Stenprop Limited
(Incorporated in Bermuda)
(Registration number 47031)
BSX share code: STP.BH JSE share code: STP ISIN: BMG8465Y1093
("Stenprop" or "the Company" or "the Group")
HALF YEARLY REPORT 2015
Stenprop Limited ("Stenprop" or "the Company" or "the Group") is a European property investment
group focused on cultivating a diversified portfolio of quality investment properties delivering
sustainable and growing earnings, distributions and capital growth to shareholders. Our existing
portfolio is located primarily in major cities in the UK, Germany and Switzerland with an emphasis
on commercial and retail assets. Stenprop is dual-listed on the Bermuda Stock Exchange and the
Johannesburg Stock Exchange. We are experts in our field and are committed to the next phase
of value enhancement for our shareholders.
(Incorporated in Bermuda) (Registration number 47031) BSX share code: STP.BH JSE share code: STP ISIN: BMG8465Y1093
STENPROP HALF YEARLY REPORT 2015
HIGHLIGHTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2015
EUR1.68 EPRA NAV per share
1.8% increase in EPRA NAV per share since year-end
5.17 cents diluted adjusted EPRA earnings per share
5.5% increase on the pro forma** diluted adjusted EPRA EPS at 2 October 2014
4.2 cents interim dividend per share declared
- Declaration of interim dividend on 25 November 2015 of 4.2 cents per share for the six months
ended 30 September 2015, payable with a scrip alternative on 28 January 2016.
- Diluted adjusted EPRA EPS* of 5.17 cents for the period ended 30 September 2015
representing a 5.5% increase on the pro forma** diluted adjusted EPRA EPS at 2 October 2014.
Diluted IFRS EPS was 9.86 cents.
- EPRA net asset value per share of EUR 1.68, an increase of 1.8% since the year-end. IFRS net
asset value per share was EUR 1.62 per share.
- Completion in May 2015 of the acquisition of a 50% interest in 25 Argyll Street, a multi-let
office building located in London's West End, based on a purchase price of the property of
GBP75 million (EUR 101.2 million).
- Completion of refinancing of GBP64.6 million (EUR 87.1 million) of debt on two London properties in
May 2015.
- Completion in August 2015 of the acquisition of the Hermann Quartier retail centre in Berlin at
a purchase price of EUR 22.7 million.
- Migration to the JSE's Main Board with effect from 5 October 2015.
- Notarisation in June 2015 of the Victoria retail centre in Berlin at a purchase price of
EUR 20.6 million, with completion on 24 November 2015.
COMMENTARY
Stenprop is pleased to announce its consolidated
results for the first half of the financial year.
INVESTMENT STRATEGY
Stenprop currently focuses on property investment in
the United Kingdom, Germany and Switzerland with an
emphasis on commercial and retail assets. Its objective
is to cultivate a diversified portfolio of quality investment
properties delivering sustainable and growing earnings,
distributions and capital growth to shareholders.
Stenprop does not generally pursue development
exposure other than value add asset management and
related development of existing assets to protect and
improve capital values. It intends to distribute most of
its earnings which are available for distribution on a
bi-annual basis.
BUSINESS REVIEW
Portfolio summary
Stenprop has an interest in 56 properties valued at
EUR 907 million(1), with 44% in the United Kingdom,
39% in Germany and 17% in Switzerland (by value).
The portfolio, which has a gross lettable area of
approximately 266,000(1) m(2) and gross annual rent of
EUR 58.6 million(1), is predominantly in the office and retail
sectors which account for 51% and 35% of rental
income respectively.
Six properties accounts for 60% of the total portfolio
asset value. The value of the three Central London
properties accounts for 30% of the total portfolio asset
value.
Top six properties by value as at 30 September 2015
Weighted
average
Market Ownership Lettable Annualised unexpired
value interest area gross rental lease term
Property (EUR 'million) (%) Sector (m2) (EUR 'million) (years)
Bleichenhof
Hamburg 121.9 94.9 Mixed use 21,721 6.12 4.3
Pilgrim Street
London 112.3 100.0 Office 9,719 6.06 5.4
Euston House
London 99.1 100.0 Office 9,974 5.19 5.3
Trafalgar Court
Guernsey 82.8 100.0 Office 10,565 5.86 11.6
Nova Eventis
Leipzig 267.7(2) 28.4 Retail 95,472 5.88 3.7
Argyll Street
London 111.3 50.0 Office 5,941 5.05 3.4
Total 795.1 153,392 34.16 5.7
Acquisitions
On 20 May 2015, the Group acquired a 50% interest
in Regent Arcade House Holdings Limited ("RAHHL"),
which owns the property known as 25 Argyll Street.
The acquisition cost was GBP18.9 million which was based
on a valuation of the property of GBP75 million. RAHHL
refinanced the property with an interest only bank loan
of GBP37.5 million at an all-in rate of 2.974% per annum
and a term of five years.
The acquisition of a shopping centre known
as Hermann Quartier for a purchase price of
EUR 22.7 million completed on 24 August 2015. The
property is on a high street location of Berlin's central
suburb of Neukolln with excellent public transport links,
including an underground station inside the shopping
centre. The property is anchored by strong tenants
including Kaiser's, DM and Netto. The return on equity on
this investment exceeded 7.5% per annum at inception.
The purchase of the Victoria shopping centre for
EUR 20.6 million was notarised on 18 June 2015 and
completed on 24 November 2015. The property
is located in the Lichtenberg district of Berlin,
approximately 15 minutes by underground from the
city centre and is comprised of two buildings. The
investment is anchored by Kaufland (a hypermarket
chain) on a new 17 year lease. The return on equity on
this investment exceeded 8% per annum at inception.
