28 August 2018
Raven Property Group Limited ('Raven' or the 'Company')
2018 Interim Results
Raven today announces its unaudited results for the six months ended 30 June 2018.
Highlights
· Net operating income of $79.3 million for the six months to 30 June 2018 (30 June 2017: $69.9 million);
· Occupancy increased to 87% across the investment portfolio (31 December 2017: 81%);
· Cash balance of $198 million supporting acquisition strategy;
· In August, contracts signed on acquisition of additional 58,851sqm of warehouse space;
· 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 have made significant progress in the period. Our vacancies are down, Net Operating Income is up and we are acquiring further space at an attractive yield.'
Click on, or paste the following link into your web browser, to view the associated PDF document.
http://www.rns-pdf.londonstockexchange.com/rns/9352Y_1-2018-8-27.pdf
Enquiries
Raven Property Group Limited Tel: + 44 (0) 1481 712955
Anton Bilton
Glyn Hirsch
Novella Communications Tel: +44 (0) 203 151 7008
Tim Robertson
Toby Andrews
N+1 Singer Tel: +44 (0) 20 7496 3000
Corporate Finance - James Maxwell / James Moat
Sales - Alan Geeves / James Waterlow
Numis Securities Limited Tel:+ 44 (0) 207 260 1000
Alex Ham / Jamie Loughborough / Alasdair AbramRavenscroft Tel: +44 (0) 1481 729100
Jade Cook
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 was founded in 2005 to invest in class A warehouse complexes in Russia and lease to Russian and International tenants. Its Ordinary Shares, Preference Shares and Warrants are listed on the Main Market of the London Stock Exchange and admitted to the Official List of The International Stock Exchange ('TISE'). Its Convertible Preference Shares are admitted to the Official List of TISE and trading on the SETSqx market of the London Stock Exchange. The Company operates out of offices in Guernsey, Moscow and Cyprus and has an investment portfolio of circa 1.8 million square metres of Grade 'A' warehouses in Moscow, St Petersburg, Rostov-on-Don and Novosibirsk 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 2018 | 30 June 2017 |
Net Rental and Related Income ($m) | 79.3 | 69.9 |
Revaluation (deficit)/ surplus ($m) | (34.4) | 11.6 |
IFRS (Loss)/Earnings after tax ($m) | (41.1) | 9.2 |
Underlying Earnings after tax ($m) | 3.2 | 15.5 |
Basic EPS (cents) | (6.3) | 1.4 |
Basic Underlying EPS (cents) | 0.5 | 2.3 |
Distribution per share (pence) | 1.25 | 1.0 |
Balance Sheet at: | 30 June 2018 | 31 December 2017 |
Investment Property Market Value ($m) | 1,557 | 1,593 |
Diluted NAV per share (cents) | 76 | 80 |
Letting Summary
Warehouse Portfolio
Our warehouse portfolio currently totals 1.77 million sqm. Occupancy at the period end was 86% (31 December 2017: 81%).
Maturities '000 sqm | 2018 | 2019 | 2020 | 2021-2027 | Total |
Maturity profile at 1 January 2018 | 159 | 247 | 308 | 710 | 1,424 |
Renegotiated and extended | (28) | (7) | (44) | (37) | (116) |
Maturity profile of renegotiations | - | 13 | 4 | 99 | 116 |
Vacated/terminated | (33) | - | (10) | (11) | (54) |
New lettings | 34 | 9 | - | 110 | 153 |
Maturity profile at 30 June 2018 | 132 | 262 | 258 | 871 | 1,523 |
Maturity profile with breaks | 194 | 332 | 329 | 668 | 1,523 |
Office Portfolio
Our office portfolio of 49,000sqm has been fully let throughout the period.
Maturities '000 sqm | 2018 | 2019 | 2020 | 2021-2027 | Total |
Maturity profile at 1 January 2018 | 10 | 13 | 6 | 20 | 49 |
Renegotiated and extended | (3) | - | - | - | (3) |
Maturity profile of renegotiations | - | - | 1 | 2 | 3 |
Vacated/terminated | (4) | - | - | - | (4) |
New lettings | 1 | 1 | - | 2 | 4 |
Maturity profile at 30 June 2017 | 4 | 14 | 7 | 24 | 49 |
Maturity profile with breaks | 12 | 12 | 1 | 24 | 49 |
Lease Currency Mix
USD | RUB | EUR | Vacant | Total | |
Sqm % | 29% | 54% | 3% | 14% | 100% |
NOI % | 47% | 46% | 7% | - | 100% |
Chairman's Message
The Russian market fundamentals have been positive for us in the six months to 30 June 2018.
Net operating income ('NOI') has improved to $79.3 million (30 June 2017: $69.9 million). Occupancy levels on our investment portfolio climbed from 81% at the year end to 87% at 30 June 2018. Rouble leases account for 54% of our warehouse space (31 December 2017: 47%) and 46% of our NOI in the period to 30 June 2018 (31 December 2017: 32%), and we have drawn funds on our first Rouble debt facility.
Our acquisition strategy is also progressing and this month we signed contracts for the acquisition of a further 58,851sqm of warehouse space in Moscow at a yield of 11.3% and purchase price of Roubles 2.45 billion ($36.5 million). We hope to announce further acquisitions in the coming quarter.
The accumulation of this work produces an income statement with reducing reliance on US Dollar pegged income and signals the start of the balance sheet restructuring away from US Dollar liabilities.
The one anomaly as we move away from the US Dollar model is that, whilst we continue with US Dollar presentation of our numbers, the increasing Rouble cash balances that we hold cause unrealised foreign exchange movements in our income statement, distorting profitability. These unrealised foreign exchange movements give a $13.6 million swing in profit for the period with a foreign exchange loss of $8.7 million for the six months compared to a profit of $4.9 million in the same period last year.
The impact can also be seen on our property valuations which have increased by 7% in Rouble terms in the period but translate to a revaluation loss of $34.4 million in US Dollar terms. Our IFRS earnings show a loss of $41.1 million following this foreign exchange impact (30 June 2017: profit of $9.2 million).
Underlying operating cash generation remains robust and underlying earnings before unrealised foreign exchange movements of $11.9 million support a proposed interim distribution of 1.25p, again by way of tender offer buy back of 1 in 44 shares at 55p (30 June 2017: 1p by way of tender offer buy back of 1 in 52 shares at 52p).
Richard Jewson
Chairman
27 August 2018
Chief Executive's Review
Dear shareholders
This is the newly toned down re-draft of my statement following news of additional US sanctions, contagion from the Turkish Lira crash and the resulting Rouble weakness. Prior to this, we were feeling pretty bullish again and early drafts of my statement reflected that.
Operating fundamentals in the Russian market are strong and many economic indicators have moved in our favour. These include a growing economy, albeit slowly, falling interest rates, increased tenant demand and a reduced vacancy rate for us and the market as a whole. At this time last year the Russian Central Bank rate was 9.0%, today it is 7.25%.
Following the recent elections, we have medium term political stability and the successful World Cup has started to show the world the positive side of Russia that we have been going on about for years. However, the weaker Rouble means we suffer foreign exchange losses when presenting our results in US Dollars.
Our main operational efforts in the period have been focussed on letting space and pursuing income producing acquisitions. These efforts continue to be the best strategy in the current climate. It is producing results.
Our portfolio occupancy has risen to 87% and this trend is continuing. The weighted average warehouse lease length is 3.3 years and average annual indexation on Rouble leases is 6.1%, an attractive level of growth.
We are delighted to have signed contracts this month on a Rouble 2.45 billion ($36.5 million) acquisition at an average yield of 11.3%. It will contribute Rouble 272 million ($4.0 million) to NOI per annum when fully let. We have also walked away from deals in the period where they have not met our criteria and this has resulted in abortive due diligence costs in the first half. We have a number of other acquisitions under discussion and hope to make further announcements in due course.
We are sitting on $198 million of cash which will support our acquisition growth.
Given the improvement in our core market we are also planning to speculatively build around 70,000sqm at our site at Nova Riga. At today's construction costs and rents this should show us a 12% return on the marginal cost of investment and further enhance NOI albeit not until 2020.
We have continued to promote our business and Russia generally wherever and whenever possible. Despite the success of the World Cup, Russia's investment audience remains limited. With this in mind we intend to list our ordinary shares on both the Moscow and Johannesburg Stock Exchanges and will make a separate announcement shortly when the process is finalised. We hope that this will increase and broaden investor interest.
To reflect our cautious optimism we are continuing our progressive distribution policy and will pay 1.25p (a 25% increase on the same period last year) as a tender offer buy back of 1 in 44 shares at 55p.
Property Update
The portfolio comprised 1.77 million sqm of warehouse space and 49,000sqm of office space at 30 June 2018. Warehouse occupancy increased to 86% in the period (31 December 2017: 81%) and our office portfolio continues to be fully let giving total occupancy of 87% across the entire portfolio.
