STENPROP LIMITED
(Incorporated in Bermuda)
Registration number: 47031
BSX share code: STP.BH
JSE share code: STP
ISIN: BMG8465Y1093
Provisional Annual Results
for the year ended 31 March 2017
Highlights
EUR1.59 10.28 cents 4.5 cents 1.1%
diluted diluted adjusted final dividend per increase in
EPRA* NAV EPRA earnings share full year dividend
per share per share declared per share
against prior year
Stenprop Limited, which has a primary listing on the Johannesburg Stock Exchange ('JSE') and a secondary listing on the
Bermuda Stock Exchange ('BSX'), presents its results for the year ended 31 March 2017 ('the reporting date').
Financial
- Declaration of a final dividend on 7 June 2017 of 4.5 cents per share which, together with the
interim dividend declared on 23 November 2016 of 4.5 cents, results in a total dividend for the
year ended 31 March 2017 of 9.0 cents per share (2016: 8.9 cents). The final dividend is payable
in cash on 4 August 2017
- The total dividend equates to a historic dividend yield of 7.1% on the share price of EUR1.26^ at
5 June 2017, or 5.7% on the diluted EPRA NAV of EUR1.59 at 31 March 2017
- Diluted adjusted EPRA EPS* of 10.28 cents for the year ended 31 March 2017, representing a
1.2% decrease on the diluted adjusted EPRA EPS at 31 March 2016, due entirely to the decline
in the value of Sterling. Diluted IFRS EPS was 6.16 cents (2016: 17.66 cents)
- This equates to a historic earnings yield of 8.2% on the share price of EUR1.26^ at 5 June 2017, or
6.5% on the diluted EPRA NAV of EUR1.59 at 31 March 2017
- Diluted EPRA net asset value per share of EUR1.59, a decrease of 4.8% since the prior year end,
a major part of which is due to the decline in the value of Sterling. Diluted IFRS net asset value
per share was EUR1.53 per share (2016: EUR1.61)
- Stenprop repurchased 9,026,189 of its own shares during the year for EUR11.4 million in a limited
programme of share buy-backs. Excluding the dividend, the average price paid was EUR1.217 per
share which compares favourably with the year end diluted EPRA NAV per share of EUR1.59.
FX rates in period
Average foreign exchange rates in the year: GBP1.00:EUR1.190; CHF1.00:EUR0.923 (2016: GBP1.00:EUR1.366; CHF1.00:EUR0.932)
Year end foreign exchange rates: GBP1.00:EUR1.169; CHF1.00:EUR0.935 (2016: GBP1.00:EUR1.265; CHF1.00:EUR0.915)
* 'EPRA' means European Public Real Estate Association. 'EPS' means earnings per share.
^ JSE closing price on 5 June 2017 was ZAR17.99. ZAR:EUR rate at the same date was 14.294
Industrial Portfolio Acquisition
- Subsequent to the year end on 6 June 2017, contracts were exchanged in an off-market
transaction to acquire all of the interests in a portfolio of 25 separate multi let industrial estates
situated across the United Kingdom for a purchase consideration which valued the portfolio at
GBP127 million, excluding costs. The portfolio comprises properties with a gross lettable area of
approximately 2 million square feet and contractual rent (including contractual fixed uplifts) of
approximately GBP9.1 million per annum representing an average rent of GBP5.15 psf. There are over
400 tenants creating a diversified base of earnings. Completion is due to take place on 30 June 2017
- On the same date, Stenprop exchanged contracts to acquire C2 Capital Limited, the
management platform responsible for aggregating and managing the portfolio for a purchase
consideration of GBP3.5 million, to be settled by the issue of 3,270,500 Stenprop shares,valued at EUR1.22 per share.
By structuring the acquisition in this way, Stenprop has acquired a strategic portfolio of sufficient
scale in the multi let industrial sector together with a specialist operating platform and team.
This is expected to form the foundation for ongoing earnings enhancing acquisitions of similar
properties
Bank Refinancing
- The EUR84.9 million of debt on the Bleichenhof property located in the core of Hamburg has
been refinanced on an interest only basis for a five year term, until 28 February 2022, at an all-
in fixed rate of 1.58 % per annum. This compares with the previous all-in fixed rate of 1.90 %
per annum
- All of the bank loans in respect of the Swiss properties which expired on 31 March 2017 have
been extended on a short term ongoing rolling basis pending their sales. The refinancing is
aligned with Stenprop's stated strategy to sell these assets. The extended loans have no swaps
and interest is charged at Swiss LIBOR plus a margin of between 1.05% and 1.5%. Since Swiss
LIBOR is currently negative, the margin represents the current interest rate.This compares
very favourably with the previous all-in rates of approximately 2.75%
- GBP12.4 million of debt on a portfolio of UK regional properties was refinanced on 26 May 2016 for
a five year period, at an all in interest rate of 3.46% and no capital repayments
Sales
- On 29 November 2016, Stenprop sold its first Swiss property in Interlaken, Switzerland at
valuation (CHF6.8 million)
- Stenprop owns a 28.42% share in Stenham European Shopping Centre which owns a shopping
centre known as Nova Eventis situated near Leipzig. Contracts were exchanged on 6 February
2017 to sell this asset at a valuation of GBP208.5 million. All closing conditions have been met and
the sale is scheduled to complete on 22 June 2017.
Commentary
Stenprop is pleased to report its Group annual financial statements for the year ended 31 March 2017.
Investment strategy
Stenprop's core strategy is to grow a portfolio of investment properties capable of delivering sustainable and growing earnings,
distributions and capital growth to shareholders.
A key aspect of this strategy is the need to continuously evaluate new opportunities which are likely to show superior growth in
earnings , distributions and capital value going forward. Stenprop also actively monitors its existing portfolio to identify assets
which need to be sold as they are no longer likely to meet these growth expectations for various micro or macro factors.
This strategy is behind the exit from Switzerland which is currently underway, and the post year-end acquisition of a UK industrial
portfolio of multi let industrial assets for a purchase consideration that values the portfolio at GBP127 million. As
discussed later in this report, the acquisition represents a strategic opportunity for Stenprop to invest significantly in an asset
class that, based on a number of positive fundamentals, Stenprop believes will deliver sustainable earnings. Stenprop intends
to utilise its newly acquired platform to pursue further opportunities in this sector quickly and decisively, in an effort to establish
itself as a leading player in the UK multi let industrial space.
Current policy is to distribute at least 85% of its EPRA earnings which are available for distribution on a bi-annual basis.
Business review
Portfolio summary
As at 31 March 2017, including Assets Held for Sale, the Company's real estate portfolio comprised an interest in 54 properties
valued at EUR848.1 million, with 40.3% in the United Kingdom, 41.7% in Germany and 18% in Switzerland (by value). The portfolio,
which has a gross lettable area of approximately 252,700 m2 and gross annual rent of EUR52.5 million(1), is predominantly in the office
and retail sectors which account for 54.7% and 31% of rental income respectively.
Top five properties by value as at 31 March 2017
Stenprop Annualised Weighted
share of gross rental average
Market Ownership market Lettable (Stenprop unexpired
value interest value area share) lease term
Property (EUR million) % (EUR million) Sector (m2) (EUR million) (years)
Bleichenhof, Hamburg 127.5 94.9 121.0 Mixed use 20,067 5.5 4.5
Pilgrim Street, London 91.2 100 91.2 Office 9,655 5.1 4.2
Euston House, London 90.8 100 90.8 Office 10,204 4.8 4.2
Trafalgar Court, Guernsey 73.1 100 73.1 Office 10,564 4.9 10.1
Berlin daily needs cluster* 70.6 100 70.6 Retail 35,347 4.5 8.8
Total 453.2 446.7 85,837 24.8 6.3
(1) Includes Stenprop's share of the properties held within the associate and joint venture investments.
* Comprising the properties known as Isabel, Hermann and Victoria.
These five properties account for 53% of the total portfolio asset value. The value of the two Central London properties shown
above accounts for 21% of the total portfolio asset value (27% including Stenprop's share of 25 Argyll Street). The Berlin daily
needs cluster refers to three centrally located properties and highlights the importance of these strongly performing retail
centres to the portfolio.
Additions and disposals
On 29 November 2016, Stenprop sold its property in Interlaken, Switzerland at valuation (CHF6.8 million).
The remaining Swiss portfolio is currently being marketed for sale and is expected to be sold within the next six to 12 months.
A policy of actively managing the disposal timeline had previously been followed in order to minimise the impact of cash drag
prior to redeployment. Now that Stenprop has contracted to acquire the multi let industrial portfolio we intend to speed up the Swiss
disposal process.
Stenprop owns a 28.42% share in Stenham European Shopping Centre Fund Limited ('SESCF'). SESCF owns a regional shopping
centre known as Nova Eventis situated near Leipzig. Contracts to dispose of this asset at a valuation of EUR208.5 million which
represents its fair value at 31 March 2017, were exchanged on 6 February 2017. The buyers paid a deposit of EUR11 million. All closing
conditions have been met, and the sale is scheduled to complete on 22 June 2017. The disposal is expected to generate
approximately EUR18.3 million for Stenprop.
There were no additions in the period.
Financial Review
Earnings
The basic earnings attributable to ordinary shareholders for the year ended 31 March 2017 were EUR17.5 million (2016: EUR49.3 million).
This equates to a diluted IFRS EPS of 6.16 cents (2016: 17.66 cents). The variance compared with the prior year is almost entirely
due to downward property valuation adjustments, which including Stenprop's share of associates and joint ventures, amounted
to EUR11.8 million (2016: EUR22.9 million uplift) and the impact of the average Sterling exchange rate in force for the period of
GBP1.00:EUR1.19 (2016: GBP1.00:EUR1.37). Headline earnings were EUR33.1 million (2016: EUR26.7 million) equating to a diluted headline EPS of
11.68 cents (2016: 9.56 cents).
In accordance with reporting standards widely adopted across the real estate industry in Europe, the board of directors feels
it is appropriate and useful, in addition to providing the IFRS disclosed earnings, to also disclose EPRA(2) earnings. Adjusted
EPRA earnings attributable to shareholders were EUR29.1 million (2016: EUR29.0 million), equating to a diluted adjusted EPRA EPS
of 10.28 cents (2016: 10.41 cents). This represents a 1.2% decrease on the diluted adjusted EPRA EPS at 31 March 2016 and is
entirely as a result of the weakening of Sterling over the period. If exchange rates had been constant compared with the prior
year, the diluted adjusted EPRA EPS at 31 March 2017 would have risen by 5.6% to 10.99 cents.
Management fee income relates to fees earned by the management companies on management and administration services
provided to certain managed property syndicates and funds. During the year the Group earned fees relating to the disposal of
assets held by managed syndicates of EUR1.7 million (2016: EUR0.9 million). Annual management fees made up the balance of the
external management fee income which totalled EUR3.7 million for the year ended 31 March 2017 (2016: EUR2.9 million).
Dividends
On 7 June 2017, the directors declared a final dividend of 4.5 cents per share (2016: 4.7 cents) which, together with the interim
dividend of 4.5 cents (2016: 4.2 cents) declared on 23 November 2016, results in a total dividend for the year ended 31 March 2017
of 9.0 cents (2016: 8.9 cents).
The final dividend will be a cash dividend. An announcement containing details of the dividend and the timetable will be made
separately.
Share repurchases
Towards the end of June 2016 the Company began a limited programme of share repurchases and during June and July 2016,
the Company repurchased 1,356,567 shares for an aggregate purchase price of EUR1.8 million. The programme continued in
November and December 2016 with the repurchase of a further 7,669,622 shares for an aggregate purchase price of EUR9.6 million.
The combined average price per share of the repurchased shares was EUR1.262. The shares were purchased with the benefit of
the dividend thereby effectively reducing the average price per share acquired to EUR1.217. All shares repurchased are held as
treasury shares.
(2) The European Public Real Estate Association ('EPRA') issued Best Practices Policy Recommendations in November 2016, which
provide guidelines for performance measures relevant to real estate companies. Their recommended reporting standards are
widely applied across this market, aiming to bring consistency and transparency to the sector. The EPRA earnings measure is
intended to show the level of recurring earnings from core operational activities with the purpose of highlighting the Group's
underlying operating results from its property rental business and an indication of the extent to which current dividend payments
are supported by earnings. The measure excludes unrealised changes in the value of investment properties, gains or losses
on the disposal of properties and other items that do not provide an accurate picture of the Group's underlying operational
performance. The measure is considered to accurately capture the long-term strategy of the Group, and is an indication of the
sustainability of dividend payments.
Net asset value
The IFRS (basic and diluted) net asset value per share at 31 March 2017 was EUR1.53 (2016: EUR1.61).
As is the case with regard to the disclosure of EPRA earnings, the directors feel that it is appropriate and useful, in addition to
IFRS NAV, to also disclose EPRA NAV(3).The diluted EPRA NAV per share at 31 March 2017 was EUR1.59 (2016: EUR1.67). 63% of the
decrease over the year is due to foreign exchange and the decline in the value of Sterling, and the balance driven by declines in
property valuations, mainly the Nova Eventis asset, and UK properties following the Brexit vote. See also the 'Foreign exchange'
and 'Portfolio valuation' sections below.
Foreign exchange
Approximately 47% of Stenprop's net asset value is in Sterling. Consequently the Sterling:Euro exchange rate has a material
impact on reported Euro earnings and net asset values. In broad terms a 10% decline in Sterling against the Euro will result in an
overall 4.5% decline in earnings or net asset values reported in Euros. Euro rates against Sterling at the start of April 2016 were
GBP1.00:EUR1.27 and devalued by 7.9% over the year to GBP1.00:EUR1.17.
Stenprop matches the currency of borrowings to the underlying asset, and, where the timing and amount of a liability has been
determined, and is to be met from the proceeds of a sale which is known in terms of timing and amount, the currency risk is
managed through hedging instruments.
Stenprop's diversification across the UK, Germany and Switzerland (until the Swiss portfolio is sold) continues to provide a
natural spread of currencies and it remains our policy not to hedge this natural spread, thereby maintaining a multi-currency
exposure,
Portfolio valuation
Including the Company's share of associates and joint ventures, its investment properties were valued at EUR848.1 million
(2016: EUR891 million), of which EUR156.2 million were classified as Assets Held for Sale at 31 March 2017 (2016: nil). Assets Held for
Sale consist of the entire Swiss portfolio, and a small part of a German asset. On a like for like basis the valuation of the portfolio
decreased by 4.2% of which 2.9% resulted from currency movements. The UK properties have been translated to Euros at a rate
of GBP1.00:EUR1.17, which is 7.9% lower than the exchange rate of GBP1.00:EUR1.27 at 31 March 2016.
Net initial Weighted
yield average
Portfolio Market Annualised 31 March unexpired
by value gross 2017 lease term
market 31 March rental (weighted ('WAULT')
value 2017 Area income average) (by rental)
Combined portfolio (%) (EUR million) Properties m2 (EUR million) (%) (years)
United Kingdom 34.7 294.1 13 63,555 18.5 5.57 5.7
Germany 30.2 256.3 23 92,264 14.5 4.95 6.6
Assets Held for Sale 18.4 155.9 12 47,111 9.6 4.33 7.2
Germany 0.3 2.7 - 250 0.2 6.40 1.2
Switzerland 18.1 153.2 12 46,861 9.4 4.29 7.3
Total 83.3 706.3 48 202,930 42.6 5.07 6.3
Share of joint
ventures and
associates 16.7 141.8 6 49,730 9.9 5.69 6.4
Total 100.0 848.1 54 252,660 52.5 5.18 6.3
(3) The objective of the EPRA NAV measure is to highlight the fair value of net assets on an ongoing, long-term basis. EPRA NAV
is used as a reporting measure to better reflect underlying net asset value attributable to shareholders. Assets and liabilities
that are not expected to crystallise in normal circumstances such as the fair value of financial derivatives and deferred taxes
on property valuation surpluses are therefore excluded. The EPRA measure thus takes into account the fair value of assets and
liabilities as at the balance sheet date, other than fair value adjustments to financial instruments, deferred tax and goodwill. As
the Group has adopted fair value accounting for investment property per IAS40, adjustments to reflect the EPRA NAV include
only those relating to the revaluation of financial instruments and deferred tax.
United Kingdom
The UK portfolio (excluding Stenprop's share of 25 Argyll Street), was independently valued at GBP251.5 million, a decrease of
1.02% on the prior year end valuation of GBP254.1 million. This decrease in value of GBP2.6 million over the year was primarily due to
a 5.5% downward valuation (GBP4.5 million) of the Pilgrim Street property which is located in the financial centre of London. This
was mainly as a result of valuers increasing the yield slightly to reflect the increased risks as a result of Brexit, particularly relevant
to properties and tenants located in the City of London. The reduction was offset by gains in Stenprop's regional portfolios and
at Euston House in London (a landmark building adjacent to Euston station and currently benefitting from demand in that area
from media , technology and communications related companies like Google, Facebook and others). The UK properties are all
fully let with a weighted average unexpired lease term ('WAULT') of 5.7 years.
Germany
The German portfolio (excluding associates and joint ventures) was independently valued at EUR259.1 million (31 March 2016:
EUR252.6 million).
The year on year increase of EUR6.5 million is driven by a EUR3.8 million uplift at Stenprop's Bleichenhof property including EUR0.7 million
capex, in central Hamburg. The property has benefitted from positive market development seen in core assets in prime cities
and also new lettings at market rental levels. Elsewhere, all properties experienced uplifts with the three Central Berlin retail
centres improving EUR2.1 million in aggregate.
Switzerland
The Swiss portfolio was valued at CHF163.9 million, a 0.3% increase on the like for like 2016 year end valuation of CHF163.5 million.
Following a decision to sell these lower yielding and more mature assets, the Swiss portfolio has been classified as held for sale in
the financial statements. All properties are being marketed for sale and are at various stages in the sale process.
As a result of negative interest rates and negative Swiss bond yields (to 10 years), real estate investment remains compelling to
local investors. Sales are expected to crystallise as the year progresses and an update will be provided in the next interim report.
Joint ventures and associates
The Care Homes portfolio was independently valued at EUR35.4 million, an increase of 3.5% on the prior year valuation of
EUR34.2 million. The uplift reflects the extension of the lease at Dessau and the strength of the sector in general.
Stenprop's 50% interest in 25 Argyll Street, a property located in the heart of London's West End, is valued at GBP40.5 million and
broadly unchanged against the 30 March 2016 valuation of GBP40.9 million.