FINANCIAL REVIEW
Earnings
The basic earnings attributable to ordinary shareholders
for the six-month period to 30 September 2015 were
EUR 27.3 million (2014 pro forma: EUR 9.2 million). This equates
to a diluted IFRS EPS of 9.86 cents (2014 pro forma:
3.69 cents). Headline earnings were EUR 13.5 million (2014
pro forma: EUR 11.2 million) equating to diluted headline
EPS of 4.88 cents (2014 pro forma: 4.48 cents).
In accordance with reporting standards widely adopted
across the real estate industry in Europe, the directors
feel it is appropriate and useful, in addition to providing
the IFRS disclosed earnings, to also disclose EPRA(3)
earnings. Adjusted EPRA earnings attributable to
shareholders were EUR 14.3 million (2014 pro forma:
EUR 12.2 million), equating to diluted adjusted EPRA EPS of
5.17 cents (2014 pro forma: 4.90 cents). This represents
a 5.5% increase on the pro forma diluted adjusted EPRA
EPS at 2 October 2014.
Management fee income relates to fees earned by
the management companies on management and
administration services provided to certain managed
property syndicates and funds, the assets of which did
not form part of the Stenham Transaction. During the
period the Group earned fees relating to the disposal
of assets held by managed syndicates of EUR 0.7 million.
Ongoing management fees made up the balance of the
management fee income which totalled EUR 1.8 million for
the six month period.
Management fee income is a source of income that will
diminish over time.
Dividends
On 25 November 2015, the directors declared a
dividend of 4.2 cents per share, relating to the six
months to 30 September 2015. The directors intend
to offer shareholders the option to receive in respect of
all or part of their Stenprop shareholding either a scrip
dividend by way of an issue of new Stenprop shares, or
a cash dividend. An announcement containing details of
the dividend, the timetable and the scrip dividend will be
made on 11 December 2015. The record date for the
dividend is 22 January 2016 and the dividend payment
date is 28 January 2016.
On 11 June 2015, the Company announced a final
distribution of 4.2 cents per share in respect of the
year ended 31 March 2015 and offered shareholders
the option to receive either a scrip dividend by way of
an issue of new Stenprop shares credited as fully paid
up, or a cash dividend. On 13 July 2015, the Company
announced a 29.48% take up of the scrip dividend, for
which 2,257,894 new Stenprop shares were issued.
Balance sheet
The IFRS (basic and diluted) net asset value per share at
30 September 2015 was EUR 1.62 (2014 pro forma: EUR 1.41).
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. The diluted EPRA NAV per share at
30 September 2015 was EUR 1.67 (2014 pro forma: EUR 1.46).
This represents a 1.2% increase on 31 March 2015
diluted EPRA NAV per share of EUR 1.65.
Foreign exchange
Foreign exchange markets have been relatively volatile
over the six-month period under review. Euro rates
against Sterling at the start of April were GBP1:EUR 1.36 and
reached over GBP1:EUR 1.44 before ending the period on
GBP1:EUR 1.35. Foreign exchange volatility has also been
seen with the Swiss Franc which began the period at
CHF1:EUR 0.96 and ended the period at CHF1: EUR 0.91. The
Euro has weakened against both Sterling and the Swiss
Franc since 30 September 2015.
Stenprop's diversification across the UK, Germany and
Switzerland provides a natural spread of currencies.
It remains our policy not to hedge currencies and to
maintain this multi-currency exposure.
PORTFOLIO VALUATION
On a like for like basis, the valuation of the portfolio
increased by EUR 18 million (including the Company's
share of joint ventures and associates), driven largely
by the continuing strength of the prime office sector in
London. The investment property balance has increased
as a result of the purchase of Hermann Quartier for
EUR 22.7 million which completed at the end of August
2015.
United Kingdom
The UK portfolio (excluding 25 Argyll Street discussed
separately below) was independently valued at
GBP256.9 million, an increase of 4.5% on the year end
valuations on a like for like basis. The strong growth in
rental and capital values in central London is driven
by a continued shortage of office supply which has
seen these assets increase in value by GBP11.0 million
over the period.
Germany
The German portfolio (excluding associates and joint
ventures) was independently valued at EUR 218.8 million.
On a like for like basis and excluding the Hermann
Quartier Berlin retail shopping centre acquired in
August 2015, property values rose by 2.2%. This was
driven by a EUR 2 million increase at the Bleichenhof mixed
use property in Hamburg with a further EUR 2 million
increase seen at our portfolio of 14 Aldi properties.
Switzerland
The Swiss portfolio was independently valued at
CHF171.4 million, a 2% decrease on the year-end
valuation of CHF175.0 million. This was driven by two
properties, the most notable being at Lugano where
we are engaged in a repositioning of the property. Two
of the main tenant leases expire shortly and we are in
negotiations with a national retailer to potentially take
a new lease over the entire building. The valuation has
reduced by CHF2.6 million to take account of this. When
the repositioning is complete we expect the value to
increase materially.
Joint ventures and associates
The Care Homes portfolio valuation of EUR 33.6 million
remains broadly unchanged at the end of the period.
The portfolio was valued at EUR 33.4 million as at
31 March 2015 and remains fully let.
The property valuation of 25 Argyll Street, in which
Stenprop holds a 50% interest has increased by 10%
since its acquisition.
The Nova Eventis shopping centre in Leipzig, in which
Stenprop holds a 28.42% interest, was valued at
EUR 267.7 million (excluding assumed selling costs of
1%), a 2.7% reduction over the year-end valuation of
EUR 275 million.
Capital management
The value of the property portfolio as at
30 September 2015, including the Group's share
of associate and joint venture properties, was
EUR 886.6 million (excluding the Victoria Centre which
completed on 24 November 2015). Bank debt at the
same date was EUR 465.2 million resulting in an average
loan to value ratio of 52.4%, down from 53.8% at year
end. Stenprop is targeting an average loan to value ratio
of 50%.