New warehouse lettings in the period totalled 153,000sqm with a further 116,000sqm of existing leases renegotiated and extended. Tenants vacated 54,000sqm of space.
Since the period end, we have let a further 38,000sqm of vacant space and renegotiated and extended 23,000sqm of maturing leases.
As at 30 June 2018 we had 132,000sqm of warehouse leases maturing in the second half of the year and 62,000sqm of potential lease breaks. Of those, we expect maturing tenants to vacate 39,000sqm and 15,000sqm of the breaks to be exercised before the year end.
Rouble denominated leases accounted for 54% (31 December 2017: 47%) of the total warehouse space at the period end and US Dollar leases 29% (31 December 2017: 31%). The average Rouble rent was 4,900 per sqm (31 December 2017: 5,200 per sqm) and the average US Dollar rent was $152 per sqm (31 December 2017: $143 per sqm). Rouble denominated leases had a weighted average term to maturity of 3.6 years (31 December 2017: 3.6 years) and US Dollar leases 2.6 years (31 December 2017: 3.0 years).
Our St Petersburg office portfolio continues to perform well with no significant change in tenant mix since the year end.
Results
Underlying Earnings
Acquisitions and increased letting activity have supported an increase in NOI to $79.3 million (30 June 2017: $69.9 million). This increase is offset by the step up in costs to implement our current strategy, with salaries and bonuses increasing by $3 million, bonuses relating to prior year performance, and last year's issue of new convertible preference shares increasing finance costs. The cost increase supports our on-going growth policy and any future warehouse acquisitions or development will improve profitability without any marked increase in overhead. The bonuses are a full year cost and not repeated in the second half of the year.
As explained in the Chairman's statement, the big swing in underlying profitability compared to the six months to 30 June 2018 relates to unrealised foreign exchange losses when presenting our results in US Dollars. Underlying earnings before these foreign exchange movements compare favourably, $11.9 million in 2018 and $10.6 million in the six months to 30 June 2017.
IFRS Earnings
The IFRS loss for the period is $41.1 million (30 June 2017: profit of $9.2 million). This is principally driven by the Rouble weakness against the US Dollar. Our investment properties increased in value in Rouble terms but show a revaluation loss of $30.8 million net of tax (30 June 2017: profit of $7.0 million) when translated into US Dollars. The other significant charge to IFRS earnings is the amortisation of the cumulative preference share redemption premium of $5.0 million (30 June 2017: $2.8 million) in the period.
Financing
As explained in the 2017 Annual Report, the refinancing of a project straddled the year end with both cash balances and bank loans increasing by $62.3 million. This needs to be taken into account when comparing the 30 June 2018 balance sheet to that of 31 December 2017. The old facility was repaid on 9 January 2018.
Our cash balance at 30 June 2018 is $198.1 million and at 31 December 2017, $266.7 million, reducing to $204.4 million when adjusting for the effect of the financing above. Similarly, secured and unsecured loans at 30 June 2018 were $824.3 million compared to $847.2 million at 31 December 2017 or $784.9 million adjusted.
In fact, our secured debt increased during the year as we drew the final tranche of €11 million on the financing of last year's St Petersburg acquisitions and then refinanced the Sever acquisition which we had completed in November 2017. This was our first Euro/Rouble mix facility, drawing €9.7 million and Roubles 2.96 billion on 8 June 2018, a facility with a term of five years. We also refinanced the one unsecured loan we have of $15 million, reducing the margin charged from 7.9% to 2.5% in the process.
At 30 June 2018 our weighted average cost of debt was 7.4% (31 December 2017: 7.6%) with a weighted average term to maturity of 4.4 years (31 December 2017: 4.5 years). The currency weighting of the Group's loan financing at 30 June 2018 was US Dollar 77.4%, Euro 16.9% and Rouble 5.7%, six of the seventeen projects supporting the secured debt now financed in Euro or Roubles.
The debt restructuring in 2016 and 2017 was undertaken to create a buffer for covenant headroom on secured debt in times of foreign exchange volatility. At 30 June 2018 the loan to value ratio on secured debt was 52% (31 December 2017: 53%).
Cash flow
Cash flows from operating activities followed the same trend as our NOI in the period, generating $55.9 million (30 June 2017: $48.8 million). Cash generation after net interest and preference share coupon paid was maintained at the same level as the previous year, $7.5 million (30 June 2017: $7.4 million).
Net Asset Value
The Group's Net Asset Value falls to $478.4 million from $529.8 million at 31 December 2017 following the IFRS loss for the period and the increased tender offer paid for the final 2017 distribution.
Diluted, Net Asset Value per share is 76 cents (31 December 2017: 80 cents).
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 2017: 1p by way of an offer of 1 in 52 shares at 52p). This reflects our progress and financial performance so far this year.
Glyn Hirsch
Chief Executive Officer
27 August 2018
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 along with the potential impact and mitigation strategies are set out in the Risk Report on pages 37 to 40 of the Group's 2017 Annual Report. These risks fall into five main categories, these being: financial, property investment, Russian domestic, personnel and political and economic risks.
Having reviewed the principal risks and uncertainties for Group in relation to the first half of 2018, the Board believes these have remained consistent with those presented in the 2017 Annual Report and that the existing mitigation strategies continue to be appropriate.
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 2017 Annual Report of the Group.
This responsibility statement was approved by the Board of Directors on the 27 August 2018 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 2018 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 2018 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
27 August 2018
Condensed Unaudited Group Income Statement | |||||||||||||||||||||
For the six months ended 30 June 2018 | |||||||||||||||||||||
Six months ended 30 June 2018 | Six months ended 30 June 2017 | ||||||||||||||||||||
Notes | Underlying earnings | Capital & other | Total | Underlying earnings | Capital & other | Total | |||||||||||||||
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | ||||||||||||||||
Gross revenue | 2 | 109,253 | - | 109,253 | 95,381 | - | 95,381 | ||||||||||||||
Property operating expenditure and cost of sales | (29,969) | - | (29,969) | (25,518) | - | (25,518) | |||||||||||||||
Net rental and related income | 2 | 79,284 | - | 79,284 | 69,863 | - | 69,863 | ||||||||||||||
Administrative expenses | 3 | (16,884) | (2,273) | (19,157) | (12,603) | (589) | (13,192) | ||||||||||||||
Share-based payments and other long term incentives | 17b | (877) | (1,600) | (2,477) | (818) | (1,409) | (2,227) | ||||||||||||||
Foreign currency (loss) / profit | (8,708) | - | (8,708) | 4,912 | - | 4,912 | |||||||||||||||
Operating expenditure | (26,469) | (3,873) | (30,342) | (8,509) | (1,998) | (10,507) | |||||||||||||||
Share of profits of joint ventures | 204 | - | 204 | 285 | - | 285 | |||||||||||||||
Operating profit / (loss) before profits and losses on investment property | 53,019 | (3,873) | 49,146 | 61,639 | (1,998) | 59,641 | |||||||||||||||
Unrealised (loss) / profit on revaluation of investment property | 7 | - | (35,055) | (35,055) | - | 13,343 | 13,343 | ||||||||||||||
Unrealised profit / (loss) on revaluation of investment property under construction | 8 | - | 606 | 606 | - | (1,730) | (1,730) | ||||||||||||||
