving the tenant mix, creating leisure experiences and upsizing successful tenants.

PROSPECTS

The Company continues to actively manage its assets in a challenging retail environment, caused in part by a weaker
sterling due to the uncertainty caused by the vote to leave the European Union, a fall in consumer confidence and rising
interest rates impacting consumer spending.

However, the Company has not been immune from the spate of Company Voluntary Arrangements ("CVAs") which have affected
UK retail. Our tenants New Look, Select and Prezzo have reduced rents with New Look closing their second store in Burton
upon Trent after only opening it last year. The impact of the CVAs for this financial year will be GBP450,000 prior to
the proactive leasing of the affected unit (which is already underway and will further mitigate the potential rental
impact). The resultant CVAs and tenant defaults will most likely adversely impact our business in the next six months.

CHANGE TO BOARD OF DIRECTORS ("THE BOARD")

Mr Daniel Romburgh, a Mauritian resident, resigned as a non-executive director of the Company and as chairperson of the
audit and risk committee with effect from 14 February 2018, following his resignation from New Frontier's company
secretary.

Shareholders are further advised that Mr George Titan, a Mauritian resident, was appointed to the Board as a
non-executive director of the Company and as chairperson of the audit and risk committee with effect from 26 February
2018.

The Board wishes to thank Mr Romburgh for his invaluable contribution to the Company and is pleased to welcome Mr Titan
to the Board.

DIVIDEND 

The Company's dividend policy is to consider declarations of dividends on a six-monthly basis in line with its year-end
and half-year which are August and February respectively. The Board is pleased to announce that a dividend of 3 pence
per share (approximately GBP4.83 million) has been declared for the period under review. An announcement, containing
details of this dividend, will be made on the Stock Exchange News Service of the JSE as well as the website of the SEM
and will be issued separately.

BASIS OF PREPARATION 

These summarised unaudited consolidated results for the six months ended 28 February 2018 have been prepared in
accordance with IFRS, including IAS34 - Interim Financial Reporting, the SEM Listing Rules, the Securities Act of
Mauritius 2005 and the JSE Listings Requirements. 

ACCOUNTING POLICIES 

The accounting policies adopted are consistent with those used to prepare the audited annual financial statements for
the year ended 31 August 2018.

These financial statements have not been reviewed or reported on by the Company's external auditors. 

SEGMENTAL INFORMATION 

The Group derives its revenue from a single business activity, the property sector, which it considers as its only
segment. 

By order of the Board 

Osiris Corporate Solutions (Mauritius) Limited

Company secretary 

13 April 2018 

NOTES 

Copies of this report are available to the public at the registered office of the Company, Chemin Vingt Pieds, 5(th)
Floor, La Croisette, Grand Baie, Mauritius.

Copies of the statement of direct or indirect interest of the Senior Officers of the Company pursuant to rule 8(2)(m) of
the Securities (Disclosure of Obligations of Reporting Issuers) Rules 2007 are available to the public upon request to
the company secretary at the Registered Office of the Company at Chemin Vingt Pieds, 5th Floor, La Croisette, Grand
Baie, Mauritius.

This communiqué is issued pursuant to Listing Rules 12.20 and 12.21 and Section 88 of the Securities Act of Mauritius
2005. The Board of New Frontier Properties Ltd accepts full responsibility for the accuracy of the information in this
communiqué.  

For further information please contact:

JSE sponsor 
Java Capital +27 11 722 3050 

Company secretary 
Osiris Corporate Solutions (Mauritius) Limited +230 650 4030

STATEMENTS OF FINANCIAL POSITION 
AT 28 FEBRUARY 2018 

                                                                                                                   THE GROUP
                                                                                                        Unaudited    Unaudited     Audited
                                                                                                      28 February  28 February   31 August
                                                                                                             2018         2017        2017
                                                                                                          GBP 000      GBP 000     GBP 000
ASSETS                                           
Non-current assets                                           
Property, plant and equipment                                                                                  17          527          17
Investment property                                                                                         4,538      272,588     264,800
Derivative financial instrument                                                                             1.529            -           -
                                                                                                          276,084      273,115     264,817
Current assets                                           
Trade and other receivables                                                                                 5,199        4,367       6,091
Cash and cash equivalents                                                                                   5,108        3,117       5,510
                                                                                                           10 307        7,484      11,601
Total assets                                                                                              286,391      280,599     276,418
EQUITY                                           
Capital and reserves (attributable to owners of the parent)                                           
Share capital                                                                                              47,136      124,412      39,412
Hedging reserve                                                                                           (1,083)      (3,914)     (3,330)
Retained earnings accumulated losses                                                                       60,991     (10,571)      63,678
Total equity                                                                                              107,044      109,927      99,760
LIABILITIES                                           
Non-current liabilities                                           
Borrowings                                                                                                163,358      163,212     159,112
Derivative financial instrument                                                                                 -        3,914         300
                                                                                                          163,358      162,767     159,412
Current liabilities                                           
Trade and other payables                                                                                    5,084        3,546       5,508
Borrowings                                                                                                 10,905            -      11,738
                                                                                                           15,989        3,546      17,246
Total liabilities                                                                                         179,347      170,672     176,658
Total equity and liabilities                                                                              286,391      280,599     276,418
                                          