The weighted average debt maturity stood at 2.8 years
at 30 September 2015 compared with 2.2 years at the
year-end and reflecting the refinancing activities
undertaken in the period and detailed below. Annual
amortisation payments since the year end remain
unchanged in Germany and Switzerland but have been
reduced in the UK to GBP0.7 million following the refinancing
at our Euston House and Pilgrim Street properties,
resulting in total annual amortisation payments of
EUR 7.2 million. The all-in contracted weighted average
cost of debt dropped to 2.86% from 3.07% at 31 March
2015. After taking into account the amortisation of the
swap contract liabilities acquired by Stenprop as part
of the Stenham Transaction, the effective weighted
average cost of debt at 30 September 2015 was 2.44%.
As previously reported, on 8 May 2015, the property
known as Euston House was refinanced on favourable
terms with a five year loan to May 2020. The new facility
of GBP27.5 million is interest only. A five year interest rate
swap agreement was entered into to fix the interest rate
at an all-in rate of 3.02% per annum (previous facility:
4.54%). The Group incurred costs of GBP0.4 million to
break the former swap agreement.
On 29 May 2015, also as previously reported, the
Group extended the existing bank loan (which was due
to expire in March 2016), on the property known as
Pilgrim Street on favourable terms until March 2019.
With effect from signature, the loan became interest
only. An interest rate swap agreement was entered
into to fix the interest rate for the period from the prior
termination date, being 23 March 2016, until the new
termination date, at an all-in rate of 2.90% per annum.
An existing swap agreement results in an all-in rate of
4.11% until 23 March 2016. The previous all-in rate on
the loan was 4.96%.
Subsequent events
As announced on 25 September 2015, the JSE
approved the transfer of Stenprop's listing from the
JSE's AltX to the JSE's Main Board with effect from
Monday, 5 October 2015. The transfer will not affect
the Company's current listing on the Bermuda Stock
Exchange.
On 24 November 2015, Stenprop completed the
acquisition of the Victoria shopping centre for
EUR 20.6 million.
Prospects
As announced on SENS in the Forecast Financial
Information announcement published on 14 August 2015,
the Group expected adjusted diluted EPRA earnings per
share for the year ended 31 March 2016 of 10.32 cents per share.
We remain on track to achieve our forecast. However, fluctuations
in exchange rates used in our forecast5 will impact earnings.
This general forecast has been based on the Group's
forecasts and has not been reported on by the external
auditors.
(1) Includes Stenprop's share of the properties held within the associate and joint venture investments
and the Victoria Centre, Berlin which completed on 24 November 2015.
(2) Nova Eventis valuation excluding selling costs assumed at 1%.
(3) The European Public Real Estate Association ("EPRA") issued Best Practices Policy Recommendations in December 2014, which provide guide-
lines for performance measures relevant to real estate companies. Their recommended reporting standards are widely applied across this mar-
ket, 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.
(4) 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
IAS 40, adjustments to reflect the EPRA NAV include only those relating to the revaluation of financial instruments and deferred tax.
(5) Exchange rates used in the forecast were GBP1:EUR 1.42 and CHF1:EUR 0.96
INDEPENDENT REVIEW REPORT TO STENPROP LIMITED
We have been engaged by the Company to review
the condensed set of financial statements in the
half-yearly financial report for the six months ended
30 September 2015 which comprises the condensed
consolidated income statement, the condensed
consolidated statement of financial position, the
condensed consolidated statement of changes
in equity, the condensed consolidated cash flow
statement and related notes. We have read the other
information contained in the half-yearly financial
report and considered whether it contains any
apparent misstatements or material inconsistencies
with the information in the condensed set of financial
statements.
This report is made solely to the company in accordance
with International Standard on Review Engagements
(UK and Ireland) 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of
the Entity" issued by the Auditing Practices Board. Our
work has been undertaken so that we might state to the
company those matters we are required to state to it in
an independent review report and for no other purpose.
To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the
company, for our review work, for this report, or for the
conclusions we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of,
and has been approved by, the directors. The directors
are responsible for preparing the half-yearly financial
report in accordance with the Listings Requirements of
the Johannesburg Stock Exchange.
As disclosed in note 1, the annual financial statements
of the Group are prepared in accordance with IFRSs
as issued by the International Accounting Standards
Board. The condensed set of financial statements
included in this half-yearly financial report has been
prepared in accordance with International Accounting
Standard 34, "Interim Financial Reporting," as issued by
the International Accounting Standards Board.
Our responsibility
Our responsibility is to express to the Company
a conclusion on the condensed set of financial
statements in the half-yearly financial report based on
our review.
Scope of review
We conducted our review in accordance with
International Standard on Review Engagements
(UK and Ireland) 2410 "Review of Interim Financial
Information Performed by the Independent Auditor of
the Entity" issued by the Auditing Practices Board for
use in the United Kingdom. A review of interim financial
information consists of making inquiries, primarily
of persons responsible for financial and accounting
matters, and applying analytical and other review
procedures. A review is substantially less in scope than
an audit conducted in accordance with International
Standards on Auditing (UK and Ireland) and consequently
does not enable us to obtain assurance that we would
become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an
audit opinion, but we will issue a review report addressed
to the members of the entity. In order to comply
with Rule 8.60 of the JSE Listings Requirements, this
review report will be referred to in the interim financial
information and will be made available by the Company
for inspection at its registered office.
Conclusion
Based on our review, nothing has come to our attention
that causes us to believe that the condensed set of
financial statements in the half-yearly financial report
for the six months ended 30 September 2015 is not
prepared, in all material respects, in accordance with
International Accounting Standard 34 as issued by the
International Accounting Standards Board.
