TIDMNEPI
RNS Number : 8181W
New Europe Property Investments PLC
04 August 2009
?
New Europe Property Investment plc
Condensed Consolidated Interim Financial Statements
For the period from 1 January 2009 to 30 June 2009
Chairman's Statement
New Europe Property Investments plc's ("the Company", "NEPI" or "the Group"
where statements refer also to the Company's subsidiaries) condensed
consolidated unaudited financial results for the six month period ended 30 June
2009 are included in this report. In general, the Group continued to perform
strongly in an environment where many other property companies have been
affected by a range of issues that are related to the reduced availability of
debt finance and a global economic recession. This positions the Group to take
advantage of exciting investment opportunities. Further details are available
in the Combined Directors' and Investment Advisor's report.
NEPI's secondary listing on the Alternative Exchange ("AltX") of the JSE Limited
("JSE") in South Africa was completed on 17 April 2009. This process took
significantly longer than originally anticipated due to regulatory
obstacles. The AltX listing is a step that was designed to bring the Group
closer to a main board listing on the JSE that is planned for early 2010.
The Group has achieved consolidated distributable earnings of 7.66 EUR cents per
share in respect of the six months period ended 30 June 2009, accordingly the
Board declared an interim dividend of 7.66 EUR cents per share (the interim
dividend was 7.48 EUR cents per share in respect of the six months period ended 30
June 2008). The salient dates relating to the distribution are presented in the
Combined Directors' and Investment Advisor's Report.
Dan Pascariu
Chairman
Combined Directors' and Investment Advisor's Report
NEPI has continued to perform in accordance with expectations during the first
six months of the 2009 financial year ("the interim period"), despite the
downturn in the economic cycle. This is the result of a strategy biased in
favour of long term leases and conservative gearing. Simultaneously, the Group
has been positioned to take advantage of investment opportunities that have
arisen from the downturn in the economic cycle.
Operational Performance
The outstanding weighted average lease duration was approximately 5.46 years as
at 30 June 2009 and rental income has been in line with budgets for the first
half of the 2009 financial year.
Administrative expenses include costs incurred in exploring a transaction in
relation to Carpathian plc. Financial expenses include EUR905,048 of costs
incurred in connection with the AltX listing. Receivables from tenants were
EUR361,134 on 30 June 2009, which is in line with receivables of EUR301,343 as at
December 2008, illustrating continued performance of tenants in accordance with
their obligations, during the interim period.
A large casino group that is a tenant in the Raiffeisen portfolio has vacated
its premises and terminated rent payments in February 2009 in breach of its
contractual obligations. The performance of the casino group, and the other
existing smaller tenants in this portfolio at the acquisition date, have been
guaranteed by the vendor up until 8 February 2012. Consequently, the Company
has limited exposure to these tenants.
Trade and other receivables have increased from EUR1,771,356 at 31 December 2008
to EUR2,313,505. This is due mainly to an increase in receivables by EUR481,683
from the vendor in relation to the Raiffeisen portfolio. The Group is earning a
high return on the overdue receivables from the vendor and has secured these
along with other vendor's payment obligations that will become due up until
December 2010, with some EUR1,600,000 of VAT receivables and unencumbered land
conservatively estimated at a value of EUR900,000.
Financial results
Three non-cash items affected the Group's consolidated income
statement negatively by EUR804,180. These items include deferred tax, changes in
the fair values of financial instruments put in place for interest rate hedging
purposes and the amortisation of the share incentive scheme fair value. These
items were discussed in the 2008 annual report and the explanations provided
therein remain relevant for the 2009 interim period. The exchange gain of
EUR1,723,780 recorded in the consolidated Group income statement results from the
weakening of the Romanian Leu compared to the EUR. As discussed in the 2008
annual report, the Romanian subsidiaries are accounted for in Leu with the
result that a movement of the currency gives rise to movements in the recorded
Leu value of assets and liabilities of the Group subsidiaries that are
consolidated. In substance, however, the Group's income, assets and liabilities
are EUR denominated.
The combination of the above mentioned items led to a net accounting profit of
EUR2,129,574 in relation to the interim period. Distributable earnings in
relation to the interim period amounted to EUR2,156,596. This figure was
calculated by adjusting the accounting profit by reversing the exchange gain,
the deferred tax expense and the AltX listing expenses. Further adjustments
were made to eliminate the financial instrument fair value adjustments and to
amortise costs incurred in relation thereto, as well as adjustments required in
relation to the accounting treatment applied to the share incentive scheme.
Adjusted NAV per share is EUR1.93 (31 December 2008 EUR1.98) due to JSE listing
expenses, changes in the fair value of the financial instruments and the
difference between the currency translation reserve in the balance sheet
(resulting from the translation of equity recorded by the Company's Romanian
subsidiaries in Leu) and the foreign exchange gain in the income statement.
Debt position and cash resources
NEPI has drawn down most of its debt facilities and had EUR9,684,271 of cash
resources at the end of the interim period (of which EUR8,205,687 was
unencumbered). The Group is meeting all of its debt covenants.NEPI's
loan-to-value ratio at 30 June 2009 was 37% when adjusted for cash on hand (36%
as at 31 December 2008). The first substantial debt repayment of EUR6,824,800 is
due in April 2011, which we expect to re-finance given the relative low loan to
value ratio in relation to the property financed by this loan. The Group has
exercised the option to dispose of the Constanta property at a price of
EUR5,782,210, in line with the book value on 31 December 2008. Raiffeisen bank
and the lender to the Group in relation to the Raiffeisen portfolio approved the
transaction, but the spin off process in relation to the property is still
underway at the date of this report. The Constanta disposal should add a net
EUR3,750,000 (after a partial repayment of debt agreed with the lender) to the
Group's available cash resources, when completed.
Dividend
The Board has declared a dividend per share of 7.66 EUR cents in respect of the
six months ended 30 June 2009. This represents a slight increase as compared to
the distribution in relation to the same period in 2008. The Company has
adequate accumulated profits to sustain the dividend payment.
The salient dates for the dividend are set out below.
+-----------------------------------------+-----------------------------------------+
| Last day to trade (JSE Limited) | Friday, 21 August 2009 |
+-----------------------------------------+-----------------------------------------+
| Ex-dividend date (JSE Limited) | Monday, 24 August 2009 |
+-----------------------------------------+-----------------------------------------+
| Ex-dividend date (AIM) | Wednesday, 26 August 2009 |
+-----------------------------------------+-----------------------------------------+
| Record date | Friday, 28 August 2009 |
+-----------------------------------------+-----------------------------------------+
| Payment date | Wednesday, 2 September 2009 |
+-----------------------------------------+-----------------------------------------+
No dematerialisation or rematerialisation of share certificates, nor transfer of
shares between registers in the Isle of Man and South Africa will take place
between Monday, 24 August 2009 and Friday, 28 August 2009, both dates inclusive.
