Regulatory Story
Go to market news section View chart   Print
RNS
Raven Property Group Limited   -  RAV   

Half-year Report

Released 07:00 27-Aug-2019

RNS Number : 1534K
Raven Property Group Limited
27 August 2019
 

27 August 2019

 

Raven Property Group Limited ("Raven" or the "Company")

 

2019 Interim Results

 

Raven today announces its unaudited results for the six months ended 30 June 2019.

 

Highlights

 

·      Net operating income of £64.3 million for the six months to 30 June 2019 (30 June 2018: £57.6 million);

·      Average occupancy of 90% for the period (30 June 2018: 84%);

·      Basic underlying earnings per share 5.31p (30 June 2018: 0.67p);

·      IFRS profit for the period of £26.2 million (30 June 2018: loss of £28.8 million);

·      Diluted net asset value per share increases by 40% to 67p (31 December 2018: 48p);

·      14.8% of the Company's ordinary shares purchased for 36p per share and cancelled on 21 August 2019;

·      On a proforma basis, this increases net asset value per share by a further 5p;

·      Proposed distribution of 1.25p per ordinary share by way of a tender offer buy back of 1 in 44 shares at 55p.

 

Glyn Hirsch CEO said "We are pleased with these results which reflect steadily improving market conditions and finally, some currency movements working in our favour. "

 

Enquiries

 

Raven Property Group Limited

Anton Bilton

Glyn Hirsch

 

Tel: + 44 (0) 1481 712955

Novella Communications

Tim Robertson

Fergus Young

 

Tel: +44 (0) 203 151 7008

N+1 Singer

Corporate Finance - James Maxwell / James Moat

Sales - Alan Geeves / James Waterlow

 

Tel: +44 (0) 20 7496 3000 

Numis Securities Limited

Alex Ham / Jamie Loughborough / Alasdair Abram

 

Tel: + 44 (0) 207 260 1000

Renaissance Capital (South Africa)

Yvette Labuschagne

 

Tel: +27 (11) 750 1448

Renaissance Capital (Moscow)

David Pipia

 

Tel: + 7 495 258 7770

Ravenscroft

Jade Cook

 

Tel: + 44 (0) 1481 729100

 

This announcement contains forward-looking statements that involve risk and uncertainties. The Group's actual results could differ materially from those estimated or anticipated in the forward-looking statements as a result of many factors. Information contained in this announcement relating to the Company should not be relied upon as a guide to future performance.

 

About Raven Property Group Limited

 

Raven Property Group Limited was founded in 2005 to invest in class A warehouse complexes in Russia and lease to Russian and International tenants. Its Ordinary Shares and preference shares are listed on the Main Market of the London Stock Exchange and admitted to the Official List of the UK Listing Authority and the Official List of The International Stock Exchange ("TISE"). Its Ordinary Shares also have a secondary listing on the main board of the Johannesburg Stock Exchange and the Moscow Stock Exchange. Its convertible preference shares are admitted to the Official List of TISE and to trading on the SETSqx market of the London Stock Exchange. The Group operates out of offices in Guernsey, Moscow and Cyprus and has an investment portfolio of circa 1.9 million square metres of Grade "A" warehouses in Moscow, St Petersburg, Rostov-on-Don, Novosibirsk and Nizhny Novgorod and 49,000 square metres of commercial office space in St Petersburg. For further information visit the Company's website: www.theravenpropertygroup.com

 

Financial Summary

 

Income Statement for the 6 months ended:

30 June 2019

30 June 2018

Net Rental and Related Income (£m)

64.3

57.6

Underlying Earnings after tax (£m)

32.4

4.4

Underlying Basic EPS (pence)

5.31

0.67

Revaluation surplus/(deficit)  (£m)

18.2

(26.1)

IFRS Earnings/(loss) after tax (£m)

26.2

(28.8)

Distribution per share (pence)

1.25

1.25




Balance Sheet at:

30 June 2019

31 December 2018

Investment Property Market Value (£m)

1,337

1,194

Diluted  NAV per share (pence)

67

48

 

Letting Summary

 

Warehouse Portfolio Maturities

 

Maturities '000 sqm

2019

2020

2021

2022

2023-2032

Total

Maturity profile at 1 January 2019

244

258

358

221

602

1,683

Renegotiated and extended

(38)

(3)

(18)

0

(33)

(92)

Maturity profile of renegotiations

21

12

0

11

48

92

Vacated/terminated

(117)

0

(3)

0

0

(120)

New Lettings

30

1

4

4

77

Maturity profile at 30 June 2019

140

268

341

236

694

Maturity profile with breaks

211

438

463

136

431

 

Office Portfolio Maturities

 

Maturities '000 sqm

2019

2020

2021

2022

2023-2032

Total

Maturity profile at 1 January 2019

11

7

1

16

14

49

Break exercised

4

(4)

0

0

0

0

Vacated/terminated

(10)

0

0

0

0

(10)

New Lettings

0

1

0

0

6

Maturity profile at 30 June 2019

5

4

1

16

20

Maturity profile with breaks

7

1

2

21

15

 

Lease Currency Mix

 


USD

RUB

EUR

Vacant

Total

Sqm %

19%

67%

3%

11%

100%

 

Secured debt currency profile

 


USD

RUB

EUR

Total

Debt portfolio%

11%

37%

52%

100%

 

 

Chairman's Message

 

I am pleased to report that it has been a positive six months trading for the Group. Average occupancy in our warehouse portfolio ran at 90% compared to 84% in the same period last year, boosting our net rental and related income. Today we are 90% let with a further 2% of vacant space subject to letters of intent.

 

Our balance sheet too continues to adapt to match our income profile. Secured debt today is 37% Rouble denominated and 52% Euro with two US Dollar denominated facilities remaining. We expect to refinance the last of those US Dollar facilities before the year end and there to be a continuing increase in Rouble weighting as we convert Euro debt. Should the Russian Central Bank continue to ease interest rates then that will accelerate the transition to Roubles.

 

We have seen a significant improvement in our net asset value per share since the year end, increasing from 48p to 67p as the Rouble strengthened and asset valuations continued to improve.

 

The threat of increased US sanctions against Russia and the effect of the current trade war tensions on the oil price have dampened the strength of the Rouble since 30 June but without exposure to US Dollar liabilities the immediate impact of events such as these on our balance sheet has been significantly reduced. With Brexit weighing heavily on the UK, the Rouble remains strong against Sterling compared to the position at 31 December 2018.

 

We have completed the buy back and cancellation of 14.8% of our ordinary shares following the various ordinary shareholder and preference shareholder votes on 20 August 2019. This also supports a strengthening of our net asset value per share. It does, however, mean that Woodford Investment Management is no longer a stakeholder in our business. Neil Woodford has been a staunch supporter of Raven and we thank him for that support.

 

We intend to pay an interim distribution of 1.25p by way of tender offer buy back in the usual manner, with 1 in 44 shares being purchased at 55p.

 

 

Richard Jewson

Chairman

26 August 2019

 

 

Chief Executive's Review

 

Dear shareholders

 

The first half of the year has shown a continuing improvement in our market. Tenant demand is good and rents are increasing as Russian Central Bank rates ("CBR") continue to fall and there are early signs of yield compression too.

 

We have let 115,002sqm of space in the first six months of the year at steadily improving rents. Today, prime Moscow dry warehouse rents have increased to Roubles 4,100 per sqm. With average annual indexation of 5.9% these levels are more attractive than they have been for a while.