Operating profit / (loss) | 2 | 53,019 | (38,322) | 14,697 | 61,639 | 9,615 | 71,254 | ||||||||||||||
Finance income | 4 | 2,216 | 5,833 | 8,049 | 2,965 | 299 | 3,264 | ||||||||||||||
Finance expense | 4 | (48,618) | (11,261) | (59,879) | (40,293) | (8,263) | (48,556) | ||||||||||||||
Profit / (loss) before tax | 6,617 | (43,750) | (37,133) | 24,311 | 1,651 | 25,962 | |||||||||||||||
Tax | 5 | (3,440) | (551) | (3,991) | (8,812) | (7,969) | (16,781) | ||||||||||||||
Profit / (loss) for the period | 3,177 | (44,301) | (41,124) | 15,499 | (6,318) | 9,181 | |||||||||||||||
Earnings per share: | 6 | ||||||||||||||||||||
Basic (cents) | (6.30) | 1.38 | |||||||||||||||||||
Diluted (cents) | (6.30) | 1.34 | |||||||||||||||||||
Underlying earnings per share: | 6 | ||||||||||||||||||||
Basic (cents) | 0.49 | 2.33 | |||||||||||||||||||
Diluted (cents) | 0.48 | 2.29 | |||||||||||||||||||
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 2018 | ||||
Six months ended | Six months ended | |||
30 June 2018 | 30 June 2017 | |||
$'000 | $'000 | |||
(Loss) / profit for the period | (41,124) | 9,181 | ||
Other comprehensive income, net of tax | ||||
Items to be reclassified to profit or loss in subsequent | ||||
periods: | ||||
Foreign currency translation on consolidation | 12,958 | (10,231) | ||
Total comprehensive income for the period, net of tax | (28,166) | (1,050) | ||
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 2018 | |||
30 June | 31 December | ||
2018 | 2017 | ||
Notes | $'000 | $'000 | |
Non-current assets | |||
Investment property | 7 | 1,531,964 | 1,568,126 |
Investment property under construction | 8 | 37,152 | 38,411 |
Plant and equipment | 4,544 | 4,248 | |
Investment in joint ventures | 9,940 | 9,983 | |
Other receivables | 20,798 | 5,625 | |
Derivative financial instruments | 15,411 | 7,948 | |
Deferred tax assets | 32,548 | 34,629 | |
1,652,357 | 1,668,970 | ||
Current assets | |||
Inventory | 415 | 423 | |
Trade and other receivables | 58,650 | 78,946 | |
Derivative financial instruments | 13 | 445 | |
Cash and short term deposits | 198,095 | 266,666 | |
257,173 | 346,480 | ||
Total assets | 1,909,530 | 2,015,450 | |
Current liabilities | |||
Trade and other payables | 93,892 | 107,357 | |
Derivative financial instruments | 69 | 35 | |
Interest bearing loans and borrowings | 10 | 43,202 | 106,697 |
137,163 | 214,089 | ||
Non-current liabilities | |||
Interest bearing loans and borrowings | 10 | 781,084 | 740,485 |
Preference shares | 11 | 143,477 | 146,458 |
Convertible preference shares | 12 | 267,353 | 269,031 |
Other payables | 24,290 | 34,566 | |
Deferred tax liabilities | 77,771 | 81,063 | |
1,293,975 | 1,271,603 | ||
Total liabilities | 1,431,138 | 1,485,692 | |
Net assets | 478,392 | 529,758 | |
Equity | |||
Share capital | 13 | 12,169 | 12,479 |
Share premium | 189,254 | 207,746 | |
Warrants | 14 | 186 | 441 |
Own shares held | 15 | (8,335) | (5,742) |
Convertible preference shares | 12 | 14,497 | 14,497 |
Capital reserve | (248,462) | (217,782) | |
Translation reserve | (188,953) | (201,911) | |
Retained earnings | 708,036 | 720,030 | |
Total equity | 478,392 | 529,758 | |
Net asset value per share (cents): | 16 | ||
Basic | 76 | 81 | |
Diluted | 76 | 80 | |
Adjusted net asset value per share (cents): | 16 | ||
Basic | 71 | 78 | |
Diluted | 71 | 77 | |
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 2018 | ||||||||||
Share Capital | 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 2017 | 12,578 | 216,938 | 1,161 | (7,449) | 8,453 | (245,426) | (177,199) | 691,170 | 500,226 | |
Profit for the period | - | - | - | - | - | - | - | 9,181 | 9,181 | |
Other comprehensive income | - | - | - | - | - | - | (10,231) | - | (10,231) | |
Total comprehensive income for the period | - | - | - | - | - | - | (10,231) | 9,181 | (1,050) | |
Warrants exercised | 178 | 4,985 | (712) | - | - | - | - | - | 4,451 | |
Ordinary shares cancelled | - | - | - | - | - | - | - | - | - | |
Own shares acquired | - | - | - | (76) | - | - | - | - | (76) | |
Own shares allocated | - | - | - | 913 | - | - | - | (600) | 313 | |
Transfer in respect of capital losses | - | - | - | - | - | 7,007 | - | (7,007) | - | |
At 30 June 2017 | 12,756 | 221,923 | 449 | (6,612) | 8,453 | (238,419) | (187,430) | 692,744 | 503,864 | |
At 1 January 2018 | 12,479 | 207,746 | 441 | (5,742) | 14,497 | (217,782) | (201,911) | 720,030 | 529,758 | |
Loss for the period | - | - | - | - | - | - | - | (41,124) | (41,124) | |
Other comprehensive income | - | - | - | - | - | - | 12,958 | - | 12,958 | |
Total comprehensive income for the period | - | - | - | - | - | - | 12,958 | (41,124) | (28,166) | |
Warrants exercised | 13/14 | 107 | 2,767 | (255) | - | - | - | - | - | 2,619 |
Ordinary shares cancelled | 13/15 | (417) | (21,259) | - | 22 | - | - | - | - | (21,654) |
Own shares acquired | 15 | - | - | - | (5,639) | - | - | - | (5,639) | |
Own shares allocated | 15 | - | - | - | 3,024 | - | - | - | (1,550) | 1,474 |
Transfer in respect of capital losses | - | - | - | - | - | (30,680) | - | 30,680 | - | |
At 30 June 2018 | 12,169 | 189,254 | 186 | (8,335) | 14,497 | (248,462) | (188,953) | 708,036 | 478,392 | |
The accompanying notes are an integral part of this statement. |
Condensed Unaudited Group Cash Flow Statement | |||||
For the six months ended 30 June 2018 | |||||
Six months ended | Six months ended | ||||
30 June 2018 | 30 June 2017 | ||||
Notes | $'000 | $'000 | |||
Cash flows from operating activities | |||||
(Loss) / profit before tax | (37,133) | 25,962 | |||
Adjustments for: | |||||
Depreciation | 3 | 509 | 590 | ||
Provision for bad debts | 3 | - | (201) | ||
Share of profits of joint ventures | (204) | (285) | |||
Finance income | 4 | (8,049) | (3,264) | ||
Finance expense | 4 | 59,879 | 48,556 | ||
Loss / (profit) on revaluation of investment property | 7 | 35,055 | (13,343) | ||
(Profit) / loss on revaluation of investment property under construction | 8 | (606) | 1,730 | ||
Foreign exchange loss / (profit) | 8,708 | (4,912) | |||
Non-cash element of share-based payments and other long term incentives | 17b | 1,600 | 1,409 | ||
59,759 | 56,242 | ||||
Changes in operating working capital | |||||
Decrease in operating receivables | 1,755 | 3,211 | |||
(Increase) / decrease in other operating current assets | (1) | 2 | |||
Decrease in operating payables | (2,444) | (2,026) | |||
59,069 | 57,429 | ||||
Tax paid | (3,210) | (8,670) | |||
Net cash generated from operating activities | 55,859 | 48,759 | |||
Cash flows from investing activities | |||||
Payments for property improvements | (5,458) | (6,615) | |||
Refund of VAT on acquisition of investment property | 16,990 | - | |||
Acquisition of subsidiaries | - | (88,301) | |||
Cash acquired with subsidiaries | - | 4,088 | |||
Payment of deferred consideration on | |||||
acquisition of investment property | (9,717) | - | |||
Purchase of plant and equipment | (1,906) | (1,305) | |||
Loans repaid | - | 45 | |||
Interest received | 2,199 | 2,951 | |||
Net cash generated from / (used in) investing activities | 2,108 | (89,137) | |||
Cash flows from financing activities | |||||
Proceeds from long term borrowings | 143,512 | 80,000 | |||
Repayment of and security on long term borrowings | (166,278) | (77,156) | |||
Loan amortisation | (15,984) | (20,187) | |||
Bank borrowing costs paid | (33,850) | (32,656) | |||
Exercise of warrants | 2,619 | 4,451 | |||
Ordinary shares purchased | (27,021) | 237 | |||
Dividends paid on preference shares | (7,895) | (7,108) | |||
Dividends paid on convertible preference shares | (8,836) | (4,502) | |||
Premium paid for derivative financial instruments | (3,820) | (759) | |||
Net cash used in financing activities | (117,553) | (57,680) | |||
Net decrease in cash and cash equivalents | (59,586) | (98,058) | |||
Opening cash and cash equivalents | 266,666 | 198,621 | |||
Effect of foreign exchange rate changes | (8,985) | 7,520 | |||
Closing cash and cash equivalents | 198,095 | 108,083 | |||