Stenprop owns a 28.42% share in Stenham European Shopping Centre Fund Limited ('SESCF'). SESCF owns the Nova Eventis
regional shopping centre situated near Leipzig. As previously reported, the directors of SESCF are in the process of selling
this asset and a closing date of 22 June 2017 has been scheduled. The sale price was based on a valuation of EUR208.5 million
(2016 SESCF directors' valuation: EUR265 million).
Capital management
The value of the property portfolio as at 31 March 2017, including the Group's share of associate and joint venture properties and
Assets Held for Sale, was EUR848.1 million. Bank debt at the same date was EUR438.0 million resulting in an average loan to value ratio
of 51.6%, unchanged from 31 March 2016. However, excluding the Swiss portfolio and Nova Eventis which are in the process of
being sold , the average loan to value ratio is 49%. Stenprop currently targets an average gearing ratio of 50%.
The weighted average debt maturity stood at 2.4 years at 31 March 2017 compared with 2.2 years at 31 March 2016. However,
excluding the Swiss portfolio and Nova Eventis, the weighted average debt maturity at 31 March 2017 stands at 3.2 years.
This is driven by the EUR84.9 million refinance of the Bleichenhof loan which was extended for five years with the existing lender,
Berlin Hyp AG. The new loan matures on 28 February 2022 and the all-in interest rate now stands at 1.58% (previously 1.90%).
Annual amortisation payments since the year end remain broadly unchanged in Germany and Switzerland. However, excluding
the Swiss portfolio and Nova Eventis, amortisation has dropped from EUR6.15 million to EUR1.37 million. All remaining amortisation
relates to German loans; in the UK, total amortisation payments have been reduced by GBP0.7 million to nil following the GBP12.4 million
refinancing of the UK regional portfolio.
The all-in contracted weighted average cost of debt dropped to 2.53% from 2.80% at 31 March 2016. This is primarily due to
the refinancing of the Swiss debt, where, in line with the disposal strategy, interest rates have not been hedged. Due to the
persistent negative interest rate environment, the impact of paying interest on a floating rate basis is that the loans attract
interest at the marginal cost only. Previously the swap contracts in place imposed negative interest rates on borrowers.
The weighted all-in interest rate on the Swiss loans has therefore decreased to 1.41% from approximately 2.80% a year earlier.
As discussed above, Swiss debt totalling CHF88.5 million was refinanced on 31 March 2017. Loans of CHF49 million and
CHF23.8 million were refinanced on a rolling basis with UBS as a current account credit facility with interest charged at an all-in
interest rate (in effect margin only due to negative interest rates) of 1.05% and 1.15% respectively. At the same time, three loans
totalling CHF15.7 million were refinanced on a rolling basis with Credit Suisse and mature on 31 March 2018. The all-in interest
rate is between 1.35% and 1.50% on these loans.
If one excludes the Swiss portfolio and Nova Eventis, the all-in contracted weighted average cost of debt remains at 2.53%.
Bermuda Stock Exchange listing and cessation of quarterly reporting
Shareholders were advised on 30 September 2016 that the Bermuda Stock Exchange ('BSX') approved Stenprop's request
to move the Company's listing on the BSX from a primary listing to a secondary listing, with effect from 3 October 2016.
This transfer does not affect the Company's current listing on the Main Board of the JSE and does not affect the trading of
shares on either the JSE or the BSX.
One of the consequences of moving from a primary to a secondary listing on the BSX is that Stenprop will no longer have to
publish quarterly results. This change is in line with the financial reporting protocol adopted by most of our peers who are listed
on the Johannesburg and/or the London Stock Exchanges, neither of which requires quarterly reporting.
A second consequence is that Stenprop is no longer required to have two board members who are resident in Bermuda.
Board appointments and resignations
On 4 April 2016 David Brown resigned from the Board as an independent non-executive director. On the same date
Peter Hughes was appointed as an independent non-executive director.
On 14 September 2016 Michael Fienberg resigned as independent non-executive director following a change of residency.
On the same date Paul Miller was appointed as independent non-executive director.
On 23 November 2016, the Board accepted the resignation of Peter Hughes and James Keyes. Both were independent
non-executive directors and resident in Bermuda.
On 19 December 2016 it was with great sadness that Stenprop announced the passing of its founder and chairman,
Gerald Leissner, who died on 16 December. Paul Arenson, Stenprop CEO, said 'We were privileged to have Gerald as a Chairman
and colleague, not only for his vast experience and knowledge of property where he was a legend in his lifetime, but also for his
personal contribution to Stenprop.'
On 1 February 2017 it was announced that Stephen Ball, who was an independent non-executive director of Stenprop, had been
appointed as the Chairman of the Company.
Subsequent to the year end on 5 April 2017, Warren Lawlor was appointed as a non-executive director.
Industrial Portfolio acquisition
On 7 June 2017 Stenprop announced the acquisition of a portfolio of multi-let industrial properties (the 'MLI Portfolio') as well
as the management business that has built up and managed the portfolio, C2 Capital Limited (the 'C2 Management Platform')
for a combined consideration that values the two businesses at GBP130.5 million.
The MLI Portfolio is made up of 25 separate multi-let industrial estates situated in or near densely populated nodes across the
United Kingdom. The portfolio has a gross lettable area of approximately 2 million square feet (200,000 sqm), a diversified base
of over 400 tenants and contractual rent (including contractual fixed uplifts) of approximately GBP9.1 million per annum.
The C2 Management Platform specialises in the acquisition and active management of multi-let industrial estates across the
UK. Founded and run by Julian Carey, with the support of five property professionals, the business has been investing on behalf
of private and institutional clients since its inception in 2009.
The MLI portfolio is being acquired with effect from the date of completion of the transaction, which is due to take place on
30 June 2017. The purchase price is payable in cash, with a GBP6.35 million deposit having been paid on exchange of contracts and
the balance of the purchase price payable on completion, with a further adjustment to take account of any working capital in
the structure.
The purchase consideration will be ultimately funded out of the proceeds from the sale of the Nova Eventis shopping centre,
which is scheduled to complete on 22 June 2017, and certain of the properties in Stenprop's Swiss portfolio that are in the
process of being sold. To ensure that it has the cash available to settle the purchase price on completion,
Stenprop has secured a 12-month bridging finance facility of EUR31 million, which attracts an arrangement fee of 1% and interest
at 7% per annum. The loan is subject to a group loan to value covenant of 65%. A further 12-month facility of EUR8 million has been
secured at an interest rate of 7% per annum.
Stenprop will acquire the shares in C2 Capital Limited from Julian Carey for GBP3.5 million, to be settled by the issue of
3,270,500 Stenprop shares, valued at EUR1.22 per share, adjusted upward or downward in cash for working capital.
Stenprop is confident that the combination of these acquisitions will provide a strategic foothold and capability in the multi
let industrial estates sector; and that this positioning will enable it to deliver sustainable higher average annual rental growth
over the next few years. The acquisition of the MLI portfolio, together with the acquisition of the C2 Management Platform,
represents a rare opportunity to make a substantial strategic investment into an asset class which Stenprop believes is likely to
show superior returns over the next few years.
Subsequent events
As detailed above, on 6 June 2017, Stenprop exchanged contracts on the acquisition of the Industrial Portfolio. Completion is
expected to take place on 30 June 2017.
As mentioned earlier in this report, the Nova Eventis shopping centre near Leipzig, in which the Group has a 28.42% interest, is
currently in the final stages of a sales process. At the date of signing these financial statements all closing conditions have been
met and the completion date is set for 22 June 2017.
Subsequent to the year end on 5 April 2017, Warren Lawlor was appointed as a non-executive director.
On 7 June 2016, the directors declared a final cash dividend of 4.50 cents per share. An announcement containing details of the
dividend and the timetable will be made separately.
Prospects
The acquisition of the portfolio of 25 multi-let properties (the MLI portfolio) and the C2 Management Platform management
business which has built up and managed the MLI portfolio provides Stenprop with a strategic platform in the multi-let industrial
estates (MLI) sector that it believes will, on a sustainable basis, deliver increased earnings growth in the future.
Stenprop is confident that, in addition to delivering organic growth through ongoing asset management of the MLI portfolio, it
will be able to add further MLI properties onto the platform through earnings enhancing acquisitions. Individual MLI properties
tend to trade at higher yields than large portfolios as, on their own, they lack the diversification and necessary economies of
scale to be efficiently operated. The opportunity to acquire individual MLI properties at higher yields and operate them efficiently
through the C2 Management Platform should also contribute to overall growth. To achieve this, Stenprop intends to pursue
further acquisition opportunities within the MLI sector with the objective of integrating additional properties and portfolios into
its newly acquired MLI platform, with the intention of establishing itself as a leading player in the UK MLI space.
Results for the year ending 31 March 2018, whilst including nine months of earnings from the MLI portfolio, will also be impacted
by acquisition and sales costs, as well as interim bridge funding costs, which will be influenced by the timing of the receipt of
exit proceeds from the Swiss sales. On this basis, assuming average exchange rates of EUR1.18:GBP1:00 and EUR0.94:CHF1.00 and ignoring the
potential positive impact of any further acquisitions in the MLI sector, Stenprop expects that diluted adjusted EPRA earnings per
share for the year ending 31 March 2018 will remain at a similar level to the current year earnings of 10.28 cents.
Stenprop expects to maintain the current pay-out ratio and therefore expects to deliver a full year dividend for the year ending
31 March 2018 of not less than 9.00 cents per share. Stenprop's objective is to continue to declare and pay a dividend every
six months.
Following completion of the acquisitions referred to above, Stenprop intends to actively investigate the merits of a conversion
to REIT status as well as a listing on the London Stock Exchange, and a possible change in its reporting currency from Euro to
Sterling to reflect the relatively larger weighting of its UK portfolio following implementation of the acquisition and sales strategy.
This general forecast has been based on the Group's forecast and has not been reported on by the external auditors.
Given the nature of its business, Stenprop has adopted distribution per share as its key performance measure, as this is
considered more relevant than earnings, headline earnings or net asset value per share.
Statement of directors' responsibilities
The directors are responsible for preparing the financial statements in accordance with applicable law and regulations.
Bermudian company law requires the directors to prepare financial statements for each financial year. Under that law the
directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards
as issued by the International Accounting Standards Board ('IASB'). The financial statements are required to give a true and
fair view of the state of affairs of the Group and of the profit or loss of the Group for that period. In preparing these financial
statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and estimates that are reasonable and prudent;
- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue
in business for the foreseeable future, and
- follow applicable accounting standards.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
financial position of the Group and to enable them to ensure that the financial statements comply with the Companies Act 1981
of Bermuda. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
Statement as to disclosure of information to auditors
So far as the directors are aware, there is no relevant audit information of which the Group's auditors are unaware, and each
director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit
information and to establish that the Group's auditors are aware of that information.
Approval of annual financial statements
The consolidated annual financial statements of Stenprop Limited were approved by the Board of Directors on 7 June 2017 and
are signed on their behalf by:
Stephen Ball Paul Arenson Patsy Watson
Chairman of Audit Committee Chief Executive Officer Chief Financial Officer
Consolidated statement of comprehensive income
Audited
Year ended year ended
31 March 31 March
2017 2016
Note EUR'000 EUR'000
Net rental income 6 30,316 31,596
Management fee income 3,701 2,927
Operating costs 7 (5,975) (8,682)
Net operating income 28,042 25,841
Fair value movement of investment properties 16 2,894 28,471
(Loss)/gain from associates 18 (11,710) 1,075
Income from joint ventures 19 4,083 7,820
Profit from operations 23,309 63,207
Net gain/(loss) from fair value of derivative financial instruments 25 582 (2,495)
Net finance costs 9 (7,137) (8,576)
Net foreign exchange gains/(losses) 319 (134)
Profit for the year before taxation 17,073 52,002
Taxation 10 (2,680) (2,933)
Profit for the year from continuing operations 14,393 49,069
Discontinued operations
Profit for the year from discontinued operations 20 3,350 514
Profit for the year 17,743 49,583
Profit attributable to:
Equity holders 17,477 49,266
Non-controlling interest derived from continuing operations 266 317
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Fair value movement on derivative financial instruments - 519
Foreign currency loss (15,026) (20,480)
Total comprehensive profit for the year 2,717 29,622
Total comprehensive profit attributable to:
Equity holders 2,451 29,305
Non-controlling interest 266 317
Earnings per share
From continuing operations
IFRS EPS (cents) 14 5.00 17.51
Diluted IFRS EPS (cents) 14 4.98 17.47
From continuing and discontinued operations
IFRS EPS (cents) 14 6.18 17.70
Diluted IFRS EPS (cents) 14 6.16 17.66
Consolidated statement of financial position
Audited
31 March 31 March
2017 2016
Note EUR'000 EUR'000
ASSETS
Investment properties 16 550,145 729,782
Investment in associates 18 20,883 39,298
Investment in joint ventures 19 36,748 37,620
Other receivables 21 13,600 7,406
Total non-current assets 621,376 814,106
Cash and cash equivalents 22 29,461 36,811
Trade and other receivables 21 4,757 6,367
Assets classified as held for sale 20 158,248 -
Total current assets 192,466 43,178
Total assets 813,842 857,284
Equity and liabilities
Capital and reserves
Share capital and share premium 12 395,141 389,927
Equity reserve (10,612) 480
Retained earnings 54,997 63,426
Foreign currency translation reserve (13,362) 1,664
Total equity attributable to equity shareholders 426,164 455,497
Non-controlling interest 2,398 2,132
Total equity 428,562 457,629
Non-current liabilities
Bank loans 24 252,563 178,708
Derivative financial instruments 25 3,335 4,173
Other loan and interest - 12
Deferred tax 26 6,774 9,705
Total non-current liabilities 262,672 192,598
Current liabilities
Bank loans 24 15,203 188,785
Derivative financial instruments 25 139 1,769
Accounts payable and accruals 23 18,189 16,503
Liabilities directly associated with assets classified as held for sale 20 89,077 -
Total current liabilities 122,608 207,057
Total liabilities 385,280 399,655
Total equity and liabilities 813,842 857,284
IFRS net asset value per share 15 1.53 1.61
Consolidated statement of changes in equity
Share Foreign Cash
capital currency flow Attributable Non-
and share Equity Retained translation hedge to equity controlling Total
premium reserve earnings reserve reserve shareholders interest equity
Note EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Balance at 1 April 2016 389,927 480 63,426 1,664 - 455,497 2,132 457,629
Issue of share capital 12 5,214 (14) - - - 5,200 - 5,200
Credit to equity for
equity-settled
share-based payments
(note 13) - 316 - - - 316 - 316
Repurchase of own shares 12 - (11,394) - - - (11,394) - (11,394)
Total comprehensive
profit/(loss) for the period - - 17,477 (15,026) - 2,451 266 2,717
Ordinary dividends 11 - - (25,906) - - (25,906) - (25,906)
Balance at 31 March 2017 395,141 (10,612) 54,997 (13,362) - 426,164 2,398 428,562
Balance at 1 April 2015 374,127 - 37,562 22,144 (519) 433,314 1,815 435,129
Issue of share capital 15,800 (41) - - - 15,759 - 15,759
Credit to equity for
equity-settled
share-based payments - 521 - - - 521 - 521
Total comprehensive
profit for the period - - 49,266 (20,480) 519 29,305 317 29,622
Ordinary dividends - - (23,402) - - (23,402) - (23,402)
Balance at 31 March 2016 389,927 480 63,426 1,664 - 455,497 2,132 457,629
Consolidated statement of cash flows
Audited
Year ended year ended
31 March 31 March
2017 2016
Note EUR'000 EUR'000
Operating activities
Profit from operations from continuing operations 23,309 63,207
Profit from operations from discontinuing operations 20 5,064 1,884
28,373 65,091
Share of loss/(profit) in associates 18 11,710 (1,075)
Increase in fair value of investment property 16 (1,872) (22,939)
Share of profit in joint ventures 19 (4,083) (7,820)
Exchange rate losses/(gains) 319 (134)
Decrease/(increase) in trade and other receivables 388 (119)
Increase/(decrease) in trade and other payables 2,808 (510)
Interest paid (9,330) (10,770)
Interest received 1,281 1,942
Net tax paid (1,106) (1,006)
Net cash from operating activities 28,488 22,660
Contributed by: Continuing operations 25,802 18,523
Discontinued operations 2,686 4,137
Investing activities
Dividends received from associates - 2,268
Dividends received from joint ventures 1,778 420
Purchases of investment property - (47,561)
Capital expenditure (1,921) (3,576)
Proceeds on disposal of investment property - discontinued operations 20 6,270 6,701
Proceeds on disposal of investment in associate 18 6,716 -
Acquisition of investment in joint venture 19 - (26,782)
Net cash from/(used in) investing activities 12,843 (68,530)
Financing activities
New bank loans raised - 60,368
Dividends paid (25,906) (15,070)
Repayment of borrowings (8,978) (41,477)
Repurchase of shares (11,394) -
Financing fees paid (203) (1,246)
Payments made on swap break (101) (571)
New loan advances (1,222) -
Repayment of loan advances 246 95
Net cash (used in)/from financing activities (47,558) 2,099
Net decrease in cash and cash equivalents (6,227) (43,771)
Effect of foreign exchange rate changes (392) 152
Cash and cash equivalents at beginning of the period 36,811 80,430
Cash and cash equivalents at end of the period 30,192 36,811
Contributed by: Continuing operations 22 29,461 33,416
Discontinued operations 22 731 3,395
Notes to the consolidated financial statements
1. Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(IFRSs) as issued by the IASB, the requirements of IAS 34: Interim Financial Reporting, the JSE Listings Requirements and
the BSX Listing Regulations and applicable Bermuda law. The consolidated financial statements have been prepared on the
historical cost basis,except for the revaluation of investment properties and financial instruments that are measured at fair
values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based
on the fair value of the consideration given in exchange for goods and services. The principal accounting policies which are
consistent with those applied in the previous annual financial statements are set out below.
This summarised report is extracted from audited information, but is itself not audited. The directors take full responsibility
for the preparation of the provisional report and that the financial information has been correctly extracted from the
underlying annual financial statements. The auditors, Deloitte, have reported on the audited financial statements and their
report was unqualified. A copy is available on the Company's website: www.stenprop.com, or upon written request from the
Company's registered office.
Going concern
At the date of signing these financial statements, the Group has positive operating cash flow forecasts and positive net assets.