 

We have continued to work on the liability side of our balance sheet and have only two US Dollar debt facilities remaining. Both of these will be converted to a Rouble/Euro mix before the year end.

 

There has also been a significant change in our shareholder register following the well publicised events at Woodford Investment Management ("WIM"). The opportunity to purchase the WIM ordinary shares for cancellation at a significant discount to net asset value was too good to miss and on a proforma basis, would result in a further 5p increase in net asset value per share. It is disappointing to see one of our longest standing supporters withdraw but life goes on. The WIM holding of convertible and irredeemable preference shares were placed with over 35 institutions.

 

With the reduced number of 511 million ordinary shares now in issue we should see more benefit in any upward valuation or distribution.

 

Property Update

 

At 30 June 2019, our warehouse portfolio comprised 1.89 million sqm and our office portfolio, 49,000sqm of space. Average occupancy for the six months ran at 90% compared to 84% for the same period last year. Today, occupancy levels hold at 90% with a further 2% of vacant space subject to letters of intent ("LOIs").

 

Warehouse Portfolio

 

New warehouse lettings in the six months to 30 June 2019 totaled 115,002sqm with a further 91,584sqm of existing leases renegotiated and extended. Tenants vacated 119,812sqm of space including one major tenant vacating 91,284sqm at the end of June.

 

As at 30 June 2019 we had 140,114sqm of warehouse leases maturing in the second half of the year and 71,644sqm of potential lease breaks. Of those, we expect 46,652sqm of maturing tenants and 4,760sqm of breaks to vacate before the year end.

 

Since the period end, we have let 19,562sqm of vacant warehouse space and renegotiated and extended 31,818sqm of maturing leases. A further 38,713sqm of vacant space and 109,383sqm of negotiations on currently let space are subject to LOIs. 

 

Prime Moscow warehouse rents are in the range Roubles 3,800 to 4,100 per sqm today as compared to Roubles 3,800 to 4,000 per sqm at the end of 2018. Prime yields remain in the range 10.75% to 12.25%.

 

Currency Mix

 

Rouble denominated leases accounted for 67% (31 December 2018: 61%) of the total warehouse space at the period end and US Dollar leases 19% (31 December 2018: 26%). The average Rouble rent was 5,118 per sqm (31 December 2018: 4,900 per sqm) and the average US Dollar rent was $147 per sqm (31 December 2018: $148 per sqm). Rouble denominated leases had a weighted average term to maturity of 4.2 years (31 December 2018: 4.5 years) and US Dollar leases 2.2 years (31 December 2018: 2.1 years).

 

Office Portfolio

 

Our St Petersburg office portfolio has seen significant changes in tenancy as a result of known lease expiries, but overall performance is satisfactory with rents continuing to increase. In the year to date, we have let 11,530sqm of vacant space with maturities of 10,171sqm vacating, including a single tenant from 6,936sqm. Average Rouble rents at the period end were Roubles 14,207 per sqm (31 December 2018: 13,997 per sqm).

 

Results

 

Underlying Earnings

 

Improving average occupancy, increasing to 90% from 84% for the same period last year, together with revenue generated from the 123,200sqm of acquisitions completed in the second half of last year supported net rental and related income of £64.3 million for the six months (30 June 2018: £57.6 million). Underlying earnings before foreign exchange profits were £13.4 million (30 June 2018: £8.6 million) and £32.4 million (30 June 2018: £4.4 million) after foreign exchange movements. The recovery of the Rouble from the weak position at the end of 2018 generated foreign exchange gains of £18.9 million in the income statement (30 June 2018: loss of £4.2 million).

 

IFRS Earnings

 

An IFRS profit of £26.2 million (30 June 2018: loss of £28.8 million) includes a profit on the revaluation of property of £18.2 million (30 June 2018: loss of £26.1 million) reflecting the continuing improvement in ERV's and yields. This was offset by mark to market losses on interest caps of £13.9 million (30 June 2018: profit of £2.6 million), principally on CBR caps taken out towards the end of 2018, the movement indicative of the positive outlook for further CBR cuts.

 

Net Asset Value

 

Our net asset value has made a marked recovery from the year end, our property asset values increasing both in Rouble terms and on translation to Sterling when compared to the very weak Rouble position at 31 December 2018. From a Sterling/Rouble rate of 88.4 at the year end the Rouble strengthened to 79.9 at 30 June 2019, the latter being close to the three year average of 80. This resulted in an increase of £129.3 million on the equivalent Sterling value of our properties.

 

Diluted, Net Asset Value per share of 67p at 30 June 2019 is a 40% increase on the year end value of 48p.

 

Financing 

 

The transition of our secured finance facilities to a Rouble/Euro blend continues. Today, of the £677 million (31 December 2018: £643 million) secured debt, 37% (31 December 2018: 31%) is Rouble denominated, 52% (31 December 2018: 35%) Euro denominated and 11% (31 December 2018: 34%) US Dollar denominated. We are currently engaged in extending £122 million of facilities, including the near term maturities, and converting another 8% into Rouble facilities. We do not expect to hold any US Dollar denominated debt at the year end.

 

Our blended cost of debt is 7.39% (31 December 2018: 7.69%), the weighted average term to maturity 3.6 years (31 December 2018: 4.0 years) and all facilities have floating rate interest hedged with interest caps. The secured debt loan to value ratio at 30 June 2019 was 50.0% (31 December 2018: 53.3%).

 

Cash flow

 

Cash balances are slightly up on the year end at £83 million (31 December 2018: £73 million), with a small cash inflow in the six months before the effect of the strengthening Rouble.

 

Share Buy Back

 

Following the EGM held on 20 August, the Company purchased 89,144,978 of its ordinary shares, representing 14.8% of the shares in issue, for 36p per share. This represents a significant discount to the Company's net asset value per share. The shares have now been cancelled and, on a proforma basis, this would add a further 5p to the Company's basic net asset value per share as at 30 June 2019.

 

Tender offer

 

We are proposing a distribution of the equivalent of 1.25p per ordinary share by way of tender offer buy back of 1 in 44 shares at 55p (30 June 2018: 1.25p by way of an offer of 1 in 44 shares at 55p).

 

 

Glyn Hirsch

Chief Executive Officer

26 August 2019

 

 

Corporate Governance

 

Principal risks and uncertainties

 

Internal controls and an effective risk management regime are integral to the Group's continued operation. The assessment of risks faced by the Group, together with their potential impact and possible mitigating actions, is set out in the Risk Report on pages 40 to 43 of the Group's 2018 Annual Report. These risks fall into five main categories: political and economic risk; financial risk; property investment; Russian domestic risk; and personnel risk.

 

Having reviewed the principal risks and uncertainties for the Group in relation to the first half of 2019, the Board believes that these have remained consistent with those presented in the 2018 Annual Report.

 

Going concern

 

The financial position of the Group, its cash flows, liquidity and borrowings are described in the Chief Executive's Review and the accompanying financial statements and related notes.  During the period the Group had, and continues to hold, substantial cash and short term deposits and is generating underlying profits. As a consequence, the Directors believe the Group is well placed to manage its business risks.

 

After making enquiries and examining major areas that could give rise to significant financial exposure, the Board has a reasonable expectation that the Company and the Group have adequate resources to continue its operations for the foreseeable future.  Accordingly, the Group continues to adopt the going concern basis in the preparation of the accompanying interim financial statements.

 

Directors' Responsibility Statement

 

The Board confirms to the best of its knowledge:

 

The condensed financial statements have been prepared in accordance with IAS 34 as adopted by the European Union, and that the half year report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.