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 2018 | |||||||||||||||
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 2017. 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 2017, except for the adoption of new standards that became effective on 1 January 2018. The Group applies for the first time, IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments. IFRS 15 does not affect the financial performance or financial position of the Group but it does require additional disclosures to be made. IFRS 15 does not apply to lease income, so the additional disclosures only relate to the Group's revenues generated by its Roslogistics and Raven Mount reporting segments and provide information as to how the nature, amount, timing and uncertainty of cash flows from these revenues are affected by economic factors. These disclosures are provided in note 2. The Group has assessed the impact of IFRS 9 and concluded that it does not affect the financial performance or financial position of the Group or the disclosures made in its financial statements. The Group has not adopted early any standard, interpretation or amendment that has been issued but is not yet effective. The requirements of IFRS 16, which is effective from 1 January 2019, has been assessed and is not expected to have a material impact on the Group's financial statements. 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 On consolidation the results and financial position of all the Group entities that have a functional currency different from the Group's presentation currency (United States Dollars) are translated into the presentation currency using the following rates: | |||||||||||||||
30 June | 31 December | ||||||||||||||
2018 | 2017 | ||||||||||||||
Balance Sheet | |||||||||||||||
- Roubles | 62.75 | 57.60 | |||||||||||||
- Sterling | 1.32 | 1.35 | |||||||||||||
- Euro | 1.17 | 1.20 | |||||||||||||
30 June | 30 June | ||||||||||||||
2018 | 2017 | ||||||||||||||
Income Statement * | |||||||||||||||
- Roubles | 59.35 | 57.99 | |||||||||||||
- Sterling | 1.38 | 1.26 | |||||||||||||
- Euro | 1.21 | 1.08 | |||||||||||||
* These are the average rates for the six months ended 30 June 2017 and 2018, 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 reportable 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 - IFRS 15 revenue - services are provided to customers over time and invoiced at appropriate intervals in accordance with the relevant contract terms; and Raven Mount - sale of residential property in the UK - IFRS 15 revenue - the transfer of land or property to the purchaser occurs on legal completion of the sale contract. | |||||||||||||||
(a) Segmental information for the six months ended and as at 30 June 2018 | |||||||||||||||
For the six months ended 30 June 2018 | Property | Raven | Segment | Central | |||||||||||
Investment | Roslogistics | Mount | Total | Overhead | Total | ||||||||||
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | ||||||||||
Gross revenue | 98,342 | 10,821 | 90 | 109,253 | - | 109,253 | |||||||||
Operating costs / Cost of sales | (24,474) | (5,442) | (53) | (29,969) | - | (29,969) | |||||||||
Net operating income | 73,868 | 5,379 | 37 | 79,284 | - | 79,284 | |||||||||
Administrative expenses | |||||||||||||||
Running general & administration expenses | (10,561) | (1,458) | (332) | (12,351) | (4,533) | (16,884) | |||||||||
Aborted project costs | (1,764) | - | - | (1,764) | - | (1,764) | |||||||||
Depreciation | (294) | (215) | - | (509) | - | (509) | |||||||||
Share-based payments and other long term incentives | (241) | - | - | (241) | (2,236) | (2,477) | |||||||||
Foreign currency losses | (8,707) | (1) | - | (8,708) | - | (8,708) | |||||||||
52,301 | 3,705 | (295) | 55,711 | (6,769) | 48,942 | ||||||||||
Unrealised loss on revaluation of investment property | (35,055) | - | - | (35,055) | - | (35,055) | |||||||||
Unrealised profit on revaluation of investment property under construction | 606 | - | - | 606 | - | 606 | |||||||||
Share of profits of joint ventures | - | - | 204 | 204 | - | 204 | |||||||||
Segment profit / (loss) | 17,852 | 3,705 | (91) | 21,466 | (6,769) | 14,697 | |||||||||
Finance income | 8,049 | ||||||||||||||
Finance expense | (59,879) | ||||||||||||||
Profit before tax | (37,133) | ||||||||||||||
As at 30 June 2018 | Property | Raven | |||||||||||||
Investment | Roslogistics | Mount | Total | ||||||||||||
$'000 | $'000 | $'000 | $'000 | ||||||||||||
Assets | |||||||||||||||
Investment property | 1,531,964 | - | - | 1,531,964 | |||||||||||
Investment property under construction | 37,152 | - | - | 37,152 | |||||||||||
Investment in joint ventures | - | - | 9,940 | 9,940 | |||||||||||
Inventory | - | - | 415 | 415 | |||||||||||
Cash and short term deposits | 194,885 | 381 | 2,829 | 198,095 | |||||||||||
Segment assets | 1,764,001 | 381 | 13,184 | 1,777,566 | |||||||||||
Other non-current assets | 73,301 | ||||||||||||||
Other current assets | 58,663 | ||||||||||||||
Total assets | 1,909,530 | ||||||||||||||
Segment liabilities | |||||||||||||||
Interest bearing loans and borrowings | 824,286 | - | - | 824,286 | |||||||||||
Capital expenditure | |||||||||||||||
Payments for property improvements | 5,458 | - | - | 5,458 | |||||||||||
Payment of deferred consideration on acquisition of investment property | 9,717 | - | - | 9,717 | |||||||||||
15,175 | - | - | 15,175 | ||||||||||||
(b) Segmental information for the six months ended and as at 30 June 2017 | |||||||||||||||
Property | Raven | Segment | Central | ||||||||||||
Investment | Roslogistics | Mount | Total | Overhead | Total | ||||||||||
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | ||||||||||
Gross revenue | 83,646 | 11,458 | 277 | 95,381 | - | 95,381 | |||||||||
Operating costs / Cost of sales | (20,305) | (5,158) | (55) | (25,518) | - | (25,518) | |||||||||
Net operating income | 63,341 | 6,300 | 222 | 69,863 | - | 69,863 | |||||||||
Administrative expenses | |||||||||||||||
Running general & administration expenses | (8,207) | (1,032) | (511) | (9,750) | (2,852) | (12,602) | |||||||||
Aborted project costs | - | - | - | - | - | - | |||||||||
Depreciation | (362) | (228) | - | (590) | - | (590) | |||||||||
Share-based payments and other long term incentives | (396) | - | - | (396) | (1,831) | (2,227) | |||||||||
Foreign currency profits | 4,919 | (7) | - | 4,912 | - | 4,912 | |||||||||
59,295 | 5,033 | (289) | 64,039 | (4,683) | 59,356 | ||||||||||
Unrealised profit on revaluation of investment property | 13,343 | - | - | 13,343 | - | 13,343 | |||||||||
Unrealised loss on revaluation of investment property under construction | (1,730) | - | - | (1,730) | - | (1,730) | |||||||||
Share of profits of joint ventures | - | - | 285 | 285 | - | 285 | |||||||||
Segment profit / (loss) | 70,908 | 5,033 | (4) | 75,937 | (4,683) | 71,254 | |||||||||
Finance income | 3,264 | ||||||||||||||
Finance expense | (48,556) | ||||||||||||||
Profit before tax | 25,962 | ||||||||||||||
Property | Raven | ||||||||||||||
Investment | Roslogistics | Mount | Total | ||||||||||||
$'000 | $'000 | $'000 | $'000 | ||||||||||||
Capital expenditure | |||||||||||||||
Corporate acquisitions | 88,301 | - | - | 88,301 | |||||||||||
Property improvements | 6,615 | - | - | 6,615 | |||||||||||
94,916 | - | - | 94,916 | ||||||||||||
(c) Segmental information as at 31 December 2017 | |||||||||||||||
Property | Raven | ||||||||||||||
Investment | Roslogistics | Mount | Total | ||||||||||||
$'000 | $'000 | $'000 | $'000 | ||||||||||||
Assets | |||||||||||||||
Investment property | 1,568,126 | - | - | 1,568,126 | |||||||||||
Investment property under construction | 38,411 | - | - | 38,411 | |||||||||||
Investment in joint ventures | - | - | 9,983 | 9,983 | |||||||||||
Inventory | - | - | 423 | 423 | |||||||||||
Cash and short term deposits | 258,908 | 907 | 6,851 | 266,666 | |||||||||||
Segment assets | 1,865,445 | 907 | 17,257 | 1,883,609 | |||||||||||
Other non-current assets | 52,450 | ||||||||||||||