Shareholders on the South African sub-register will receive dividends in South
African Rand, based on the exchange rate to be obtained by the Company on 13
August 2009. A further announcement in this respect will be made on or about 14
August 2009.
Market overview and prospects
The Romanian economy is in recession and has been subject to an acute shortage
of liquidity during the half year period. As a result, the Group was able to
negotiate deposit rates in excess of 7% on call facilities denominated in EUR.
The liquidity position seemed to have eased somewhat towards the end of the
interim period, in that deposit rates have decreased significantly.
There is a reduction in tenant demand and downward pressure on rental levels in
Romania. A number of landlords with shorter term lease agreements have had to
agree to rent reductions. The German market seemed to have been affected to a
lesser extent.
The economic downturn has created unique investment opportunities. A number of
property holding companies and developers are under financial pressure, due to a
number of reasons including over gearing and consequent breaches of loan to
value covenants, rent reductions where short term rent strategies were
implemented, a lack of finance sources in relation to continued development and
overdue loans held in relation to non-income producing assets with little
foreseeable development potential. Although few bank loans in relation to
properties have been accelerated, cash sweeps are generally implemented by banks
where the opportunities arise.
The Group has been exploring a number of acquisition opportunities, including
a transaction in relation to Carpathian plc (a company holding commercial
properties in Central and Eastern Europe) that was abandoned. In management's
view, the most appropriate and attractive of the opportunities explored seem to
be direct acquisitions of commercial assets in Romania. Due to Romania's retail
environment being the most underdeveloped in the European Union, dominant or
potentially dominant operating commercial assets anchored by international and
national retailers with long term lease agreements could present significant
value.NEPI is in advanced negotiations in respect of a number of these
opportunities and plans to acquire a number of operating commercial centres
Romania in a phased manner over the course of the next few months. The
potential vendors are selected developers with which NEPI wishes to form
mutually beneficial long term relationships. The potential acquisitions are
being pursued on the basis that the equity portions of the purchase prices will
be settled mostly through the issue of NEPI shares to the vendors. A substantial
portion of the vendor shares issued will be locked up for agreed periods to
align interests between NEPI and the developers. An investment in relation to a
fully pre-leased commercial centre under development is also under discussion.
If completed, the acquisitions are expected to have a material enhancing effect
on NEPI's future earnings per share. Further announcements are expected to be
made in due course.
Martin Slabbert
Director
Balance Sheet
+---+-----------------------------------+------+--------------+--------------+---------------+
| | | | | | Group |
| | | | Group | Group | Audited |
| | | | Unaudited 30 | Reviewed | 31 December |
| | | | June 2009 | 30 June 2008 | 2008 |
+---+-----------------------------------+------+--------------+--------------+---------------+
| | | | EUR | EUR | EUR |
+---+-----------------------------------+------+--------------+--------------+---------------+
| ASSETS | | | | |
+---------------------------------------+------+--------------+--------------+---------------+
| Non-current assets | | 87,794,134 | 87,796,648 | 87,533,635 |
+---------------------------------------+------+--------------+--------------+---------------+
| | | | | | |
+---+-----------------------------------+------+--------------+--------------+---------------+
| Investment property | 5 | 85,280,283 | 81,848,110 | 85,142,170 |
+---------------------------------------+------+--------------+--------------+---------------+
| Investment property at fair value | | 78,676,715 | 78,954,078 | 78,627,504 |
+---------------------------------------+------+--------------+--------------+---------------+
| Investment property under development | | 6,603,568 | 2,894,032 | 6,514,666 |
+---------------------------------------+------+--------------+--------------+---------------+
| | | | | | |
+---+-----------------------------------+------+--------------+--------------+---------------+
| Goodwill | 6 | 2,386,463 | 5,736,305 | 2,386,463 |
+---------------------------------------+------+--------------+--------------+---------------+
| Land concession | | - | 29,864 | - |
+---------------------------------------+------+--------------+--------------+---------------+
| Tenant installation | | - | 4,372 | - |
+---------------------------------------+------+--------------+--------------+---------------+
| Guarantee deposits | | - | 49,429 | - |
+---------------------------------------+------+--------------+--------------+---------------+
| Investments in subsidiaries | | - | - | - |
+---------------------------------------+------+--------------+--------------+---------------+
| Loans to subsidiaries | | - | - | - |
+---------------------------------------+------+--------------+--------------+---------------+
| Financial assets at fair value | | 127,388 | 128,568 | 5,002 |
| through profit or loss | 8 | | | |
+---------------------------------------+------+--------------+--------------+---------------+
| | | | | | |
+---+-----------------------------------+------+--------------+--------------+---------------+
| Current assets | | 11,997,776 | 4,813,788 | 6,190,203 |
+---------------------------------------+------+--------------+--------------+---------------+
| | | | | | |
+---+-----------------------------------+------+--------------+--------------+---------------+
| Trade and other receivables | | 2,313,505 | 1,621,547 | 1,771,356 |
+---------------------------------------+------+--------------+--------------+---------------+
| Cash and cash equivalents | | 9,684,271 | 3,192,241 | 4,418,847 |
+---------------------------------------+------+--------------+--------------+---------------+
| | | | | | |
+---+-----------------------------------+------+--------------+--------------+---------------+
| Total assets | | 99,791,910 | 92,610,436 | 93,723,838 |
+---------------------------------------+------+--------------+--------------+---------------+
| EQUITY AND LIABILITIES | | | | |
+---------------------------------------+------+--------------+--------------+---------------+
| Total equity attributable to equity | | 49,815,481 | 54,682,210 | 51,397,909 |
| holders | | | | |
+---------------------------------------+------+--------------+--------------+---------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+---------------+
| Share capital | | 267,950 | 267,950 | 267,950 |
+---------------------------------------+------+--------------+--------------+---------------+
| Share premium | | 52,487,190 | 52,487,190 | 52,487,190 |
+---------------------------------------+------+--------------+--------------+---------------+
| Share based payment reserve | 7 | 152,665 | 6,712 | 81,841 |
+---------------------------------------+------+--------------+--------------+---------------+
| Currency translation reserve | | (2,591,223) | (34,132) | (757,686) |
+---------------------------------------+------+--------------+--------------+---------------+
| Accumulated (loss)/ profit | | (501,101) | 1,954,490 | (681,386) |
+---------------------------------------+------+--------------+--------------+---------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+---------------+