 

The names and functions of the Directors of Raven Property Group Limited are disclosed in the 2018 Annual Report of the Group.

 

This responsibility statement was approved by the Board of Directors on the 26 August 2019 and is signed on its behalf by

 

 

Mark Sinclair                                                            Colin Smith

Chief Financial Officer                                            Chief Operating Officer

 

 

INDEPENDENT REVIEW REPORT TO RAVEN PROPERTY GROUP LIMITED

 

Introduction

 

We have been engaged by the Company to review the condensed set of financial statements in the interim financial report for the six months ended 30 June 2019 which comprises the Condensed Unaudited Group Income Statement, the Condensed Unaudited Group Statement of Comprehensive Income, the Condensed Unaudited Group Balance Sheet, the Condensed Unaudited Group Statement of Changes in Equity, the Condensed Unaudited Group Cash Flow Statement and the related notes 1 to 20. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

 

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

 

Directors' Responsibilities

 

The interim financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this interim financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

 

Our Responsibility

 

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the interim financial report based on our review.

 

Scope of Review

 

We conducted our review in accordance with International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the interim financial report for the six months ended 30 June 2019 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

 

Ernst & Young LLP

London

26 August 2019

 

Condensed Unaudited Group Income Statement












For the six months ended 30 June 2019





















Six months ended 30 June 2019






Six months ended 30 June 2018





Notes


Underlying earnings


Capital & other


Total


Underlying earnings


Capital & other


Total





£'000


£'000


£'000


£'000


£'000


£'000































Gross revenue


2


87,731


-


87,731


79,405


-


79,405

Property operating expenditure and cost of sales


(23,429)


-


(23,429)


(21,781)


-


(21,781)

Net rental and related income


2


64,302


-


64,302


57,624


-


57,624
















Administrative expenses


3


(11,419)


(953)


(12,372)


(12,272)


(1,652)


(13,924)

Share-based payments and other long term incentives

17b


-


(873)


(873)


(637)


(1,163)


(1,800)

Foreign currency profits / (losses)




18,943


-


18,943


(4,238)


-


(4,238)

Share of profits of joint ventures




701


-


701


148


-


148
















Operating profit / (loss) before profits and losses on investment property




72,527


(1,826)


70,701


40,625


(2,815)


37,810
















Unrealised profit / (loss) on revaluation of investment property


7


-


18,073


18,073


-


(26,537)


(26,537)

Unrealised profit on revaluation of investment property under construction


8


-


92


92


-


459


459

Operating profit / (loss)


2


72,527


16,339


88,866


40,625


(28,893)


11,732
















Finance income


4


1,281


-


1,281


1,611


4,240


5,851

Finance expense


4


(37,227)


(19,298)


(56,525)


(35,334)


(8,185)


(43,519)











-


-



Profit / (loss) before tax




36,581


(2,959)


33,622


6,902


(32,838)


(25,936)
















Tax


5


(4,195)


(3,212)


(7,407)


(2,500)


(400)


(2,900)

Profit / (loss) for the period




32,386


(6,171)


26,215


4,402


(33,238)


(28,836)
















Earnings per share:


6













Basic (pence)








4.30






(4.42)

Diluted (pence)








3.89






(4.42)
















Underlying earnings per share:


6













Basic (pence)




5.31






0.67





Diluted (pence)




4.16






0.67




















The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS as adopted by the EU.  The "underlying earnings" and "capital and other" columns are both supplied as supplementary information permitted by IFRS as adopted by the EU.  Further details of the allocation of items between the supplementary columns are given in note 6.
















All items in the above statement derive from continuing operations.
























All income is attributable to the equity holders of the parent company. There are no non-controlling interests.




















The accompanying notes are an integral part of this statement.









 

Condensed Unaudited Group Statement Of Comprehensive Income



For the six months ended 30 June 2019







Six months ended


Six months ended



30 June 2019


30 June 2018



£'000


£'000






Profit / (loss) for the period


26,215


(28,836)






Other comprehensive income, net of tax










Items to be reclassified to profit or loss in subsequent periods:




Foreign currency translation on consolidation


85,406


16,927






Total comprehensive income for the period, net of tax

111,621


(11,909)






All income is attributable to the equity holders of the parent company.  There are no non-controlling interests.






The accompanying notes are an integral part of this statement.



 

Condensed Unaudited Group Balance Sheet



As at 30 June 2019






30 June

31 December



2019

2018


Notes

£'000

£'000

Non-current assets




Investment property

7

1,319,486

1,175,440

Investment property under construction

8

33,875

30,548

Plant and equipment


6,499

3,574

Investment in joint ventures


7,308

6,566

Other receivables


3,672

15,535

Derivative financial instruments


7,101

21,953

Deferred tax assets


25,455

24,405



1,403,396

1,278,021





Current assets




Inventory


358

356

Trade and other receivables


41,876

43,658

Derivative financial instruments


-

349

Cash and short term deposits


83,012

73,450



125,246

117,813





Total assets


1,528,642

1,395,834





Current liabilities




Trade and other payables


44,758

66,192

Derivative financial instruments


-

1

Interest bearing loans and borrowings

10

78,260

75,565



123,018

141,758





Non-current liabilities




Interest bearing loans and borrowings

10

598,965

567,865

Preference shares

11

109,783

109,271

Convertible preference shares

12

213,872

206,116

Other payables


19,579

17,797

Deferred tax liabilities


66,569

57,400



1,008,768

958,449





Total liabilities


1,131,786

1,100,207





Net assets


396,856

295,627





Equity




Share capital

13

6,005

6,233

Share premium


92,829

103,144

Warrants

14

-

98

Own shares held

15

(4,582)

(5,965)

Convertible preference shares


11,212

11,212

Capital reserve


(263,034)

(281,001)

Translation reserve


36,576

(48,887)

Retained earnings


517,850

510,793

Total equity


396,856

295,627





Net asset value per share (pence):

16



Basic


67

48

Diluted


67

48





The accompanying notes are an integral part of this statement.


 

Condensed Unaudited Group Statement Of Changes In Equity







For the six months ended 30 June 2019











Share Capital

Share Premium

Warrants

Own Shares Held

Convertible Preference Shares

Capital Reserve

Translation Reserve

Retained Earnings

Total


Notes

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000












At 1 January 2018


6,606

124,568

438

(3,652)

11,212

(166,494)

(98,741)

517,901

391,838












Loss for the period


-

-

-

-

-

-

-

(28,836)

(28,836)

Other comprehensive income


-

-

-

-

-

-

16,927

-

16,927

Total comprehensive income for the period

-

-

-

-

-

-

16,927

(28,836)

(11,909)












Warrants exercised


79

2,199

(314)

-

-

-

-

-

1,964

Ordinary shares cancelled


(313)

(15,973)

-

14

-

-

-

-

(16,272)

Own shares acquired


-

-

-

(4,235)

-

-

-

-

(4,235)

Own shares allocated


-

-

-

1,886

-

-

-

(934)

952

Transfer in respect of capital losses

-

-

-

-

-

(23,338)

-

23,338

-












At 30 June 2018


6,372

110,794

124

(5,987)

11,212

(189,832)

(81,814)

511,469

362,338












For the six months ended 30 June 2019





















At 31 December 2018


6,233

103,144

98

(5,965)

11,212

(281,001)

(48,887)

510,793

295,627












On adoption of IFRS 16 Leases


-

-

-

-

-

-

57

(390)

(333)

Restated as at 1 January 2019


6,233

103,144

98

(5,965)

11,212

(281,001)

(48,830)

510,403

295,294












Profit for the period


-

-

-

-

-

-

-

26,215

26,215

Other comprehensive income


-

-

-

-

-

-

85,406

-

85,406

Total comprehensive income for the period

-

-

-

-

-

-

85,406

26,215

111,621












Warrants exercised

13 / 14

17

486

(69)

-

-

-

-

-

434

Warrants lapsed

13 / 14

-

-

(29)

-

-

-

-

29

-

Ordinary shares cancelled

13 / 15

(245)

(10,801)

-

151

-

-

-

-

(10,895)

Own shares acquired

15

-

-

-

(106)

-

-

-


(106)

Own shares allocated

15

-

-

-

1,338

-

-

-

(830)

508

Transfer in respect of capital profits

-

-

-

-

-

17,967

-

(17,967)

-












At 30 June 2019


6,005

92,829

-

(4,582)

11,212

(263,034)

36,576

517,850

396,856












The accompanying notes are an integral part of this statement.