Other current assets | 79,391 | ||||||||||||||
Total assets | 2,015,450 | ||||||||||||||
Segment liabilities | |||||||||||||||
Interest bearing loans and borrowings | 847,182 | - | - | 847,182 | |||||||||||
3. Administrative expenses | |||||||||||||||
Six months | Six months | ||||||||||||||
ended | ended | ||||||||||||||
30 June | 30 June | ||||||||||||||
2018 | 2017 | ||||||||||||||
$'000 | $'000 | ||||||||||||||
Employment costs | 9,481 | 7,023 | |||||||||||||
Directors' remuneration | 2,360 | 1,624 | |||||||||||||
Bad debts | - | (201) | |||||||||||||
Office running costs and insurance | 1,984 | 1,702 | |||||||||||||
Travel costs | 887 | 840 | |||||||||||||
Auditors' remuneration | 419 | 338 | |||||||||||||
Aborted project costs | 1,764 | - | |||||||||||||
Legal and professional | 1,546 | 1,087 | |||||||||||||
Depreciation | 509 | 590 | |||||||||||||
Registrar costs and other administrative expenses | 207 | 189 | |||||||||||||
19,157 | 13,192 | ||||||||||||||
4. Finance income and expense | |||||||||||||||
Six months | Six months | ||||||||||||||
ended | ended | ||||||||||||||
30 June | 30 June | ||||||||||||||
2018 | 2017 | ||||||||||||||
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 | 2,199 | 2,951 | |||||||||||||
Interest receivable from joint ventures | 17 | 14 | |||||||||||||
Other finance income | |||||||||||||||
Change in fair value of open interest rate derivative financial instruments | 5,833 | - | |||||||||||||
Change in fair value of foreign currency embedded derivatives | - | 299 | |||||||||||||
Finance income | 8,049 | 3,264 | |||||||||||||
Finance expense | |||||||||||||||
Interest expense on loans and borrowings measured at amortised cost | 35,032 | 31,777 | |||||||||||||
Interest expense on preference shares | 8,475 | 7,725 | |||||||||||||
Interest expense on convertible preference shares | 13,715 | 7,184 | |||||||||||||
Total interest expense on financial liabilities not at fair value through profit or loss | 57,222 | 46,686 | |||||||||||||
Change in fair value of open forward currency derivative financial instruments | 94 | 110 | |||||||||||||
Change in fair value of foreign currency embedded derivatives | 256 | - | |||||||||||||
Change in fair value of open interest rate derivative financial instruments | 2,307 | 1,760 | |||||||||||||
Finance expense | 59,879 | 48,556 | |||||||||||||
5. Taxation | Six months | Six months | |||||||||||||
ended | ended | ||||||||||||||
30 June | 30 June | ||||||||||||||
2018 | 2017 | ||||||||||||||
The tax charge for the period can be reconciled to the profit per the Income Statement as follows: | $'000 | $'000 | |||||||||||||
(Loss) / profit before tax | (37,133) | 25,962 | |||||||||||||
Tax at the Russian corporate tax rate of 20% | (7,427) | 5,192 | |||||||||||||
Tax effect of financing arrangements | (2,097) | (2,818) | |||||||||||||
Tax effect of non deductible preference share coupon | 4,438 | 2,982 | |||||||||||||
Tax effect of foreign exchange movements | (7) | 1,009 | |||||||||||||
Movement in provision for uncertain tax positions | (406) | 5,379 | |||||||||||||
Tax effect of other income not subject to tax and non-deductible expenses | 3,019 | 2,651 | |||||||||||||
Tax effect of property depreciation on revaluations | 3,057 | 2,283 | |||||||||||||
Tax on dividends and other inter company gains | 950 | 1,115 | |||||||||||||
Movement on previously unprovided deferred tax assets | 2,464 | (1,012) | |||||||||||||
3,991 | 16,781 | ||||||||||||||
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. 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, material non-recurring items, depreciation and amortisation of loan origination costs, together with any related tax. | |||||||||||||||
Six months | Six months | ||||||||||||||
ended | ended | ||||||||||||||
30 June | 30 June | ||||||||||||||
The calculation of basic and diluted earnings per share is based on the following data: | 2018 | 2017 | |||||||||||||
$'000 | $'000 | ||||||||||||||
Earnings | |||||||||||||||
Net (loss) / profit for the period prepared under IFRS | (41,124) | 9,181 | |||||||||||||
Adjustments to arrive at underlying earnings: | |||||||||||||||
Depreciation | 509 | 589 | |||||||||||||
Aborted project costs | 1,764 | - | |||||||||||||
Share-based payments and other long term incentives | 1,600 | 1,409 | |||||||||||||
Unrealised loss / (profit) on revaluation of investment property | 35,055 | (13,343) | |||||||||||||
Unrealised loss on revaluation of investment property under construction | (606) | 1,730 | |||||||||||||
Change in fair value of open forward currency derivative financial instruments | 94 | 110 | |||||||||||||
Change in fair value of open interest rate derivative financial instruments | (3,526) | 1,760 | |||||||||||||
Change in fair value of foreign currency embedded derivatives | 256 | (299) | |||||||||||||
Premium on redemption of preference shares and amortisation of issue costs | 286 | 262 | |||||||||||||
Premium on redemption of convertible preference shares and amortisation of issue costs | 4,982 | 2,799 | |||||||||||||
Amortisation of loan origination costs | 3,336 | 3,332 | |||||||||||||
Movement on deferred tax arising on depreciation and revaluation of investment property | 368 | 7,919 | |||||||||||||
Tax on unrealised foreign exchange movements in loans | 183 | 50 | |||||||||||||
Underlying earnings | 3,177 | 15,499 | |||||||||||||
30 June 2018 | 30 June 2017 | ||||||||||||||
Weighted | Weighted | ||||||||||||||
average | average | ||||||||||||||
Earnings | shares | EPS | Earnings | shares | EPS | ||||||||||
IFRS | $'000 | No. '000 | Cents | $'000 | No. '000 | Cents | |||||||||
Basic | (41,124) | 653,093 | (6.30) | 9,181 | 666,209 | 1.38 | |||||||||
Effect of dilutive potential ordinary shares: | |||||||||||||||
Warrants (note 14) | - | - | - | 10,082 | |||||||||||
LTIP (note 17) | - | - | - | 1,711 | |||||||||||
2016 Retention scheme (note 17) | - | - | - | 4,873 | |||||||||||
Convertible preference shares (note 12) | - | - | - | - | |||||||||||
Diluted | (41,124) | 653,093 | (6.30) | 9,181 | 682,875 | 1.34 | |||||||||
30 June 2018 | 30 June 2017 | ||||||||||||||
Weighted | Weighted | ||||||||||||||
average | average | ||||||||||||||
Earnings | shares | EPS | Earnings | shares | EPS | ||||||||||
Underlying earnings | $'000 | No. '000 | Cents | $'000 | No. '000 | Cents | |||||||||
Basic | 3,177 | 653,093 | 0.49 | 15,498 | 666,209 | 2.33 | |||||||||
Effect of dilutive potential ordinary shares: | |||||||||||||||
Warrants (note 14) | - | 4,052 | - | 10,082 | |||||||||||
LTIP (note 17) | - | 777 | - | 1,711 | |||||||||||
2016 Retention scheme (note 17) | - | 3,584 | - | 4,873 | |||||||||||
Convertible preference shares (note 12) | - | - | 4,385 | 187,032 | |||||||||||
Diluted | 3,177 | 661,506 | 0.48 | 19,883 | 869,907 | 2.29 | |||||||||
The finance expense for the period relating to the convertible preference shares is greater than IFRS basic earnings per share and underlying earnings per share and thus the convertible preference shares are not dilutive for either measure of fully diluted earnings per share. | |||||||||||||||
7. Investment property | |||||||||||||||
Asset class | Logistics | Logistics | Logistics | Office | 30 June | ||||||||||
Location | Moscow | St Petersburg | Regions | St Petersburg | 2018 | ||||||||||
Fair value hierarchy * | Level 3 | Level 3 | Level 3 | Level 3 | Total | ||||||||||
$'000 | $'000 | $'000 | $'000 | $'000 | |||||||||||
Market value at 1 January 2018 | 1,155,680 | 196,035 | 159,404 | 82,143 | 1,593,262 | ||||||||||
Property improvements | (2,720) | 400 | 569 | 764 | (987) | ||||||||||
Unrealised (loss) / profit on revaluation | (24,537) | 2,552 | (4,231) | (8,976) | (35,192) | ||||||||||
Market value at 30 June 2018 | 1,128,423 | 198,987 | 155,742 | 73,931 | 1,557,083 | ||||||||||
Tenant incentives and contracted rent uplift balances | (18,003) | (5,807) | (1,885) | (730) | (26,425) | ||||||||||
Head lease obligations | 1,306 | - | - | - | 1,306 | ||||||||||