| Non-current liabilities | | 45,281,792 | 32,426,370 | 37,195,489 |
+---------------------------------------+------+--------------+--------------+---------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+---------------+
| Loans and borrowings | 8 | 40,283,172 | 30,125,890 | 32,750,804 |
+---------------------------------------+------+--------------+--------------+---------------+
| Financial liabilities at fair value | 8 | 934,866 | - | 575,303 |
| through profit or loss | | | | |
+---------------------------------------+------+--------------+--------------+---------------+
| Deferred tax liabilities | | 4,063,754 | 2,300,480 | 3,869,382 |
+---------------------------------------+------+--------------+--------------+---------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+---------------+
| Current liabilities | | 4,694,637 | 5,501,856 | 5,130,440 |
+---------------------------------------+------+--------------+--------------+---------------+
| | | | | |
+---------------------------------------+------+--------------+--------------+---------------+
| Trade and other payables | | 3,057,850 | 4,315,018 | 3,268,082 |
+---------------------------------------+------+--------------+--------------+---------------+
| Loans and borrowings | 8 | 1,636,787 | 1,186,838 | 1,862,358 |
+---------------------------------------+------+--------------+--------------+---------------+
| | | | | | |
+---+-----------------------------------+------+--------------+--------------+---------------+
| Total equity and liabilities | | 99,791,910 | 92,610,436 | 93,723,838 |
+---------------------------------------+------+--------------+--------------+---------------+
| NAV per share | 11 | 1.86 | - | 1.92 |
+---------------------------------------+------+--------------+--------------+---------------+
| Adjusted NAV per share (28,150,000 | 11 | 1.93 | - | 1.98 |
| shares) | | | | |
+---+-----------------------------------+------+--------------+--------------+---------------+
Income Statement
+---+--------------------------------------+----+--------------+---------------+----------------+
| | | | Group | Group | Group |
| | | | Unaudited | Reviewed | Audited |
+---+--------------------------------------+----+--------------+---------------+----------------+
| | | | 30 June | 30 June | 31 December |
| | | | 2009 | 2008 | 2008 |
+---+--------------------------------------+----+--------------+---------------+----------------+
| | | | EUR | EUR | EUR |
+---+--------------------------------------+----+--------------+---------------+----------------+
| Net rental and related income | | 3,520,962 | 2,844,649 | 6,315,183 |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+---+--------------------------------------+----+--------------+---------------+
| Contractual rental income and expense | | 4,323,488 | 3,475,127 | 7,713,486 |
| recoveries | | | | |
+------------------------------------------+----+--------------+---------------+----------------+
| Property operating expenses | | (802,526) | (630,478) | (1,398,303) |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+---+--------------------------------------+----+--------------+---------------+
| Share based payments | 7 | (70,824) | (6,712) | (81,841) |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+---+--------------------------------------+----+--------------+---------------+
| Investment advisory fees | | (275,574) | (300,618) | (571,137) |
+------------------------------------------+----+--------------+---------------+----------------+
| Administrative expenses | | (274,508) | (215,459) | (498,656) |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+------------------------------------------+----+--------------+---------------+----------------+
| Foreign exchange gain | | 1,723,780 | - | 1,144,227 |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+------------------------------------------+----+--------------+---------------+----------------+
| Fair value adjustment on investment | | - | - | (1,671,077) |
| property | | | | |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+---+--------------------------------------+----+--------------+---------------+
| Profit before net finance expense | | 4,623,836 | 2,321,860 | 4,636,699 |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+---+--------------------------------------+----+--------------+---------------+
| Finance income | | 134,523 | 245,908 | 275,930 |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+---+--------------------------------------+----+--------------+---------------+
| Finance expense | | (2,286,056) | (556,606) | (2,239,250) |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+---+--------------------------------------+----+--------------+---------------+
| Net finance (expense) | | (2,151,533) | (310,698) | (1,963,320) |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+---+--------------------------------------+----+--------------+---------------+
| Earnings before tax | | 2,472,303 | 2,011,162 | 2,673,379 |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+---+--------------------------------------+----+--------------+---------------+
| Tax | | (342,729) | - | (1,204,029) |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+---+--------------------------------------+----+--------------+---------------+
| Earnings after tax | | 2,129,574 | 2,011,162 | 1,469,350 |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+---+--------------------------------------+----+--------------+---------------+
| Basic weighted average earnings per | 9 | 7.95 | 7.51 | 5.48 |
| share (EUR cents) | | | | |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+------------------------------------------+----+--------------+---------------+----------------+
| Diluted weighted average earnings per | 9 | 7.57 | 7.46 | 5.33 |
| share (EUR cents) | | | | |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+------------------------------------------+----+--------------+---------------+----------------+
| Distributable earnings per share (EUR | 9 | 7.66 | 7.48 | 14.72 |
| cents) | | | | |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+------------------------------------------+----+--------------+---------------+----------------+
| Headline earnings per share (EUR cents) | 10 | 1.78 | - | 7.76 |
+------------------------------------------+----+--------------+---------------+----------------+
| | | | | |
+------------------------------------------+----+--------------+---------------+----------------+
| Diluted headline earnings per share (EUR | 10 | 1.69 | - | 7.54 |
| cents) | | | | |
| | | | | |
+---+--------------------------------------+----+--------------+---------------+----------------+
Condensed Consolidated Statement of Comprehensive Income
+------------------+---------------------------+--+--+-------------+------------+---------------+
| | | Group | Group | Group |
| | | Unaudited | Unaudited | Unaudited |
| | | 30 June | 30 June | 31 December |
| | | 2009 | 2008 | 2008 |
+----------------------------------------------+-----+-------------+------------+---------------+
| | | | EUR | EUR | EUR |
+------------------+---------------------------+-----+-------------+------------+---------------+
| Profit for the period | | 2,129,574 | 2,011,162 | 1,469,350 |
+----------------------------------------------+-----+-------------+------------+---------------+
| | | | | |
+----------------------------------------------+-----+-------------+------------+---------------+
| Other comprehensive income | | | | |
+----------------------------------------------+-----+-------------+------------+---------------+
| - currency translation reserve | | (1,833,537) | (56,765) | (780,319) |
+----------------------------------------------+-----+-------------+------------+---------------+