The directors have reviewed the Group's budgets for the year to 31 March 2018, forecasts for the period to
September 2018 and the current financial position and, in light of this review, they are satisfied that the Company and the
Group have access to adequate resources to meet the obligations and continue in operational existence for the foreseeable
future, and specifically the 12 months subsequent to the signing of these financial statements.
The cash flow forecasts take into account projected income and expenses; possible changes in the investment property
portfolio, including exposure to tenant credit risk; lease expiries; the raising of additional capital; external debt; refinancings
which have occurred and are expected to occur subsequent to the reporting date, and forecast financial loan covenants.
As mentioned earlier in this report, the Nova Eventis shopping centre near Leipzig, in which the Group has a 28.42% interest
is currently in the final stages of a sales process. A sale and purchase agreement was signed on 6 February 2017 by the
shareholders of the underlying property company, owned by Stenham European Shopping Centre ('SESCF'), an associate
of Stenprop, and at which time the buyers paid a deposit of EUR11 million into an escrow account. At the date of signing these
financial statements all closing conditions have been met and the completion date is set for 22 June 2017. The likely wind up
process of SESCF is expected to take longer than 12 months and the consolidated financial statements of SESCF show the
investment property as Held for Sale and its accounts have been prepared on a going concern basis.
The Swiss portfolio, valued at CHF163.9 million after taking into account estimated selling costs, is currently being
marketed for sale. The properties are at various stages in the sale process and are expected to be sold within the next six to
12 months. As such, loans have been refinanced on a short-term basis as a rolling credit facility or mature on 31 March 2018.
Should a decision be taken not to sell the properties for any reason, the directors anticipate that, given the quality of the
property and the strong relationships with Swiss lenders, a refinancing can be secured on favourable terms.
On 7 June 2017, Stenprop announced the acquisition of a portfolio of multi-let industrial properties (the "MLI Portfolio")
as well as the management business that has built up and managed the portfolio, C2 Capital Limited (the "C2 Management
Platform") for a combined consideration that values the two businesses at GBP130.5 million. The acquired portfolio assets are
financed with a loan facility provided by RBS which matures in June 2022.
The purchase consideration will be ultimately funded out of the proceeds from the sale of the Nova Eventis shopping
centre, which is scheduled to complete on 22 June 2017, and certain of the properties in Stenprop's Swiss portfolio that are
in the process of being sold. To ensure that it has the cash available to settle the purchase price on completion, Stenprop
has secured a twelve month bridging finance facility of EUR31 million, which attracts an arrangement fee of 1% and interest at
7% per annum. The loan is subject to a group loan to value covenant of 65%. A further twelve month facility of EUR8 million has
been secured at an interest rate of 7% per annum.
The directors believe that it is therefore appropriate to prepare the financial statements on a going concern basis. Note 27
to the financial statements includes the Group's objectives, policies and procedures for managing its market, interest and
liquidity risk.
2. Adoption of new and revised standards
In the current period the following new and revised Standards and Interpretations have been adopted. Their adoption has
not had any material impact on the disclosures or the amounts reported in these financial statements:
IFRS 14 Regulatory deferral accounts (1 January 2016)
IFRS 11 (amendments) Accounting for acquisitions of interests in joint operations (1 January 2016)
IAS 16 and IAS 38 (amendments) Clarification of acceptable methods of depreciation and amortisation
(1 January 2016)
IAS 27 (amendments) Equity method in separate financial statements (1 January 2016)
IAS 1 (amendments) Disclosure Initiative (1 January 2016)
IFRS 10, IFRS 12 & IAS 28 (amendments) Investment entities: applying the consolidation exception (1 January 2016)
IFRS 5 (amendments) Annual improvements to IFRS 5 (1 January 2016)
IFRS 7 (amendments) Annual improvements to IFRS 7 (1 January 2016)
Annual improvements 2012 - 2014 cycle (1 January 2016)
At the date of authorisation of these financial statements, the following applicable standards which have not been applied
to these financial statements, were in issue but not yet effective. They are effective for periods commencing on or after
the disclosed date and will be adopted as they become effective.
IFRS 9 Financial instruments (1 January 2018)
IFRS 15 Revenue from contracts with customers (1 January 2018)
IFRS 16 Leases (1 January 2019)
IFRIC 22 Foreign currency transactions and advance consideration (1 January 2018)
IAS 12 (amendments) Recognition of deferred tax assets for unrealised losses (1 January 2017)
IAS 7 (amendments) Disclosure Initiative (1 January 2017)
IFRS 2 (amendments) Classification and measurement of share-based payment transactions
(1 January 2018)
IFRS 10 & IAS 28 (amendments) Sale or contribution of assets between an investor and its associate or joint
venture (effective date deferred indefinitely)
IAS 40 (amendments) Transfers of investment property (1 January 2018)
Annual improvements 2014 - 2016 cycle (1 January 2017)
Management are in the process of assessing these standards and do not expect that the adoption of the standards listed
above will have a material impact on the financial statements of the Group in the future period.
3. Significant accounting policies
Basis of consolidation
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses
control of the subsidiary. Specifically, the results of the subsidiaries acquired or disposed of during the period are included
in the consolidated statement of comprehensive income from the date the Company gains control until the date when the
Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the
non-controlling interests. Total comprehensive income of the subsidiaries is attributed to the owners of the Company and
to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in
line with the Group's accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between the members
of the Group are eliminated on consolidation.
When the Group loses control of a subsidiary, the gain or loss on disposal recognised in profit or loss is calculated as the
difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained
interest and (ii) the previous carrying amount of the assets (including goodwill), less liabilities of the subsidiary and any
non-controlling interests.
All amounts previously recognised in other comprehensive income in relation to that subsidiary are accounted for as if the
Group had directly disposed of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred
to another category of equity as specified/permitted by applicable IFRS). The fair value of any investment retained in the
former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting
under IAS 39 Financial instruments: recognition and measurement or, when applicable, the costs on initial recognition of an
investment in an associate or jointly controlled entity.
Investments in associates
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a
joint venture. Significant interest is the power to participate in the financial and operating policy decisions of the investee
but is not control or joint control over those policies.
The results, assets and liabilities of associates are incorporated in these financial statements using the equity method
of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with
IFRS 5 Non-current Assets Held for Sale and discontinued operations. Under the equity method, an investment in associate
is initially recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the
Group's share of the profit or loss and other comprehensive income of the associate.
Joint ventures
The Group's investment properties are typically held in property-specific special purpose vehicles ('SPVs'), which may be
legally structured as joint ventures. In assessing whether a particular SPV is accounted for as a subsidiary or joint venture,
the Group considers all of the contractual terms of the arrangement, including the extent to which the responsibilities
and parameters of the venture are determined in advance of the joint venture agreement being agreed between the two
parties. The Group will then consider whether it has the power to govern the financial and operating policies of the SPV,
so as to obtain benefits from its activities, and the existence of any legal disputes or challenges to this control in order to
conclude on the classification of the SPV as a joint venture or subsidiary undertaking. The Group considers this position
with the evidence available at the time.
The consolidated financial statements account for interests in joint ventures using the equity method of accounting per
IFRS 11.
Revenue recognition
The Group earns returns from investments in direct property assets and management fees. Revenue is recognised when
it is probable that the economic benefits associated with the transaction will flow to the Group and the amount of revenue
can be measured reliably.
Revenue includes amounts receivable in respect of property rental income and service charges earned in the normal course
of business, net of sales-related taxes.
Rental income from operating leases is recognised on an accruals basis. A rent adjustment based on open market estimated
rental value is recognised from the rent review date in relation to unsettled rent reviews. Where a significant rent free period
is included in a lease, the rental income foregone is allocated evenly over the period from the date of lease commencement
to the expiry date of the lease.
Rental income from fixed and minimum guaranteed rent reviews is recognised on a straight-line basis over the entire lease
term. Where such rental income is recognised ahead of the related cash flow, an adjustment is made to ensure the carrying
value of the investment property, including the accrued rent, does not exceed the external valuation. Initial significant direct
costs incurred in negotiating and arranging a new lease are amortised on a straight-line basis over the period from the date
of lease commencement to the expiry date of the lease.
Where a lease incentive payment, or surrender premium is paid to enhance the value of a property, it is amortised on a
straight-line basis over the period from the date of lease commencement to the expiry date of the lease. Upon receipt of
a surrender premium for the early determination of a lease, the profit, net of dilapidations and non-recoverable outgoings
relating to the lease concerned, is immediately reflected in income.
Contingent rents, such as turnover rents, rent reviews and indexation, are recorded as income in the periods in which they
are earned.
Management fees are recognised in the income statement on an accruals basis.
Service charge income is recognised in the accounting period in which the services are rendered and the related property
expenses are recognised in the period in which they are incurred.
Dividend income from listed securities is recognised at the date the dividend is declared. Interest income is recognised in
the consolidated statement of comprehensive income under the effective interest method as it accrues.
Foreign currencies
The individual financial statements of each Group company are presented in the currency of the primary economic
environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the
results and financial position are expressed in Euros, which is the functional currency of the Group and the presentation
currency for the consolidated financial statements.
In preparing the financial statements of the individual companies, transactions in currencies other than the entity's
functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions.
At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are translated at
the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are
translated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured
in terms of historical cost in a foreign currency are not retranslated. Exchange difference are recognised in profit or loss for
the period in which they arise.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations
are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the
average exchange rates for the period. Exchange differences arising are recognised in other comprehensive income and
accumulated in equity (attributed to non-controlling interests as appropriate).
Borrowing costs
Interest costs are recognised in the consolidated statement of comprehensive income using the effective interest rate
method.
Borrowing costs directly attributable to arranging finance are amortised over the facility term in the consolidated statement
of comprehensive income.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax, in those jurisdictions where the property
companies are registered, namely Germany, Switzerland and the United Kingdom. In addition, Stenprop Management
Limited incurs tax in the United Kingdom.
Current tax
Tax currently payable is based on taxable profit for the year. The Group's liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that
taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax
assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit
nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and
associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only recognised to the extent that it
is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and
they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that
it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability
is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end
of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
Non-controlling interest
Non-controlling interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified separately from
the Group's equity therein. Non-controlling interests consist of the amount of those interests at the date of the original
business combination and the non-controlling interests' share of the changes in equity since the date of the combination.
Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests
having a deficit balance.
Investment properties
Properties held to earn rentals and/or for capital appreciation are classified as investment properties. Investment properties
comprise both freehold and leasehold land and buildings.
Investment properties are recognised as assets when:
- it is probable that the future economic benefits that are associated with the investment property will flow to the Group;
- there are no material conditions precedent which could prevent completion; and
- the cost of the investment property can be measured reliably.
Investment properties are measured initially at cost, including related transaction costs. After initial recognition, investment
properties are carried at fair value, determined by the directors and/or based on independent external appraisals.
The Group uses the valuations prepared by its independent valuers as the fair value of its investment properties.
These valuations are undertaken in accordance with the appropriate sections of the current Practice Statements contained
in the Royal Institution of Chartered Surveyors Valuation - Professional Standards (Red Book). This is an internationally
accepted basis of valuation. The valuations are based upon assumptions including contractual and estimated rental
values, future rental income, anticipated maintenance costs, future development costs and appropriate discount rates.
The valuers also make reference to market evidence of transaction prices for similar properties.
The difference between the fair value of a property at the reporting date and its carrying amount prior to re-measurement
is included in the consolidated statement of comprehensive income as a valuation surplus or deficit.
Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and short-term deposits with an original maturity
of three months or less.
Expenditure
Expenses are accounted for on an accrual basis.
Financial instruments
Classification
A financial instrument is a contract that gives rise to a financial asset to one entity and a financial liability or equity instrument
to another. The classification of financial assets and financial liabilities depends on the nature and purpose of the instrument
and is determined at the time of initial recognition. Debt and equity instruments are classified as either financial liabilities or
as equity in accordance with the substance of the contractual agreement.
Measurement
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets at fair value through profit
or loss ('FVTPL')) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate,
on initial recognition.
Transactions costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised
immediately in the statement of comprehensive income.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the
degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as follows:
Level 1 - Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
at the measurement date.
Level 2 - Inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability,
either directly or indirectly.
Level 3 - Inputs are unobservable inputs for the asset or liability.
The financial statements are presented in Euros.
Financial assets
The Group classifies its financial assets as either at fair value through profit and loss or as loans and receivables.
Recognition and derecognition
Loan and receivables, including those relating to the purchase of Stenprop shares (note 21), are measured at amortised
cost using the effective interest method, less impairment losses which are recognised in the statement of comprehensive
income. Financial liabilities are measured at amortised cost using the effective interest method. In the case of short-term
trade receivables and payables, the impact of discounting is not material and cost approximates amortised costs.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset have expired or
have been transferred and the Group has transferred substantially all risk and rewards of ownership of the asset to another
entity.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They include current assets with maturities or terms greater than 12 months after the reporting dates which
are classified as non-current assets.
Impairment of financial assets
Financial assets, specifically accounts receivable and other debtors, are assessed for indicators of impairment at the end
of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of
one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the
investments have been affected.
Objective evidence of impairment could include:
- significant financial difficulty of the issuer or counterparty; or
- breach of contract, such as a default or delinquency in interest or principal payments; or
- it becoming probable that the borrower will enter bankruptcy or financial reorganisation.
For financial assets carried at amortised cost, the amount of the impairment loss is measured as the difference between
the asset's carrying amount and present value of the estimated future cash flows, discounted at the financial assets original
effective interest rate.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets, with the
exception of trade receivables, where the carrying amount is reduced through the use of a provision account. When a trade
receivable is considered uncollectable, it is written off against the provision account. Changes in the carrying amount of the
provision account are recognised in the statement of comprehensive income in the period.
For financial assets measured at amortised cost if, in a subsequent period, the amount of the impairment loss decreases
and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously
recognised impairment loss is reversed through the statement of comprehensive income to the extent that the carrying
amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have
been had the impairment not been recognised.
Financial liabilities and equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the
contractual agreement.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all its
liabilities. Ordinary shares are classed as equity. Equity instruments issued by the Group are recorded at the proceeds
received, net of direct issue costs.
Financial liabilities
The Group's financial liabilities comprise interest-bearing borrowings, loans and payables and trade payables.
Recognition and derecognition
Financial liabilities are recognised when the Group becomes party to the contractual provisions of the instrument.
The Group derecognises financial liabilities when the Group's obligations are discharged, cancelled or they expire.
Derivatives
Interest rate swaps have been initially recognised at fair value, and subsequently re-measured at fair value in accordance
with IAS 39, Financial Instruments: Recognition and Measurement. They have been entered into in order to hedge against
the exposure to variable interest rate loans as described in note 25. They have been valued by an independent valuer in line
with internationally accepted practice.
A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is
recognised as a financial liability. A derivative is presented as a non-current asset or non-current liability if the remaining
maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months.
It is Group policy not to hedge account. Other derivatives are presented as current assets or current liabilities.
Trade and other receivables
These are valued at their nominal value (less accumulated impairment losses) as the time value of money is immaterial for
these current assets. Impairment losses are estimated at the year-end by reviewing amounts outstanding and assessing
the likelihood of recoverability.
Trade and other payables
Trade and other payables are valued at their nominal value as the time value of money is immaterial for these current
liabilities.
Dividends
Dividends to the Group's ordinary shareholders are recognised when they are declared. This is when they are approved by
the board.
Earnings/(loss) per share
Earnings per share is calculated on the weighted average number of shares in issue in respect of the current period and is
based on the profit attributable to the ordinary shareholders.
Share-based payments
Deferred Share Bonus Plan
Share options are granted to key management, subject to achieving annual targets, under the Deferred Share Bonus Plan.
The cost of equity settled transactions is measured with reference to the fair value at the date at which they were granted.
The Group accounts for the fair value of these options at grant date over the vesting period in the income statement,
with a corresponding increase to the share-based payment reserve included as part of equity reserve in the Statement of
Financial Position.
The fair value of the options granted is determined using the Black-Scholes Option Pricing Model, which takes into account
the exercise price of the option, the current share price, the risk-free interest rate, the expected volatility of the Group's
share price over the life of the option and other relevant factors. Readers are referred to note 13: share-based payments,
where key assumptions are further disclosed. The cumulative expense recognised for equity-settled transactions at each
reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best
estimate of the number of equity instruments that will ultimately vest.
Share Purchase Plan
As part of the Group's remuneration policy, the Company can award shares to qualifying participants, funded through the
advance of loans to the participants. Loans advanced under the share purchase plan are interest-bearing at a rate equal
to the average interest rate incurred by the Group from time to time. Interest is payable six-monthly in arrears. Loans are
repayable within 30 days of cessation of employment (unless the participant ceases employment in circumstances beyond
his or her control, in which case the loan is repayable within 12 months), and must in all circumstances be repaid in 10 years.
All dividends received by such employees (or his or her nominee) by virtue of their shareholding, must first be utilised to
discharge any interest outstanding in terms of the loan advanced in terms of the Share Purchase Plan.
The loans have full recourse to the participants and as such fall outside of the scope of IFRS 2 and are accounted for as
financial instruments under IAS. The participants must charge their shares by way of security for the loan. The loans have
full recourse to the participants who waive all rights to compensation for any loss in relation to the Plan.
Repurchase of share capital (Own Shares)
Where share capital recognised as equity is repurchased, the amount of the consideration paid, including directly
attributable costs, is recognised as a deduction from equity. Such shares may either be held as Own Shares (treasury
shares) or cancelled. Where Own Shares are subsequently re-sold from treasury, the amount received is recognised as an
increase in equity.
4. Critical accounting judgements and key sources of estimation uncertainty
Judgements and estimates
The preparation of the consolidated financial statements in accordance with IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise judgement in the process of applying the Group's accounting
policies. Although the estimates are based on management's best knowledge of the amount, events or actions, actual
results may ultimately differ from those estimates.
The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting
year, that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are discussed below.
Investment properties
The Group's investment properties are stated at estimated fair value, determined by directors, based on an independent
external appraisal. The valuation of certain of the Swiss properties disclosed as Assets Held for Sale has been determined
by the directors and is based on offers made to acquire the properties. The directors valuation amounts to CHF77.6 million
(2016 independent valuation: CHF77.3 million). The valuation of the Group's property portfolio is inherently subjective due
to a number of factors including the individual nature of each property, its location and the expectation of future rentals. As
a result, the valuations placed on the property portfolio are subject to a degree of uncertainty and are made on the basis of
assumptions that may not prove to be accurate particularly in years of volatility or low transaction flow in the market. The
estimated market value may differ from the price at which the Group's assets could be sold at a particular time, since actual
selling prices are negotiated between willing buyers and sellers. As a result, if the assumptions prove to be false, actual
results of operations and realisation of net assets could differ from the estimates set forth in these financial statements,
and the difference could be significant.