Deloitte LLP
Chartered Accountants
Guernsey
25 November 2015
CONDENSED CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME
*Restated **Pro forma
Unaudited Unaudited Unaudited
for the for the for the
six months six months six months
ended ended ended
30 September 30 September 2 October
2015 2014 2014
Note EUR '000 EUR '000 EUR '000
Net rental income 3 19,625 1,705 16,382
Management fee income 1,786 ? 67
Operating costs 4 (4,650) (360) (2,602)
Net operating income 16,761 1,345 13,847
Fair value movement of investment properties 8 11,982 1,305 12,497
Reversal of provision for selling costs ? ? 5,612
Investment in associates 9 (1,016) ? 1,161
Investment in joint ventures 10 6,410 ? 1,108
Impairment of notional goodwill ? ? (19,374)
Profit from operations 34,137 2,650 14,851
Other gains and losses ? 15 23
Net (loss)/gain from fair value of financial liabilities (180) ? 214
Net finance costs (5,577) (279) (5,051)
Net foreign exchange gain 81 ? ?
Profit for the period before taxation 28,461 2,386 10,037
Taxation (1,030) (156) (774)
Profit for the period after taxation 27,431 2,230 9,263
Profit attributable to:
Equity holders 27,254 2,230 9,188
Non-controlling interest 177 ? 75
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Fair value movement on interest rate swaps 519 13 13
Foreign currency translation reserve (6,539) 1,283 2,648
Total comprehensive profit for the period 21,411 3,526 11,924
Total comprehensive profit attributable to:
Equity holders 21,234 3,526 11,899
Non-controlling interest 177 ? 25
Earnings per share
IFRS EPS (cents) 5 9.88 13.95 3.69
Diluted IFRS EPS (cents) 5 9.86 13.95 3.69
EPRA EPS (cents) 5 4.81 5.79 4.39
Diluted EPRA EPS (cents) 5 4.80 5.79 4.39
Adjusted EPRA EPS (cents) 5 5.18 5.79 4.91
Diluted adjusted EPRA EPS (cents) 5 5.17 5.79 4.90
* The comparatives have been restated to reflect the change in presentational and functional currency, see note 1.
** Readers are referred to note 1 where the basis of preparation of the pro forma information is explained.
Results derive from continuing operations.
CONDENSED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
**Pro forma
Unaudited Audited Unaudited
as at as at as at
30 September 31 March 2 October
2015 2015 2014
Note EUR '000 EUR '000 EUR '000
ASSETS
Investment properties 8 722,117 695,196 614,089
Investment in associates 9 38,085 39,652 35,113
Investment in joint ventures 10 39,610 8,506 8,948
Investments ? ? 314
Other debtors 7,500 ? ?
Property, plant and equipment 3 2 10
Total non-current assets 807,315 743,356 658,474
Cash and cash equivalents 45,420 80,430 44,532
Accounts receivable 2,363 2,634 2,944
Other debtors 2,259 3,910 546
Prepayments 1,658 1,519 411
Total current assets 51,700 88,493 48,433
Total assets 859,015 831,849 706,907
EQUITY AND LIABILITIES
Capital and reserves
Share capital 7 ? ? ?
Share premium 7 385,036 374,127 339,898
Equity reserve 303 ? ?
Retained earnings 53,162 37,561 11,945
Foreign currency translation reserve 15,604 22,143 66
Cash flow hedge reserve ? (519) (80)
Total equity attributable to equity shareholders 454,105 433,312 351,829
Non-controlling Interest 1,992 1,815 1,750
Total equity 456,097 435,127 353,579
Non-current liabilities
Bank loans 11 360,648 296,873 292,079
Derivative financial instruments 4,624 5,108 4,376
Other loan and interest 23 23 22
Deferred tax 7,653 7,230 6,532
Total non-current liabilities 372,948 309,234 303,009
Current liabilities
Bank loans 11 10,791 68,058 34,830
Derivative financial instruments 738 1,273 169
Accounts payable and accruals 18,441 18,157 15,320
Total current liabilities 29,970 87,488 50,319
Total liabilities 402,918 396,722 353,328
Total equity and liabilities 859,015 831,849 706,907
IFRS net asset value per share 6 1.62 1.59 1.41
EPRA net asset value per share 6 1.68 1.65 1.46
* The comparatives have been restated to reflect the change in presentational currency, see note 1.
** Readers are referred to note 1 where the basis of preparation of the pro forma information is explained.
CONDENSED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
Attri-
Foreign Cash butable
currency flow to equity Non-
Share Share Equity Retained translation hedge share- controlling Total
capital premium reserve earnings reserve reserve holders interest equity
EUR '000 EUR '000 EUR '000 EUR '000 EUR '000 EUR '000 EUR '000 EUR '000 EUR '000
Balance at 1 April 2015 ? 374,127 ? 37,561 22,143 (519) 433,312 1,815 435,127
Issue of share capital ? 10,909 (25) ? ? ? 10,884 ? 10,884
Credit to equity for
equity-settled
share-based payments ? ? 328 ? ? ? 328 ? 328
Total comprehensive
profit for the period ? ? ? 27,254 (6,539) 519 21,234 177 21,411
Ordinary dividends ? ? ? (11,653) ? ? (11,653) ? (11,653)
Balance at
30 September 2015 ? 385,036 303 53,162 15,604 ? 454,105 1,992 456,097
Balance at 1 April 2014 ? 21,131 ? (37) ? 5 21,099 ? 21,099
Novation
of swap contract ? ? ? 98 ? (98) ? ? ?
Listing costs ? (36) ? ? ? ? (36) ? (36)
Total comprehensive
profit for the period ? ? ? 2,230 1,283 13 3,526 ? 3,526
Balance at
30 September 2014 ? 21,095 ? 2,291 1,283 (80) 24,589 ? 24,589
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS
*Restated
Unaudited Unaudited
for the for the
six months six months
ended ended
30 September 30 September
2015 2014
Note EUR '000 EUR '000
Operating activities
Profit from operations 34,137 2,650
Share of loss in associates 9 1,016 ?