| | | | | | |
+------------------+---------------------------+-----+-------------+------------+---------------+
| Other comprehensive income for the period, net | (1,833,537) | (56,765) | (780,319) |
| of income tax | | | |
+-------------------------------------------------+----------------+------------+---------------+
| | | | | | |
+------------------+---------------------------+-----+-------------+------------+---------------+
| Total comprehensive income for the period | | 296,037 | 1,954,397 | 689,031 |
+------------------+---------------------------+--+--+-------------+------------+---------------+
Statement of Changes in Equity
+----------------+------------+---------+------------+----------+-------------+-----------+------------+
| | | Share | Share | Share | Currency | Retained | Total |
| | | capital | premium | based | translation | earnings | |
| | | | | payments | reserves | | |
| | | | | reserve | | | |
+----------------+------------+---------+------------+----------+-------------+-----------+------------+
| | | EUR | EUR | EUR | EUR | EUR | EUR |
+----------------+------------+---------+------------+----------+-------------+-----------+------------+
| | | | | | | | |
+----------------+------------+---------+------------+----------+-------------+-----------+------------+
| Opening balance 1 January | 267,950 | 52,487,190 | - | 22,633 | 275,746 | 53,053,519 |
| 2008 | | | | | | |
+-----------------------------+---------+------------+----------+-------------+-----------+------------+
| | | | | | | |
+-----------------------------+---------+------------+----------+-------------+-----------+------------+
| Transactions with owners | - | - | 6,712 | - | (332,418) | (325,706) |
+-----------------------------+---------+------------+----------+-------------+-----------+------------+
| - share based payments | - | - | 6,712 | - | - | 6,712 |
| reserve | | | | | | |
+-----------------------------+---------+------------+----------+-------------+-----------+------------+
| - dividend distribution | - | - | - | - | (332,418) | (332,418) |
+-----------------------------+---------+------------+----------+-------------+-----------+------------+
| | | | | | | | |
+----------------+------------+---------+------------+----------+-------------+-----------+------------+
| Total comprehensive income | - | - | - | (56,765) | 2,011,162 | 1,954,397 |
+-----------------------------+---------+------------+----------+-------------+-----------+------------+
| - currency translation | - | - | - | (56,765) | - | (56,765) |
| reserve | | | | | | |
+-----------------------------+---------+------------+----------+-------------+-----------+------------+
| - profit for the period | - | - | - | - | 2,011,162 | 2,011,162 |
+-----------------------------+---------+------------+----------+-------------+-----------+------------+
| | | | | | | | |
+----------------+------------+---------+------------+----------+-------------+-----------+------------+
| Closing balance 30 June | 267,950 | 52,487,190 | 6,712 | (34,132) | 1,954,490 | 54,682,210 |
| 2008 | | | | | | |
+----------------+------------+---------+------------+----------+-------------+-----------+------------+
+--------------+--------------+---------+------------+---------+-----------+-------------+-------------+
| Opening balance 1 January | 267,950 | 52,487,190 | - | 22,633 | 275,746 | 53,053,519 |
| 2008 | | | | | | |
+-----------------------------+---------+------------+---------+-----------+-------------+-------------+
| | | | | | | | |
+--------------+--------------+---------+------------+---------+-----------+-------------+-------------+
| Transaction with owners | - | - | 81,841 | - | (2,416,482) | (2,344,641) |
+-----------------------------+---------+------------+---------+-----------+-------------+-------------+
| - share based payments | - | - | 81,841 | - | - | 81,841 |
| reserve | | | | | | |
+-----------------------------+---------+------------+---------+-----------+-------------+-------------+
| - dividend distribution | - | - | - | - | (2,426,482) | (2,426,482) |
+-----------------------------+---------+------------+---------+-----------+-------------+-------------+
| | | | | | | | |
+--------------+--------------+---------+------------+---------+-----------+-------------+-------------+
| Total comprehensive income | - | - | - | (780,319) | 1,469,350 | 689,031 |
+-----------------------------+---------+------------+---------+-----------+-------------+-------------+
| - currency translation | - | - | - | (780,319) | - | (780,319) |
| reserve | | | | | | |
+-----------------------------+---------+------------+---------+-----------+-------------+-------------+
| - profit for the year | - | - | - | - | 1,469,350 | 1,469,350 |
+-----------------------------+---------+------------+---------+-----------+-------------+-------------+
| | | | | | | | |
+--------------+--------------+---------+------------+---------+-----------+-------------+-------------+
| Closing balance 31 December | 267,950 | 52,487,190 | 81,841 | (757,686) | (681,386) | 51,397,909 |
| 2008 | | | | | | |
+--------------+--------------+---------+------------+---------+-----------+-------------+-------------+
+--------------+--------------+---------+------------+---------+-------------+-------------+-------------+
| Opening balance 1 January | 267,950 | 52,487,190 | 81,841 | (757,686) | (681,386) | 51,397,909 |
| 2009 | | | | | | |
+-----------------------------+---------+------------+---------+-------------+-------------+-------------+
| | | | | | | | |
+--------------+--------------+---------+------------+---------+-------------+-------------+-------------+
| Transaction with owners | - | - | 70,824 | - | (1,949,289) | (1,878,465) |
+-----------------------------+---------+------------+---------+-------------+-------------+-------------+
| - share based payments | - | - | 70,824 | - | - | 70,824 |
| reserve | | | | | | |
+-----------------------------+---------+------------+---------+-------------+-------------+-------------+
| - dividend distribution | - | - | - | - | (1,949,289) | (1,949,289) |
+-----------------------------+---------+------------+---------+-------------+-------------+-------------+
| | | | | | | | |
+--------------+--------------+---------+------------+---------+-------------+-------------+-------------+
| Total comprehensive income | - | - | - | (1,833,537) | 2,129,574 | 296,037 |
+-----------------------------+---------+------------+---------+-------------+-------------+-------------+
| - currency translation | - | - | - | (1,833,537) | - | (1,833,537) |
| reserve | | | | | | |
+-----------------------------+---------+------------+---------+-------------+-------------+-------------+
| - profit for the period | - | - | - | - | 2,129,574 | 2,129,574 |
+-----------------------------+---------+------------+---------+-------------+-------------+-------------+
| | | | | | | | |
+--------------+--------------+---------+------------+---------+-------------+-------------+-------------+
| Closing balance 30 June | 267,950 | 52,487,190 | 152,665 | (2,591,223) | (501,101) | 49,815,481 |
| 2009 | | | | | | |
+--------------+--------------+---------+------------+---------+-------------+-------------+-------------+
Cash Flow Statement
+-----------------------------------------+-------------+---------------+---------------+
| | Group | Group | Group |
| | Unaudited | Reviewed | Audited |
+-----------------------------------------+-------------+---------------+---------------+
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
+-----------------------------------------+-------------+---------------+---------------+
| | EUR | EUR | EUR |
+-----------------------------------------+-------------+---------------+---------------+