Associates
The Group holds an investment in Stenham European Shopping Centre Fund Limited ('SESCF'). A sale and purchase
agreement was signed on 6 February 2017. At the date of signing these financial statements all closing conditions have been
met and the completion date is set for 22 June 2017. The likely wind up process of SESCF is expected to take longer than
12 months and the consolidated accounts of SESCF show the investment property as Held for Sale and its accounts
have been prepared on a going concern basis. Stenprop has therefore deemed it appropriate to continue to disclose the
investment in associate relating to SESCF as a non-current asset. Readers are referred to the commentary (page 4) and the
going concern paragraph in note 1 where this is discussed in further detail.
The Group holds an investment in Stenham Berlin Residential Fund Limited ('SBRF') with a shareholding of 5.24%. Although
this shareholding represents less than 20% of the voting power, Stenprop has representation on the board of SBRF
and is the manager of the fund and as such has significant influence including participation in policy making processes.
In addition, Stenprop is the largest single shareholder in SBRF. These factors have been taken into account when assessing
the classification of SBRF as an associate.
Deferred tax assets and liabilities
Tax liabilities are recognised when it is considered probable that there will be a future outflow of funds to a taxing authority.
In such cases, provision is made for the amount that is expected to be settled, where this can be reasonably estimated.
This requires the application of judgement as to the ultimate outcome, which can change over time depending on facts
and circumstances. A change in estimate of the likelihood of a future outflow and/or in the expected amount to be settled
would be recognised in income in the period in which the change occurs. Deferred tax assets are recognised only to the
extent it is considered probable that those assets will be recoverable. This involves an assessment of when those assets are
likely to reverse, and a judgement as to whether or not there will be sufficient taxable profits available to offset the assets
when they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain. To the
extent assumptions regarding future profitability change, there can be an increase or decrease in the amounts recognised
in respect of deferred tax assets as well as in the amounts recognised in income in the period in which the change occurs.
Deferred tax assets and liabilities are presented in note 26.
5. Operating segments
The Group is focused on real estate investment in well-developed, large economies with established real estate markets.
The investment portfolio is geographically diversified across Germany, the United Kingdom and Switzerland, and these
geographical locations provide the basis of the business segments identified by the Group. Each segment derives its
revenue from the rental of investment properties in the respective geographical regions.
Relevant financial information is set out below:
Discontinued
Continuing operations operation
United
Germany Kingdom Switzerland Total
EUR'000 EUR'000 EUR'000 EUR'000
(i) Information about reportable segments
For the year ended 31 March 2017
Net rental income 12,462 17,854 - 30,316
Fair value movement of investment properties 5,866 (2,972) - 2,894
Net gain/(loss) from fair value of financial liabilities 431 151 - 582
Loss from associates (11,710) - - (11,710)
Income from joint ventures 2,702 1,017 - 3,719
Net finance costs (2,796) (4,351) - (7,147)
Operating costs (780) (166) - (946)
Net foreign exchange gain 64 - - 64
Profit for the year from discontinued operations
(see note 20) - - 3,350 3,350
Taxation (1,570) (967) - (2,537)
Total profit/(loss) per reportable segments 4,669 10,566 3,350 18,585
As at 31 March 2017
Investment properties 256,088 294,057 - 550,145
Investment in associates 20,883 - - 20,883
Investment in joint ventures 12,022 24,684 - 36,706
Cash 13,670 14,355 - 28,025
Other 15,196 2,743 - 17,939
Assets classified as held for sale 2,970 - 155,278 158,248
Total assets 320,829 335,839 155,278 811,946
Borrowings - bank loans 143,673 124,093 - 267,766
Other 13,286 13,146 - 26,432
Liabilities directly associated with assets classified
as held for sale (see note 20) - - 89,077 89,077
Total liabilities 156,959 137,239 89,077 383,275
For the year ended 31 March 2016
Net rental income 11,713 19,883 - 31,596
Fair value movement of investment properties 12,228 16,242 - 28,470
Net (loss)/gain from fair value of financial liabilities (175) (2,319) - (2,494)
Income from associates 1,075 - - 1,075
Income from joint ventures 2,569 4,826 - 7,395
Net finance costs (2,950) (5,626) - (8,576)
Operating costs (794) (288) - (1,082)
Net foreign exchange gain 23 - - 23
Profit for the year from discontinued operations
(see note 20) - - 514 514
Taxation (2,337) (502) - (2,839)
Total profit per reportable segments 21,352 32,216 514 54,082
As at 31 March 2016
Investment properties 252,510 321,532 155,740 729,782
Investment in associates 39,298 - - 39,298
Investment in joint venture 10,329 27,250 - 37,579
Cash 10,435 15,053 3,395 28,883
Other 9,687 2,277 1,178 13,142
Total assets 322,259 366,112 160,313 848,684
Borrowings - bank loans (145,913) (134,512) (87,068) (367,493)
Other (9,154) (12,231) (7,826) (29,211)
Total liabilities (155,067) (146,743) (94,894) (396,704)
Audited
Year ended year ended
31 March 31 March
2017 2016
EUR'000 EUR'000
(ii) Reconciliation of reportable segment profit or loss
Rental income
Net rental income for reported segments 30,316 31,596
Profit or loss
Fair value movement of investment properties 2,894 28,470
Net gain/(loss) from fair value of financial liabilities 582 (2,494)
(Loss)/gain from associates (11,710) 1,075
Income from joint ventures 3,719 7,395
Net finance costs (7,147) (8,576)
Operating costs (946) (1,082)
Net foreign exchange gains 64 23
Profit for the year from discontinued operations (see note 20) 3,350 514
Taxation (2,537) (2,839)
Total profit per reportable segments 18,585 54,082
Other profit or loss - unallocated amounts
Management fee income 3,701 2,927
Income from joint ventures 364 425
Net finance income 10 -
Tax, legal and professional fees (239) (446)
Audit fees (265) (250)
Administration fees (257) (356)
Non-executive directors (159) (214)
Staff remuneration costs (2,719) (4,289)
Other operating costs (1,390) (2,045)
Net foreign exchange gain 255 (157)
Taxation (143) (94)
Consolidated profit for the year 17,743 49,583
Audited
31 March 31 March
2017 2016
EUR'000 EUR'000
(iii) Reconciliation of reportable segment financial position
ASSETS
Investment properties 550,145 729,782
Investment in associates 20,883 39,298
Investment in joint venture 36,706 37,579
Cash 28,025 28,883
Other 17,939 13,142
Assets classified as held for sale (see note 20) 158,248 -
Total assets per reportable segments 811,946 848,684
Other assets - unallocated amounts
Investment in joint ventures 42 41
Cash 1,436 7,928
Other 418 631
Total assets per consolidated statement of financial position 813,842 857,284
LIABILITIES
Borrowings - bank loans 267,766 (367,493)
Other 26,432 (29,211)
Liabilities directly associated with assets classified as held for sale (see note 20) 89,077 -
Total liabilities per reportable segments 383,275 (396,704)
Other liabilities - unallocated amounts
Other 2,005 (2,951)
Total liabilities per consolidated statement of financial position 385,280 (399,655)
Audited
Year ended year ended
31 March 31 March
2017 2016
EUR'000 EUR'000
6. Net rental income
Rental income 41,500 43,458
Other income - tenant recharges 7,807 7,632
Other income 117 201
Rental income 49,424 51,291
Direct property costs (12,499) (11,674)
Discontinued operations adjustment (see note 20) (6,609) (8,021)
Total net rental income 30,316 31,596
7. Operating costs
Tax, legal and professional fees 780 1,200
Audit fees 296 297
Interim review fees 37 43
Administration fee 402 466
Investment advisory fees 510 519
Non-executive directors 159 214
Staff remuneration costs 2,719 4,289
Other operating costs 1,595 2,259
Discontinued operations adjustment (note 20) (523) 605
5,975 8,682
8. Employees' and directors' emoluments
The Group had 11 employees (2016: 15) at year end and incurred EUR2,391,000 (2016: EUR3,942,000) in wages and salaries and
EUR328,000 (2016: EUR347,000) in related social security costs and pension charges during the year.
Their aggregate remuneration for the period including that of executive directors is:
Audited
Year ended year ended
31 March 31 March
2017 2016
EUR'000 EUR'000
Wages and salaries (excluding key management) 1,008 2,396
Key management remuneration 1,383 1,546
Social security costs 219 246
Other pension costs 109 101
2,719 4,289
As at 31 March 2017 the Group had six directors (2016: 9). The directors of the Company during the financial year and at the
date of this report were as follows:
Change in
Appointed appointment
Non-executive directors
S Ball (Chairman) 2/10/2014 appointed chairman 1/2/2017
M Yachad 10/12/2014
P Miller 14/9/2016
G Leissner (Chairman) 3/12/2012 passed away 16/12/2016
M Fienberg 2/10/2014 resigned 14/9/2016
D Brown 25/9/2013 resigned 4/4/2016
J Keyes 26/10/2012 resigned 23/11/2016
P Hughes 4/4/2016 resigned 23/11/2016
Executive directors
P Arenson (CEO) 2/10/2014
P Watson (CFO) 2/10/2014
N Marais 2/10/2014
The Group pays remuneration to executive directors which amounted to EUR1,383,000 (2016: EUR1,546,000 ) and non-executive
directors which amounted to EUR159,000 (2016: EUR214,000) in the year. A breakdown of directors' remuneration is provided
below:
Total
Vested remuneration
Basic Other Cash share 31 March
salary Pension benefits(1) bonus options 2017
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Executive directors
P Arenson 301 30 2 141 171 645
P Watson 240 24 - 113 137 514
N Marais 150 15 2 38 19 224
691 69 4 292 327 1,383
Total
Vested remuneration
Basic Other Cash share 31 March
salary Pension benefits(1) bonus options 2016
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Executive directors
P Arenson 341 34 1 171 171 717
P Watson 273 27 - 137 137 574
N Marais 171 17 7 43 17 255
785 78 7 350 325 1,546
(1) Other benefits relates to the provision of private medical insurance.
Based on the average GBP:EUR foreign exchange rate over the year of GBP1:EUR1.1904 (2016: GBP1:EUR1.3658)
Audited
Year ended year ended
31 March 31 March
2017 2016
EUR'000 EUR'000
Non-executive directors
S Ball^ 45 44
M Yachad* 19 11
P Miller (appointed 14 September 2016) 27 -
G Leissner (passed away 16 December 2016) 25 50
M Fienberg (resigned 14 September 2016) 21 75
D Brown (resigned 4 April 2016) - 14
J Keyes (resigned 23 November 2016) 13 20
P Hughes (appointed 4 April 2016, resigned 23 November 2016) 9 -
159 214
* these fees were paid to Peregrine SA Holdings Proprietary Limited
^ these fees were paid to Sphere Management Limited
The above non-executive fees include all management, consulting, technical or other fees paid for such services rendered,
including payments to management companies.
On 7 June 2017, the board of directors, on the recommendation of the remuneration committee, approved the following:
Bonuses in respect of
the year ended 31 March 2017 Share Purchase Plan^
Deferred
Share
Cash bonus Bonus Plan* Number Loans Number
EUR'000 EUR'000 of shares EUR'000 of shares
Executive directors
Paul Arenson 141 - - 1,108 907,842
Patsy Watson 113 - - 886 726,274
Neil Marais 38 14 11,348 102 83,234
292 14 11,348 2,095 1,717,350
Based on the average exchange rate of GBP1:EUR1.1904.
On 8 June 2016, the board of directors, on the recommendation of the remuneration committee, approved the following:
Bonuses in respect of
the year ended 31 March 2016 Share Purchase Plan^
Deferred
Share
Cash bonus Bonus Plan* Number Loans Number
EUR'000 EUR'000 of shares EUR'000 of shares
Executive directors
Paul Arenson 171 171 115,248 2,600 1,843,972
Patsy Watson 137 137 92,199 2,080 1,475,177
Neil Marais 43 23 15,847 126 89,317
350 331 223,294 4,806 3,408,466
Based on the average exchange rate of GBP1:EUR1.3658.
* Share options vest in three equal tranches and are accounted for as share-based payments (see note 3). The first tranche vests on grant.
Subsequent tranches will vest in accordance with the rules of the Deferred Share Bonus Plan at the end of the relevant year.
^ Loans advanced under the share purchase plan are interest-bearing at a rate equal to the average interest rate incurred by the Group from time
to time. Interest is payable six-monthly in arrears. Loans are repayable within 30 days of cessation of employment (unless the participant ceases
employment in circumstances beyond his or her control, in which case the loan is repayable within 12 months), and must in all circumstances be
repaid in 10 years. All dividends paid to such employees (or his or her nominee) by virtue of their shareholding, must first be utilised
to discharge any interest outstanding in terms of the loan advanced in terms of the Share Purchase Plan.
Directors' interests - beneficial direct and indirect holdings in the Company
Direct Indirect Number
number % number % of share %
of shares of shares of shares of shares options held of shares
31 March 2017
S Ball (Chairman) - 250,000 0.09 - -
M Yachad - 150,000 0.06 - -
P Miller - 21,898 0.01 - -
P Arenson (CEO) - 9,955,994 3.47 474,908 0.17
P Watson (CFO) - 3,658,510 1.28 412,918 0.14
N Marais - 219,663 0.08 15,345 0.01
31 March 2016
G Leissner (Chairman) - 422,034 0.15 -
D Brown - - -
J Keyes - - -
M Yachad - - -
M Fienberg - 114,994 0.04 -
S Ball - 250,000 0.09 -
P Arenson (CEO) 97,783 0.03 8,854,419 3.13 236,894 0.05
P Watson (CFO) - 2,183,333 0.77 189,515 0.05
N Marais - 120,283 0.04 19,646 0.01
The directors' interests have not changed from 31 March 2017 to the date of the signing of these financial statements.
Audited
Year ended year ended
31 March 31 March
2017 2016
EUR'000 EUR'000
9. Net finance costs
Interest receivable:
Cash and cash equivalents 292 174
292 174
Finance costs:
Bank interest payable (9,331) (10,787)
Amortisation of facility costs (474) (478)
(9,805) (11,265)
Discontinued operations adjustment (note 20) 2,376 2,515
Net finance costs (7,137) (8,576)
10. Taxation
(i) Tax recognised in statement of comprehensive income
Income tax in respect of current year 1,461 618
Deferred tax (see note 26) 2,040 2,666
Discontinued Operations Adjustment (see note 20) (821) (351)
Total tax expense 2,680 2,933
No tax was recognised on other comprehensive income during the period
(2016: Nil).
- Germany 15.825%
- United Kingdom 20%
- Switzerland (depending on the district in which the property is situated).
Average rate of 19.6%.
(ii) Reconciliation of tax charge for the year
Continuing operations
Profit for the year before taxation 17,073 52,002
Tax provided at applicable rate in Bermuda - -
Tax charge in respect of different jurisdictions (2,680) (2,933)
Profit for the year after taxation 14,393 49,069
Discontinuing operations
Profit for the year before taxation 4,170 865
Tax provided at applicable rate in Bermuda - -
Tax charge in respect of different jurisdictions (820) (351)
Profit for the year after taxation 3,350 514
Audited
Year ended year ended
31 March 31 March
2017 2016
EUR'000 EUR'000
11. Dividends
Amounts recognised as distributions to equity holders in the period:
Final dividend for the prior year 13,411 11,654
Interim dividend for the current year 12,495 11,748
25,906 23,402
On 18 July 2016, the directors of the Company declared a final dividend of 4.7 cents per share in respect of the year ended
31 March 2016 equating to EUR13,411,000 (2016: EUR11,654,000). This was paid in cash on 29 July 2016. An interim dividend of
4.5 cents per share equating to EUR12,495,000 (2016: EUR11,748,000) was declared on 23 November 2016 and paid in cash on
17 January 2017.
The directors declared a final dividend on 7 June 2017 for the year ended 31 March 2017, of 4.50 cents per share. The
payment of this dividend, which will not have any tax consequences for the Group, is detailed in note 31.
Audited
Year ended year ended
31 March 31 March
2017 2016
EUR'000 EUR'000
12. Share capital
Authorised
1,000,000,000 ordinary shares with a par value of EUR0.000001258 each 1 1
Issued share capital
Opening balance (shares) 282,984,626 272,236,146
Issue of new shares (shares) 3,697,254 10,748,480
Closing number of shares issued (shares) 286,681,880 282,984,626
Share capital - -
Share premium 397,999 392,785
Less: Acquisition/transaction costs (2,858) (2,858)
Total share premium 395,141 389,927
There were no changes made to the number of authorised shares of the Company during the year. Stenprop Limited has
one class of share; all shares rank equally and are fully paid.
The Company has 286,681,880 (March 2016: 282,984,626) ordinary shares in issue at the reporting date. On 9 June 2016,
3,687,191 and 10,063 new ordinary shares were issued on the JSE and the BSX at an issue price of EUR1.41 per share in respect
of the Share Purchase Plan and Deferred Share Bonus Plan respectively (refer note 13).
As at 31 March 2017, the Company held 9,026,189 treasury shares (March 2016: Nil). In June and July 2016 the Company
repurchased 1,356,567 shares for an aggregate purchase price of EUR1.8 million. The programme continued in November
and December 2016 with the repurchase of a further 7,669,622 shares for an aggregate repurchase price of EUR9.6 million.
The combined average price per share of the repurchased shares was EUR1.262. The shares were purchased with the benefit
of the dividend thereby effectively reducing the average price per share to EUR1.217. The impact to the equity reserve of
EUR11.4 million can be seen in the Consolidated Statement of Changes in Equity.
Major shareholders
As at the financial year end there were 2,847 shareholders in the Company. In terms of the Companies Act 1981 of
Bermuda, there is no requirement for registered shareholders to disclose their beneficial shareholdings and
accordingly, the Company provides disclosure on the shareholdings where this information is provided to the Company.