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME                  
FOR QUARTER AND HALF YEAR ENDED 28 FEBRUARY 2018               
               
                                                                                                             THE GROUP
                                                                                     Unaudited      Unaudited     Unaudited      Unaudited
                                                                                 For the three  For the three   For the six    For the six 
                                                                                  months ended   months ended  months ended   months ended
                                                                                   28 February    28 February   28 February    28 February
                                                                                          2018           2017          2018           2017
                                                                                       GBP 000        GBP 000       GBP 000        GBP 000
Rental income                                                                            4,464          4,934         8,995         10,308
Expenses                
Property operating expenses                                                            (1,458)          (442)       (1,988)        (1,424)
Administrative expenses                                                                  (427)          (316)         (746)          (587)
Other income                                                                                 -             72             -             72
Movement in foreign exchange                                                                49              -          (64)              -
                                                                                         2,628          4,289         6,197          8,369
Net finance costs                                                                      (1,692)        (1,434)       (3,412)        (2,862)
Profit before tax                                                                          936          2,809         2,785          5,507
Taxation                                                                                     -             84             -             84
Profit for the period                                                                      936          2,893         2,785          5,591
Other comprehensive income for the period                 
Items that may be reclassified subsequently to profit or loss                 
Fair value gain/(loss) on derivatives financial instruments                                439          (466)         1,830          1,700
Other comprehensive income for the period                                                  439          (466)         1,830          1,700
Total comprehensive income for the period                                                1,375          2,427         4,615          7,291
Earnings per share                 
Basic earnings per share (GBP)                                                           0.006          0.019         0.018          0.037
Headline earnings per share (GBP)                                                        0.006          0.019         0.018          0.037
               
The Company does not have any dilutionary instruments in issue.               
               
STATEMENTS OF CHANGES IN EQUITY                
FOR THE HALF YEAR ENDED 28 FEBRUARY 2018               
               
                                                                                                                 (Accumulated
                                                                                                                     losses)/
                                                                                                      Hedging        Retained
                                                                                     Share capital    reserve        earnings        Total
                                                                                           GBP 000    GBP 000         GBP 000      GBP 000
THE GROUP                                        
Balance at 1 September 2017                                                                 39,412    (3,330)          63,678       99,760
Profit for the period                                                                            -          -           2,785        2,785
Other comprehensive income for the period                                                        -      1,830               -        1,830
Total comprehensive income for the period                                                        -      1,830           2,785        4,615
Issue of shares                                                                              7,724          -               -        7,724
Amortisation of historic cash flow hedge reserve                                                 -        417               -          417
Dividends                                                                                        -          -         (5,500)      (5,500)
Waiver of dividends                                                                              -          -              28           28
Balance at 29 February 2018                                                                 47,136    (1,083)          60,991      107,044
Balance at 1 September 2016                                                                124,412    (5,614)        (10,051)      108,747
Profit for the period                                                                            -          -           5,591        5,591
Other comprehensive income for the period                                                        -      1,700               -        1,700
Total comprehensive income for the year                                                          -      1,700           5,591        7,291
Dividends                                                                                        -          -         (6,111)      (6,111)
Total transactions with owners of the parent                                                     -          -         (6,111)      (6,111)
Balance at 28 February 2017                                                                124,412    (3,914)        (10,571)      109,907
Balance at 1 September 2016 (Audited)                                                      124,412    (5,614)        (10,051)      108,747
                                          
Profit for the year                                                                              -          -             242          242
Other comprehensive income for the year                                                          -      2,284               -        2,284
Total comprehensive income for the year                                                          -      2,284             242        2,526
                                           
Capital reduction                                                                         (85,000)          -          85,000            -
Dividends                                                                                        -          -        (11,611)     (11,611)
Waiver of dividends                                                                              -          -              98           98
Total transactions with owners of the parent                                              (85,000)          -          73,487     (11,513)
Balance at 31 August 2017 (Audited)                                                         39,412    (3,330)          63,678       99,760
                 