Increase in fair value of investment property 8 (11,982) (1,344)
Increase in fair value of joint venture 10 (6,410) ?
Exchange rate gains 81 ?
Decrease/(increase) in trade and other receivables 373 (16)
Increase/(decrease) in trade and other payables 896 (398)
Interest paid (5,320) (248)
Interest received 520 1
Net tax paid (263) (11)
Net cash from operating activities 13,048 634
Investing activities
Dividends received from trading activities ? 8
Dividends received from associates 1,388 ?
Dividends received from joint ventures 210 ?
Capital expenditure on investment properties 8 (26,902) ?
Acquisition of investment in joint venture 10 (26,782) ?
Net cash (used in)/from investing activities (52,086) 8
Financing activities
Repayment of borrowings (36,437) ?
Dividends paid (8,198)
Listing costs paid ? (113)
Financing fees paid (945) (55)
Unutilised facility fee paid ? (44)
Payments made on swap break (571) ?
New bank loans raised 50,069 ?
Net cash from/(used in) financing activities 3,918 (212)
Net (decrease)/increase in cash and cash equivalents (35,120) 430
Effect of foreign exchange rate changes 110 175
Cash and cash equivalents at beginning of the period 80,430 1,671
Cash and cash equivalents at end of the period 45,420 2,276
* The comparatives have been restated to reflect the change in presentational currency, see note 1.
NOTES TO THE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
1. BASIS OF PREPARATION
These unaudited condensed consolidated financial results (the "IFRS Statements") for the six months ended
30 September 2015 have been prepared in accordance with the recognition and measurements principles of the
International Financial Reporting Standards ("IFRS") and its interpretations adopted by the International Accounting
Standards Board ("IASB"), specifically IAS 34 "Interim Financial Reporting" and the listing requirements of the Bermuda
Stock Exchange and the Johannesburg Stock Exchange as applicable.
The accounting policies and methods of computation are consistent with those applied in the preparation of the annual
financial statements for the year ended 31 March 2015 which were audited and reported on by the Group's external
auditors, except for the new standards adopted during the period.
Going concern
At the date of signing these accounts, the Group has positive operating cash flow forecasts and positive net assets.
Management have reviewed the Group's cash flow forecasts for the 18 months to 30 September 2016 and, in the light of
this review and the current financial position, 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 directors believe that it is therefore appropriate to
prepare the accounts on a going concern basis.
COMPARATIVE PRO FORMA INFORMATION
Comparative pro forma
In the interests of consistency in those areas of reporting that are seen to be of most relevance to investors, and
of providing a meaningful basis of comparison for users of the financial information, the Group has presented for
the comparative period an unaudited pro forma statement of comprehensive income for the six months ended
2 October 2014 and an unaudited pro forma consolidated statement of financial position as at 2 October 2014. The
comparative pro forma statements, which are denominated in EUR, are for illustration purposes only and may not fairly
represent the Group's financial position or results of operations.
The main difference between the comparative pro forma statements and the comparative IFRS statements is that the
comparative pro forma statement of comprehensive income has been prepared as if completion of the acquisition of
the property owning companies had taken place on 1 April 2014, which was the effective date on which risk and reward
passed to Stenprop in the purchase of the various property companies, while the comparative IFRS statements use the
completion date of the acquisition (date that control passes), being 2 October 2014, to account for these investments. The
pro forma statements, which are denominated in EUR, are for illustration purposes only and may not fairly represent the
Group's financial position or results of operations.
The comparative pro forma statement of comprehensive income therefore separately shows trading profits, property
revaluations and other adjustments for the six months ended 30 September 2014. In addition, the comparative pro
forma statement of comprehensive income discloses the notional goodwill arising on the purchase of the management
companies, the gain arising on the purchase of the property companies (which under IFRS is treated as one linked
transaction), and the recognition of the amount of the deferred consideration which is reasonably expected to become
payable.
Comparative presentational currency
The functional currency of the Group is the Euro and all amounts referred to in this report are, unless otherwise stated,
in Euros. The change from GBP to Euro was implemented with effect from 1 October 2014 as from this date the Euro
was considered to be the currency which best reflects the primary economic environment in which the Group operates.
All prior period comparatives have been restated at a spot rate of GBP1:EUR 1.28 being the exchange rate prevailing at
30 September 2014 and an average rate of GBP1:EUR 1.243. For the purposes of changing the currency denomination of the
share capital of the Company, a GBP:EUR exchange rate of GBP1:1.2102 was used at 31 March 2014.
ADOPTION OF NEW AND REVISED STANDARDS
In the current period the following new and revised Standards and Interpretations have been adopted:
- IAS 19 Defined benefit plans: Employee contributions
- Annual improvements to IFRSs: 2010 ? 2012 Cycle
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:
- IFRS 9 Financial instruments (1 January 2018)
- IFRS 14 Regulatory Deferral Accounts (1 January 2016)
- IFRS 15 Revenue from Contracts with Customers (1 January 2018)
- IFRS 11 (amendments) Accounting for acquisitions of interests in joint operations (1 January 2016)
- IFRS 12 (amendments) Disclosure of interest in other entities (1 January 2016)
- IAS 16 and IAS 38 Clarification of acceptable methods of depreciation and amortisation (1 January 2016)
- IAS 27 (amendments) Equity method in separate financial statements (1 January 2016)
- IFRS 10 and IAS 28 (amendments) Sale or contribution of assets between an Investor and its Associate or Joint
Venture (1 January 2016) (amendments)
- Annual improvements to IFRSs: 2014 Cycle (1 January 2016)
- IAS 1 (amendments) Disclosure Initiative (1 January 2016)
- IFRS 10 (amendments) Investment entities: applying the Consolidation Exception (1 January 2016)
The directors are looking into whether the new standards listed above will have a material impact on the financial
statements of the Group in the future period.
