Interim Results

Date : 12/08/2011 @ 2:02AM
Source : UK Regulatory (RNS & others)
Stock : West Pioneer (WPR)
Quote : 10.25  0.0 (0.00%) @ 2:38AM
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Interim Results

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RNS Number : 5710T

West Pioneer Properties Limited

08 December 2011

 Press Release   8 December 2011 

West Pioneer Properties Limited

("West Pioneer" or the "Company")

Interim Results

West Pioneer Properties Limited (AIM:WPR), a leading developer and operator of shopping malls and mixed use developments in west and south India, announces its interim results for the 6 months ended 30 September 2011.


         Trading and footfall figures at Metro Junction Mall in Kalyan 
    --    continue to perform well with 74% retail leasing 
         Residential development at Kalyan behind schedule but apartment 
    --    sales continue to progress well with over 85% of available 
          units already sold at prices approximately 50% higher than 
          launch price 
         Ground break of Commercial Plaza at Kalyan in November 2011 
    --    with strong pre-launch bookings for approximately 30% of 
          the area received and at an average sale price approximately 
          50% higher than the residential sale price 
         Risk of material delay at Nashik project due to complications 
    --    caused by delays in receiving development approvals 
         Development and eventual sale of Aurangabad project on schedule 
    --    and expected to generate sale proceeds of US$15.2 million 
          over the next 12 months subject to contract 
         Balance sheet remains robust as a result of prudent cash 
    --    management and low gearing with year end cash and cash equivalents 
          of $1.76 million; also funding of US$5 million available 
          from a sanctioned but unutilised debt facility 

Commenting on the results, Amit Jatia, Chairman of West Pioneer, said: "This has been a challenging period not only for the Company but for all Indian real estate developers coping with a tightening of the country's monetary policies to counter inflation and slow project approvals by government bodies. However, I am confident that our persistent and focused efforts to position the Kalyan mall as a leading value shopping and lifestyle destination will produce significant results in the near future. The mall continues to cement its position as the most appealing shopping and entertainment destination for the local population in its catchment area.

"We are committed to the delivery of quality development of Residential and Commercial projects with ever strengthening support from our customers. The recent agreement to develop and sell the Company's Aurangabad asset will boost our ability to accelerate progress at the more value generating projects at Kalyan and Nashik. The Board remains optimistic in its ability to seek out further opportunities in the retail, hospitality, residential and commercial sectors which will bring best value to our shareholders going forward."


For further information:

 Evolution Securities Limited, NOMAD 
  and Joint Broker 
 Jeremy Ellis                          Tel: +44 (0) 20 7071 
 Religare Capital Markets plc, Joint 
 Daniel Briggs, Director, Corporate    Tel: +44 (0) 20 7444 
  Broking                                              0503 

Media enquiries:

 Abchurch Communications 
 Mark Dixon / Oliver Baxendale     Tel: +44 (0) 20 7398 

Chairman's Statement

In the period ended 30 September 2011, West Pioneer achieved revenue and other income of $2.4 million (2010: $2.2 million), including property rentals and other operating income of $2.3 million (2010: $2.0 million). Loss before tax of $0.6 million (2010: loss of $0.4 million) and basic loss per share was $0.003 (2010: loss of $0.007). Net assets were $61.0 million (2010: $63.0 million), including cash and cash equivalents of $1.12 million (2010: $1.68 million). Interest bearing loans and borrowings decreased from $7.8 million to $7.4 million during the period, inclusive of debt repayments.

Indian Economy

Whilst the macro-economic fundamentals of the Indian economy remain attractive, persistently high inflation rates and ensuing tightening of monetary policy by the Central Bank are contributing to lower than expected rates of growth. With Q1 and Q2 GDP growth at 7.7% and 6.9% respectively, the Central Bank has revised the growth estimate downward from 8% to 7.6% for the year 2011/12. West Pioneer's low gearing has ensured that its cash flows have not been badly affected by the resulting higher interest rates. The Board will however, as a result of the increased risk free rate in the country, be keeping under review the appropriateness of the discount rates it is using in valuing the Company's investment properties and this could lead to an impairment in the carrying value of these properties being recognized in the 31 March 2012 results.