 

Condensed Unaudited Group Cash Flow Statement





For the six months ended 30 June 2019










Six months ended

Six months ended





30 June 2019

30 June 2018




Notes

£'000

£'000













Cash flows from operating activities






Profit / (loss) before tax




33,622

(25,936)







Adjustments for:






Depreciation



3

822

370

Share of profits of joint ventures




(701)

(148)

Finance income



4

(1,281)

(5,851)

Finance expense



4

56,525

43,519

(Profit) / loss on revaluation of investment property


7

(18,073)

26,537

Profit on revaluation of investment property under construction

8

(92)

(459)

Foreign exchange (profits) / losses




(18,943)

4,238

Non-cash element of share-based payments and other long term incentives

17b

873

1,163





52,752

43,433

Changes in operating working capital






Decrease in operating receivables




1,391

1,275

Increase in other operating current assets




(2)

(1)

Decrease in operating payables




(8,304)

(1,776)





45,837

42,931

Tax paid




(4,122)

(2,333)

Net cash generated from operating activities



41,715

40,598







Cash flows from investing activities






Payments for property improvements



(2,971)

(3,967)

Refund of VAT on acquisition of investment property



3,920

12,754

Acquisition of subsidiaries




(187)

-

Payment of deferred consideration on






acquisition of investment property




(12,255)

(7,062)

Purchase of plant and equipment




(1,224)

(1,385)

Investment in joint ventures




(14)

-

Loans granted




(75)

-

Loans repaid




30

-

Interest received




1,258

1,599

Net cash used in investing activities




(11,518)

1,939







Cash flows from financing activities






Proceeds from long term borrowings




35,309

108,326

Repayment of long term borrowings




(1,308)

(124,848)

Loan amortisation




(12,396)

(11,692)

Bank borrowing costs paid




(27,188)

(25,029)

Exercise of warrants




434

1,963

Ordinary shares purchased




(10,826)

(20,383)

Dividends paid on preference shares




(5,650)

(5,757)

Dividends paid on convertible preference shares




(6,367)

(6,441)

Proceeds from disposal of derivative financial instruments



2,363

-

Premium paid for derivative financial instruments



(7)

(2,776)

Net cash used in financing activities




(25,636)

(86,637)













Net increase / (decrease) in cash and cash equivalents


4,561

(44,100)







Opening cash and cash equivalents




73,450

197,137







Effect of foreign exchange rate changes




5,001

(2,999)







Closing cash and cash equivalents




83,012

150,038







The accompanying notes are an integral part of this statement.




 

Notes to the Condensed Unaudited Group Financial Statements




For the six months ended 30 June 2019














1.  Basis of accounting

 

Basis of preparation

The condensed unaudited financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards adopted for use in the European Union ("IFRS") and have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting.

 

The condensed financial statements do not include all the information and disclosures required in annual financial statements and should be read in conjunction with the Group's financial statements for the year ended 31 December 2018.

 

Significant accounting policies

The accounting policies adopted in the preparation of the condensed financial statements are consistent with those followed in the preparation of the Group's financial statements for the year ended 31 December 2018, except for the adoption of new standards that became effective on 1 January 2019.  The Group has applied for the first time IFRS 16 Leases and IFRIC 23 Uncertainty over income tax treatments.  IFRS 16 and IFRIC 23 do not have a material impact on the financial position or financial performance of the Group. 

 

The Group has not adopted early any standard, interpretation or amendment that has been issued but is not yet effective. 

 

Going concern

The financial position of the Group, its cash flows, liquidity position and borrowings are described in the Chief Executive's Review and the notes to these interim financial statements.  After making appropriate enquiries and examining sensitivities that could give rise to financial exposure, the Board has a reasonable expectation that the Group has adequate resources to continue operations for the foreseeable future.  Accordingly, the Group continues to adopt the going concern basis in the preparation of these interim financial statements.










Foreign currency

As disclosed in the 2018 Annual Report, the Group has changed the currency in which it presents its consolidated financial statements from US Dollars to Sterling.  As a consequence, the Group's results for the six months to 30 June 2018 have been restated in Sterling.  On consolidation the results and financial position of all the Group entities that a have functional currency different from the Group's presentation currency (Sterling) are translated into the presentation currency using the following rates:
























30 June


31 December







2019


2018


Balance Sheet







- Roubles




79.9105


88.3524


- US Dollars




1.2669


1.2736


- Euro




1.1127


1.1142
















30 June


30 June







2019


2018


Income Statement *







- Roubles




84.5079


81.7804


- US Dollars




1.2934


1.3759


- Euro




1.1447


1.1370











* These are the average rates for the six months ended 30 June 2018 and 2019, which are used unless this does not approximate the rates ruling at the dates of the relevant transactions in which case the item of income or expenditure is translated at the transaction date rate.

 

2.  Segmental information

 

The Group has three operating segments, which are managed and report independently to the Board of Directors.  These comprise:

 

Property investment - acquire, develop and lease commercial property in Russia

Roslogistics - provision of warehousing, transport, customs brokerage and related services in Russia

Raven Mount - sale of residential property in the UK.










(a) Segmental information for the six months ended and as at 30 June 2019














For the six months ended 30 June 2019

Property


Raven

Segment

Central





Investment

Roslogistics

Mount

Total

Overhead

Total




£'000

£'000

£'000

£'000

£'000

£'000










Gross revenue

79,516

8,155

60

87,731

-

87,731

Operating costs / cost of sales

(19,304)

(4,097)

(28)

(23,429)

-

(23,429)

Net rental and related income

60,212

4,058

32

64,302

-

64,302










Administrative expenses







Running general & administration expenses

(7,847)

(994)

(183)

(9,024)

(2,395)

(11,419)

Aborted project costs

(131)

-

-

(131)

-

(131)

Depreciation


(659)

(162)

(1)

(822)

-

(822)

Share-based payments and other long term incentives

(90)

-

-

(90)

(783)

(873)

Foreign currency profits

18,941

2

-

18,943

-

18,943




70,426

2,904

(152)

73,178

(3,178)

70,000










Unrealised profit on revaluation of investment property

18,073

-

-

18,073

-

18,073

Unrealised profit on revaluation of investment







property under construction

92

-

-

92

-

92

Share of profits of joint ventures

-

(197)

898

701

-

701

Segment profit / (loss)

88,591

2,707

746

92,044

(3,178)

88,866










Finance income






1,281

Finance expense






(56,525)