Share-based payments
Share options have been granted to key management as part of the acquisition of the management companies. 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.
Reclassification of associates
As of 30 September 2015, management agreed to reclassify Stenpark Management Limited from an associate to a joint
venture to more accurately reflect the substance of this investment. The net asset value of Stenpark Management Limited
at this date was EUR 41,000. The impact of this transfer can be seen in notes 9 and 10.
Dividends
Dividends to the Company's shareholders are recognised when they become legally payable. In the case of interim
dividends, this is when paid. In the case of final dividends, this is when approved by the board.
JUDGEMENTS AND ESTIMATES
The preparation of the condensed consolidated interim financial statements requires the use of judgements and
estimates that affect the reported amounts of assets and liabilities at the reporting date and the reported amounts of
revenues and expenses reported during the period. Although these estimates are based on the directors' best knowledge
of the amount, event or actions, actual results may 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 significant 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 preparation of the financial statements requires management to make estimates affecting the reported amounts
of assets and liabilities, of revenues and expenses, and of gains and losses. As described below, the Group's investment
properties are stated at estimated fair value, determined by directors, based on an independent external appraisal. The
valuation of the Group's property portfolio is inherently subjective due to a number of factors including the individual
nature of the 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 times 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 different,
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.
Hedge accounting
As at 31 March 2015, the Group designated certain derivative hedging instruments as cash flow hedges. The effective
portion of changes in the fair value of derivatives that were designated and qualified as cash flows hedges were recognised
in other comprehensive income. The gain or loss relating to the ineffective portion was recognised immediately in profit
or loss. During the period to 30 September 2015, the Group discontinued hedge accounting for all interest rate swaps and
as such any gain or loss is recognised immediately in the statement of comprehensive income. The decision was taken in
order to reduce the costs associated with the initial and ongoing assessment of hedge effectiveness as well as to simplify
financial derivative reporting requirements. At the time of this designation, the loss accumulated in equity of EUR 518,000 was
immediately recognised in the statement of comprehensive income.
2. 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:
i) Information about reportable segments
United
Germany Kingdom Switzerland Total
EUR '000 EUR '000 EUR '000 EUR '000
Unaudited
for the period ended 30 September 2015
Net rental income 5,431 10,194 4,000 19,625
Fair value movement of investment properties 2,641 13,050 (3,709) 11,982
Net loss/(gain) from fair value of financial liabilities 51 (985) 754 (180)
Investment in associates (1,016) ? ? (1,016)
Investment in joint venture 1,099 5,093 ? 6,192
Net finance costs (1,431) (2,879) (1,267) (5,577)
Operating costs (307) (150) (326) (783)
Total profit per reportable segments 6,468 24,323 (548) 30,243
As at 30 September 2015
Investment properties 218,802 346,494 156,821 722,117
Investment in associates 38,085 ? ? 38,085
Investment in joint venture 9,125 30,438 ? 39,563
Cash 23,570 15,430 3,797 42,797
Other 9,666 1,573 958 12,197
Total assets 299,248 393,935 161,576 854,759
Borrowings ? bank loans (135,967) (146,654) (88,818) (371,439)
Other (6,576) (13,206) (8,401) (28,183)
Total liabilities (142,543) (159,860) (97,219) (399,622)
Unaudited
for the period ended 30 September 2014
Net rental income ? 1,705 ? 1,705
Fair value movement of investment properties ? 1,305 ? 1,305
Net finance costs ? (279) ? (279)
Operating costs ? (360) ? (360)
Total profit per reportable segments ? 2,371 ? 2,371
Pro forma unaudited
for the period ended 2 October 2014
Net rental income 4,609 8,187 3,586 16,382
Fair value movement of investment properties 4 12,439 54 12,497
Net loss/(gain) from fair value of financial liabilities (394) 598 10 214
Investment in associates 1,161 ? ? 1,161
Investment in joint venture 1,108 ? ? 1,108
Net finance costs (1,688) (2,513) (850) (5,051)
Operating costs (818) (1,156) (558) (2,532)
Total profit per reportable segments 3,982 17,555 2,242 23,779
Pro forma as at 2 October 201
Investment properties 189,570 279,315 145,204 614,089
Investment in associates 35,082 ? ? 35,082
Investments ? 314 ? 314
Investment in joint venture 8,948 ? ? 8,948
Cash 16,602 24,592 3,310 44,504
Other 817 1,037 518 2,372
Total assets 251,019 305,258 149,032 705,309
Borrowings ? bank loans 127,066) (115,646) (84,197) (326,909)
Other (5,700) (10,545) (7,377) (23,622)
Total liabilities 132,766) (126,191) (91,574) (350,531)
ii) Reconciliation of reportable segment profit or loss
*Restated **Pro forma
Unaudited Unaudited Unaudited
for the for the for the
six months six months six months
ended ended ended
30 September 30 September 2 October
2015 2014 2014
EUR'000 EUR'000 EUR'000
Rental income
Net rental income for reported segments 19,625 1,705 16,382
Profit or loss
Fair value movement of investment properties 11,982 1,305 12,497
Net (loss)/gain from fair value of financial liabilities (180) ? 214
Investment in associates (1,016) ? 1,161
Investment in joint venture 6,192 ? 1,108
Net finance costs (5,577) (279) (5,051)
Operating costs (783) (360) (2,532)
Total profit per reportable segments 30,243 2,371 23,779
Other profit or loss ? unallocated amounts
Management fee income 1,786 ? 67
Investment in joint venture 218 ? ?