There is no ultimate controlling party. Known shareholders holding in excess of 5% of the Company's share capital are
detailed below:
Beneficial shareholder greater than 5% Percentage of issued share capital
Peregrine Holdings Limited (direct and indirect interest) 6.51
13. Share-based payments
The Group operates two share incentive plans which are used to attract and retain high-calibre employees to help grow the
business. All awards are considered by the Remuneration Committee and are subject to board approval. The incentive plans
are discussed in more detail below:
Deferred Share Bonus Plan
The board may grant an award to an eligible employee following a recommendation from the Remuneration Committee
over such number of shares that have an aggregate value equal to the deferred bonus. Such share options vest in three
equal tranches; The first tranche vests on the date of grant with subsequent tranches vesting at the first and second
anniversaries of the relevant year end. Share options may be exercised until the tenth anniversary of the grant date, after
which time, they will lapse.
The below table summarises the position at year end in terms of the number of share options granted and exercised in the
period. All share options were granted at nil-cost. Further details relating to share options issued to executive directors are
disclosed in more detail in note 8.
31 March 31 March
2017 2016
Number of share options
Outstanding at beginning of year 356,242 -
Granted during year 282,544 376,059
Exercised during year (10,063) (27,620)
Other (includes dividend equivalents and forfeited shares) 35,898 7,803
Outstanding at end of year 664,621 356,242
Exercisable at the end of the year 575,281 225,966
The fair value of the options was calculated using the Black-Scholes pricing model. The aggregate of the fair value credit of
options granted at 31 March 2017 was EUR100,424 (2016: EUR42,110 expense). The table below sets out the assumptions made
for the purposes of this valuation.
31 March 31 March
2017 2016
Stock price at date of grant (EUR) 1.41 1.43
Stock price at year end (EUR) 1.25 1.54
Weighted average exercise price 1.43 1.30
Compounded risk-free interest rate (%) 1.50 1.50
Volatility (%) 28 22
Expected life (years) 10 10
The Group recognised a total share-based payment expense of EUR316,000 (2016: EUR521,000) during the year relating to
share-based payment transactions and holds an Equity Reserve at 31 March 2017 of EUR782,000 (2016: EUR480,000).
Share Purchase Plan
Loans advanced under the share purchase plan are interest-bearing at a rate equal to the average interest rate incurred by
the Group from time to time. Interest is payable six monthly in arrears. Loans are repayable within 30 days of cessation of
employment (unless the participant ceases employment in circumstances beyond his or her control, in which case the loan
is repayable within 12 months), and must in all circumstances be repaid in 10 years. All dividends received by such employees
(or his or her nominee) by virtue of their shareholding, must first be utilised to discharge any interest outstanding in terms
of the loan advanced in terms of the Share Purchase Plan. The loans have full recourse to the participants who must charge
their shares by way of security for the loans.
The below table summarises the position at year end in terms of loans advanced and the number of shares to which they
relate. Loans relating to the Share Purchase Plan issued to executive directors are disclosed in more detail in note 8.
31 March 31 March
2017 2016
Brought forward at start of year (number of shares) 5,209,109 -
Share Purchase Plan shares issued in year (number of shares) 3,687,191 5,209,109
Share Purchase Plan shares redeemed (number of shares) (240,081) -
Carried forward at end of year (number of shares) 8,656,219 5,209,109
Stock price at date of grant (EUR) 1.41 1.43
Share Purchase Plan loans advanced (including accrued interest) (EUR'000) 12,380 7,406
Other share options
On 30 March 2017 the Company agreed to grant an option to subscribe for two million Stenprop shares to an individual
appointed a non-executive director after the year end on 5 April 2017. The exercise price was EUR1.53 and the option lapses
should the individual cease to be a director, or after five years, whichever is sooner. The options only have a dilutive effect
when the average market price of ordinary shares exceeds the exercise price of the options. The share price at year end was
EUR1.25, which was below the exercise price.
Year ended year ended
31 March 31 March
2017 2016
EUR'000 EUR'000
14. Earnings per ordinary share
Reconciliation of profit for the period to adjusted EPRA(1) earnings
Earnings per IFRS income statement attributable to shareholders 17,477 49,266
Adjustment to exclude profit from discontinued operations (3,350) (514)
Earnings per IFRS income statement from continuing operations
attributable to shareholders 14,127 48,752
Earnings per IFRS income statement attributable to shareholders 17,477 49,266
Adjustments to calculate EPRA earnings, exclude:
Changes in fair value of investment properties (1,872) (22,939)
Changes in fair value of financial instruments (2,064) 999
Deferred tax in respect of EPRA adjustments
(investment properties and financial instruments) 2,525 2,666
Adjustments above in respect of joint ventures and associates
Changes in fair value of investment properties and financial instruments 12,985 (2,959)
Deferred tax in respect of EPRA adjustments
(investment properties and financial instruments) (864) 39
EPRA earnings attributable to shareholders 28,187 27,072
Further adjustments to arrive at adjusted EPRA earnings
Straight-line unwind of purchased swaps 954 1,976
Adjusted EPRA earnings attributable to shareholders 29,140 29,048
Weighted average number of shares in issue (excluding treasury shares)(2) 282,644,639 278,350,720
Share-based payment award 956,185 647,806
Diluted weighted average number of shares in issue 283,600,824 278,998,526
Earnings per share from continuing operations
IFRS EPS (cents) 5.00 17.51
Diluted IFRS EPS (cents) 4.98 17.47
Earnings per share from continuing and discontinued operations
IFRS EPS (cents) 6.18 17.70
Diluted IFRS EPS (cents) 6.16 17.66
EPRA EPS (cents) 9.97 9.73
Diluted EPRA EPS (cents) 9.94 9.70
Adjusted EPRA EPS (cents) 10.31 10.44
Diluted adjusted EPRA EPS (cents) 10.28 10.41
(1) The European Public Real Estate Association (EPRA) issued Best Practices Policy Recommendations in November 2016, which provide
guidelines for performance measures relevant to real estate companies. Their recommended reporting standards are widely applied across
this market, aiming to bring consistency and transparency to the sector. The EPRA earnings measure is intended to show the level of recurring
earnings from core operational activities with the purpose of highlighting the Group's underlying operating results from its property rental
business and an indication of the extent to which current dividend payments are supported by earnings. The measure excludes unrealised
changes in the value of investment properties, gains or losses on the disposal of properties and other items that do not provide an accurate
picture of the Group's underlying operational performance. The measure is considered to accurately capture the long-term strategy of the
Group, and is an indication of the sustainability of dividend payments.
(2) As at 31 March 2017, the Company held 9,026,189 treasury shares (March 2016: Nil).
Straight-line unwind of purchased swaps
A further adjustment was made to the EPRA earnings attributable to shareholders relating to the straight-line unwind
of the value as at 1 April 2014 of the swap contracts in the property companies acquired. When the property companies
were acquired by Stenprop with effect from 1 April 2014, it also acquired the bank loans and swap contracts which were in
place within these property companies. As a result, Stenprop took over loans with higher swap interest rates than would
have been the case had new loans and swaps been put in place at 1 April 2014. To compensate for this, the value of the
swap break costs was calculated at 1 April 2014 and the purchase consideration for the property companies was reduced
accordingly to reflect this liability.
Audited Revised*
Year ended year ended year ended
31 March 31 March 31 March
2017 2016 2015
EUR'000 EUR'000 EUR'000
Earnings per IFRS income statement attributable to shareholders 17,477 49,266 37,600
Adjustments to calculate headline earnings, exclude:
Changes in fair value of investment properties (1,872) (22,939) (17,956)
Reversal of gain on acquisition - - (9,657)
Changes in fair value of financial instruments - 519 (431)
Deferred tax in respect of headline earnings adjustments
(investment properties) 2,202 2,666 1,538
Adjustments above in respect of joint ventures and associates
Changes in fair value of investment properties 16,254 (2,529) 1,360
Deferred tax in respect of headline earnings adjustments (944) (307) (204)
Headline earnings attributable to shareholders 33,116 26,676 12,250
Weighted average number of shares in issue
(excluding treasury shares) 282,644,639 278,350,720 132,254,338
Share-based payment award 956,185 647,806 291,563
Diluted weighted average number of shares in issue 283,600,824 278,998,526 132,545,901
Earnings per share
Headline EPS (cents) 11.72 9.58 9.26
Diluted headline EPS (cents) 11.68 9.56 9.24
* Readers are referred to the 2015 headline EPS which has been revised since the publication of the 2015 Annual Financial Statements.
The revised 2015 Headline EPS is 9.26 cents per share, which differs from that of 8.20 cents published in the 2015 Annual Financial statements,
due to the adjustment for deferred tax in respect of headline earnings adjustments. The deferred tax adjustment had originally included all
deferred tax but should have adjusted for deferred tax relating only to changes in fair value of investment properties.
Audited
Year ended year ended
31 March 31 March
2017 2016
EUR'000 EUR'000
15. Net asset value per ordinary share
Net assets attributable to equity shareholders 426,164 455,497
Adjustments to arrive at EPRA net asset value:
Derivative financial instruments 3,474 5,942
Deferred tax 11,853 9,705
Adjustments above in respect of non-controlling interests 1,839 2,838
EPRA net assets attributable to shareholders 443,330 473,982
Number of shares in issue (excluding treasury shares)(1) 277,655,691 282,984,626
Share-based payment award 956,185 647,806
Diluted number of shares in issue 278,611,876 283,632,432
Net asset value per share (basic and diluted)
IFRS net asset value per share (Euros) 1.53 1.61
Diluted IFRS net asset value per share (Euros) 1.53 1.61
EPRA net asset value per share (Euros) 1.60 1.67
Diluted EPRA net asset value per share (Euros) 1.59 1.67
(1) As at 31 March 2017, the Company held 9,026,189 treasury shares (March 2016: Nil).
16. Investment property
The fair value of the consolidated investment properties at 31 March 2017 was EUR550,145,000 (31 March 2016: EUR729,782,000).
This excludes an amount of EUR155,900,000 (31 March 2016: EURNil) for properties which have been classified as held for
sale, including the entire Swiss portfolio. The carrying amount of investment property is the fair value of the property as
determined by registered independent appraisers having an appropriate recognised professional qualification and recent
experience in the location and category of the property being valued ('valuers').
The fair value of each of the properties for the year ended 31 March 2017 was assessed by the valuers in accordance with
the Royal Institute of Chartered Surveyors ('RICS') standards and IFRS 13. Valuers are qualified for purposes of providing
valuations in accordance with the 'Appraisal and Valuation Manual' published by RICS.
The valuations performed by the independent valuers are reviewed internally by senior management. This includes
discussions of the assumptions used by the external valuers, as well as a review of the resulting valuations.
Discussions of the valuations process and results are held between the senior management and the external valuers on
a bi-annual basis. The Audit Committee reviews the valuation results and, provided the committee is satisfied with the
results, recommends them to the board for approval.
The valuation techniques used are consistent with IFRS 13 and use significant 'unobservable' inputs. Investment properties
are all at level 3 in the fair value hierarchy and valuations represent the highest and best use of the properties. There have
been no changes in valuation techniques since the prior year.
There are interrelationships between all these unobservable inputs as they are determined by market conditions.
An increase in more than one unobservable input would magnify the impact on the valuation. The impact on the valuation
would be mitigated by the interrelationship of two unobservable inputs moving in the opposite directions e.g. an increase
in rent may be offset by an increase in yield, resulting in no net impact on the valuation. Expected vacancy rates may impact
the yield with higher vacancy rates resulting in higher yield. All revenue is derived from the underlying tenancies given on the
investment properties.
All investment properties are mortgaged. Details of which can be seen in note 24. As at the date of signing this report, there
are no restrictions on the realisability of any of the underlying investment properties, nor on the remittance of income and
disposal proceeds.
The key unobservable inputs used in the valuation of the Group's investment properties at 31 March 2017 are detailed in
the table below:
% of Market Net initial
Combined portfolio portfolio value Annualised yield
(including share by market 31 March gross rental (weighted Voids by
of jointly value 2017 Area income average) area
controlled entities) (%) (EUR million) Properties (m2) (EUR million) (%) (%)
UK 34.7 294.1 13 63,555 18.5 5.57 0.05
Germany 30.2 256.3 23 92,264 14.5 4.95 5.37
Assets held for sale 18.4 155.9 12* 47,111 9.6 4.33 4.65
Sub-total 83.3 706.3 48 202,930 42.6 5.07 3.54
Share of joint ventures
and associates 16.7 141.8 6 49,730 9.9 5.69 5.78
Total 100.0 848.1 54 252,660 52.5 5.18 3.98
* The Burger King space, which is an annexe to the property known as Hermann is not included in the property count, but its inputs have been
considered in other measures.
Audited
31 March 31 March
2017 2016
EUR'000 EUR'000
Opening balance 729,782 695,196
Properties acquired - 48,206
Capitalised expenditure 1,924 3,604
Disposals through the sale of property - (6,701)
Foreign exchange movement in foreign operations (20,934) (33,462)
Net fair value gain on investment property - continuing operations 2,894 28,471
Net fair value loss on investment property - discontinued operations (note 20) (1,022) (5,532)
Transfer to Assets Held for Sale (see note 20) (162,499) -
Closing balance 550,145 729,782
Acquisitions
Germany
Stenprop Hermann Limited - 24,458
Stenprop Victoria Limited - 23,748
- 48,206
Disposals
United Kingdom
GGP1 Limited - (6,701)
- (6,701)
17. Subsidiaries, associates and joint ventures
The Group consists of a parent company, Stenprop Limited, incorporated in Bermuda and a number of subsidiaries,
associates and joint ventures held directly and indirectly by Stenprop Limited which operate and are incorporated around
the world.
Details of the Group's subsidiaries as at 31 March 2017 are as follows:
Place of % equity owned by
Name incorporation Principal activity Company Subsidiary
BVI
Davemount Properties Limited BVI Property Investment 100.00
Laxton Properties Limited BVI Property Investment 100.00
Loveridge Properties Limited BVI Dormant 100.00
Normanton Properties Limited BVI Property Investment 100.00
Ruby Red Holdings Limited BVI Management 100.00
SP Corporate Services Limited BVI Management 100.00
SP Nominees Limited BVI Management 100.00
SP Secretaries Limited BVI Management 100.00
Stenprop Management Holdings Limited BVI Holding Company 100.00
Stenprop (Germany) Limited BVI Holding Company 100.00
Stenprop (Swiss) Limited BVI Holding Company 100.00
Stenprop (UK) Limited BVI Holding Company 100.00
Stenprop Trafalgar Limited BVI Holding Company 100.00
Leatherback Property Holdings Limited BVI Holding Company 100.00
Stenprop Hermann Ltd BVI Property Investment 100.00
Stenprop Victoria Ltd BVI Property Investment 100.00
Curacao
Anarosa Holdings N.V. Curacao Holding Company 94.90
C.S. Property Holding N.V. Curacao Holding Company 94.90
Lakewood International N.V. Curacao Holding Company 89.00
T.B Property Holdings N.V. Curacao Holding Company 100.00
Guernsey
APF1 Limited (in liquidation) Guernsey Dormant 100.00
Bernina Property Holdings Limited Guernsey Holding Company 100.00
GGP1 Limited Guernsey Property Investment 100.00
Kantone Holdings Limited Guernsey Property Investment 100.00
KG Bleichenhof Grundtuscksverwaaltung
GmbH & Co. KG Germany Property Investment 94.90
LPE Limited Guernsey Property Investment 100.00
Stenham Paramount Hotel GP Limited Guernsey Management 100.00
Stenprop Advisers Limited Guernsey Management 100.00
Luxembourg
Algy Properties Sarl Luxembourg Property Investment 100.00
Bruce Properties Sarl Luxembourg Property Investment 100.00
Clint Properties Sarl Luxembourg Property Investment 100.00
David Properties Sarl Luxembourg Property Investment 100.00
Jimmy Investments Sarl Luxembourg Holding Company 100.00
Spike Investments S.A. Luxembourg Holding Company 100.00
Netherlands
Century 2 BV Netherlands Property Investment 94.90
Century BV Netherlands Property Investment 94.90
Isabel Properties BV Netherlands Property Investment 94.90
Mindel Properties BV Netherlands Holding Company 94.50
Isle of Man (I oM)
Stenham Beryl Limited IoM Property Investment 100.00
Stenham Crystal Limited IoM Property Investment 100.00
Stenham Jasper Limited IoM Property Investment 100.00
Gemstone Properties Limited (formerly
Stenham Properties (Germany) Limited) IoM Holding Company 100.00
Switzerland
Polo Property GmbH Switzerland Property Investment 100.00
United Kingdom
Stenprop Management Limited England Management 100.00
Details of the Group's investments in associates and joint ventures are disclosed in note 18 and note 19 respectively.
18. Investment in associates
Details of the Group's associates at the end of the reporting period are as follows:
% equity
Place of Principal owned by
Name incorporation activity subsidiary
Stenham European Shopping Centre Fund Limited ('SESCF') Guernsey Fund 28.42*
Stenham Berlin Residential Fund Limited Guernsey Fund 5.24
* 28.16% of the investment in the underlying property is held through SESCF, and 0.26% of the property investment is held via a wholly-owned
subsidiary, Leatherback Property Holdings Limited, a company incorporated in the British Virgin Islands.
The above associates are accounted for using the equity method in these consolidated financial statements as set out in
the Group's accounting policies in note 3. The judgements exercised are disclosed in note 4.
Summarised financial information in respect of each of the Group's associates is set out below:
Stenham Stenham
European Berlin
Shopping Residential
Centre Fund Fund
Limited Limited Total
EUR'000 EUR'000 EUR'000
31 March 2017
Non-current assets 165 - 165
Assets Held for Sale 207,666 19,716 227,382
Current assets 7,861 22,583 30,444
Non-current liabilities - - -
Current liabilities (150,021) (582) (150,603)
Equity attributable to owners of the Company 65,671 41,717 107,388
Revenue 19,027 59,794 78,821
Profit/(loss) from continuing operations and total comprehensive income (50,599) 23,330 (27,269)
31 March 2016
Non-current assets - 55,672 55,672
Current assets 265,286 - 265,286
Non-current liabilities 15,408 4,600 20,008
Current liabilities (164,318) (150) (164,468)
Equity attributable to owners of the Company 116,376 60,122 176,498
Revenue 20,638 4,621 25,259
Profit from continuing operations and total comprehensive income 1,343 6,876 8,219
Reconciliation of the above summarised financial information to the carrying amount of the interest in the associates
recognised in the financial statements:
Stenham Stenham
European Berlin
Shopping Residential Stenpark
Centre Fund Fund Management
Limited Limited Limited Total
EUR'000 EUR'000 EUR'000 EUR'000
31 March 2017
Opening balance 33,019 6,279 - 39,298
Share of associates' (loss)/profit* (14,333) 2,623 - (11,710)
Associate balance sheet adjustment 18 - - 18
Share in associates disposed during the period - (6,716) - (6,716)
Distribution received from associates (7) - - (7)
Closing balance 18,697 2,186 - 20,883
31 March 2016
Opening balance 34,041 5,570 41 39,611
Share in associates acquired during the period 367 - - 367
Reclassification of associate to joint venture - - (41) -
Share of associates' profit* 366 709 - 1,075
Distribution received from associates (1,755) - - (1,755)
Closing balance 33,019 6,279 - 39,298
* The share of associates' profit includes the fair value movement in the underlying investments for the period. The investment property
owned by Stenham European Shopping Centre, Nova Eventis was valued by the directors of the associate at EUR208 million less selling costs at
31 March 2017, a 21.5% reduction of the fair value at 31 March 2016 of EUR265 million. The Stenham Berlin Residential Fund share price
increased by 49.2% from EUR1.24 to EUR1.85 per share during the year under review.