Impact of depreciation of Rupee

During recent months the Indian Rupee has fallen in value by more than 10% against the US Dollar, falling from 45.7 rupees dollar as at 31 March 2011 to 49.7 rupees to the dollar as at 30 September 2011. This has negatively impacted the Company's reported Net Asset Value by US$ 5.76 million during the 6 months ended 30 September 2011. The value has fallen even further to 51.5 rupees as of today and if this is not reversed by the end of the Company's financial year in 31 March 2012 then there would be a further fall in the Company's reported Net Asset Value as at the year end.

On a more positive note, India's central government has reiterated its commitment to reforming Foreign Direct Investment ("FDI") policy by proposing FDI in multi-brand retail and also increasing the FDI limit in single-brand retail to 100%. The plan by the government to open up the Indian retail market to global retail chains is a positive undertaking for all participants in the sector. However, the proposals have met with strong resistance and are currently on hold.

Operating Review


The Company continues with its planned development of a 300,000 sq. ft. shopping mall and has been in advanced negotiations with a number of anchor tenants with a view to pre-leasing space in the mall. Further potential has been identified for a hotel on the site with a management agreement with InterContinental Hotels Group in place for the development of a Holiday Inn hotel.

However, in the past few months there has been slow progress in processing project approvals by government bodies. Unfortunately for West Pioneer, due to the need for on going regulatory and government approvals, property developers have been among the worst hit by the slow movement in decision making and progress at the Company's Nashik project has slowed significantly as a result of this. However, the Board is hopeful of a resolution in the near future.


Since the period end and as announced on 7 November 2011, the Company entered into a non-binding Memorandum of Understanding ("MoU") to develop and sell, subject to contract, its asset in Aurangabad, India ("Aurangabad") to Golden Crown Realtors Limited Liability Partnership ("GCR") for a total cash consideration of approximately $15.2 million. The Company has started developing the project in three phases which, when completed, will include built up retail space of approximately 148,000 square feet and built up warehousing space of approximately 398,000 square feet as per GCR's requirement on the site prior to completing the transaction. West Pioneer will fund the construction costs up to a maximum amount of approximately $2.8 million, with all further costs being borne by the purchaser.

The proposal to develop and sell the Aurangabad asset follows the Board's decision to focus efforts and resources on the projects on which it has the greatest visibility and those which it considers will generate the most value for shareholders, namely its mixed use development in Kalyan and its development project in Nashik. Accordingly, the sale proceeds will be used to accelerate and expand the existing projects at Nashik and Kalyan.


Phase I - Retail

West Pioneer's efforts to reposition the Kalyan mall as leading value and lifestyle destination are showing positive results with a number of leading national Indian lifestyle brands expressing strong interest in occupying the remaining space in the mall. The mall is currently 74% leased. Other key performance indicators such as trading density and footfall numbers have remained positive over the period.

Phase II - Kalyan residential

The Company is disappointed to report that the three-tower residential project of 560,000 sq. ft., construction of residential towers (A and B) has not progressed at the desired pace in the last few months on account of delays in approvals from local authorities and a temporary shortage of manpower. These problems have now been resolved and the Company has regained momentum in the construction of both towers.

Customer response to the project has been very encouraging with 85% of the apartments sold and with current sale rates commanding approximately a 50% premium to the launch rate.

Phase III - Commercial Plaza

The Company is pleased to report that the development of the three story commercial plaza of 68,000 sq. ft. has begun with ground break in November 2011. The plaza will consist of three floors, ground, first and second. The ground floor will be leased and the first and second floor offices will be sold. The development has achieved pre-sales of 30% of the space available for sale. The current sale rate commands a premium of around 50% over prevailing residential sale rates.