Tax, legal and professional fees (202) ? (39)
Audit fees (158) ? ?
Administration fees (156) ? (4)
Non-executive directors' fees (128) ? ?
Staff remuneration costs (1,847) ? ?
Other operating costs (1,376) ? (27)
Reversal of provision for selling costs ? ? 5,612
Impairment of goodwill ? ? (19,374)
Other gains and losses ? 15 23
Net foreign exchange losses 81 ? ?
Consolidated profit before taxation 28,461 2,386 10,037
* The comparatives have been restated to reflect the change in presentational currency, see note 1.
** Readers are referred to note 1 where the basis of preparation of the pro forma information is explained.
iii) Reconciliation of reportable segment financial position
*Pro forma
Unaudited Unaudited
as at as at
30 September 2 October
2015 2014
EUR'000 EUR'000
Assets
Investment properties 722,117 614,089
Investment in associates 38,085 35,082
Investments ? 314
Investment in joint venture 39,563 8,948
Cash 42,797 44,504
Other 12,197 2,372
Total assets per reportable segments 854,759 705,309
Other assets ? unallocated amounts
Investment in associates ? 31
Investment in joint venture 47 ?
Cash 2,623 28
Other 1,585 1,539
Total assets per consolidated statement of financial position 859,014 706,907
Liabilities
Borrowings ? bank loans (371,439) (326,909)
Other (28,183) (23,622)
Total liabilities per reportable segments (399,622) (350,531)
Other liabilities ? unallocated amounts (3,296) (2,797)
Total liabilities per consolidated statement of financial position (402,918) (353,328)
* Readers are referred to note 1 where the basis of preparation of the pro forma information is explained.
3. NET RENTAL INCOME
*Restated **Pro forma
Unaudited Unaudited Unaudited
for the for the for the
six months six months six months
ended ended ended
30 September 30 September 2 October
2015 2014 2014
EUR'000 EUR'000 EUR'000
Rental income 21,763 1,708 18,582
Other income ? tenant recharges 2,577 41 1,081
Other income 178 ? 105
Rental income 24,518 1,749 19,768
Direct property costs (4,893) (44) (3,386)
Total net rental income 19,625 1,705 16,382
* The comparatives have been restated to reflect the change in presentational currency, see note 1.
** Readers are referred to note 1 where the basis of preparation of the pro forma information is explained.
4. OPERATING COSTS
*Restated **Pro forma
Unaudited Unaudited Unaudited
for the for the for the
six months six months six months
ended ended ended
30 September 30 September 2 October
2015 2014 2014
EUR'000 EUR'000 EUR'000
Tax, legal and professional fees 505 54 393
Audit and professional fees 164 8 14
Administration fees 211 61 318
Investment advisory fees 198 218 218
Asset management fees^ ? ? 1,633
Non-executive directors' fees 131 17 18
Staff remuneration costs 2,176 ? ?
Other operating costs 1,265 2 8
4,650 360 2,602
^ Asset management fees were paid for the six months from 1 April 2014. With effect from 2 October 2014, management was internalised
and no further asset management fees were payable by Stenprop. Stenprop therefore bears the direct costs of management from
2 October 2014.
* The comparatives have been restated to reflect the change in presentational currency, see note 1.
** Readers are referred to note 1 where the basis of preparation of the pro forma information is explained.
5. EARNINGS PER ORDINARY SHARE
Reconciliation of profit for the period to adjusted EPRA earnings
*Restated **Pro forma
Unaudited Unaudited Unaudited
for the for the for the
six months six months six months
ended ended ended
30 September 30 September 2 October
2015 2014 2014
EUR'000 EUR'000 EUR'000
Earnings per IFRS income statement attributable to shareholders 27,254 2,230 9,188
Adjustments to calculate EPRA earnings, exclude: ?
Changes in fair value of investment properties (11,982) (1,305) (12,497)
Reversal of provision for selling costs ? ? (5,612)
Reversal of impairment of goodwill ? ? 19,374
Changes in fair value of financial instruments 180 ? (214)
Deferred tax in respect of EPRA adjustments 609 ? 574
Adjustments above in respect of joint ventures and associates:
Changes in fair value (2,478) ? 146
Deferred tax in respect of EPRA adjustments (318) ? (22)
EPRA earnings attributable to shareholders 13,265 925 10,937
Further adjustments to arrive at adjusted EPRA earnings
Straight-line unwind of purchase swaps 1,021 ? 1,273
Adjusted EPRA earnings attributable to shareholders 14,286 925 12,210
Weighted average number of shares in issue 275,801,583 15,986,003 248,902,812
Share-based payment award 652,799 ? 291,563
Diluted weighted average number of shares in issue 276,454,382 15,986,003 249,194,375
Earnings per share
IFRS EPS (cents) 9.88 13.95 3.69
Diluted IFRS EPS (cents) 9.86 13.95 3.69
EPRA EPS (cents) 4.81 5.79 4.39
Diluted EPRA EPS (cents) 4.80 5.79 4.39
Adjusted EPRA EPS (cents) 5.18 5.79 4.91
Diluted adjusted EPRA EPS (cents) 5.17 5.79 4.90
* The comparatives have been restated to reflect the change in presentational currency, see note 1.
** Readers are referred to note 1 where the basis of preparation of the pro forma information is explained.
Straight-line unwind of purchase 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.