Stenham European Shopping Centre Fund Limted ('SESCF')
As mentioned earlier in this report, SESCF, in which the Group has a 28.42% interest is currently in the final stages of a sales
process in respect of the Nova Eventis shopping centre. A sale and purchase agreement was signed on 6 February 2017 at
which time the buyers paid a deposit of EUR11 million into an escrow account. At the date of signing these financial statements
all closing conditions have been met and the completion date is set for 22 June 2017. There are no significant restrictions
on the remittance of the disposal proceeds.
Stenham Berlin Residential Fund Limited ('SBRF')
At 31 March 2017 Stenprop had a 5.24% shareholding in SBRF. At 31 March 2016 SBRF'S investments comprised a holding
of 3,154,618 shares in ADO Group Limited (a company listed on the Tel Aviv Stock Exchange) and 1,283,283 shares in
ADO Properties Sarl (listed on the Frankfurt Stock Exchange). During the year to 31 March 2017 SBRF disposed of its entire
holding in ADO Group Limited and 659,415 shares in ADO Properties Limited. These disposals enabled SBRF to buy back
19.5 million of its shares for EUR1.73 per share at a total cost of EUR33.7 million in December 2016. This enabled Stenprop to
realise EUR6.7 million from the sale of 3,882,317 shares in SBRF. At 31 March 2017 SBRF's sole investment was its remaining
holding of 623,868 shares in ADO Properties Limited. SBRF embarked on a disposal programme to sell these remaining
shares and Stenprop's investment in SBRF has been categorised at 31 March 2017 as Assets Held for Sale. At the date of
signing these financial statements all remaining shares in ADO Properties Limited held by SBRF had been sold. There are no
significant restrictions on the remittance of the disposal proceeds.
19. Investment in joint ventures
Details of the Group's joint ventures at the end of the reporting period are as follows:
% equity
Place of owned by
Name incorporation Principal activity subsidiary
Luxembourg
Elysion S.A. Luxembourg Holding company 50.00
Elysion Braunschweig Sarl Luxembourg Property company 50.00
Elysion Dessau Sarl Luxembourg Property company 50.00
Elysion Kappeln Sarl Luxembourg Property company 50.00
Elysion Winzlar Sarl Luxembourg Property company 50.00
Guernsey
Stenpark Management Limited Guernsey Management company 50.00
BVI
Stenprop Argyll Limited BVI Holding company 50.00
Regent Arcade House Holdings Limited BVI Property company 50.00
Summarised consolidated financial information in respect of the Group's joint ventures is set out below. Where applicable
these represent the consolidated results of the respective holding companies.
Stenpark Stenprop
Elysion Management Argyll
S.A. Limited Limited Total
EUR'000 EUR'000 EUR'000 EUR'000
31 March 2017
Investment property 35,521 - 94,689 130,210
Current assets 526 302 4,472 5,300
Assets 36,047 302 99,161 135,510
Bank loans (22,672) - (43,620) (66,292)
Shareholder loan (14,537) - - (14,537)
Deferred tax (529) - - (529)
Financial liability (588) - (1,445) (2,033)
Current liabilities (237) (217) (4,729) (5,183)
Liabilities (38,563) (217) (49,794) (88,574)
Net assets/(liabilities) of joint ventures (2,516) 85 49,367 46,936
Net assets of joint ventures excluding
shareholder loans 12,021 85 49,367 61,473
Group share of net assets 12,021 43 24,684 36,748
Revenue 2,753 978 5,367 9,098
Interest payable (1,995) - (1,326) (3,321)
Tax expense (389) - - (389)
Profit from continuing operations and total
comprehensive income excluding interest due to Group 2,703 727 2,034 5,464
Share of joint ventures profit due to the Group 2,703 363 1,017 4,083
Stenpark Stenprop
Elysion Management Argyll
S.A. Limited Limited Total
EUR'000 EUR'000 EUR'000 EUR'000
31 March 2016
Investment property 34,349 - 103,375 137,724
Current assets 613 405 4,130 5,148
Assets 34,962 405 107,505 142,872
Bank loans (23,222) - (47,131) (70,353)
Shareholder loan third party - - (23,851) (23,851)
Shareholder loan Group (14,140) - (23,850) (37,990)
Deferred tax (223) - - (223)
Financial liability (1,068) - (1,585) (2,653)
Current liabilities (120) (324) (4,290) (4,734)
Liabilities (38,773) (324) (100,707) (139,804)
Net (liabilities)/assets of joint ventures (3,811) 81 6,798 3,068
Net assets of joint ventures excluding
shareholder loans 10,329 81 54,499 64,909
Group share of net assets 10,329 41 27,250 37,620
Revenue 2,797 1,115 4,990 8,902
Interest payable (2,456) - - (2,456)
Tax expense (91) - - (91)
Profit from continuing operations and total
comprehensive income excluding interest due to Group 2,569 848 9,654 13,071
Share of joint ventures profit due to the Group 2,569 424 4,827 7,820
Elysion S.A
Stenprop owns 100% of the shares and shareholder loans in Bernina Property Holdings Limited (Bernina). Bernina in
turn owns 50% of the issued share capital and 100% of the shareholder loans of Elysion S.A., a company incorporated in
Luxembourg which is the beneficial owner of the Care Home portfolio. The remaining 50% of Elysion S.A. is owned by a joint
venture partner who manages the portfolio.
The acquired shareholder loans have attracted, and continue to attract, a 10% compounded interest rate since inception
in 2007. The outstanding shareholder loan, which is wholly owned by Stenprop, has been valued at the recoverable balance
which is deemed equal to the net assets of the joint venture excluding the shareholder loan.
Reconciliation of the above summarised financial information to the carrying amount of the interest recognised in the
consolidated financial statements:
Stenpark Stenprop
Elysion Management Argyll
S.A. Limited Limited Total
EUR'000 EUR'000 EUR'000 EUR'000
31 March 2017
Opening balance 10,329 41 27,250 37,620
Share of joint venture profit 2,703 363 1,017 4,083
Distribution received from joint venture (1,010) (355) (1,489) (2,854)
Foreign exchange movement in foreign operations - (7) (2,094) (2,101)
Closing balance 12,022 42 24,684 36,748
31 March 2016
Opening balance 8,506 - - 8,506
Reclassification of associate to joint venture - 41 - 41
Share in joint ventures acquired during the period - - 26,782 26,782
Share of joint venture profit 2,569 424 4,827 7,820
Distribution received from joint ventures (746) (420) (1,072) (2,238)
Foreign exchange movement in foreign operations - (4) (3,287) (3,291)
Closing balance 10,329 41 27,250 37,620
20. Discontinued operations
Management consider 11 properties (the entire Swiss portfolio) and an annexe of a 12th property ('Burger King' element of
the Hermann Quartier property) to meet the conditions relating to Assets Held for Sale, as per IFRS 5: Non-current Assets
Held for Sale and discontinued operations. The properties are expected to be disposed of during the next financial year.
The values have been determined by the directors based on the sale price per a letter of intent, a draft sales and purchase
agreement, or in the case where this is not yet finalised, the fair value as determined by a third party valuer.
The results of the discontinued operations were as follows:
31 March 31 March
2017 2016
EUR'000 EUR'000
Net rental income 6,609 8,021
Operating costs (523) (605)
Net operating income 6,086 7,416
Fair value movement of investment properties (1,022) (5,531)
Profit from operations 5,064 1,884
Other gains and losses - -
Net gain from fair value of derivative financial instruments 1,482 1,495
Net finance costs (2,376) (2,515)
Profit for the year before taxation 4,170 865
Taxation (820) (351)
Profit for the year from discontinued operations 3,350 514
The fair value of these properties are shown in the table below:
31 March
2017
EUR'000
The fair value of these properties are shown in the table below:
Investment properties 155,949
Cash and cash equivalents 731
Trade and other receivables 1,568
Total assets classified as held for sale 158,248
Bank loans 82,744
Deferred tax 5,079
Accounts payable and accruals 1,255
Liabilities directly associated with assets classified as held for sale 89,077
Disposals
On 29 November 2016, the Group disposed of the Clint Properties Sarl property known as Interlaken, Switzerland,
for CHF6.8 million (equating to EUR6.3 million after disposal costs). There was no gain to the Group as the disposal was made
at fair value.
Audited
31 March 31 March
2017 2016
EUR'000 EUR'000
21. Trade and other receivables
Non-current receivables
Other debtors 13,600 7,403
13,600 7,403
Non-current other debtors includes EUR12.38 million of loans advanced under the Share Purchase Plan (see note 13; share-
based payments) and a EUR1.22 million loan advanced on 30 March 2017 used to purchase one million Stenprop shares in the
market by a non-executive director, appointed to the board of Stenprop on 5 April 2017.
Audited
31 March 31 March
2017 2016
EUR'000 EUR'000
Current receivables
Accounts receivable(1) 4,851 3,509
Other debtors 593 1,935
Prepayments 601 923
Transfer to Assets Held for Sale (see note 20)(2) (1,288) -
4,757 6,367
(1) Included in this balance are provisions for doubtful debts of EUR272,000 (2016: EUR101,000)
(2) Included in this balance are provisions for doubtful debts of EUR163,000
22. Cash and cash equivalents
Cash at bank 30,192 36,811
Transfer to Assets Held for Sale (see note 20) (731) -
29,461 36,811
Restricted cash
At year end funds totalling EUR14.5 million (2016: EUR11.9 million) were restricted. Tenant deposits of EUR2.8million
(2016: EUR2.7 million) are included in this amount as are net rents held in bank accounts which are secured by the lenders for
the purposes of debt repayments and redevelopment, including EUR11 million (2016: EUR8.5 million) for the redevelopment of
Bleichenhof. As the Group is in compliance with all the terms and conditions of its loans as at the date of signing these
financial statements, there are no further restrictions, and any surplus will flow to the Group.
Audited
31 March 31 March
2017 2016
EUR'000 EUR'000
23. Accounts payable and accruals
Accruals 3,373 3,868
Deferred income 5,763 5,183
Taxes payable 2,682 1,776
Other payables 7,626 5,676
Liabilities directly associated with assets classified as held for sale adjustment
(see note 20) (1,255) -
18,189 16,503
Audited
31 March 31 March
2017 2016
EUR'000 EUR'000
24. Borrowings
Opening balance 367,493 364,931
Loan repayments (4,844) (30,608)
New loans - 56,196
Amortisation of loans (4,134) (7,514)
Capitalised borrowing costs (188) (1,049)
Amortisation of transaction fees 459 378
Foreign exchange movement in foreign operations (8,276) (14,841)
Adjustment for liabilities directly associated with assets classified as held for sale
adjustment (see note 20) (82,744) -
Total borrowings 267,766 367,493
Amount due for settlement within 12 months 97,947 188,785
Amount due for settlement between one to three years 92,662 29,892
Amount due for settlement between three to five years 159,901 139,816
Amount due for settlement after five years - 9,000
Liabilities directly associated with assets classified as held for sale adjustment
(see note 20) (82,744) -
267,766 367,493
Non-current liabilities
Bank loans 252,563 178,708
Total non-current loans and borrowings 252,563 178,708
The maturity of non-current borrowings is as follows:
One year to five years 252,563 169,708
More than five years - 9,000
252,563 178,708
Current liabilities
Bank loans 97,947 188,785
Liabilities directly associated with assets classified as held for sale adjustment
(see note 20) (82,744) -
Total current loans and borrowings 15,203 188,785
Total loans and borrowings 267,766 367,493
The facilities are secured by debentures and legal charges over the properties to which they correspond. There is no
cross-collateralisation of the facilities. The terms and conditions of outstanding loans are as follows:
Nominal value Carrying value*
Loan 31 March 31 March 31 March 31 March
interest Maturity 2017 2016 2017 2016
Facility Note Amortising rate Currency date EUR'000 EUR'000 EUR'000 EUR'000
United Kingdom
Laxton Properties Limited No LIBOR 1.4% GBP 08/05/2020 32,194 34,846 31,969 34,497
Normanton Properties Limited No LIBOR 1.4% GBP 25/03/2019 43,312 46,879 43,205 46,690
Davemount Properties Limited 1 Yes LIBOR 2.25% GBP 26/05/2021 4,676 5,445 4,637 5,445
LPE Limited No LIBOR 2% GBP 23/03/2020 35,070 37,959 34,626 37,317
GGP1 Limited 1 No LIBOR 2.25% GBP 26/05/2021 9,773 10,578 9,656 10,563
Switzerland
Algy Properties Sarl 2 Yes LIBOR 1.5% CHF 31/03/2018 3,028 3,099 3,028 3,099
Bruce Properties Sarl 2 Yes LIBOR 1.35% CHF 31/03/2018 4,447 4,384 4,447 4,384
Clint Properties Sarl 3 CHF - 2,820 - 2,820
David Properties Sarl 2 Yes LIBOR 1.4% CHF 31/03/2018 7,225 7,340 7,225 7,340
Kantone Holdings Limited 2 Yes LIBOR 1.05% CHF Note 2 45,830 46,787 45,830 46,787
Polo Property GmbH 2 Yes LIBOR 1.15% CHF Note 2 22,213 22,639 22,213 22,639
Germany
Century BV Yes Euribor 1.65% EUR 31/12/2017 9,649 9,911 9,631 9,870
Century 2 BV Yes Euribor 1.65% EUR 31/12/2017 4,177 4,291 4,169 4,273
Century 2 BV Yes Euribor 1.65% EUR 31/12/2017 874 898 873 894
Stenham Beryl Limited Yes Euribor 1.85% EUR 30/04/2018 5,377 5,488 5,377 5,488
Stenham Crystal Limited Yes Euribor 1.85% EUR 30/04/2018 4,490 4,583 4,490 4,583
Stenham Jasper Limited Yes Euribor 1.85% EUR 30/04/2018 5,494 5,608 5,494 5,608
Isabel Properties BV No Euribor 2.50% EUR 31/12/2021 9,000 9,000 9,000 9,000
Bleichenhof GmbH & Co.KG 4 No 1,58% EUR 28/02/2022 84,937 84,937 84,937 84,884
Stenprop Hermann Ltd No Euribor 1.13% EUR 30/06/2020 9,430 11,050 9,399 11,012
Stenprop Victoria Ltd No Euribor 1.28% EUR 31/08/2020 10,300 10,300 10,300 10,300
351,496 368,842 350,506 367,493
* The difference between the nominal and the carrying value represents unamortised facility costs.
(1) On 26 May 2016, Davemount Properties Limited ('Davemount') and GGP1 Limited ('GGP1') refinanced their loan facilities with Santander.
Santander have provided a single facility with a five-year term of GBP12,360,000 split GBP4,000,000 to Davemount and GBP8,360,000 to GGP1.
The all-in rate on this facility is 3.46% (including a swap of 1.21%) which compares to 2.7% on the current Davemount facility and 3.72%
on the GGP1 facility.
(2) All of the bank loans in respect of the Swiss properties were due for expiry on 31 March 2017. Given that all of the properties in the
Swiss portfolio were held for sale at this date, the loans were re-financed on a short-term basis as follows:
- Algy Properties Sarl extended its loan with Credit Suisse in the sum of CHF3,237,500, for a period of one year from 1 April 2017 at a
loan interest rate of LIBOR 1.5 % and no swap (previous facility: LIBOR 1.3% 0.91% swap).
- Bruce Properties Sarl extended its loan with Credit Suisse in the sum of CHF4,755,000, for a period of one year from 1 April 2017 at a
loan interest rate of LIBOR 1.35 % and no swap (previous facility: LIBOR 1.25% 1.90% swap).
- David Properties Sarl extended its loan with Credit Suisse in the sum of CHF7,725,000, for a period of one year from 1 April 2017 at a
loan interest rate of LIBOR 1.4 % and no swap (previous facility: LIBOR 1.3% 1.73% swap).
- Kantone Holdings Limited entered into a rolling credit facility with its existing lender, Union Bank of Switzerland ('UBS'). The credit
facility was for CHF 49,000,000 at a loan interest rate of LIBOR 1.05 % and no swap (previous facility: LIBOR 1.05% 0.7% swap).
As each property within the Kantone portfolio is sold, partial repayments of the loan are to be made.
- Polo Properties GmbH entered into a rolling credit facility with its existing lender, Union Bank of Switzerland ('UBS'). The credit
facility was for CHF 23,750,000 at a loan interest rate of LIBOR 1.15 % and no swap (previous facility: LIBOR 1.15% 0.73% swap).
As each property within the Polo portfolio is sold, partial repayments of the loan are to be made.
(3) 0n 29 November 2016, Clint Properties Sarl ('Clint') sold its sole investment, a property in Interlaken Switzerland. As a condition of the
sale Clint repaid, in full, its outstanding loan of CHF3,067,500 with Credit Suisse.
(4) On 28 February 2017 Kommandtigesellschaft Bleichenhof Grundstucksverwaltung GmbH & Co. ('Bleichenhof') refinanced its EUR84,937,000 interest
only loan facility with Berlin Hyp AG for a five-year term, until 28 February 2022, at an all-in fixed rate of 1.58 % per annum compared to
the previous all-in fixed rate of 1.90 % per annum.