Profit before tax





33,622










As at 30 June 2019



Property


Raven







Investment

Roslogistics

Mount

Total






£'000

£'000

£'000

£'000

Assets







Investment property



1,319,486

-

-

1,319,486

Investment property under construction



33,875

-

-

33,875

Investment in joint ventures



-

213

7,095

7,308

Inventory




-

-

358

358

Cash and short term deposits



81,249

1,034

729

83,012

Segment assets



1,434,610

1,247

8,182

1,444,039










Other non-current assets






42,727

Other current assets






41,876

Total assets






1,528,642










Segment liabilities







Interest bearing loans and borrowings


677,225

-

-

677,225










Capital expenditure







Corporate acquisitions



187

-

-

187

Payments for property improvements


2,971

-

-

2,971

Payment of deferred consideration on acquisition of investment property

12,255

-

-

12,255






15,413

-

-

15,413










(b) Segmental information for the six months ended and as at 30 June 2018

















Property


Raven

Segment

Central





Investment

Roslogistics

Mount

Total

Overhead

Total




£'000

£'000

£'000

£'000

£'000

£'000










Gross revenue

71,475

7,865

65

79,405

-

79,405

Operating costs / Cost of sales

(17,788)

(3,955)

(38)

(21,781)

-

(21,781)

Net rental and related income

53,687

3,910

27

57,624

-

57,624










Administrative expenses







Running general & administration expenses

(7,676)

(1,060)

(241)

(8,977)

(3,295)

(12,272)

Aborted project costs

(1,282)

-

-

(1,282)

-

(1,282)

Depreciation

(214)

(156)

-

(370)

-

(370)

Share-based payments and other long term incentives

(175)

-

-

(175)

(1,625)

(1,800)

Foreign currency losses

(4,237)

(1)

-

(4,238)

-

(4,238)




40,103

2,693

(214)

42,582

(4,920)

37,662










Unrealised loss on revaluation of investment property

(26,537)

-

-

(26,537)

-

(26,537)

Unrealised profit on revaluation of investment property under construction

459

-

-

459

-

459

Share of profits of joint ventures

-

-

148

148

-

148

Segment profit / (loss)

14,025

2,693

(66)

16,652

(4,920)

11,732










Finance income






5,851

Finance expense






(43,519)

Profit before tax






(25,936)










For the six months ended 30 June 2018


Property


Raven







Investment

Roslogistics

Mount

Total






£'000

£'000

£'000

£'000

Capital expenditure







Payments for property improvements

4,134

-

-

4,134

Payment of deferred consideration on acquisition of investment property

7,359

-

-

7,359






11,493

-

-

11,493










(c) Segmental information as at 31 December 2018










Property


Raven







Investment

Roslogistics

Mount

Total






£'000

£'000

£'000

£'000

Assets








Investment property



1,175,440

-

-

1,175,440

Investment property under construction


30,548

-

-

30,548

Investment in joint ventures



-

369

6,197

6,566

Inventory



-

-

356

356

Cash and short term deposits



69,605

1,358

2,487

73,450

Segment assets



1,275,593

1,727

9,040

1,286,360










Other non-current assets






65,467

Other current assets





44,007

Total assets






1,395,834










Segment liabilities







Interest bearing loans and borrowings


643,430

-

-

643,430










Capital expenditure







Corporate acquisitions



33,249

-

-

33,249

Other acquisitions



27,239

-

-

27,239

Property improvements


2,741

-

-

2,741






63,229

-

-

63,229










3. Administrative expenses













Six months

Six months








ended

ended








30 June

30 June








2019

2018








£'000

£'000










Employment costs





6,713

6,892

Directors' remuneration





1,248

1,715

Office running costs and insurance




1,295

1,442

Travel costs





686

645

Auditors' remuneration





355

304

Legal and professional





982

1,124

Aborted project costs





131

1,282

Depreciation





822

370

Registrar costs and other administrative expenses




140

150








12,372

13,924



















4.  Finance income and expense













Six months

Six months








ended

ended








30 June

30 June








2019

2018

Finance income





£'000

£'000

Total interest income on financial assets not at fair value through profit or loss





Income from cash and short term deposits



1,258

1,599

Interest receivable from joint ventures




23

12

Other finance income






Change in fair value of open interest rate derivative financial instruments



-

4,240

Finance income





1,281

5,851










Finance expense







Interest expense on loans and borrowings measured at amortised cost



26,477

25,461

Interest expense on preference shares




6,162

6,159

Interest expense on convertible preference shares



9,990

9,968

Total interest expense on financial liabilities not at fair value through profit or loss



42,629

41,588










Change in fair value of open forward currency derivative financial instruments



20

68

Change in fair value of foreign currency embedded derivatives



-

186

Change in fair value of open interest rate derivative financial instruments



13,876

1,677

Finance expense





56,525

43,519










5.  Taxation






Six months

Six months








ended

ended








30 June

30 June








2019

2018

The tax charge for the period can be reconciled to the profit per the Income Statement as follows:


£'000

£'000










Profit / (loss) before tax




33,622

(25,936)










Tax at the Russian corporate tax rate of 20%




6,724

(5,187)

Tax effect of financing arrangements




22

(1,524)

Tax effect of non deductible preference share coupon



3,230

3,225

Tax effect of foreign exchange movements




(2,450)

(216)

Movement in provision for uncertain tax positions




(1,992)

(295)

Tax effect of other income not subject to tax and non-deductible expenses



3,312

2,194

Tax effect of property depreciation on revaluations




(2,982)

2,221

Tax on dividends and other inter company gains




1,594

691

Movement on previously unprovided deferred tax assets




(51)

1,791








7,407

2,900










The tax effect of financing arrangements reflects the impact of intra group funding in each jurisdiction.  Foreign exchange movements on intra group financing are taxable or tax deductible in Russia but not in other jurisdictions.  In accordance with its accounting policy, the Group is required to estimate its provision for uncertain tax positions and the movement in the provision is reflected above.  Other income and expenditure not subject to tax arises in Guernsey.










6.  Earnings measures
















In addition to reporting IFRS earnings the Group also reports its own underlying earnings measure.  The Directors consider underlying earnings to be a key performance measure, as this is the measure used by Management to assess the return on holding investment assets for the long term and the Group's ability to declare covered distributions.  As a consequence the underlying earnings measure excludes investment property revaluations, gains or losses on the disposal of investment property, intangible asset movements, gains and losses on derivative financial instruments, share-based payments and other long term incentives (to the extent not settled in cash), the accretion of premiums payable on redemption of preference shares and convertible preference shares, depreciation and amortisation of loan origination costs (as these represent non-cash expenses that do not affect the ability to declare covered distributions); and material non-recurring items, together with any related tax.

 

The Group is also required to report Headline earnings per share as required by the listing requirements of the Johannesburg Stock Exchange.