Carrying value at 30 June 2018 | 1,111,726 | 193,180 | 153,857 | 73,201 | 1,531,964 | ||||||||||
Revaluation movement in the period ended 30 June 2018 | |||||||||||||||
Gross revaluation | (24,537) | 2,552 | (4,231) | (8,976) | (35,192) | ||||||||||
Effect of tenant incentives and contracted rent uplift balances | 549 | (58) | (174) | (180) | 137 | ||||||||||
Revaluation reported in the Income Statement | (23,988) | 2,494 | (4,405) | (9,156) | (35,055) | ||||||||||
Asset class | Logistics | Logistics | Logistics | Office | 31 December | ||||||||||
Location | Moscow | St Petersburg | Regions | St Petersburg | 2017 | ||||||||||
Fair value hierarchy * | Level 3 | Level 3 | Level 3 | Level 3 | Total | ||||||||||
$'000 | $'000 | $'000 | $'000 | $'000 | |||||||||||
Market value at 1 January 2017 | 1,005,449 | 141,431 | 151,846 | 24,818 | 1,323,544 | ||||||||||
Corporate acquisitions | - | 35,994 | - | 50,179 | 86,173 | ||||||||||
Other acquisition | 122,730 | - | - | - | 122,730 | ||||||||||
Property improvements | 11,155 | 1,738 | 3,081 | 312 | 16,286 | ||||||||||
Unrealised profit on revaluation | 16,346 | 16,872 | 4,477 | 6,834 | 44,529 | ||||||||||
Market value at 31 December 2017 | 1,155,680 | 196,035 | 159,404 | 82,143 | 1,593,262 | ||||||||||
Tenant incentives and contracted rent uplift balances | (18,552) | (5,749) | (1,711) | (550) | (26,562) | ||||||||||
Head lease obligations | 1,426 | - | - | - | 1,426 | ||||||||||
Carrying value at 31 December 2017 | 1,138,554 | 190,286 | 157,693 | 81,593 | 1,568,126 | ||||||||||
Revaluation movement in the period ended 30 June 2017 | |||||||||||||||
Gross revaluation | (5,536) | 13,554 | 904 | 3,874 | 12,796 | ||||||||||
Effect of tenant incentives and contracted rent uplift balances | 366 | 138 | 251 | (208) | 547 | ||||||||||
Revaluation reported in the Income Statement | (5,170) | 13,692 | 1,155 | 3,666 | 13,343 | ||||||||||
*Classified in accordance with the fair value hierarchy. There were no transfers between fair value hierarchy in 2017 or 2018. | |||||||||||||||
At 30 June 2018 the Group has pledged investment property with a value of $1,546 million (31 December 2017: $1,435 million) to secure banking facilities granted to the Group (note 10). | |||||||||||||||
8. Investment property under construction | |||||||||||||||
Asset class | Assets under construction | Land Bank | 30 June | ||||||||||||
Location | Moscow | Regions | Regions | 2018 | |||||||||||
Fair value hierarchy * | Level 3 | Level 3 | Sub-total | Level 3 | Sub-total | Total | |||||||||
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | ||||||||||
Market value at 1 January 2018 | 26,700 | 7,600 | 34,300 | 3,596 | 3,596 | 37,896 | |||||||||
Costs incurred | (19) | 3 | (16) | - | - | (16) | |||||||||
Effect of foreign exchange rate changes | (934) | (557) | (1,491) | (314) | (314) | (1,805) | |||||||||
Unrealised profit on revaluation | 53 | 553 | 606 | - | - | 606 | |||||||||
Market value at 30 June 2018 | 25,800 | 7,599 | 33,399 | 3,282 | 3,282 | 36,681 | |||||||||
Head lease obligations | 471 | - | 471 | - | - | 471 | |||||||||
Carrying value at 30 June 2018 | 26,271 | 7,599 | 33,870 | 3,282 | 3,282 | 37,152 | |||||||||
Asset class | Assets under construction | Land Bank | 31 December | ||||||||||||
Location | Moscow | Regions | Regions | 2017 | |||||||||||
Fair value hierarchy * | Level 3 | Level 3 | Sub-total | Level 3 | Sub-total | Total | |||||||||
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | ||||||||||
Market value at 1 January 2017 | 29,600 | 7,500 | 37,100 | 3,662 | 3,662 | 40,762 | |||||||||
Costs incurred | 57 | 12 | 69 | - | - | 69 | |||||||||
Effect of foreign exchange rate changes | 686 | 341 | 1,027 | 206 | 206 | 1,233 | |||||||||
Unrealised loss on revaluation | (3,643) | (253) | (3,896) | (272) | (272) | (4,168) | |||||||||
Market value at 31 December 2017 | 26,700 | 7,600 | 34,300 | 3,596 | 3,596 | 37,896 | |||||||||
Head lease obligations | 515 | - | 515 | - | - | 515 | |||||||||
Carrying value at 31 December 2017 | 27,215 | 7,600 | 34,815 | 3,596 | 3,596 | 38,411 | |||||||||
*Classified in accordance with the fair value hierarchy. There were no transfers between fair value hierarchy in 2017 or 2018. | |||||||||||||||
No borrowing costs were capitalised in the period (31 December 2017: $nil). At 30 June 2018 the Group has pledged investment property under construction with a value of $33.4 million (31 December 2017: $34.3 million) to secure banking facilities granted to the Group (note 10). | |||||||||||||||
9. Valuation assumptions and key inputs | |||||||||||||||
Class of property | Carrying amount | Valuation | Input | Range | |||||||||||
30 June | 31 December | 30 June | 31 December | ||||||||||||
2018 | 2017 | technique | 2018 | 2017 | |||||||||||
$'000 | $'000 | ||||||||||||||
Completed investment property | |||||||||||||||
Moscow - Logistics | 1,111,726 | 1,138,554 | Income | Long term ERV per sqm for existing tenants | Rub 4,895 to Rub 5,334 | Rub 4,500 to Rub 4,896 | |||||||||
capitalisation | |||||||||||||||
Short term ERV per sqm for vacant space | Rub 3,500 to Rub 3,800 | Rub 3,500 to Rub 3,800 | |||||||||||||
Initial yield | 2.2% to 17.1% | 2.5% to 15.5% | |||||||||||||
Equivalent yield | 10.5% to 12.0% | 10.5% to 12.0% | |||||||||||||
Vacancy rate | 1% to 61% | 1% to 94% | |||||||||||||
Passing rent per sqm | $113 to $166 | $110 to $166 | |||||||||||||
Passing rent per sqm | Rub 3,000 to Rub 11,847 | Rub 3,104 to Rub 11,847 | |||||||||||||
St Petersburg - Logistics | 193,180 | 190,286 | Income | Long term ERV per sqm for existing tenants | Rub 4,707 to Rub 5,021 | Rub 4,320 to Rub 4,608 | |||||||||
capitalisation | |||||||||||||||
Short term ERV per sqm for vacant space | |||||||||||||||
Rub 3,800 | Rub 3,800 | ||||||||||||||
Initial yield | 6.8% to 12.2% | 6.0% to 13.4% | |||||||||||||
Equivalent yield | 11.7% to 11.8% | 12.1% to 13.4% | |||||||||||||
Vacancy rate | 7% to 19% | 3% to 19% | |||||||||||||
Passing rent per sqm | $109 to $135 | $69 to $140 | |||||||||||||
Passing rent per sqm | Rub 2,339 to Rub 5,260 | Rub 2,339 to Rub 4,916 | |||||||||||||
Regional - Logistics | 153,857 | 157,693 | Income | Long term ERV per sqm for existing tenants | |||||||||||
capitalisation | |||||||||||||||
Rub 5,021 | Rub 4,608 | ||||||||||||||
Short term ERV per sqm for vacant space | |||||||||||||||
Rub 3,800 | Rub 3,800 | ||||||||||||||
Initial yield | 11.1% to 12.0% | 9.0% to 11.3% | |||||||||||||
Equivalent yield | 11.6% to 11.7% | 12.1% to 12.5% | |||||||||||||
Vacancy rate | 3% to 12% | 6% to 27% | |||||||||||||
Passing rent per sqm | $105 to $138 | $104 to $133 | |||||||||||||
Passing rent per sqm | Rub 3,780 to Rub 4,549 | Rub 3,720 to Rub 6,707 | |||||||||||||
St Petersburg - Office | 73,201 | 81,593 | Income | ERV per sqm | $159 to $197 | $173 to $215 | |||||||||
capitalisation | Initial yield | 12.0% to 27.5% | 12.5% to 24.3% | ||||||||||||
Equivalent yield | 11.0% to 12.3% | 11.0% to 12.3% | |||||||||||||
Vacancy rate | 0% to 2% | 0% to 1% | |||||||||||||
Passing rent per sqm | $366 | $388 | |||||||||||||
Passing rent per sqm | Rub 8,004 to Rub 16,272 | Rub 8,124 to Rub 16,271 | |||||||||||||
Passing rent per sqm | €390 | €390 | |||||||||||||
Range | |||||||||||||||
Other key information | Description | 30 June | 31 December | ||||||||||||
2018 | 2017 | ||||||||||||||
Moscow - Logistics | Land plot ratio | 34% - 65% | 34% - 65% | ||||||||||||
Age of building | 2 to 13 years | 1 to 13 years | |||||||||||||
Outstanding costs (US$'000) | 2,980 | 9,436 | |||||||||||||
St Petersburg - Logistics | Land plot ratio | 48% - 57% | 48% - 57% | ||||||||||||
Age of building | 3 to 9 years | 3 to 9 years | |||||||||||||
Outstanding costs (US$'000) | 667 | 826 | |||||||||||||
Regional - Logistics | Land plot ratio | 48% - 61% | 48% - 61% | ||||||||||||
Age of building | 8 years | 8 years | |||||||||||||
Outstanding costs (US$'000) | 545 | 154 | |||||||||||||
St Petersburg - Office | Land plot ratio | 148% to 496% | 148% to 496% | ||||||||||||