STATEMENTS OF CASH FLOWS 
FOR HALF YEAR ENDED 28 FEBRUARY 2018

                                                                                                                 THE GROUP
                                                                                      Unaudited             Unaudited              Audited
                                                                           For the period ended  For the period ended   For the year ended
                                                                               28 February 2018      28 February 2017       31 August 2017
                                                                                        GBP 000               GBP 000              GBP 000
Cash flows from operating activities  
Cash generated from operations                                                            6,137                 8,832               16,375
Tax refunded                                                                                146                     -                  217
Interest paid                                                                           (2,138)               (2,727)              (5,411)
Net cash generated from operating activities                                              4,145                 6,105               11,181
Cash flows from investing activities  
Capital improvements to investment property                                             (1,312)                 (516)              (2,258)
Purchase of investment property                                                         (8,455)                     -                    -
Interest received                                                                             -                     -                    5
Net cash used in investing activities                                                   (9,767)                 (516)             (45,850)
Cash flows from financing activities  
Proceeds from loans                                                                      11,996                     -                7,500
Amortisation of loans                                                                     (588)                     -                    -
Payments of borrowing costs                                                               (701)                     -                 (14)
Premium paid to reset interest rate swap                                                      -                     -              (3,030)
Dividend payment                                                                        (5,472)               (6,111)             (11,513)
Net cash from/(used in) financing activities                                              5,235               (6,111)              (7,057)
Net (decrease)/increase in cash and cash equivalents for the period/year                  (387)                 (522)                1,871
Exchange difference                                                                        (15)                     -                    -
Cash and cash equivalents at the beginning of the period/year                             5,510                 3,639                3,639
At 28 February 2018/28 February 2017/31 August 2017                                       5,108                 3,117                5,510

RECONCILIATION OF PROFIT 
FOR HALF YEAR ENDED 28 FEBRUARY 2018 TO HEADLINE EARNINGS 

                                                                                                   THE GROUP
                                                                               For the           For the           For the         For the 
                                                                          three months      three months        six months      six months
                                                                                 ended             ended             ended           ended
                                                                           28 February       28 February       28 February     29 February
                                                                                  2018              2017              2018            2017
Basic and headline earnings per share                                          GBP 000           GBP 000           GBP 000         GBP 000
Basic earnings attributable to                                                     
equity holders of the Company                                                      936             2,893             2,785           5,591
Headline earnings attributable to                                                           
equity holders of the Company                                                      936             2,893             2,785           5,591
Weighted average number of                                                
shares/number of shares                                                    159,665,971       152,774,750       156,201,324     152,774,750
Earnings per share                            
Basic earnings per share (GBP)                                                   0.006             0.019             0.018           0.037
Headline earnings per share (GBP)                                                0.006             0.019             0.018           0.037

Reconciliation of IFRS total comprehensive income to recurring profit

Basis of preparation

In order to provide information of relevance to investors and a meaningful basis of comparison, unaudited management
accounts have been prepared and are presented below. The management accounts diverge from IFRS as they make adjustments
to total comprehensive income to determine recurring profit and EPRA NAV.

The preparation of the management accounts is the sole responsibility of the directors and they have prepared in
accordance with the basis decided for illustrative purposes only. Due to their nature, the management accounts may not
fairly present the results of the Company.  

                                                                             Unaudited for the       Unaudited for the    Unaudited for the 
                                                                                  period ended            period ended           year ended
                                                                              28 February 2018        28 February 2017       31 August 2017
                                                                                       GBP 000                 GBP 000              GBP 000
Total comprehensive income for the period                                                4,615                   7,291                2,526
Fair value gain on financial derivatives                                               (1,830)                 (1,700)              (2,284)
                 
Basic earnings                                                                           2,785                   5,591                  242
                 
Fair value movement on investment property                                                   -                       -               10,046
Amortised and other loan costs                                                             431                       -                  451
Taxation                                                                                     -                    (84)                 (84)
Amortisation of loan arrangement fees                                                      197                     202                    -
Legal and professional fees                                                                239                       -                    -
Administrative expenses                                                                      -                       -                  352
Movement in foreign exchange translation                                                    64                       -                    -
Amortisation of costs in relation to recoupon of derivatives                               417                       -                    -
Asset management fees written off                                                          700                       -                    -
                                              
Recurring profit                                                                         4,833                   5,709               11,007


EPRA has issued recommended bases for the calculation of NAV per share (see the table below). Commentary on NAV per share is provided in 
the business review.


                                                                               Unaudited as at         Unaudited as at        Audited as at
                                                                              28 February 2018        28 February 2017       31 August 2017
                                                                                       GBP 000                 GBP 000              GBP 000
Total equity                                                                           107,044                 109,927                99,76
Adjusted for
MTM of financial derivatives                                                             1,083                   3,914                3,330

EPRA NAV                                                                               108,127                 113,841              103,090

Number of shares                                                                   160,935,407             152,774,750          152,774,750

NAV per share (GBP)                                                                       0.67                    0.75                 0.67
EPRA NAV excludes MTM of financial derivatives


Date: 13/04/2018 04:43:59 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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