| OPERATING ACTIVITIES | | | |
+-----------------------------------------+-------------+---------------+---------------+
| Earnings after tax | 2,129,574 | 2,011,162 | 1,469,350 |
+-----------------------------------------+-------------+---------------+---------------+
| Adjustments for: | | | |
+-----------------------------------------+-------------+---------------+---------------+
| Fair value of derivative instruments | 392,176 | (128,568) | 570,301 |
+-----------------------------------------+-------------+---------------+---------------+
| Fair value adjustments on investment | - | - | 1,671,077 |
| property | | | |
+-----------------------------------------+-------------+---------------+---------------+
| Share based payments | 70,824 | 6,712 | 81,841 |
+-----------------------------------------+-------------+---------------+---------------+
| Net finance expense | 1,759,357 | 310,698 | 1,963,320 |
+-----------------------------------------+-------------+---------------+---------------+
| Foreign exchange gain | (1,723,780) | - | (1,144,227) |
+-----------------------------------------+-------------+---------------+---------------+
| Corporate tax charge and deferred tax | 341,180 | - | 1,204,029 |
+-----------------------------------------+-------------+---------------+---------------+
| Operating profit before changes in | 2,969,331 | 2,200,004 | |
| working capital | | | 5,815,691 |
+-----------------------------------------+-------------+---------------+---------------+
| | | | |
+-----------------------------------------+-------------+---------------+---------------+
| (Increase) in trade and other | | (1,139,591) | |
| receivables | (534,924) | | (1,219,480) |
+-----------------------------------------+-------------+---------------+---------------+
| (Decrease) in trade and other payables | (217,457) | (172,427) | (430,680) |
+-----------------------------------------+-------------+---------------+---------------+
| Interest paid | (1,014,619) | (446,048) | (839,299) |
+-----------------------------------------+-------------+---------------+---------------+
| Interest received | 134,523 | 234,097 | 275,930 |
+-----------------------------------------+-------------+---------------+---------------+
| Cash flows from operating activities | 1,336,854 | 676,035 | 3,602,162 |
+-----------------------------------------+-------------+---------------+---------------+
| | | | |
+-----------------------------------------+-------------+---------------+---------------+
| INVESTING ACTIVITIES | | | |
+-----------------------------------------+-------------+---------------+---------------+
| | | | |
+-----------------------------------------+-------------+---------------+---------------+
| Acquisition of investment property | (138,113) | (19,813,740) | (22,465,661) |
+-----------------------------------------+-------------+---------------+---------------+
| Payments for acquisition of | - | (27,209,412) | (27,198,062) |
| subsidiaries less cash acquired | | | |
+-----------------------------------------+-------------+---------------+---------------+
| | | | |
+-----------------------------------------+-------------+---------------+---------------+
| Cash flows from investing activities | (138,113) | (47,023,152) | (49,663,723) |
+-----------------------------------------+-------------+---------------+---------------+
| | | | |
+-----------------------------------------+-------------+---------------+---------------+
| FINANCING ACTIVITIES | | | |
+-----------------------------------------+-------------+---------------+---------------+
| | | | |
+-----------------------------------------+-------------+---------------+---------------+
| Listing expenses on JSE | (905,048) | - | - |
+-----------------------------------------+-------------+---------------+---------------+
| Proceeds from bank borrowings | 8,911,596 | 16,659,802 | 20,348,000 |
+-----------------------------------------+-------------+---------------+---------------+
| Repayment of borrowings | (1,579,012) | (382,368) | (1,177,853) |
+-----------------------------------------+-------------+---------------+---------------+
| Acquisition of interest hedging | (155,000) | - | - |
| instruments | | | |
+-----------------------------------------+-------------+---------------+---------------+
| Payment of dividends | (1,949,289) | (332,418) | (2,426,482) |
+-----------------------------------------+-------------+---------------+---------------+
| | | | |
+-----------------------------------------+-------------+---------------+---------------+
| Cash flows from financing activities | 4,323,247 | 15,945,016 | 16,743,665 |
+-----------------------------------------+-------------+---------------+---------------+
| | | | |
+-----------------------------------------+-------------+---------------+---------------+
| Net increase/(decrease) in cash and | | | |
| cash equivalents | 5,522,248 | (30,402,101) | (29,317,896) |
+-----------------------------------------+-------------+---------------+---------------+
| Cash and cash equivalents brought | | | |
| forward | 4,418,847 | 33,651,107 | 33,651,107 |
+-----------------------------------------+-------------+---------------+---------------+
| Translation effect on cash and cash | | | |
| equivalents | (256,564) | (56,765) | 85,636 |
+-----------------------------------------+-------------+---------------+---------------+
| Cash and cash equivalents carried | | | |
| forward | 9,684,271 | 3,192,241 | 4,418,847 |
+-----------------------------------------+-------------+---------------+---------------+
Notes to the condensed consolidated unaudited interim financial statement
1 General
New Europe Property Investments plc is a company incorporated in the Isle of Man
on 23 July 2007. The Company has a primary listing on the AIM market of the
London Stock Exchange and secondary listing on AltX of the JSE Limited. The
Group includes the Company and its subsidiaries.
2 Basis of preparation
The condensed consolidated unaudited interim financial statements have been
prepared in accordance with applicable Isle of Man law and International
Financial Reporting Standards (IFRS) IAS 34 Interim Financial Reporting. The
interim financial statements do not include all of the information required for
full annual financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the year ended 31 December
2008.
The condensed consolidated interim financial statements have not been reviewed
or reported on by the Company's auditor.
3 Significant accounting policies
Except as described below, the accounting policies applied by the Group in the
condensed consolidated unaudited interim financial statements are the same as
those applied by the Group in its consolidated financial statements of the Group
for the period ended 31 December 2008.
(a) Changes in accounting policies
(i) Determination and presentation of operating segments
As of 1 January 2009 the Group determines and presents operating segments based
on information that is internally produced. This change in accounting policy is
due to the adoption of IFRS 8 Operating Segments. Previously operating segments
were determined and presented in accordance with IAS 14 Segment Reporting. The
new accounting policy in respect of segment operating disclosure is presented as
follows.
Comparative segment information has been re-presented in conformity with the
transitional requirements of IFRS 8. Since the change in accounting policy only
impacts presentation and disclosure, there is no impact on earnings per share.
An operating segment is a component of the Group that engages in business
activities from which it may earn revenue and incur expenses, including revenue
and expenses that relate to transactions with any of the Group's other
components.