Directorate changes

The Company was pleased to announce on 23 September 2011 that Chris Hough, aged 52, joined the Board as a Non-Executive Director. Chris qualified as a Chartered Surveyor and has worked on a wide range of construction projects both in the UK and overseas for last 34 years. He is one of the founding members of the Association of Project Management, a registered charity in the United Kingdom which aims to develop and promote the professional disciplines of project management and currently has over 19,000 individual members and 500 corporate members.

In recent years, Chris has acted as Project Manager on a $2 billion leisure development in Zanzibar, the $20 million Central Bank in Mauritius and provided programming advice for the new $25 million Hilton Hotel, also in Mauritius. In 2007 he was the lead Project Director on a EUR120 million retail mall development in Romania. In the UK, Chris has a range of experience on new build and refurbishment projects in both public and private sectors, including the Broadgate Development and the Imperial War Museum. Most recently Chris has been providing development and project management advice to a development and finance company working in London. We are confident that his knowledge and expertise will be invaluable to the West Pioneer as we continue to make progress on the Company's developments.

The Company also announced that Mihir Thacker, Non-Executive Director of the Company stepped down from the Board at the same time in order to pursue other business interests. The Board would also like to thank Mihir Thacker for his contribution to the Company over the years and wish him well in the future.

Amit Jatia


8 December 2011

Interim consolidated income statement

for the six month period ended 30(th) September 2011

                                        2011           2010 
                                          $             $ 
 Property rentals                      1,147,780      1,037,680 
 Other operating income                1,153,868      1,008,497 
                                    ------------  ------------- 
 Total Revenue                         2,301,648      2,046,177 
 Finance and other income                106,812        189,862 
 Total Income                          2,408,460      2,236,039 
 Property revaluation                   (46,943)              - 
 Direct operating expenses for 
  rent-earning properties            (1,132,494)    (1,028,378) 
 Administrative expenses             (1,010,806)      (756,482) 
 Selling and distribution costs        (232,322)      (330,377) 
 Finance costs                         (585,817)      (513,111) 
                                    ------------  ------------- 
 Total expenses                      (3,008,382)    (2,628,348) 
 Loss before tax                       (599,922)      (392,309) 
 Income tax credit / (expense)           335,092      (163,373) 
 Loss after tax                        (264,830)      (555,682) 
                                    ============  ============= 
 Attributable to: 
  Equity holders                       (264,830)      (555,682) 
 Earnings per share (attributable 
  to equity holders) 
 Basic                                  (0.0033)       (0.0069) 
 Diluted                                (0.0033)       (0.0069) 

Interim consolidated statement of comprehensive income

for the six month period ended 30(th) September 2011

                                          2011          2010 
                                      ------------  ----------- 
                                            $            $ 
 Loss for the period                     (264,830)    (555,682) 
                                      ============  =========== 
 Exchange (loss) / gain on 
  translation of foreign operations    (5,759,269)      190,724 
 Other comprehensive (loss) 
  /income for the period, 
  net of tax                           (5,759,269)      190,724 
                                      ------------  ----------- 
 Total comprehensive loss 
  for the period, net of tax           (6,024,099)    (364,958) 
                                      ============  =========== 
 Attributable to: 
 Equity holders                        (6,024,099)    (364,958) 
                                       (6,024,099)    (364,958) 
                                      ============  =========== 