Age of building | 9 to 11 years | 9 to 11 years | |||||||||||||
Outstanding costs (US$'000) | 253 | 81 | |||||||||||||
Carrying amount | Input | Range | |||||||||||||
Investment property under construction | 30 June 2018 | 31 December 2017 | Valuation technique | 30 June 2018 | 31 December 2017 | ||||||||||
$'000 | $'000 | ||||||||||||||
Moscow - Logistics | 26,271 | 27,215 | Comparable | Value per ha ($m) | $0.29 - $0.52 | $0.32 - $0.53 | |||||||||
Regional - Logistics | 7,599 | 7,600 | Comparable | Value per ha ($m) | $0.30 | $0.30 | |||||||||
10. Interest bearing loans and borrowings | 30 June | 31 December | ||||||
2018 | 2017 | |||||||
Bank loans | $'000 | $'000 | ||||||
Loans due for settlement within 12 months | 43,202 | 106,697 | ||||||
Loans due for settlement after 12 months | 781,084 | 740,485 | ||||||
824,286 | 847,182 | |||||||
The Group's borrowings have the following maturity profile: | ||||||||
On demand or within one year | 43,202 | 106,697 | ||||||
In the second year | 81,686 | 148,390 | ||||||
In the third to fifth years | 437,097 | 383,582 | ||||||
After five years | 262,301 | 208,513 | ||||||
824,286 | 847,182 | |||||||
The amounts above include unamortised loan origination costs of $9.7 million (31 December 2017: $10.6 million) and interest accruals of $1.8 million (31 December 2017: $1.7 million). | ||||||||
The principal terms of the Group's interest bearing loans and borrowings on a weighted average basis are summarised below: | ||||||||
As at 30 June 2018 | Interest | Maturity | ||||||
Rate | (years) | $'000 | ||||||
Secured on investment property and investment property under construction | 7.49% | 4.4 | 809,554 | |||||
Unsecured facility of the Company | 4.84% | 2.9 | 14,732 | |||||
824,286 | ||||||||
As at 31 December 2017 | ||||||||
Secured on investment property and investment property under construction | 7.60% | 4.5 | 832,405 | |||||
Unsecured facility of the Company | 8.90% | 2.7 | 14,777 | |||||
847,182 | ||||||||
The interest rates shown above are the weighted average cost, including US LIBOR (or equivalent benchmark rate as appropriate), as at the Balance Sheet dates. | ||||||||
11. Preference shares | ||||||||
30 June | 31 December | |||||||
2018 | 2017 | |||||||
$'000 | $'000 | |||||||
At 1 January | 146,458 | 131,703 | ||||||
Purchased in the period / year | - | (112) | ||||||
Re-issued in the period / year | - | 961 | ||||||
Premium on redemption of preference shares and amortisation of issue costs | 286 | 537 | ||||||
Scrip dividends | 261 | 863 | ||||||
Effect of foreign exchange rate changes | (3,528) | 12,506 | ||||||
At 30 June / 31 December | 143,477 | 146,458 | ||||||
30 June | 31 December | |||||||
2018 | 2017 | |||||||
Number | Number | |||||||
At 1 January | 99,143,192 | 98,265,327 | ||||||
Purchased in the period / year | - | (56,866) | ||||||
Re-issued in the period / year | - | 487,047 | ||||||
Scrip dividends | 132,974 | 447,684 | ||||||
At 30 June / 31 December | 99,276,166 | 99,143,192 | ||||||
Shares in issue | 99,333,034 | 99,200,060 | ||||||
Held by the Company's Employee Benefit Trusts | (56,868) | (56,868) | ||||||
At 30 June / 31 December | 99,276,166 | 99,143,192 | ||||||
12. Convertible preference shares | ||||||||
30 June | 31 December | |||||||
2018 | 2017 | |||||||
$'000 | $'000 | |||||||
At 1 January | 269,031 | 119,859 | ||||||
Issued in the period / year | - | 130,290 | ||||||
Allocated to equity | - | (6,067) | ||||||
Acquired by Company's Employee Benefit Trust | - | (3,888) | ||||||
Reissued in the period / year | - | 4,376 | ||||||
Converted to ordinary shares (note 13) | - | (331) | ||||||
Premium on redemption of preference shares and amortisation of issue costs | 4,982 | 7,448 | ||||||
Movement on accrual for preference dividends | - | 22 | ||||||
Effect of foreign exchange rate changes | (6,660) | 17,322 | ||||||
At 30 June / 31 December | 267,353 | 269,031 | ||||||
30 June | 31 December | |||||||
2018 | 2017 | |||||||
Number | Number | |||||||
At 1 January | 192,388,886 | 102,837,876 | ||||||
Issued in the period / year | - | 89,766,361 | ||||||
Acquired by Company's Employee Benefit Trust | - | (2,631,578) | ||||||
Reissued in the year | - | 2,683,075 | ||||||
Converted to ordinary shares (note 13) | - | (266,848) | ||||||
At 30 June / 31 December | 192,388,886 | 192,388,886 | ||||||
Shares in issue | 198,189,014 | 198,189,014 | ||||||
Held by the Company's Employee Benefit Trusts | (5,800,128) | (5,800,128) | ||||||
At 30 June / 31 December | 192,388,886 | 192,388,886 | ||||||
On 4 July 2017 the Company created and issued a further 89,766,361 convertible preference shares at a placing price of 114p per share. The new convertible preference shares rank pari passu with the existing convertible preference shares in issue. One of the Company's employee benefit trusts participated in the placing and subscribed for a further 2,631,578 convertible preference shares. | ||||||||
13. Share capital | 30 June | 31 December | ||||||
2018 | 2017 | |||||||
$'000 | $'000 | |||||||
At 1 January | 12,479 | 12,578 | ||||||
Issued in the period / year for cash on warrant exercises | 107 | 180 | ||||||
On conversion of convertible preference shares (note 12) | - | 6 | ||||||
Repurchased and cancelled in the period / year | (417) | (285) | ||||||
At 30 June / 31 December | 12,169 | 12,479 | ||||||
30 June | 31 December | |||||||
2018 | 2017 | |||||||
Number | Number | |||||||
At 1 January | 660,571,843 | 667,968,463 | ||||||
Issued in the period / year for cash on warrant exercises | 7,853,348 | 13,946,387 | ||||||
On conversion of convertible preference shares (note 12) | - | 474,722 | ||||||
Repurchased and cancelled in the period / year | (31,311,181) | (21,817,729) | ||||||
At 30 June / 31 December | 637,114,010 | 660,571,843 | ||||||
Of the authorised ordinary share capital of 1,500,000,000 at 30 June 2018 (31 December 2017: 1,500,000,000), 3.1 million (31 December 2017: 10.9 million) ordinary shares are reserved for warrants. | ||||||||
Details of own shares held are given in note 15. | ||||||||
30 June | 31 December | |||||||
2018 | 2017 | |||||||
Summary of ordinary share movements from tender offers in the period / year | Number | Number | ||||||
Number of ordinary shares purchased | 39,311,181 | 21,817,729 | ||||||
Retained as own shares (note 15) | (8,000,000) | - | ||||||
Cancelled in the period / year | 31,311,181 | 21,817,729 | ||||||
14. Warrants | 30 June | 31 December | ||||||
2018 | 2017 | |||||||
$'000 | $'000 | |||||||
At 1 January | 441 | 1,161 | ||||||
Exercised in the period / year | (255) | (720) | ||||||
At 30 June / 31 December | 186 | 441 | ||||||
30 June | 31 December | |||||||
2018 | 2017 | |||||||
Number | Number | |||||||
At 1 January | 10,948,352 | 24,894,739 | ||||||
Exercised in the period / year | (7,853,348) | (13,946,387) | ||||||
At 30 June / 31 December | 3,095,004 | 10,948,352 | ||||||
15. Own shares held | 30 June | 31 December | ||||||
2018 | 2017 | |||||||
$'000 | $'000 | |||||||
At 1 January | (5,742) | (7,449) | ||||||
Acquired under tender offers | (5,536) | - | ||||||
Acquisitions | (103) | (158) | ||||||
Allocation to satisfy Annual Performance Incentive (note 17b) | 2,049 | - | ||||||
Cancelled | 22 | 47 | ||||||
Allocation to satisfy LTIP options exercised (note 17a) | 975 | 1,818 | ||||||
At 30 June / 31 December | (8,335) | (5,742) | ||||||
30 June | 31 December | |||||||
2018 | 2017 | |||||||
Number | Number | |||||||
At 1 January | 5,150,122 | 6,444,080 | ||||||
Acquired under a tender offer | 8,000,000 | - | ||||||
Other acquisitions | 173,958 | 257,703 | ||||||
Allocation to satisfy Annual Performance Incentive (note 17b) | (1,704,000) | - | ||||||
Cancelled | (18,398) | (39,472) | ||||||
Allocation to satisfy LTIP options exercised (note 17a) | (810,811) | (1,512,189) | ||||||
At 30 June / 31 December | 10,790,871 | 5,150,122 | ||||||