An operating segment's operating results are reviewed regularly by the
management to make decisions about resources to be allocated to the segment and
assess its performance, and for which discrete financial information is
available.
Segment results that are reported include items directly attributable to a
segment as well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly corporate assets (primarily the Company's
headquarters), head office expenses, and income tax assets and liabilities.
(ii) Presentation of financial statements
The Group applies revised IAS 1 Presentation of Financial Statements (2007),
which became effective as of 1 January 2009. As a result, the Group presents in
the consolidated statement of changes in equity all owner changes in equity,
whereas all non-owner changes in equity are presented in the consolidated
statement of comprehensive income. This presentation has been applied in the
condensed consolidated unaudited interim financial statements for the six months
period ended 30 June 2009.
Comparative information has been re-presented so that it also is in conformity
with the revised standard. Since the change in accounting policy only impacts
presentation aspects, there is no impact on earnings per share.
4 Financial risk management
During the six months ended 30 June 2009 the Group has not changed its
objectives and policies in respect of credit risk, liquidity risk, market risk,
currency risk and interest rate risk.
5 Investment property
+---------------------------------------+-------------+--------------+-----------------+
| | Group | Group | Group |
+---------------------------------------+-------------+--------------+-----------------+
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
+---------------------------------------+-------------+--------------+-----------------+
| | EUR | EUR | EUR |
+---------------------------------------+-------------+--------------+-----------------+
| Movement in investment property | | | |
+---------------------------------------+-------------+--------------+-----------------+
| Carrying value at beginning of period | 85,142,170 | 21,718,366 | 21,718,364 |
+---------------------------------------+-------------+--------------+-----------------+
| Additions from business combination | - | 36,473,582 | 36,473,582 |
+---------------------------------------+-------------+--------------+-----------------+
| Assets under development acquired | - | 6,514,666 | 6,514,666 |
| through business combination | | | |
+---------------------------------------+-------------+--------------+-----------------+
| Additions | 138,113 | 17,141,496 | 22,106,635 |
+---------------------------------------+-------------+--------------+-----------------+
| Fair value adjustment | - | - | (1,671,077) |
+---------------------------------------+-------------+--------------+-----------------+
| | | | |
+---------------------------------------+-------------+--------------+-----------------+
| Carrying value at period end | 85,280,283 | 81,848,110 | 85,142,170 |
+---------------------------------------+-------------+--------------+-----------------+
Except for EUR118,113 representing the value of works in relation to the Brasov
building under construction no investment property was acquired or disposed of
during the period.Further information on investment property is available in the
Group's 2008 annual report.
6 Goodwill
Detailed information about recognition and measurement of goodwill is disclosed
in the Group's 2008 annual report.
7 Share based payments
The features of the share incentive scheme and its measurement on recognition
are disclosed in the audited financial statements for the year ended 31 December
2008.
The amount of EUR152,665 represents the pro-rata amount of the fair value of the
options at grant date, in relation to the period over which the share scheme
shares were in issue.
8 Loans and borrowings
The Group contracted bank loan facility agreements with Nord LB Bank and Alpha
Bank Romania S.A. for an aggregate amount of EUR 28,119,800. Of that amount,
EUR600,000 was available for draw-down as at 30 June 2009. A loan from EuroHypo
AG for an amount of EUR15,000,000 has been taken over as a result of the
acquisition of General Investment S.R.L. and General Building Management S.R.L.
The facility agreements concluded with Nord LB bear interest at a fixed rate of
5.17% as a result of an interest rate swap concluded with the Nord LB Bank
fixing the reference rate of the loan. As at 30 June 2009 the fair value of the
interest rate swap amounted to (EUR934,866).
The facility agreements concluded with Alpha Bank Romania S.A. bear interest at
a floating rate of one month Euribor plus 1.9% p.a. and 4.5%, respectively. The
Group has capped its Euribor interest rate risk at 4.7% for the amount of EUR7.6m
and at 3% for the amount of EUR7.3m by purchasing two derivative financial
instruments. As at 30 June 2009 the fair value of the derivative financial
instruments amounted to EUR127,388.
The loan from EuroHypo AG bears interest at a fixed rate of 6.20% per annum.
In addition to the bank loans, the Group also obtained financing from the
vendors of the German portfolio amounting to EUR853,281 for a period of five
years. Of this amount EUR250,000 bears interest at a fixed interest rate of 6%
p.a. while the balance does not attract interest.
The repayment profile of the group's outstanding loans is set out in the table
below.
+----------------------------------+----------------+----------------+----------------+
| Loans and borrowings | Due within one | Due within two | Due after five |
| | year | to five years | years |
| | EUR | EUR | EUR |
+----------------------------------+----------------+----------------+----------------+
| Alpha Bank Romania S.A. | - | 13,524,800 | - |
| revolving credit facilities | | | |
+----------------------------------+----------------+----------------+----------------+
| Nord LB bank loan | 137,754 | 1,224,972 | 12,581,640 |
+----------------------------------+----------------+----------------+----------------+
| EuroHypo AG | 898,864 | 4,514,275 | 7,584,204 |
+----------------------------------+----------------+----------------+----------------+
| Vendor finance | - | 853,281 | - |
+----------------------------------+----------------+----------------+----------------+
| Accrued interest on Alpha Bank | - | - | - |
| Romania S.A. | | | |
+----------------------------------+----------------+----------------+----------------+
| Accrued interest on Nord LB loan | 384,420 | - | - |
+----------------------------------+----------------+----------------+----------------+
| Accrued interest on Eurohypo AG | 204,531 | - | - |
| loan | | | |
+----------------------------------+----------------+----------------+----------------+
| Accrued interest on vendor | 11,218 | - | - |
| finance | | | |
+----------------------------------+----------------+----------------+----------------+
| | | | |
+----------------------------------+----------------+----------------+----------------+
| TOTAL | 1,636,787 | 20,117,328 | 20,165,844 |
+----------------------------------+----------------+----------------+----------------+
As a result of the loan contract concluded with EuroHypo AG, first ranking
security interests were created over the real estate properties of General
Investment S.R.L. in favour of Eurohypo AG together with a prohibition to sell,
encumber or lease the real estate properties, through mortgage agreements
concluded for each individual property. In addition the following security
agreements have been concluded in relation to the loan:
- Pledge agreement over the bank accounts of General Investment S.R.L.;
- General security agreement over the assets owned by General Investment S.R.L.;
- Assignment of rental receivable to EuroHypo AG; and
- Personal guarantee agreement between EuroHypo AG (as lender) and the Company
(as first guarantor).
Covenants:
- Debt service ratio min 120%; and
- Loan to value ratio max 70%.