Interim consolidated statement of financial position

As at 30(th) September 2011

                                         30(th) September        31(st) March 
                                        2011         2010(*)         2011 
                                   -------------  ------------  ------------- 
                                            Unaudited              Audited 
                                         $              $             $ 
 Non-current assets 
 Property, plant and equipment         3,151,545     3,670,707      3,455,261 
 Investment properties                68,557,254    73,458,395     75,018,955 
 Intangible assets                         8,385        17,316         12,755 
 Other financial assets                  289,769       312,820        313,781 
 Advance income tax                      292,369       454,320        482,167 
                                      72,299,322    77,913,558     79,282,919 
                                   -------------  ------------  ------------- 
 Current assets 
 Inventories                          10,081,640     6,524,397      9,953,710 
 Investments - held for trading          435,120       636,888        549,527 
 Trade and other receivables           1,068,846     1,252,253      1,121,141 
 Other non financial assets              250,818       207,610        262,755 
 Prepayments                             175,867        59,369         50,210 
 Cash and short-term deposits          1,760,516     1,676,822      2,191,013 
                                      13,772,807    10,357,339     14,128,356 
                                   -------------  ------------  ------------- 
 Total Assets                         86,072,129    88,270,897     93,411,275 
                                   =============  ============  ============= 
 Equity and liabilities 
 Equity attributable to the 
  equity holders 
 Issued capital                        7,996,130     7,996,130      7,996,130 
 Share premium                        45,717,870    45,717,870     45,717,870 
 Retained earnings                    17,325,675    12,650,260     17,449,183 
 Employee equity benefit 
  reserve                                554,104       663,133        690,216 
 Foreign currency translation 
  reserve                           (10,502,064)   (4,041,978)    (4,742,795) 
                                   -------------  ------------  ------------- 
                                      61,091,715    62,985,415     67,110,604 
                                   -------------  ------------  ------------- 
 Non current liabilities 
 Interest bearing loans and 
  borrowings                                   -     4,733,699      3,744,675 
 Advance from sale of units            5,493,409     3,567,573      5,001,611 
 Other financial liabilities           1,018,516     1,105,199      1,076,772 
 Other non-financial liabilities          15,300        73,889         28,276 
 Employee benefit liability               49,139        49,193         51,900 
 Deferred tax liability                7,918,438    10,395,746      9,013,315 
                                      14,494,802    19,925,299     18,916,549 
                                   -------------  ------------  ------------- 
 Current liabilities 
 Trade and other payables              1,848,949     2,298,928      2,151,057 
 Interest bearing loans and 
  borrowings                           7,423,863     2,139,436      4,116,708 
 Other financial liabilities           1,182,870       904,424      1,066,790 
 Other non-financial liabilities          29,930        17,395         49,567 
                                      10,485,612     5,360,183      7,384,122 
                                   -------------  ------------  ------------- 
 Total Liabilities                    24,980,414    25,285,482     26,300,671 
                                   -------------  ------------  ------------- 
 Total Equity and Liabilities         86,072,129    88,270,897     93,411,275 
                                   =============  ============  ============= 
 (*) Adjusted for the effects of 
  IAS 17 - amendment 

Interim consolidated statement of changes in equity

for the six month period ended 30(th) September 2011

                                                                                   Attributable to equity holders 
                                                                                                          equity     Foreign currency 
                                             Issued               Share            Retained             benefits          translation              Total 
                                            capital             premium            earnings              reserve              reserve             Equity 
                                 ------------------  ------------------  ------------------  -------------------  -------------------  ---------------------------- 
                                          $                   $                   $                   $                             $           $ 
 Balance as at 1(st) April 2011           7,996,130          45,717,870          17,449,183              690,216          (4,742,795)           67,110,604 
  Loss for the period                             -                   -           (264,830)                    -                    -            (264,830) 
 Other comprehensive loss                         -                   -                   -                    -          (5,759,269)          (5,759,269) 
                                 ------------------  ------------------  ------------------  -------------------  -------------------  ------------------- 
 Total comprehensive loss                         -                   -           (264,830)                    -          (5,759,269)          (6,024,099) 
 Share based payment                              -                   -                   -                5,210                    -                5,210 
 Transfer to retained earnings 
  on options forfeited                            -                   -             141,322            (141,322)                    -                    - 
                                 ------------------  ------------------  ------------------  -------------------  -------------------  ------------------- 
 Balance as at 30(th) September 
  2011 (Unaudited)                        7,996,130          45,717,870          17,325,675              554,104         (10,502,064)           61,091,715 
                                 ==================  ==================  ==================  ===================  ===================  =================== 
 Balance as at 1(st) April 2010           7,996,130          45,717,870          13,192,220              650,152          (4,232,702)           63,323,670 
  Loss for the period                             -                   -           (555,682)                    -                    -            (555,682) 
 Other comprehensive income                       -                   -                   -                    -              190,724              190,724 
                                 ------------------  ------------------  ------------------  -------------------  -------------------  ------------------- 
 Total comprehensive (loss)                       -                   -           (555,682)                    -              190,724            (364,958) 
 Share based payment                              -                   -                   -               26,703                    -               26,703 
 Transfer to retained earnings 
  on options forfeited                            -                   -              13,722             (13,722)                    -                    - 
 Balance as at 30(th) September 
  2010 (Unaudited)                        7,996,130          45,717,870          12,650,260              663,133          (4,041,978)           62,985,415 
                                 ==================  ==================  ==================  ===================  ===================  =================== 