25. Derivative financial instruments
In accordance with the terms of the borrowing arrangements and group policy, the Group has entered into interest rate
swap agreements. The interest rate swap agreements are entered into by the borrowing entities to convert the borrowings
from floating to fixed interest rates and are used to manage the interest rate profile of financial liabilities and eliminate future
cash exposure to interest rate fluctuations. It is the Group's policy that no economic trading in derivatives is undertaken. In
the current year the Group recognised a total net gain in fair value of financial instruments from continuing and discontinuing
operations of EUR582,000 (2016: EUR2,495,000 loss) and EUR1.482,000 (2016: EUR1,495,000) respectively.
The following table sets out the interest rate swap agreements at 31 March 2016 and 31 March 2017.
Notional Fair Notional Fair
value value value value
Swap 31 March 31 March 31 March 31 March
Effective Maturity rate 2017 2017 2016 2016
Facility date date % EUR'000 EUR'000 EUR'000 EUR'000
United Kingdom
Laxton Properties Limited 14/04/2014 8/05/2020 1,62 32,194 (1,105) 34,846 (1,232)
Normanton Properties Limited 1/04/2014 25/03/2019 1,50 43,312 (964) 46,879 (1,285)
LPE Limited 26/03/2015 31/03/2020 1,35 35,070 (872) 37,959 (891)
GGP1 Limited
(novated from APF1 Limited) - - 6,630 (55)
GGP1 Limited
(novated from APF1 Limited) - - 1,265 (10)
Switzerland
Algy Properties Sarl - - 3,522 (62)
Bruce Properties Sarl - - 4,384 (122)
Clint Properties Sarl - - 2,820 (74)
David Properties Sarl - - 7,409 (171)
Kantone Holdings Limited - - 46,787 (721)
Polo Property GmbH - - 22,639 (355)
Germany
Century BV 1/04/2014 29/12/2017 1,00 9,649 (95) 9,911 (220)
Century 2 BV 1/04/2014 29/12/2017 1,08 4,177 (44) 4,291 (102)
Century 2 BV 1/04/2014 29/12/2017 1,85 874 - 898 -
Stenham Beryl Limited 1/04/2014 30/04/2018 0,83 5,340 (65) 5,488 (125)
Stenham Crystal Limited 1/04/2014 30/04/2018 0,83 4,459 (54) 4,583 (105)
Stenham Jasper Limited 1/04/2014 30/04/2018 0,83 5,456 (67) 5,608 (128)
Isabel Properties BV 30/01/2015 30/12/2021 0,48 9,000 (208) 9,000 (284)
Total swaps 149,531 (3,475) 254,919 (5,942)
Maturing within 12 months (139) (1,769)
Maturing after 12 months (3,335) (4,173)
Derivative financial instruments - on balance sheet (3,475) (5,942)
Swaps included in investments
in associates and joint ventures
Regent Arcade House Holdings Ltd 20/05/2015 20/05/2020 1,57 43,838 (1,445) 47,449 (1,585)
Elysion Braunschweig Sarl 1/04/2014 29/03/2018 2,43 5,963 (115) 6,125 (240)
Elysion Dessau Sarl 1/04/2014 29/03/2018 2,43 5,762 (110) 5,918 (230)
Elysion Kappeln Sarl 1/04/2014 31/12/2018 2,80 6,252 (217) 6,420 (359)
Elysion Winzlar Sarl 1/04/2014 31/12/2018 2,80 4,168 (145) 4,280 (239)
Prejan Enterprises Limited - - 44,380 (231)
Derivative financial instruments - associates and joint ventures 65,983 (2,032) 114,572 (2,884)
26. Deferred tax
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the
current and prior reporting period.
Audited
31 March 31 March
2017 2016
EUR'000 EUR'000
Opening balance (9,705) (7,230)
Deferred tax recognised on investment properties (2,202) (2,667)
Deferred tax recognised on revaluation of financial liabilities (323) (220)
Deferred tax on tax losses 377 412
Adjustment for liabilites directly associated with assets classified as held for sale
adjustment (see note 20) 5,079 -
Closing balance (6,774) (9,705)
Deferred tax assets and liabilities are offset where the Group has a legally enforceable
right to do so. The following is the analysis of the deferred tax balances (after offset) for
financial reporting purposes:
Deferred tax liabilities (16,790) (14,821)
Deferred tax assets 4,937 5,116
Adjustment for liabilities directly associated with assets classified as held for sale
adjustment (see note 20) 5,079 -
Closing balance (6,774) (9,705)
Deferred tax opening balance 9,705 7,230
Exchange movements 107 (191)
Deferred tax liability closing balance (11,852) (9,705)
Movement in deferred tax (2,040) (2,666)
27. Financial risk management
The Group is exposed to a variety of financial risks including market risk, credit risk and liquidity risk. The overall risk
management strategy seeks to minimise the potential adverse effects on the Group's financial performance. Certain risk
exposures are hedged via the use of financial derivatives.
This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies
and processes for measuring and managing these risks, and the Group's management of capital. Further quantitative
disclosures are included throughout these audited financial statements where relevant. The Group's board of directors
has overall responsibility for the establishment and oversight of the Group's risk management framework.
The board has established the Risk Committee which has assumed responsibility for developing and monitoring the Group's
risk management policies. The Risk Committee participates in management's process of formulating and implementing
the risk management plan and reports on the plan adopted by management to the Board.
The objective of risk management is to identify, assess, manage and monitor the risks to which the business is exposed,
including, but not limited to, information technology risk. The board will be responsible for ensuring the adoption of
appropriate risk management policies by management. The Group's risk management policies are established to identify
and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to
limits. Risk management policies are reviewed regularly to reflect changes in market conditions and the Group's activities.
The board will also ensure that there are processes in place between itself and management enabling complete, timely,
relevant, accurate and accessible risk disclosure to shareholders.
To enable the Risk Committee to meet its responsibilities, the Risk Committee has adopted a charter which includes
appropriate standards and the implementation of systems of internal control and an effective risk-based internal audit,
comprising policies, procedures, systems and information to assist in:
- safeguarding assets and reducing the risk of loss, error, fraud and other irregularities;
- ensuring the accuracy and completeness of accounting records and reporting;
- preparing timely, reliable financial statements and information in compliance with relevant legislation and generally
accepted accounting policies and practices; and
- increasing the probability of anticipating unpredictable risk.
The committee oversees how management monitors compliance with the Group's risk management policies and
procedures and reviews the adequacy of the risk management framework in relation to risks faced by the Group.
Credit risk
The Group's principal financial assets are cash and cash equivalents and trade and other receivables. The credit risk arising
from deposits with banks is managed through a policy of utilising only independently-rated banks with acceptable credit
ratings.
The credit quality of cash and cash equivalents can be assessed by reference to external credit ratings of the counterparty
where the account or deposit is placed. A summary of the European financial institutions credit ratings for the six banks in
which 81% of the Group's cash is held, are as follows:
31 March 31 March
2017 2016
ABN AMRO Bank NV A A
Barclays Private Clients International Limited A- A-
Berliner Sparkasse AA- AA-
HSBC Bank plc. AA- AA-
Santander UK plc. A A
UBS AG A A
The directors are satisfied as to the credit worthiness of the banks where the remaining cash is held.
At the time of acquisition of a property, and from time to time thereafter, the Company reviews the quality of the contracted
tenants to ensure that the tenants meet acceptable covenants. Trade receivables are presented in the statement of financial
position net of allowances for doubtful receivables. An allowance for impairment is made where there is an indefinable loss
event, which based on previous experience, may give risk to a non-recovery of a receivable.
The carrying amount of financial assets represents the maximum credit exposure at the reporting date.
At 31 March 2017, trade and other receivables and cash and cash equivalents amounts to EUR34,218,000 (March 2016:
EUR43,178,000) as shown in the statement of financial position.
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash resources, the availability of funding through
appropriate and adequate credit lines and managing the ability of tenants to settle within lease obligations. The Group
ensures, through the forecasting and budgeting of cash requirements that adequate committed resources are available.
By its nature, the market for investment property is not immediately liquid. As a result of this illiquidity, the Group's ability
to vary its portfolio in a timely fashion and to receive a fair price in response to changes in economic and other conditions
may be limited. Furthermore, where the Group acquires investment properties for which there is not a readily available
market, the Group's ability to deal in any such investment or obtain reliable information about the value of such investment
or risks to which such property investment is exposed may be limited. The Group's short-term liquidity risk is secured by the
existence of cash balances, through the fact that rental income exceeds the Group's cost structures and through ensuring
that facilities are managed within debt covenants.
The following table details the contractual maturity date of the Group's financial liabilities. The table has been drawn up
based on the undiscounted contractual maturities of the financial liabilities, including interest that will accrue to those
liabilities, except where there Group is entitled and intends to repay the liability before its maturity. The discount column
represents the possible future cash flows included in the maturity analysis, such as future interest or potential payments
that have not been included in the carrying amount of the financial liability. The table also includes a reconciliation to the
carrying value in the statement of financial position.
Less One Three One Over
than one to three to twelve to five five
month months months years years Discount Total
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Interest-bearing loans - - 97,946 252,564 - - 350,510
Loan interest 575 1,950 5,609 14,120 - (21,634) 620
Financial liabilities - - 139 3,335 - - 3,474
Deferred tax - - 5,079 6,774 - - 11,853
Other payables (including tax) - 4,225 6,083 - - - 10,308
Accruals - - 2,753 - - - 2,753
Deferred income - 5,763 - - - - 5,763
Liabilities directly associated with
assets classified as held for sale - (770) (89,250) - - 943 (89,077)
As at 31 March 2017 575 11,168 28,359 276,793 - (20,691) 296,204
Interest-bearing loans 5,445 - 183,340 169,708 9,000 - 367,493
Loan interest 531 2,388 6,636 14,056 203 (23,278) 536
Financial liabilities 199 - 1,570 3,889 284 - 5,942
Deferred tax - - - 9,705 - - 9,705
Other loans and interest - - - 12 - - 12
Other payables (including tax) - 2,811 4,641 - - - 7,452
Accruals - - 3,332 - - 3,332
Deferred income - 5,156 27 - - - 5,183
As at 31 March 2016 6,175 10,355 199,546 197,370 9,487 (23,278) 399,655
Fair value of financial instruments
The following table summarises the Group's financial assets and liabilities into categories required by IFRS 7 Financial
instruments disclosures. The directors consider that the carrying amounts of financial assets and financial liabilities
recorded at amortised cost in the financial statements approximate their fair values.
Held at Total
fair value carrying
through Held at amount
profit amortised 31 March
and loss cost 2017
EUR'000 EUR'000 EUR'000
Financial assets
Cash and cash equivalents - 29,461 29,461
Trade and other receivables - 18,357 18,357
- 47,818 47,818
Financial liabilities
Bank loans - 267,766 267,766
Derivative financial instruments 3,474 - 3,474
Accounts payable and accruals - 18,189 18,189
As at 31 March 2017 3,474 285,955 289,429
Held at Total
fair value carrying
through Held at amount
profit amortised 31 March
and loss cost 2016
EUR'000 EUR'000 EUR'000
Financial assets
Cash and cash equivalents - 36,811 36,811
Accounts receivable - 3,509 3,509
Other debtors - 9,338 9,338
- 49,658 49,658
Financial liabilities
Bank loans - 367,493 367,493
Other loan and interest - 12 12
Derivative financial instruments 5,942 - 5,942
Accounts payable and accruals - 16,503 16,503
As at 31 March 2016 5,942 384,008 389,950
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: foreign currency risk, interest rate risk and price risk. The objective
of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising
returns to shareholders.
Investment in property is subject to varying degrees of risk. The main factors which affect the value of the investment in
property include:
- changes in the general economic climate;
- local conditions in respective markets, such as oversupply, or a reduction in demand, for commercial space in a specific
area;
- competition from other available properties; and
- government regulations, including planning, environmental and tax laws.
Whilst a large number of these factors are outside the control of the management, market and property specific factors
relevant to maintain a sustainable income stream within the Group's yield parameters are considered as part of the initial
due diligence. Properties and tenant leases are actively managed.
Foreign currency risk
The Group's functional currency is Euros. Foreign currency risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in foreign currency or exchange rates. At the reporting date, the below table
summarises the Group's exposure to foreign currency risk in respect of assets and liabilities held in GBP (United Kingdom)
and CHF (Switzerland).
31 March 31 March
2017 2016
EUR'000 EUR'000
Assets
GBP 337,187 371,938
CHF 155,278 160,313
Liabilities
GBP 138,557 149,120
CHF 89,077 94,894
Foreign currency sensitivity analysis
The sensitivity analysis measures the impact on the Group's exposure in Euros (based on a change in the reporting date
spot rate) and the impact on the Group's Euro profitability, given a simultaneous change in the foreign currencies to which
the Group is exposed at the reporting date.
A 10% strengthening in the Euro exchange rate against the following currencies at year end would have decreased equity
and profits by the amounts shown below. The 10% threshold was selected as a reasonable, worse-case scenario and is
considered a prudent threshold. This analysis assumes that all other variables remain constant. For a 10% weakening of the
Euro, there would be an equal but opposite impact on the profit and equity and the balance would be positive.
Equity Profit or loss
EUR'000 EUR'000
GBP impact (19,863) (1,079)
CHF impact (6,620) (335)
(26,483) (1,414)
The following exchange rates were applied during the year:
Average
rate for
12 months Period end
to 31 March 31 March
2017 2017
CHF 0.9229 0.9353
GBP 1.1904 1.1690
Interest rate risk
The Group's interest rate risk is associated with cash and cash equivalents, on the one hand, and interest-bearing
borrowings, on the other. If the interest is variable, it presents the Group with a cash flow interest rate risk. Interest rate
risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market
interest rates. As stated in note 24, borrowings from credit institutions are protected against movements in interest rates.
The Company uses interest rate swaps to manage its interest rate exposure.
Fair value hierarchy
The table below analyses the Group's financial instruments carried at fair value, by valuation method. The different levels
have been defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Total financial
instruments Designated at fair value
recognised
at fair value Level 1 Level 2 Level 3
EUR'000 EUR'000 EUR'000 EUR'000
31 March 2017
Liabilities
Derivative financial liabilities 3,474 - 3,474 -
Total liabilities 3,474 - 3,474 -
31 March 2016
Liabilities
Derivative financial liabilities 5,942 - 5,942 -
Total liabilities 5,942 - 5,942 -
Details of changes in valuation techniques
There have been no significant changes in valuation techniques during the period under review.
Significant transfers between Level 1, Level 2 and Level 3
There have been no significant transfers during the period under review.
Unobservable inputs
Investment properties are considered Level 3 and associated unobservable inputs are disclosed in note 16.
Capital risk management
The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 25, cash and cash
equivalents and equity attributable to ordinary shareholders of the Company, comprising issued capital, reserves and
retained earnings as disclosed in the statement of changes in equity. Stenprop's average loan-to-value ratio ('LTV') ratio at
31 March 2017 was 51.6% (March 2016: 51.6%), including joint ventures and associates and the Group is not subject to any
external capital requirements. The Group strategy is to maintain a debt-to-equity ratio and LTV to ensure that property
performance is translated into an enhanced return for shareholders whilst at the same time ensuring that it will be able
to continue as a going concern through changing market conditions. The directors are of the opinion that a 50% LTV in
respect of secured external borrowings is an appropriate target for the Group, given the current market conditions.
28. Related party transactions
Parties are considered related if one party has control, joint control or significant influence over the other party in making
financial and operating decisions. Transactions with related parties are made on terms equivalent to those that prevail in an
arm's-length transaction.
Other than those further referred to below, there were no other related party transactions during the period ended
31 March 2017.
P Arenson and M Fienberg, both directors of the Company until 14 September 2016 when M Fienberg resigned, are also
directors of Stenham Limited which at 31 March 2017 had an indirect beneficial interest of 4.85% in Stenprop Limited
through its wholly-owned subsidiary, Stenham Group Limited (March 2016: 4.91%).
At 31 March 2017, P Arenson held an indirect 1.13% interest in the share capital of Stenham Limited (March 2016: 2.58%).
His interest in Stenprop Limited is seperately disclosed in note 8.
M Yachad is a non-executive director of the Company and an executive director of Peregrine Holdings Limited, which has a
beneficial interest (direct and indirect) of 6.51% in the shares of the Company at 31 March 2017 (March 2016: 6.41%).
29. Operating lease commitments
The Group earns rental income by leasing its investment properties to tenants under non-cancellable operating leases.
At the balance sheet date the Group had contracted with tenants for the following future minimum lease payments on its
investment properties:
Audited
31 March 31 March
2017 2016
EUR'000 EUR'000
Continuing operations
Within one year 32,536 32,662
Between one and two years 30,531 31,777
Between two and five years 76,284 81,790
After five years 63,304 72,157
202,656 218,386
Discontinuing operations
Within one year 9,210 8,011
Between one and two years 8,282 7,145
Between two and five years 20,792 16,203
After five years 30,030 14,532
68,314 45,891
30. Contingent liabilities and commitments
As at 31 March 2017, the Group was contractually committed to CHF2.5 million (EUR2.3 million). This reflects a contribution
towards capital expenditure in respect of an investment property in Switzerland.
31. Subsequent events
(i) Declaration of dividend after reporting date
On 7 June 2017, the directors declared a final dividend of 4.5 cents per share, payable in cash on 4 August 2017.
An announcement containing details of the dividend and the timetable will be made separately.
(ii) Sale of Assets Held for Sale
Burger King
On 25 April 2017, the sale completed on the annexe of the Hermann Quartier property known as Burger King.
The annexe was recognised at its sale price per the signed sales and purchase agreement at reporting date. Readers
are referred to note 20 where details of this annexe are disclosed as per IFRS 5 Non-current Assets Held for Sale and
discontinued operatio
(iii) Signing of sale and puchase agreement of shares in subsidiary of associate
On 6 February 2017, a sale and purchase agreement was signed to sell the shares in the company which owns the
underlying property known as Nova Eventis shopping centre. Stenprop owns 28.16% of the underlying investment
through Stenham European Shopping Centre Fund Limited ('SESCF'), and 0.26% via a wholly-owned subsidiary,
Leatherback Property Holdings Limited. The directors have estimated the fair value of the Nova Eventis shopping
centre to be EUR207.7 million as at 31 March 2017 being the agreed property valuation of EUR208.5 million per the
agreement, less sale costs. The buyers have paid a deposit of EUR11 million into an escrow account. At the date of signing
all closing conditions are met, and completion date is set for 22 June 2017.