The Alpha Bank Romania S.A. loans have been secured as follows:
- Mortgage over the land and building located in Rasnov and the land and
buildings in the Flanco portfolio;
- Pledge agreement over the bank accounts of NEPI Bucharest One S.R.L. and NEPI
Bucharest Two S.R.L opened with Alpha Bank Romania S.A.;
- Real movable security over the shares of NEPI Bucharest One S.R.L. and NEPI
Bucharest Two S.R.L; and
- Corporate guarantee issued by the Company.
Covenants:
- Loan to value ratio max 60% in case of Nepi Bucharest Two S.R.L; and
- Loan to value ratio max 65% in case of Nepi Bucharest One S.R.L.
9 Earnings per share
The calculation of basic earnings per share for the period ended 30 June 2009
was based on the profit attributable to ordinary equity holders of EUR2,129,574
(30 June 2008: EUR2,011,162) and the weighted average number of 26,795,000 (30
June 2008: 26,795,000) ordinary shares in issue during the period (excluding the
share incentive scheme shares).
The calculation of diluted earnings per share for the period ended 30 June 2009
was based on the profit attributable to ordinary equity holders of EUR2,129,574
(30 June 2008: EUR2,011,162) and the weighted average number of 28,150,000 (30
June 2008: 26,974,669) ordinary shares in issue during the period (including the
share incentive scheme shares).
The calculation of distributable earnings per share was based on earnings after
tax adjusted as shown in the table below to arrive at the distributable earnings
of EUR2,156,596 (30 June 2008: EUR2,104,386) and the number of shares in issue at 30
June 2009.
+------------------+-------------------------------+----------------+--+-----------------+
| | Group | | Group |
| | 30 June 2009 | | 30 June 2008 |
| | EUR | | EUR |
+--------------------------------------------------+----------------+--+-----------------+
| Distributable earnings | 2,156,596 | | 2,104,386 |
+--------------------------------------------------+----------------+--+-----------------+
| | | | |
+--------------------------------------------------+----------------+--+-----------------+
| Earnings after tax | 2,129,574 | | 2,011,162 |
+--------------------------------------------------+----------------+--+-----------------+
| | | | | |
+------------------+-------------------------------+----------------+--+-----------------+
| Unrealised foreign exchange gains | (1,723,780) | | - |
+--------------------------------------------------+----------------+--+-----------------+
| | | | | |
+------------------+-------------------------------+----------------+--+-----------------+
| Share based payment fair value | 70,824 | | 6,712 |
+--------------------------------------------------+----------------+--+-----------------+
| | | | |
+--------------------------------------------------+----------------+--+-----------------+
| JSE Listing expenses | 905,048 | | - |
+--------------------------------------------------+----------------+--+-----------------+
| | | | |
+--------------------------------------------------+----------------+--+-----------------+
| Interest receivable from key employees | 81,351 | | - |
+--------------------------------------------------+----------------+--+-----------------+
| | | | | |
+------------------+-------------------------------+----------------+--+-----------------+
| Fair value adjustments on investment property | - | | - |
+--------------------------------------------------+----------------+--+-----------------+
| | | | | |
+------------------+-------------------------------+----------------+--+-----------------+
| Net change in fair value of financial assets and | 392,176 | | 432 |
| liabilities | | | |
+--------------------------------------------------+----------------+--+-----------------+
| | | | | |
+------------------+-------------------------------+----------------+--+-----------------+
| Amortisation of the premium paid for derivative | (39,777) | | (1,648) |
| instrument | | | |
+--------------------------------------------------+----------------+--+-----------------+
| | | | | |
+------------------+-------------------------------+----------------+--+-----------------+
| Share issue cum distribution | - | | 87,728 |
+--------------------------------------------------+----------------+--+-----------------+
| | | | | |
+------------------+-------------------------------+----------------+--+-----------------+
| Deferred tax expense | 341,180 | | - |
+--------------------------------------------------+----------------+--+-----------------+
| | | | |
+--------------------------------------------------+----------------+--+-----------------+
| Number of shares in issue at end of period | 28,150,000 | | 28,150,000 |
+--------------------------------------------------+----------------+--+-----------------+
| Distributable earnings per share (EUR cents) | 7.66 | | 7.48 |
+------------------+-------------------------------+----------------+--+-----------------+
1,355,000 shares were issued as part of the share option scheme and are
accounted for as treasury shares.
10 Headline earnings per share
The calculation of headline earnings per share for the period ended 30 June 2009
was based on headline earnings of EUR476,618 and 26,795,000 ordinary shares in
issue during the period (excluding the share incentive scheme shares).
The calculation of diluted headline earnings per share for the period ended 30
June 2009 was based on headline earnings of EUR476,618 and the weighted average of
28,150,000 ordinary shares in issue during the period (including the share
incentive scheme shares).
+------------------+-----------------------------+----------------+--+---+------------------+
| | Group |
| | 30 June 2009 |
| | EUR |
+------------------------------------------------+------------------------------------------+
| | Gross | | Net |
+------------------------------------------------+----------------+------+------------------+
| Profit after tax | 2,129,574 | | 2,129,574 |
+------------------------------------------------+----------------+--+----------------------+
| | | | |
+------------------------------------------------+----------------+--+----------------------+
| Unrealised foreign exchange gain | (1,723,780) | | (1,723,780) |
+------------------------------------------------+----------------+--+----------------------+
| | | | |
+------------------------------------------------+----------------+--+----------------------+
| Share base payment fair value | 70,824 | | 70,824 |
+------------------------------------------------+----------------+--+----------------------+
| | | | | |
+------------------+-----------------------------+----------------+--+----------------------+
| | | | |
+------------------------------------------------+----------------+--+----------------------+
| Headline earnings | 476,618 | | 476,618 |
+------------------+-----------------------------+----------------+--+---+------------------+
As of 30 June 2008 headline earnings per share has not been computed as the
Company was not listed on AltX of the JSE.