Interim consolidated cash flow statement

for the six months ended 30(th) September 2011

                                                       2011         2010 
                                                        $            $ 
 Operating activities 
 Loss before tax                                     (599,922)    (392,309) 
 Adjustments to reconcile loss before tax 
  to net cash flows 
 Depreciation and amortisation                          14,982       17,650 
 Provision for doubtful debts                          157,222      108,228 
 Share based payments expense                            5,210       26,703 
 Decrease in fair value of investment properties        46,943            - 
 Decrease / (Increase) in value of investments 
  held-for-sale                                          9,377     (57,997) 
 Foreign exchange difference                            39,428            - 
 Net gain on sale of investment                            (5)            - 
 Dividend income                                       (5,229)      (5,089) 
 Interest Income                                      (78,728)     (44,552) 
 Interest expense                                      536,532      507,918 
                                                       125,810      160,552 
 Working Capital adjustments 
 (Increase) in prepayments (current)                 (139,325)        (264) 
 (Increase) / Decrease in trade and other 
  receivables                                        (350,118)    1,298,941 
 Decrease / (Increase) in other assets 
  (current)                                             43,208     (55,145) 
 (Increase) in other assets (non-current)              (3,671)      (5,148) 
 (Increase) in Inventories                         (1,083,815)  (1,093,798) 
 (Decrease) in trade and other payables 
  (current)                                           (83,828)  (1,012,336) 
 Increase / (Decrease) in other liabilities 
  (current)                                             45,790     (51,212) 
 Increase in other liabilities (non current)         1,037,428    1,258,837 
                                                   -----------  ----------- 
                                                     (534,331)      339,875 
 Income tax refund / (paid)                            268,877     (98,837) 
 Net cash flows (used in) / from operating 
  activities                                         (139,644)      401,590 
                                                   -----------  ----------- 
 Investing activities 
 Proceeds from sale of held-for-trading 
  investments                                        1,528,590       85,079 
 Purchase of property, plant and equipment 
  and intangible assets                                (9,086)      (2,516) 
 Purchase of held-for-trading investments          (1,438,428)            - 
 Capital expenditure on Investment Property          (101,212)    (177,210) 
 Dividend income                                         5,229        3,465 
 Interest received                                      52,731       19,913 
 Net cash flows (used in) investing activities          37,824     (71,269) 
                                                   -----------  ----------- 
 Financing activities 
 Proceeds from borrowings                            1,808,283      216,456 
 Repayment of borrowings                           (1,668,040)    (940,138) 
 Interest paid                                       (344,089)    (507,918) 
                                                   -----------  ----------- 
 Net cash flows (used in) financing activities       (203,846)  (1,231,600) 
                                                   -----------  ----------- 
 Net (decrease) in cash and cash equivalents         (305,666)    (901,279) 
 Net foreign exchange difference                      (63,883)        4,679 
 Cash and cash equivalents at 1(st) April            1,492,741    2,573,422 
                                                   -----------  ----------- 
 Cash and cash equivalents at 30(th) September       1,123,192    1,676,822 
                                                   -----------  ----------- 

This information is provided by RNS

The company news service from the London Stock Exchange



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