(iv) Sale of shares held by associate
Following year end, an associate of the Group, Stenham Berlin Residential Fund Limited ('SBRF') sold all of its shares
in its sole investment, ADO Properties SA. Subsequent to this, a voluntary buy back offer was made to all investors in
SBRF. Stenprop has participated in this buyback which will result in net sales proceeds of EUR2.3 million being received by
20 June 2017.
(v) Change to the board of directors
On 6 April 2017, an announcement was made containing details of the appointment of Warren Lawlor as a
non-executive director of the board of Stenprop with effect from 5 April 2017.
(vi) Share incentive awards
On 7 June 2017, the directors, on the recommendation of the remuneration committee, approved the following
share-based awards:
Bonus awards under Deferred
Share Bonus Plan in respect of
the year ended 31 March 2017* Share Purchase Plan^
Number of Loan Number of
EUR'000 shares EUR'000 shares
Executive directors 14 11,348 2,095 1,717,350
Other staff 39 31,856 285 233,654
53 43,204 2,380 1,951,004
* Share options vest in three equal tranches. The first tranche vests on grant. Subsequent tranches will vest at the relevant year-end in
accordance with the rules of the Deferred Share Bonus Plan.
^ Shares will be issued on 8 June 2017.
Loans advanced under the share purchase plan are interest-bearing at a rate equal to the average interest rate
incurred by the Group from time to time. Interest is payable six monthly in arrear. Loans are repayable within 30 days
of cessation of employment (unless the participant ceases employment in circumstances beyond his or her control,
in which case the loan is repayable within 12 months), and must in all circumstances be repaid in 10 years. All dividends
received by such employees (or his or her nominee) by virtue of their shareholding, must first be utilised to discharge
any interest outstanding in terms of the loan advanced in terms of the Share Purchase Plan.
(vii) Industrial portfolio acquisition
On 7 June 2017 Stenprop announced the acquisition of 100% of the interests in Industrials UK LP which owns a portfolio
of multi-let industrial properties (the 'MLI Portfolio') as well 100% as the management business that has built up and
managed the portfolio, C2 Capital Limited (the 'C2 Management Platform') for a combined consideration that values
the two businesses at GBP130.5 million.
The MLI Portfolio is made up of 25 separate multi-let industrial estates situated in or near densely populated nodes
across the United Kingdom. The portfolio has a gross lettable area of approximately 2 million square feet (200,000
sqm), a diversified base of over 400 tenants and contractual rent (including contractual fixed uplifts) of approximately
GBP9.1 million per annum.
The C2 Management Platform specialises in the acquisition and active management of multi-let industrial estates
across the UK. Founded and run by Julian Carey, with the support of five property professionals, the business has been
investing on behalf of private and institutional clients since its inception in 2009.
The MLI Portfolio is being acquired with effect from the date of completion of the transaction, which is expected to
be 30 June 2017. The purchase price is payable in cash, with a GBP6.35 million deposit having been paid on exchange
of contracts on 6 June 2017 with the balance of the purchase price payable on completion, subject to a further
adjustment to take account of any working capital in the structure.
The purchase consideration will ultimately be funded out of the proceeds from the sale of the Nova Eventis shopping
centre, which is scheduled to complete on 22 June 2017, and certain of the properties in Stenprop's Swiss portfolio
that are in the process of being sold. To ensure that it has the cash available to settle the purchase price on completion,
Stenprop has secured a twelve month bridging finance facility of EUR31 million, which attracts an arrangement fee of 1% and
interest at 7% per annum. The loan is subject to a group loan to value covenant of 65%. A further twelve month facility of
EUR8 million has been secured at an interest rate of 7% per annum.
Stenprop will acquire the shares in C2 Capital Limited from Julian Carey for GBP3.5 million, to be settled by the issue of
3,270,500 Stenprop shares valued at EUR1.22 per share, adjusted upward or downward in cash for working capital.
The accounting for these transactions will be finalised on completion and more information will be given when Stenprop
reports its interim results.
Stenprop is confident that the combination of these acquisitions will provide a strategic foothold and capability in the
multi-let industrial estates sector; and that this positioning will enable it to deliver sustainable higher average annual
rental growth over the next few years. The acquisition of the MLI Portfolio, together with the acquisition of the C2
Management Platform, represents a rare opportunity to make a substantial strategic investment into an asset class
which Stenprop believes is likely to show superior returns over the next few years.
Property summary
Weighted
Asset average
value as Gross Annual WAULT rental
Asset percentage lettable Occupancy gross rental (by WAULT per square
value of portfolio area (by area) income revenue) (by area) metre
(EUR million) (%) (m2) (%) (EUR million) years years EUR/m2
United Kingdom
Office 324.7 38.3 44,566 99.9 19.0 5.5 5.6 426
Retail 8.7 1.0 7,678 100.0 1.1 4.0 4.3 143
Industrial 8.0 0.9 14,313 100.0 0.7 3.4 3.4 49
Total 341.4 40.2 66,557 100.0 20.8 5.4 5.0 313
Germany
Retail 206.2 24.3 103,396 95.6 14.5 6.7 7.0 140
Office 53.5 6.3 15,015 80.1 2.4 4.5 4.8 160
Nursing Homes 35.4 4.2 19,330 100.0 2.7 12.4 12.1 140
Other 55.7 6.6 1,251 80.1 2.5 4.5 4.8 1,998
Total 350.8 41.4 138,990 94.4 22.1 6.9 7.4 159
Assets Held for
Sale*
Retail 84.6 10.0 24,511 94.7 5.3 9.2 10.5 216
Office 70.7 8.3 21,487 96.5 4.3 4.7 4.7 200
Other 0.6 0.1 1,113 87.8 0.0 4.6 4.3 -
Total 155.9 18.4 47,111 95.4 9.6 7.2 7.7 204
Total
Office 448.9 52.9 81,068 95.4 25.7 5.3 5.2 317
Retail 299.5 35.3 135,585 95.6 20.9 7.2 7.5 154
Industrial 8.0 0.9 14,313 100.0 0.7 3.4 3.4 49
Nursing Homes 35.4 4.2 19,330 100.0 2.7 12.4 12.1 140
Other 56.3 6.7 2,364 83.7 2.5 4.5 4.6 1,058
Total 848.1 100.0 252,660 96.0 52.5 6.3 6.8 208
* Readers are referred to note 20. Assets Held for Sale includes the remaining Swiss portfolio.
Rental Escalation profile
Stenprop operates in countries with low inflation rates. The annual inflation rate during the 2016 calendar year was 1.6% for the
UK, 1.7% for Germany and nil for Switzerland. Rental escalation clauses vary across the portfolio. In the UK, a majority of leases
are subject to periodic upwards-only rent reviews, at different stages of the tenancy. Leases in the German and Swiss properties
are generally adjusted for CPI with a hurdle rate before an increase can be applied, with the exception of the Aldi portfolio, which
sees increases of 1.66% annually. During the past year, the UK increased by 0.38% entirely due to one rent review at the Argyll
Street property. Rents from German properties saw an average increase of 0.63%, while Swiss properties saw no indexation.
Portfolio analysis
Net initial
yield
Portfolio Market Annualised 31 March
by value gross 2017
market 31 March rental (weighted WAULT Voids Rental
Combined value 2017 Area income average) (by rental) (by area) per m2
portfolio (%) (EUR million) Properties (m2) (EUR million) (%) (years) (%) (EUR/m2)
United Kingdom 34.7 294.1 13 63,555 18.5 5.57 5.7 0.0 291
Germany 30.2 256.3 23 92,264 14.5 4.95 6.6 5.4 157
Assets
Held for Sale 18.4 155.9 12 47,111 9.6 4.33 7.2 4.6 204
Germany 0.3 2.7 - 250 0.2 6.40 1.2 0.0 800
Switzerland 18.1 153.2 12 46,861 9.4 4.29 7.3 4.7 201
Total 83.3 706.3 48 202,930 42.6 5.07 6.3 3.5 210
Share of joint
ventures and
associates 16.7 141.8 6 49,730 9.9 5.69 6.4 5.8 199
Total 100.0 848.1 54 252,660 52.5 5.18 6.3 4.0 208
Tenant profile
Stenprop's tenants are classified into three groups, as follows:
Tenant profile by annual rent
Type A 64%
Type B 21%
Type C 15%
Tenant profile by let area
Type A 57%
Type B 26%
Type C 17%
Type A: Large tenants with a national presence or multi-national tenants, government and major franchisees.
Type B: Nationally recognised tenants, listed tenants, franchisees, and medium to large professional firms.
Type C: All other tenants.
Includes Stenprop's share of joint ventures and associates.
Consolidated portfolio
Net initial
yield
Market Annualised 31 March
value gross 2017
Ownership 31 March rental (weighted WAULT Voids Rental
Property/ interest 2017 Pro- Area income average) (by rental) (by area) per m2
Company portfolio (%) (EUR million) perties (m2) (EUR million) (%) (years) (%) (EUR/m2)
United Kingdom
Davemount Davemount 100.00 8.7 3 7,678 1.1 11.42 4.0 0.0 143
Properties (BVI)
Laxton
Properties Ltd Euston 100.00 90.8 1 10,204 4.8 4.07 4.2 0.0 470
(BVI)
GGP1 Limited GGP1 100.00 30.3 7 25,454 2.6 8.23 3.8 0.0 102
(Guernsey)
Normanton
Properties Pilgrim 100.00 91.2 1 9,655 5.1 4.98 4.2 0.0 528
(BVI)
LPE Ltd Trafalgar 100.00 73.1 1 10,564 4.9 6.38 10.1 0.3 464
(Guernsey)
United
Total Kingdom 294.1 13 63,555 18.5 5.57 5.7 0.0 291
Germany
Gemstone Aldi 100.00 33.0 14 18,843 2.2 5.78 9.9 0.0 117
Properties Ltd
Anarosa
Holdings N.V BikeMax 100.00 25.2 5 18,007 2.0 7.0 9 4.5 0.0 111
(Curacao)
KG Bleichenhof Bleichenhof 94.90 127.5 1 20,067 5.8 3.98 4.5 19.9 289
GmbH
Isabel Isabel 100.00 18.7 1 13,365 1.3 6.08 6.4 3.0 97
Properties B.V
Stenprop
Hermann Ltd Hermann 100.00 20.7 1 8,272 1.4 6.40 5.1 5.3 169
Stenprop
Victoria Ltd Victoria 100.00 31.2 1 13,710 1.8 4.65 13.5 0.9 131
Total Germany 256.3 23 92,264 14.5 4.95 6.6 5.4 157
Wholly-
Total owned 550.4 36 155,819 33.0 5.28 6.1 3.2 212
portfolio
Assets Held for sale properties
Net initial
yield
Market Annualised 31 March
value gross 2017 WAULT
Ownership 31 March rental (weighted (by Voids Rental
Property/ interest 2017 Pro- Area income average) rental) (by area) per m2
Company portfolio (%) (EUR million) perties (m2) (EUR million) (%) (years) (%) (EUR/m2)
Germany Germany
Burger
King space 100 2.7 - 250 0.2 6.40 1.2 0.0 800
(Hermann)
Switzerland Switzerland
Credit Suisse Credit Suisse
David Properties Cham 100.00 13.2 1 5,335 0.8 4.46 4.5 14.2 150
Sarl (Lux)
Bruce Properties Chiasso 100.00 8.9 1 4,183 0.6 4.28 2.4 9.7 143
Sarl (Lux)
Algy Properties
Sarl (Lux) Sissach 100.00 3.9 1 1,988 0.2 4.91 4.2 45.4 101
Total Credit Suisse 26.0 3 11,506 1.6 4.47 3.7 18.0 139
Polo Polo
Polo Property Altendorf 100.00 27.1 1 8,199 1.5 4.09 10.4 0.0 183
GmbH (Swiss)
Polo Property
GmbH (Swiss) Arlesheim 100.00 13.1 1 4,834 1.0 4.95 6.5 0.0 207
Total Polo 40.2 2 13,033 2.5 4.37 8.9 0.0 192
Kantone Kantone
Kantone Holdings Baar 100.00 22.3 1 4,114 1.4 4.00 2.8 1.8 340
Ltd (Guernsey)
Kantone Holdings Granges 100.00 18.6 3 5,261 1.1 4.46 4.8 0.0 209
Ltd (Guernsey)
Kantone Holdings Lugano 100.00 18.3 1 7,036 1.3 4.46 19.5 0.0 185
Ltd (Guernsey)
Kantone Holdings Montreux 100.00 22.3 1 4,362 1.1 4.09 4.6 0.5 252
Ltd (Guernsey)
Kantone Holdings
Ltd (Guernsey) Vevey 100.00 5.5 1 1,549 0.4 3.82 3.6 1.8 258
Total Kantone 87.0 7 22,322 5.3 4.21 7.7 0.6 237
Total Switzerland 153.2 12 46,861 9.4 4.29 7.3 4.7 201
Total Held for sale 155.9 12 47,111 9.6 4.33 7.2 4.6 204
Current
Total subsidiaries 706.3 48 202,930 42.6 5.07 6.3 3.5 210
Jointly controlled entities
Net initial
yield
Market Annualised 31 March
value gross 2017 WAULT
Ownership 31 March rental (weighted (by Voids Rental
Property/ interest 2017 Pro- Area income average) rental) (by area) per m2
Company portfolio (%) (EUR million) perties (m2) (EUR million) (%) (years) (%) (EUR/m2)
United
Kingdom Argyll 50.0 94.7 1 6,007 4.6 4.54 2.7 0.0 766
Germany
Elysion Sarl Carehomes 100.00 35.4 4 19,330 2.7 6.28 12.4 0.0 140
SESCF Ltd
(Guernsey) Nova 28.42 207.7 1 96,397 17.2 6.27 4.8 10.5 178
Total Germany 243.1 5 115,727 19.9 6.27 5.8 6.2 172
Jointly-owned
Total interests 337.8 6 121,734 24.5 5.79 5.2 5.9 201
(100%)
Jointly-owned
interests
(Stenprop
Total share) 141.8 6 49,730 9.9 5.69 6.4 5.8 199
Analysis of shareholders
Number of Number
shareholdings % of shares %
SHAREHOLDER SPREAD
1 - 1 000 shares 369 12.96 131,613 0.05
1 001 - 10 000 shares 1,108 38.92 4,628,198 1.61
10 001 - 100 000 shares 899 31.58 34,429,088 12.01
100 001 - 1 000 000 shares 422 14.82 113,479,116 39.58
1 000 001 shares and over 49 1.72 134,013,865 46.75
Total 2,847 100.00 286,681,880 100.00
DISTRIBUTION OF SHAREHOLDERS
Banks/brokers 55 1.93 32,528,773 11.35
Close corporations 23 0.81 518,811 0.18
Control account 2 0.07 254,592 0.09
Endowment funds 14 0.49 1,162,857 0.41
Individuals 1,837 64.52 55,146,817 19.24
Insurance companies 16 0.56 5,982,922 2.09
Investment company 2 0.07 71,801 0.03
Mutual funds 97 3.41 28,724,174 10.02
Other corporations 11 0.39 346,298 0.12
Private companies 195 6.85 51,437,951 17.94
Public companies 32 1.12 41,124,912 14.35
Retirement funds 43 1.51 6,331,530 2.21
Treasury stock 1 0.04 9,026,189 3.15
Trusts 519 18.23 54,024,253 18.84
Total 2,847 100.00 286,681,880 100.00
PUBLIC/NON-PUBLIC SHAREHOLDERS
Non-public shareholders 13 0.46 23,107,874 8.06
Directors and associates of the Company holdings 12 0.42 14,081,685 4.91
Treasury stock 1 0.04 9,026,189 3.15
Public shareholders 2,835 99.58 272,600,195 95.09
Total 2,847 100.00 286,681,880 100.00
Major shareholders
As at the financial year end there were 2,847 shareholders in the Company. In terms of the Companies Act 1981 of Bermuda,
there is no requirement for registered shareholders to disclose their beneficial shareholdings and accordingly, the Company
provides disclosure on the shareholdings where this information is provided to the Company. As at 31 March 2017 Peregrine
Holdings Limited held a direct and indirect interest of 6.51% in the issued share capital of the Company. The Company does
not know of any other shareholder which has beneficial interest of greater than 5% of the Company's issued share capital as at
31 March 2017.
Shareholder diary
Financial year-end 31 March
Integrated Annual Report posted August
Annual general meeting September
Announcement of results
Interim December
Annual June
Dividends Declared Paid
Interim December January
Final June July/August
Corporate information
Registered office of the Company
Stenprop Limited
(Registration number 47031)
20 Reid Street
3rd Floor, Williams House
Hamilton, HM11
Bermuda
Company secretary
Apex Corporate Services Ltd.
(Registration number 33832)
3rd Floor, Williams House
20 Reid Street
Hamilton HM11, Bermuda
(PO Box 2460 HM JX, Bermuda)
JSE sponsor
Java Capital Trustees and Sponsors
Proprietary Limited
(Registration number 2006/005780/07)
6A Sandown Valley Crescent
Sandown
Sandton, 2196
South Africa
(PO Box 2087, Parklands, 2121)
SA transfer secretaries
Computershare Investor Services
Proprietary Limited
(Registration number 2004/003647/07)
Rosebank Towers, 15 Biermann Avenue,
Rosebank, Johannesburg, 2196,
South Africa
Correspondence address
PO Box 61051
Marshalltown, 2107
South Africa
Legal advisors
Berwin Leighton Paisner LLP
Adelaide House
London Bridge
London, EC4R 9HA
United Kingdom
Postal address of the Company
Kingsway House
Havilland Street
St Peter Port, GY1 2QE
Guernsey
South African corporate advisor
Java Capital Proprietary Limited
(Registration number 2012/089864/07)
6A Sandown Valley Crescent
Sandown
Sandton, 2196
South Africa
(PO Box 2087, Parklands, 2121)
BSX sponsor
Estera Securities (Bermuda) Limited
(Registration number 25105)
Canon's Court
22 Victoria Street
Hamilton, HM12, Bermuda
(Postal address the same as the
physical address above)
Bermudian registrars
Computershare Investor Services
(Bermuda) Limited
(Company number 41776)
Corner House
20 Parliament Street
Hamilton, HM12
Bermuda
Correspondence address
2nd Floor, Queensway House
Hilgrove Street
St. Helier
Jersey
JE1 1ES
Channel Islands
Auditors
Deloitte LLP
Regency Court
Glategny Esplanade
St Peter Port
GY1 3HW
Guernsey
Channel Islands
www.stenprop.com