11 Net asset value per share
+------------------+----------------------------+-----------------+--+------------------+
| | Group | | Group |
| | 30 June 2009 | | 31 December 2008 |
+-----------------------------------------------+-----------------+--+------------------+
| | EUR | | EUR |
+-----------------------------------------------+-----------------+--+------------------+
| Adjusted net asset value | 54,446,673 | | 55,834,728 |
+-----------------------------------------------+-----------------+--+------------------+
| | | | |
+-----------------------------------------------+-----------------+--+------------------+
| Net asset value in balance sheet | 49,815,481 | | 51,397,909 |
+-----------------------------------------------+-----------------+--+------------------+
| | | | |
+-----------------------------------------------+-----------------+--+------------------+
| Value of shares issued in the share incentive | 2,953,900 | | 2,953,900 |
| scheme | | | |
+-----------------------------------------------+-----------------+--+------------------+
| | | | | |
+------------------+----------------------------+-----------------+--+------------------+
| Deferred tax | 4,063,754 | | 3,869,382 |
+-----------------------------------------------+-----------------+--+------------------+
| | | | |
+-----------------------------------------------+-----------------+--+------------------+
| Goodwill | (2,386,462) | | (2,386,462) |
+-----------------------------------------------+-----------------+--+------------------+
| | | | | |
+------------------+----------------------------+-----------------+--+------------------+
| | | | |
+-----------------------------------------------+-----------------+--+------------------+
| Number of shares in issue at end of period | 28,150,000 | | 28,150,000 |
+-----------------------------------------------+-----------------+--+------------------+
| | | | |
+-----------------------------------------------+-----------------+--+------------------+
| Net asset value per share (based on | 1.86 | | 1.92 |
| 26,795,000 shares in issue) | | | |
+-----------------------------------------------+-----------------+--+------------------+
| Adjusted net asset value per share | 1.93 | | 1.98 |
+------------------+----------------------------+-----------------+--+------------------+
12 Segment reporting
The Group operates only one business segment, which is the rental of investment
property.
On a primary basis, the Group operates in the following geographical areas of
Europe:
- Romania
- Germany
The Group's primary format for segmental reporting is based on geographic
segments.
The above geographic areas represent separate geographic segments.
From 15 April 2008, the Group commenced operations in a second geographic
segment as a result of its joint acquisition of six properties in Germany. The
Group's segmental revenue and results for the period are presented below.
+---------------------------------------+--------------------+----------------+--------------+
| | Romania | Germany | Consolidated |
+---------------------------------------+--------------------+----------------+--------------+
| | 30 June 2009 | 30 June 2009 | 30 June 2009 |
| | EUR | EUR | EUR |
+---------------------------------------+--------------------+----------------+--------------+
| External revenues | 3,572,907 | 750,581 | 4,323,488 |
+---------------------------------------+--------------------+----------------+--------------+
| Inter-segment revenue | - | - | - |
+---------------------------------------+--------------------+----------------+--------------+
| Reportable segment profit before | 3,798,312 | (142,784) | 3,655,528 |
| income tax | | | |
+---------------------------------------+--------------------+----------------+--------------+
| | | | |
+---------------------------------------+--------------------+----------------+--------------+
| Segment assets | 69,513,236 | 18,385,331 | 87,898,567 |
+---------------------------------------+--------------------+----------------+--------------+
| | | | |
+---------------------------------------+--------------------+----------------+--------------+
| | Romania | Germany | Consolidated |
+---------------------------------------+--------------------+----------------+--------------+
| | 30 June 2008 | 30 June 2008 | 30 June 2008 |
| | EUR | EUR | EUR |
+---------------------------------------+--------------------+----------------+--------------+
| External revenues | 3,266,879 | 208,249 | 3,475,128 |
+---------------------------------------+--------------------+----------------+--------------+
| Inter-segment revenue | - | - | - |
+---------------------------------------+--------------------+----------------+--------------+
| Reportable segment profit before | 2,221,434 | 89,716 | 2,311,150 |
| income tax | | | |
+---------------------------------------+--------------------+----------------+--------------+
| | | | |
+---------------------------------------+--------------------+----------------+--------------+
| Segment assets | 71,566,421 | 19,450,098 | 91,016,519 |
+---------------------------------------+--------------------+----------------+--------------+
+-----------------------------------------------------------+------------------+---------------------+
| | Group | Group |
| | 30 June 2009 | 30 June 2008 |
+-----------------------------------------------------------+------------------+---------------------+
| | EUR | EUR |
+-----------------------------------------------------------+------------------+---------------------+
| Total profit for reportable segments | 3,655,528 | 2,311,150 |
+-----------------------------------------------------------+------------------+---------------------+
| | | |
+-----------------------------------------------------------+------------------+---------------------+
| Share based payments | (70,824) | (6,712) |
+-----------------------------------------------------------+------------------+---------------------+
| Investment advisor management fee | (275,574) | (300,618) |
+-----------------------------------------------------------+------------------+---------------------+
| Administrative expenses | (274,508) | (215,459) |
+-----------------------------------------------------------+------------------+---------------------+
| JSE listing costs | (905,048) | - |
+-----------------------------------------------------------+------------------+---------------------+
| Interest income | - | 222,801 |
+-----------------------------------------------------------+------------------+---------------------+
| | | |
+-----------------------------------------------------------+------------------+---------------------+
| Consolidated profit before income tax | 2,129,574 | 2,011,162 |
+-----------------------------------------------------------+------------------+---------------------+
13 Contingent assets and liabilities
Guarantees
The Group's policy is to provide financial guarantees to subsidiaries to the
extent required in the normal course of business.
The Company issued two corporate letters of guarantee to Nepi Bucharest One
S.R.L. and Nepi Bucharest Two S.R.L. in relation to the Alpha Bank Romania S.A.
credit facilities (see note 8).
14 Related party transactions
Identity of related parties with whom material transactions have occurred
The subsidiaries and Directors are related parties. The subsidiaries of the
Company are presented on page 1 and 2 of the interim financial statements. The
Directors are set out on page 1 of the interim financial statements.
Material related party transactions
Pursuant to the investment advisory agreement, the Investment Advisor is paid a
monthly advisory fee of one percent per annum of the daily average market
capitalisation of NEPI, in consideration for performing investment advisory
services for the Group, whether itself or through sub-contractors. The
Investment Advisor is also entitled to an annual performance fee from the Group
of an amount equal to 20 percent of the declarable dividend arising from
investment income in respect of the financial year under consideration to the
extent that this exceeds an annual 10 percent return on the aggregate capital
invested in the company as at the relevant date.
15 Subsequent events
There are no significant transactions between the reporting period and the
release date of the financial statements.
For further information please contact:
+--------------------------------------------------------------+-------------------+
| New Europe Property Investments plc | +40 74 432 8882 |
| Martin Slabbert | |
| | |
+--------------------------------------------------------------+-------------------+
| Smith & Williamson Corporate Finance Limited | +44 20 7131 4000 |
| Azhic Basirov/Joanne Royden-Turner | |
| | |
| South African Sponsor | +27 11 283 0042 |
| Java Capital (Proprietary) Limited | |
+--------------------------------------------------------------+-------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FGGGRVDVGLZG
|