Allocations are transfers by the Company's Employee Benefit Trusts to satisfy LTIP options exercised in the period and two of the 2017 Annual Performance Incentives. The amounts shown for share movements are net of the Trustees' participation in tender offers during the period from grant to exercise. Details of outstanding LTIP options, which are vested but unexercised, are given in note 17a. | ||||||||
16. Net asset value per share | ||||||||
As well as reporting IFRS net asset value per share, the Group also reports its own adjusted net asset value and adjusted net asset value per share measure. The Directors consider that the adjusted measure provides more relevant information to shareholders as to the net asset value of a property investment group with a strategy of long term investment. The adjustments remove or adjust assets and liabilities, including goodwill and amounts relating to irredeemable preference shares, that are not expected to crystallise in normal circumstances. | ||||||||
30 June | 31 December | |||||||
2018 | 2017 | |||||||
$'000 | $'000 | |||||||
Net asset value | 478,392 | 529,758 | ||||||
Goodwill in joint venture | (4,599) | (4,712) | ||||||
Unrealised foreign exchange profits on preference shares | (11,384) | (7,856) | ||||||
Fair value of interest rate derivative financial instruments | (15,378) | (8,032) | ||||||
Fair value of embedded derivatives | 69 | (186) | ||||||
Fair value of foreign exchange derivative financial instruments | (46) | (140) | ||||||
Adjusted net asset value | 447,054 | 508,832 | ||||||
Number | Number | |||||||
Number of ordinary shares (note 13) | 637,114,010 | 660,571,843 | ||||||
Less own shares held (note 15) | (10,790,871) | (5,150,122) | ||||||
626,323,139 | 655,421,721 | |||||||
30 June 2018 | 31 December 2017 | |||||||
Net asset | Net asset | |||||||
Net asset | Ordinary | value per | Net asset | Ordinary | value per | |||
value | shares | share | value | shares | share | |||
IFRS | $'000 | No. '000 | Cents | $'000 | No. '000 | Cents | ||
Net asset value per share | 478,392 | 626,323 | 76 | 529,758 | 655,422 | 81 | ||
Effect of dilutive potential ordinary shares: | ||||||||
Convertible preference shares (note 12) | - | - | 269,031 | 338,412 | ||||
Warrants (note 14) | 1,021 | 3,095 | 3,703 | 10,948 | ||||
LTIP (Note 17) | 351 | 1,062 | 633 | 1,873 | ||||
2016 Retention Scheme (note 17) | 2,219 | 4,912 | 1,714 | 4,616 | ||||
Fully diluted net asset value per share | 481,983 | 635,392 | 76 | 804,839 | 1,011,271 | 80 | ||
30 June 2018 | 31 December 2017 | |||||||
Net asset | Net asset | |||||||
Net asset | Ordinary | value per | Net asset | Ordinary | value per | |||
value | shares | share | value | shares | share | |||
Adjusted | $'000 | No. '000 | Cents | $'000 | No. '000 | Cents | ||
Net asset value per share | 447,054 | 626,323 | 71 | 508,832 | 655,422 | 78 | ||
Effect of dilutive potential ordinary shares: | ||||||||
Convertible preference shares (note 12) | - | - | - | - | ||||
Warrants (note 14) | 1,021 | 3,095 | 3,703 | 10,948 | ||||
LTIP (Note 17) | 351 | 1,062 | 633 | 1,873 | ||||
2016 Retention Scheme (note 17) | 2,219 | 4,912 | 1,714 | 4,616 | ||||
Fully diluted net asset value per share | 450,645 | 635,392 | 71 | 514,882 | 672,859 | 77 | ||
The carrying value of the convertible preference shares at 30 June 2018 (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 2018. | ||||||||
17. Share-based payments and other long term incentives | Six months ended 30 June 2018 | Six months ended 30 June 2017 | ||||||
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 | 1,872,973 | 25p | 3,872,973 | 25p | ||||
Exercised during the period | ||||||||
- LTIP | (810,811) | 25p | (1,000,000) | 25p | ||||
Outstanding at the end of the period | 1,062,162 | 25p | 2,872,973 | 25p | ||||
Represented by: | ||||||||
- LTIP | 1,062,162 | 2,872,973 | ||||||
Exercisable at the end of the period | 1,062,162 | 25p | 2,872,973 | 25p | ||||
Six months | Six months | |||||||
ended | ended | |||||||
(b) Income statement charge for the period | 30 June 2018 | 30 June 2017 | ||||||
$'000 | $'000 | |||||||
Five Year Performance Plan | - | - | ||||||
Annual Performance Incentive | 1,031 | - | ||||||
2016 Retention Scheme | 1,446 | 2,227 | ||||||
2,477 | 2,227 | |||||||
Satisfied by or to be satisfied by allocation of: | ||||||||
Ordinary shares (IFRS 2 expense) | 1,031 | - | ||||||
Convertible preference shares (IFRS 2 expense) | 569 | 1,409 | ||||||
Cash | 877 | 818 | ||||||
2,477 | 2,227 | |||||||
18. Ordinary dividends The Company did not declare a final dividend for the year ended 31 December 2017 (2016: none) and instead implemented a tender offer buy back for ordinary shares on 1 June 2018 on the basis of 1 in every 17 shares held and a tender price of 52 pence per share, the equivalent of a final dividend of 3 pence per share. (2016: 1 in every 26 shares at 52p per share the equivalent of 2p 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 2018 | 31 December 2017 | |||||||
Carrying | Fair | Carrying | Fair | |||||
Value | Value | Value | Value | |||||
$'000 | $'000 | $'000 | $'000 | |||||
Non-current assets | ||||||||
Loans receivable | 664 | 620 | 665 | 621 | ||||
Security deposits | 16,616 | 13,467 | 1,305 | 1,220 | ||||
Derivative financial instruments | 15,411 | 15,411 | 7,948 | 7,948 | ||||
Current assets | ||||||||
Trade receivables | 41,644 | 41,644 | 44,315 | 44,315 | ||||
Security deposits | 1,332 | 1,332 | - | - | ||||
Other current receivables | 834 | 834 | 1,509 | 1,509 | ||||
Derivative financial instruments | 13 | 13 | 445 | 445 | ||||
Cash and short term deposits | 198,095 | 198,095 | 266,666 | 266,666 | ||||
Non-current liabilities | ||||||||
Interest bearing loans and borrowings | 781,084 | 777,646 | 740,485 | 743,488 | ||||
Preference shares | 143,477 | 193,991 | 146,458 | 195,816 | ||||
Convertible preference shares | 267,353 | 303,545 | 269,031 | 317,521 | ||||
Rent deposits | 22,521 | 19,306 | 22,626 | 19,838 | ||||
Deferred consideration on property acquisition | - | - | 10,008 | 10,008 | ||||
Other payables | 1,769 | 1,769 | 1,932 | 1,932 | ||||
Current liabilities | ||||||||
Interest bearing loans and borrowings | 43,202 | 43,202 | 106,697 | 106,697 | ||||
Derivative financial instruments | 69 | 69 | 35 | 35 | ||||
Rent deposits | 7,398 | 7,398 | 6,622 | 6,622 | ||||
Deferred consideration on property acquisition | 22,693 | 22,693 | 24,166 | 24,166 | ||||
Other payables | 1,874 | 1,874 | 17,455 | 17,455 | ||||
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 2018 | $'000 | $'000 | $'000 | $'000 | ||||
Assets measured at fair value | ||||||||
Investment property | - | - | 1,531,964 | 1,531,964 | ||||
Investment property under construction | - | - | 37,152 | 37,152 | ||||
Derivative financial instruments | - | 15,424 | - | 15,424 | ||||
Liabilities measured at fair value | ||||||||
Derivative financial instruments | - | 69 | - | 69 | ||||
As at 31 December 2017 | ||||||||
Assets measured at fair value | ||||||||
Investment property | - | - | 1,568,126 | 1,568,126 | ||||
Investment property under construction | - | - | 38,411 | 38,411 | ||||
Derivative financial instruments | - | 8,393 | - | 8,393 | ||||
Liabilities measured at fair value | ||||||||
Derivative financial instruments | - | 35 | - | 35 | ||||
* 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 comprise swap contracts and interest rate caps. These contracts are valued using a discounted cash flow model and where not cash collateralised consideration is given to the Group's own credit risk. | ||||||||
20. Subsequent events On 10 August 2018 the Group entered into two agreements to purchase an extension to the Sever logistics park in Moscow for a consideration of Rub 2.45 billion. The agreements are conditional on the satisfaction of certain escrow arrangements and the acquisition is expected to complete in late September 2018. |
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Raven Russia Ltd. published this content on 28 August 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 28 August 2018 06:16:02 UTC