Six months

Six months






ended

ended

The calculation of basic and diluted earnings per share is based on the following data:

30 June

30 June

2019

2018






£'000

£'000

£'000

£'000

Earnings







Net profit / (loss) for the period prepared under IFRS


26,215


(28,836)










Adjustments to arrive at underlying earnings:






Administration expenses






Depreciation



822


370


Aborted project costs


131


1,282








953


1,652

Share-based payments and other long term incentives



873


1,163

Unrealised (profit) / loss on revaluation of investment property


(18,073)


26,537

Unrealised profit on revaluation of investment property under construction


(92)


(459)

Finance income







Change in fair value of open interest rate derivative financial instruments


-


(4,240)

Finance expense






Change in fair value of open forward currency derivative financial instruments

20


68


Change in fair value of open interest rate derivative financial instruments

13,876


1,677


Change in fair value of foreign currency embedded derivatives

-


186


Premium on redemption of preference shares and amortisation of issue costs

181


208


Premium on redemption of convertible preference shares and amortisation of issue costs

3,623


3,621


Amortisation of loan origination costs

1,598


2,425








19,298


8,185

Tax








Movement on deferred tax arising on depreciation and revaluation of investment property

3,293


267


Tax on unrealised foreign exchange movements in loans


(81)


133








3,212


400

Underlying earnings



32,386


4,402

























Six months


Six months







ended


ended







30 June


30 June







2019


2018

Calculation of Headline earnings



£'000


£'000










Net profit / (loss) for the period prepared under IFRS



26,215


(28,836)

Adjustments to arrive at Headline earnings:






Unrealised (profit) / loss on revaluation of investment property


(18,073)


26,537

Unrealised profit on revaluation of investment property under construction


(92)


(459)

Movement on deferred tax arising on revaluation of investment property


3,212


400

Headline earnings




11,262


(2,358)














30 June 2019



30 June 2018






Weighted



Weighted






average



average





Earnings

shares

EPS

Earnings

shares

EPS

IFRS


£'000

No. '000

Pence

£'000

No. '000

Pence

Basic


26,215

610,057

4.30

(28,836)

653,093

(4.42)

Effect of dilutive potential ordinary shares:







Warrants (note 14)

-

603


-

-


LTIP (note 17)


-

197


-

-


2016 Retention scheme (note 17)

-

2,047


-

-


Convertible preference shares (note 12)

9,990

318,047


-

-


Diluted


36,205

930,951

3.89

(28,836)

653,093

(4.42)














30 June 2019



30 June 2018






Weighted



Weighted






average



average





Earnings

shares

EPS

Earnings

shares

 EPS

Underlying earnings

£'000

No. '000

Pence

£'000

No. '000

 Pence

Basic


32,386

610,057

5.31

4,402

653,093

0.67

Effect of dilutive potential ordinary shares:







Warrants (note 14)

-

603


-

4,052


LTIP (note 17)

-

197


-

777


2016 Retention scheme (note 17)

-

2,047


-

3,584


Convertible preference shares (note 12)

6,367

318,047


-

-


Diluted


38,753

930,951

4.16

4,402

661,506

0.67














Weighted



Weighted






average



average





Earnings

shares

EPS

Earnings

shares

EPS

Headline earnings

£'000

No. '000

Pence

£'000

No. '000

Pence










Basic


11,262

610,057

1.85

(2,358)

653,093

(0.36)

Effect of dilutive potential ordinary shares







Warrants (note 14)

-

603


-

-


LTIP (note 17)

-

197


-

-


2016 Retention scheme (note 17)

-

2,047


-

-


Diluted


11,262

612,904

1.84

(2,358)

653,093

(0.36)










The finance expense for the period relating to the convertible preference shares is greater than Headline earnings per shares and thus the convertible preference shares are not dilutive for Headline earnings per share.










7.  Investment property
















Asset class



Logistics

Logistics

Logistics

Office


Location



Moscow

St Petersburg

Regions

St Petersburg

30 June 2019

Fair value hierarchy *


Level 3

Level 3

Level 3

Level 3

Total





£'000

£'000

£'000

£'000

£'000










Market value at 1 January 2019

840,613

147,978

144,843

60,402

1,193,836

Property improvements


(116)

566

1,045

160

1,655

Unrealised profit / (loss) on revaluation

8,721

2,324

5,893

(1,177)

15,761

On translation to presentation currency

88,792

15,640

15,356

6,395

126,183

Market value at 30 June 2019

938,010

166,508

167,137

65,780

1,337,435










Tenant incentives and contracted rent uplift balances

(13,108)

(4,087)

(1,245)

(758)

(19,198)

Head lease obligations


1,249

-

-

-

1,249

Carrying value at 30 June 2019


926,151

162,421

165,892

65,022

1,319,486










Revaluation movement in the period ended 30 June 2019






Gross revaluation


8,721

2,324

5,893

(1,177)

15,761

Movement on tenant incentives and contracted rent uplift balances

566

(41)

11

(282)

254

Impact of translation to presentation currency

1,445

430

133

50

2,058

Revaluation reported in the Income Statement

10,732

2,713

6,037

(1,409)

18,073










Asset class



Logistics

Logistics

Logistics

Office


Location


Moscow

St Petersburg

Regions

St Petersburg

31 December 2018

Fair value hierarchy *


Level 3

Level 3

Level 3

Level 3

Total





£'000

£'000

£'000

£'000

£'000










Market value at 1 January 2018


854,288

144,910

117,871

60,682

1,177,751

Corporate acquisition


-

-

30,805

-

30,805

Other acquisition


27,239

-

-

-

27,239

Property improvements


1,430

293

504

514

2,741

Unrealised loss on revaluation


(97,641)

(6,468)

(10,795)

(4,686)

(119,590)

On translation to presentation currency


55,297

9,243

6,458

3,892

74,890

Market value at 31 December 2018


840,613

147,978

144,843

60,402

1,193,836










Tenant incentives and contracted rent uplift balances

(13,674)

(4,046)

(1,256)

(476)

(19,452)

Head lease obligations

1,056

-

-

-

1,056

Carrying value at 31 December 2018

827,995

143,932

143,587

59,926

1,175,440










Revaluation movement in the year ended 31 December 2018






Gross revaluation


(97,641)

(6,468)

(10,795)

(4,686)

(119,590)

Movement on tenant incentives and contracted rent uplift balances

41

203

8

(70)

182

Impact of translation to presentation currency

(1,626)

(532)

(150)

(48)

(2,356)

Revaluation reported in the Income Statement

(99,226)

(6,797)

(10,937)

(4,804)

(121,764)










*Classified in accordance with the fair value hierarchy, see note 19.  There were no transfers between fair value hierarchy in 2018 or 2019.










At 30 June 2019 the Group has pledged investment property with a value of £1,328 million (2018: £1,153 million) to secure banking facilities granted to the Group (see note 10).










8. Investment property under construction















Asset class


Assets under construction

Land Bank

30 June

Location



Moscow

Regions


Regions

2019

Fair value hierarchy *


Level 3

Level 3

Sub-total

Level 3

Total





£'000

£'000

£'000

£'000

£'000

Market value at 1 January 2019


19,342

8,335

27,677

2,537

30,214

Costs incurred


30

42

72

-

72

On translation to presentation currency


2,027

883

2,910

219

3,129

Unrealised profit / (loss) on revaluation


261

(169)

92

-

92

Market value at 30 June 2019

21,660

9,091

30,751

2,756

33,507

Head lease obligations


368

-

368

-

368

Carrying value at 30 June 2019


22,028

9,091

31,119

2,756

33,875










Asset class


Assets under construction

Land Bank

31 December

Location



Moscow

Regions


Regions

2018

Fair value hierarchy *


Level 3

Level 3

Sub-total

Level 3

Total





£'000

£'000

£'000

£'000

£'000










Market value at 1 January 2018


19,736

5,618

25,354

2,873

28,227

Costs incurred


18

10

28

-

28

Corporate acquisition

-

2,444

2,444

-

2,444

On translation to presentation currency

(268)

(636)

(904)

(336)

(1,240)

Unrealised (loss) / profit on revaluation

(144)

899

755

-

755

Market value at 31 December 2018

19,342

8,335

27,677

2,537

30,214

Head lease obligations


334

-

334

-

334

Carrying value at 31 December 2018

19,676

8,335

28,011

2,537

30,548



















*Classified in accordance with the fair value hierarchy (see note 19). There were no transfers between fair value hierarchy in 2018 or 2019.










No borrowing costs were capitalised in the period  (31 December 2018: £nil).

 

At 30 June 2019 the Group has pledged investment property under construction with a value of £30.8 million (31 December 2018: £25.3 million) to secure banking facilities granted to the Group (note 10).

 

9. Valuation assumptions and key inputs






 










 

Class of property

Carrying amount

Valuation technique

Input

Range




30 June

31 December


30 June

31 December




2019

2018


2019

2018




£'000

£'000






Completed investment property
















Moscow - Logistics

926,151

827,995

Discounted  cash flow

ERV per sqm

Rub 3,700 to Rub 4,350

Rub 3,500 to Rub 3,800







ERV growth

5.00% to 7.00%

4.00% to 7.00%







Discount rate

10.85% to 12.50%

10.75% to 12.60%







Exit cap rate

10.50% to 11.50%

10.50% to 11.50%







Vacancy rate

1% to 66%

1% to 50%







Passing rent per sqm

$100 to $170

$113 to $170







Passing rent per sqm

Rub 3,150 to Rub 12,315

Rub 3,000 to Rub 12,315











St Petersburg - Logistics

162,421

143,932

Discounted  cash flow

ERV per sqm

Rub 3,800 to Rub 4,000

Rub 3,800







ERV growth

5.00% to 7.00%

6.00%







Discount rate

12.30% to 12.50%

12.30% to 12.50%







Exit cap rate

11.75%

11.75%







Vacancy rate

0% to 12%

0% to 29%







Passing rent per sqm

$111 to $137

$109 to $133







Passing rent per sqm

Rub 2,456 to Rub 5,628

Rub 2,456 to Rub 5,260











Regional - Logistics

165,892

143,587

Discounted  cash flow

ERV per sqm

Rub 3,700 to Rub 4,100

Rub 3,800







ERV growth

5.00% to 7.00%

6.00%







Discount rate

12.25% to 12.50%

12.25% to 12.50%







Exit cap rate

11.75%

11.75%







Vacancy rate

0% to 5%

0% to 9%







Passing rent per sqm

$107 to $143

$107 to $138







Passing rent per sqm

Rub 3,800 to Rub 18,869

Rub 3,750 to Rub 7,300







Passing rent per sqm

N/a

€88











St Petersburg - Office

65,022

59,926

Discounted  cash flow

ERV per sqm

Rub 11,667 to Rub 12,426

Rub 10,976 to Rub 12,366







ERV growth

2.00% to 4.00%

2.00% to 4.00%







Discount rate

12.00% to 12.25%

12.00% to 12.25%







Exit cap rate

11.25% to 12.25%

11.25% to 12.25%







Vacancy rate

0% to 15%

1% to 8%







Passing rent per sqm

$428

$408







Passing rent per sqm

€ 508

€410 to €413







Passing rent per sqm

Rub 4,384 to Rub 18,319

Rub 4,384 to Rub 17,570











 







Range


 

Other key information


Description

30 June


31 December

 







2019


2018

 










 

Moscow - Logistics


Land plot ratio

34% - 65%


34% - 65%

 





Age of building

1 to 14 years


1 to 14 years

 




Outstanding costs (£'000)

1,315


2,290

 










 

St Petersburg - Logistics


Land plot ratio

48% - 57%


48% - 57%

 





Age of building

5 to 11 years


4 to 10 years

 




Outstanding costs (£'000)

678


282

 










 

Regional - Logistics


Land plot ratio

48% - 61%


48% - 61%

 





Age of building

9 to 10 years


9 years

 




Outstanding costs (£'000)

378


363

 










 

St Petersburg - Office


Land plot ratio

148% to 496%


148% to 496%

 





Age of building

10 to 12 years


10 to 12 years

 




Outstanding costs (£'000)

95


23

 










 

Investment property under construction

Carrying amount

Valuation

technique

Input

Range

 

30 June

31 December


30 June

31 December



2019

2018


2019

2018




£'000

£'000















Moscow - Logistics

22,028

19,676

Comparable

Value per ha

Rub 19.0m to Rub 33.5m

Rub 17.9m to Rub 33.6m











Regional - Logistics

9,091

8,335

Comparable

Value per ha

Rub 9.5m to Rub 20.4m

Rub 9.7m to Rub 20.6m


 

10.  Interest bearing loans and borrowings




30 June

31 December








2019

2018

Bank loans






£'000

£'000










Loans due for settlement within 12 months



78,260

75,565

Loans due for settlement after 12 months



598,965

567,865








677,225

643,430










The Group's borrowings have the following maturity profile:





On demand or within one year




78,260

75,565

In the second year





157,517

20,730

In the third to fifth years




265,907

333,862

After five years





175,541

213,273








677,225

643,430










The amounts above include unamortised loan origination costs of £7.7 million (31 December 2018: £7.1 million) and interest accruals of £1.1 million (31 December 2018: £1.3 million).

 

The Group's interest bearing loans and borrowings have a weighted average all-in interest rate of 7.39% (2018: 7.69%) and a weighted average term to maturity of 3.65 years (2018: 4.0 years).










11.  Preference shares














30 June

31 December








2019

2018

Issued share capital:





£'000

£'000










At 1 January





109,271

108,263

Premium on redemption of preference shares and amortisation of issue costs


181

417

Scrip dividends





331

591

At 30 June / 31 December




109,783

109,271


























30 June

31 December








2019

2018

Issued share capital:





Number

Number










At 1 January







99,556,534

99,143,192

Scrip dividends







239,901

413,342

At 30 June / 31 December




99,796,435

99,556,534










Shares in issue





99,853,303

99,613,402

Held by the Company's Employee Benefit Trusts



(56,868)

(56,868)

At 30 June / 31 December




99,796,435

99,556,534



















12.  Convertible preference shares













30 June

31 December








2019

2018

Issued share capital:





£'000

£'000










At 1 January





206,116

198,870

Reissued in the period / year



4,133

-

Premium on redemption of preference shares and amortisation of issue costs


3,623

7,246

At 30 June / 31 December





213,872

206,116


























30 June

31 December








2019

2018

Issued share capital:





Number

Number










At 1 January





192,388,886

192,388,886

Reissued in the period / year




3,552,907

-

At 30 June / 31 December




195,941,793

192,388,886










Shares in issue





198,189,014

198,189,014

Held by the Company's Employee Benefit Trusts




(2,247,221)

(5,800,128)

At 30 June / 31 December





195,941,793

192,388,886










The convertible preference shares are convertible to ordinary shares at the holder's request at any time prior to their redemption date of 6 July 2026 at a rate that is currently 1.553 ordinary shares for each convertible preference share.










13.  Share capital





30 June

31 December








2019

2018








£'000

£'000

Issued share capital







At 1 January





6,233

6,606

Issued in the period / year for cash on warrant exercises




17

85

Repurchased and cancelled in the period / year




(245)

(458)

At 30 June / 31 December





6,005

6,233

















30 June

31 December








2019

2018








Number

Number

Issued share capital







At 1 January






623,269,434

660,571,843

Issued in the period / year for cash on warrant exercises




1,734,577

8,500,126

Repurchased and cancelled in the period / year




(24,509,961)

(45,802,535)

At 30 June / 31 December





600,494,050

623,269,434










Details of own shares held are given in note 15.















14.  Warrants





30 June

31 December








2019

2018








£'000

£'000










At 1 January





98

438

Exercised in the period / year





(69)

(340)

Lapsed in the period / year





(29)

-

At 30 June / 31 December





-

98

















30 June

31 December








2019

2018








Number

Number










At 1 January





2,448,226

10,948,352

Exercised in the period / year





(1,734,577)

(8,500,126)

Lapsed in the period / year




(713,649)

-

At 30 June / 31 December




-

2,448,226



















15.  Own shares held





30 June

31 December








2019

2018








£'000

£'000










At 1 January





(5,965)

(3,652)

Acquired under tender offers




-

(4,160)

Other acquisitions





(106)

(75)

Allocation to satisfy employee bonuses (note 17)




647

1,278

Cancelled





151

36

Allocation to satisfy LTIP options exercised (note 17)




691

608

At 30 June / 31 December




(4,582)

(5,965)

















30 June

31 December








2019

2018








Number

Number










At 1 January






10,760,656

5,150,122

Acquired under a tender offer




-

8,000,000

Other acquisitions





253,679

173,958

Allocation to satisfy employee bonuses (note 17)




(876,000)

(1,704,000)

Cancelled






(298,039)

(48,613)

Allocation to satisfy LTIP options exercised (note 17)




(922,110)

(810,811)

At 30 June / 31 December




8,918,186

10,760,656










Allocations to satisfy LTIP options exercised are transfers by the Company's Employee Benefit Trusts upon the exercise of fully vested options in the period.  The amounts shown for share movements are net of the Trustees' participation in tender offers during the period from grant to exercise.










16.  Net asset value per share




















30 June



31 December






2019



2018






Number



Number











Number of ordinary shares (note 13)

600,494,050



623,269,434


Less own shares held (note 15)

(8,918,186)



(10,760,656)






591,575,864



612,508,778















30 June 2019



31 December 2018







Net asset



Net asset




Net asset

Ordinary

value per

Net asset

Ordinary

value per




value

shares

share

value

shares

share




£'000

No. '000

Pence

£'000

No. '000

Pence

Net asset value per share

396,856

591,576

67

295,627

612,509

48

Effect of dilutive potential ordinary shares:







Warrants (note 14)

-

-


612

2,448


LTIP (note 17)

-

-


266

1,062


2016 Retention Scheme (note 17)

-

-


2,095

4,998


Fully diluted net asset value per share

396,856

591,576

67

298,600

621,017

48




























The carrying value of the convertible preference shares at 30 June 2019 (see note 12) when divided by the number of ordinary shares that would be issued on conversion, is greater than basic net asset value per share and thus the convertible preference shares are not dilutive at 30 June 2019.










17.  Share-based payments and other long term incentives

Six months ended 30 June 2019

Six months ended 30 June 2018






No of options

Weighted

No of options

Weighted

(a) Movements in Executive Share Option Schemes


average


average







exercise


exercise







price


price










Outstanding at the beginning of the period


1,062,162

25p

1,872,973

25p

Exercised during the period







- LTIP



(1,062,162)

25p

(810,811)

25p

Outstanding at the end of the period


-

25p

1,062,162

25p










Represented by:







- LTIP




-


1,062,162




















Exercisable at the end of the period


-

25p

1,062,162

25p


























Six months

Six months








ended

ended

(b) Income statement charge for the period




30 June 2019

30 June 2018








£'000

£'000










2016 Retention Scheme



541

1,051

Bonuses







332

-

Annual Performance incentive - 2018




-

-

Annual Performance Incentive - 2017




-

749

Five Year Performance Plan




-

-








873

1,800

Satisfied by or to be satisfied by allocation of:





Ordinary shares (IFRS 2 expense)




332

749

Convertible preference shares (IFRS 2 expense)



541

414

Cash





-

637








873

1,800










In accordance with Company's Remuneration Policy an Annual Performance Incentive was not due for 2018.  Certain bonuses awarded to employees below executive level for performance in 2018 were settled in ordinary shares of the Company.










18. Ordinary dividends

 

The Company did not declare a final dividend for the year ended 31 December 2018 (2017: none) and instead implemented a tender offer buy back for ordinary shares on 31 May 2019 on the basis of 2 in every 51 shares held and a tender price of 45 pence per share, the equivalent of a final dividend of 1.75 pence per share. (2017: 1 in every 17 shares at 52p per share the equivalent of 3p per share).










19. Fair value measurement

 

Set out below is a comparison of the carrying amounts and fair value of the Group's financial instruments as at the balance sheet date:
















30 June 2019

31 December 2018






Carrying

Fair

Carrying

Fair






Value

Value

Value

Value






£'000

£'000

£'000

£'000

Non-current assets






Loans receivable


504

466

676

627

Restricted cash


-

-

12,249

12,249

Derivative financial instruments


7,101

7,101

21,953

21,953










Current assets






Trade receivables


28,340

28,340

27,803

27,803

Restricted cash


3,644

3,644

1,792

1,792

Other current receivables


1,059

1,059

907

907

Derivative financial instruments


-

-

349

349

Cash and short term deposits


83,012

83,012

73,450

73,450










Non-current liabilities






Interest bearing loans and borrowings


598,965

615,176

567,865

561,076

Preference shares


109,783

134,725

109,271

130,494

Convertible preference shares


213,872

221,414

206,116

226,057

Rent deposits


16,444

13,736

16,425

13,130

Other payables


3,135

3,135

1,372

1,372










Current liabilities






Interest bearing loans and borrowings


78,260

78,260

75,565

75,565

Derivative financial instruments


-

-

1

1

Rent deposits



6,801

6,801

7,242

7,242

Deferred consideration on property acquisition

-

-

12,197

12,197

Other payables





4,516

4,516

5,262

5,262










Fair value hierarchy















The following table provides the fair value measurement hierarchy* of the Group's assets and liabilities.



















Total Fair






Level 1

Level 2

Level 3

Value

As at 30 June 2019



£'000

£'000

£'000

£'000

Assets measured at fair value





Investment property


-

-

1,319,486

1,319,486

Investment property under construction

-

-

33,875

33,875

Derivative financial instruments

-

7,101

-

7,101










Liabilities measured at fair value






Derivative financial instruments


-

-

-

-










As at 31 December 2018






Assets measured at fair value






Investment property



-

-

1,175,440

1,175,440

Investment property under construction

-

-

30,548

30,548

Derivative financial instruments


-

22,302

-

22,302










Liabilities measured at fair value






Derivative financial instruments


-

1

-

1










* Explanation of the fair value hierarchy:










Level 1 - Quoted prices in active markets for identical assets or liabilities that can be accessed at the balance sheet date.

 

Level 2 - Use of a model with inputs that are directly or indirectly observable market data.

 

Level 3 - Use of a model with inputs that are not based on observable market data.

 

The Group's foreign currency derivative financial instruments are call options and are measured based on spot exchange rates, the yield curves of the respective currencies as well as the currency basis spreads between the respective currencies.  The Group's interest rate derivative financial instruments are interest rate caps.  These contracts are valued using a discounted cash flow model and consideration is given to the Group's own credit risk.










20. Events since the balance sheet date











On 21 August 2019, the Company completed the purchase of 89,144,978 ordinary shares from two of its institutional shareholders for a total consideration of £32.1 million.  The ordinary shares purchased were cancelled.  The purchase and cancellation has increased NAV per share.  On a proforma basis NAV per share at 30 June 2019 would increase from 67 pence to 72 pence per ordinary share.

 

 

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
IR LLFEATLIRFIA
Close


London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

 


Half-year Report - RNS