Reconciliation of profit for the period to headline earnings
*Restated **Pro forma
Unaudited Unaudited Unaudited
for the for the for the
six months six months six month
ended ended s ended
30 September 30 September 2 October
2015 2014 2014
EUR'000 EUR'000 EUR'000
Earnings per IFRS income statement attributable to shareholders 27,254 2,230 9,188
Adjustments to calculate headline earnings, exclude:
Changes in fair value of investment properties (11,982) (1,305) (12,497)
Reversal of provision for selling costs ? ? (5,612)
Reversal of gain on acquisition ? ? 19,374
Changes in fair value of financial instruments 519 13 13
Deferred tax in respect of headline earnings adjustments 609 ? 574
Adjustments above in respect of joint ventures and associate
Changes in value of investment properties (2,551) ? 146
Deferred tax (367) ? (22)
Headline earnings attributable to shareholders 13,482 938 11,164
Earnings per share
Headline EPS (cents) 4.89 5.87 4.49
Diluted headline EPS (cents) 4.88 5.87 4.48
* The comparatives have been restated to reflect the change in presentational currency, see note 1.
** Readers are referred to note 1 where the basis of preparation of the pro forma information is explained.
6. NET ASSET VALUE PER ORDINARY SHARE
Net asset value per share
*Pro forma
Unaudited Audited Unaudited
as at as at as at
30 September 31 March 2 October
2015 2015 2014
EUR'000 EUR'000 EUR'000
Net assets attributable to equity shareholders 454,105 433,312 351,829
Adjustments to arrive at EPRA net asset value:
Derivative financial instruments 5,362 6,381 4,545
Deferred tax 7,653 7,230 6,532
Adjustments above in respect of non-controlling interests 2,343 2,504 1,067
EPRA net assets attributable to shareholders 469,463 449,427 363,973
Number of shares in issue 279,720,942 272,236,146 248,902,812
Share-based payment awards 652,799 291,563 291,563
Diluted number of shares in issue 280,373,741 272,527,709 249,194,375
Net asset value per share
IFRS net asset value per share (cents) 1.62 1.59 1.41
Diluted IFRS net asset value per share (cents) 1.62 1.59 1.41
EPRA net asset value per share (cents) 1.68 1.65 1.46
Diluted EPRA net asset value per share (cents) 1.67 1.65 1.46
* Readers are referred to note 1 where the basis of preparation of the pro forma information is explained.
7. SHARE CAPITAL
*Pro forma
Unaudited Audited Unaudited
as at as at as at
30 September 31 March 2 October
2015 2015 2014
EUR EUR EUR
Authorised
1,000,000,000 ordinary shares with a par value of EUR0.000001258 each 1,258 1,258 1,258
*Pro forma
Unaudited Unaudited
for the Audited for the
six months for the six months
ended year ended ended
30 September 31 March 2 October
2015 2015 2014
Issued share capital
Opening balance 272,236,146 15,986,003 15,986,003
Issue of new shares 7,484,796 256,250,143 232,916,809
Closing number of shares issued 279,720,942 272,236,146 248,902,812
Share capital
Share premium (EUR'000) 387,895 376,986 341,985
Less: Acquisition/transaction costs (EUR'000) (2,859) (2,859) (2,087)
Total share premium 385,036 374,127 339,898
* Readers are referred to note 1 where the basis of preparation of the pro forma information is explained.
There were no changes made to the number of authorised shares of the Company during the period under review. Stenprop
Limited has one class of share; all shares rank equally and are fully paid.
The Company has 279,720,942 (March 2015: 272,236,146) ordinary shares in issue at the reporting date which have a primary
listing on the BSX and a secondary listing on the JSE.
On 11 June 2015, a dividend of 4.2 cents per share was declared in repsect of the year ended 31 March 2015. The record
date for the dividend was 10 July 2015 and the payment date was 16 July 2015. On 30 June 2015, 5,209,109 and 17,793 new
ordinary shares were issued on the BSX and JSE at an issue price of EUR1.43 per share in respect of the Share Purchase Plan
and Deferred Share Bonus Plan respectively. On 16 July 2015, the owners of 277,463,048 shares were entitled to receive the
dividend of 4.2 cents resulting in an overall dividend payment of EUR11,653,000. From this total, 2,257,894 new ordinary shares
were issued in respect of the scrip dividend offering for the year ended 31 March 2015, representing a scrip dividend take up
of 29.48%.
Subsequent to the period end, and with effect from 5 October 2015, the JSE approved the transfer of Stenprop's listing
from the JSE's AltX to the JSE's Main Board. The transfer will not affect the Company's current listing on the Bermuda
Stock Exchange.
8. INVESTMENT PROPERTY
The fair value of the consolidated investment properties at 30 September 2015 was EUR722,117,022 (31 March 2015:
EUR695,196,554). 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 period ended 30 September 2015 was assessed by the valuers in accordance
with the RICS standards and IFRS 13. The fair value represents the highest and best use.
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 and approves the valuation results.
The valuation techniques used are consistent with IFRS13 and use significant "unobservable" inputs. 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 the market conditions. The
effect of an increase in more than one unobservable input would be to magnify the impact on the valuation. The impact on
the valuation will 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.
The key unobservable inputs used in the valuation of the Group's investment properties at 30 September 2015 are detailed
in the table below:
Net Weighted
% of Market Annualised initial average Voids
portfolio value gross yield lease (by gross
Combined portfolio by market 30 Sep rental (Weighted length rental
(including share of jointly value 2015 Area income average) by rental Income)
controlled entities) (%) (EUR'000) Properties (sqm) (EURm) (%) (years) (%)
UK 39 346,494 14 73,737 22.2 5.43 6.6 1.9
Germany 25 218,802 22 80,528 13.3 5.21 5.7 5.9
Switzerland 18 156,821 13 48,506 10.2 3.57 4.3 5.5
Sub-total 81 722,117 49 202,771 45.7 4.96 6.0 3.9
Share of joint ventures
and associates 19 164,505 6 49,415 11.2 5.42 5.6 1.2
Total 100 886,622 55 252,186 56.9 5.17 5.9 3.3
*Pro forma
Unaudited Audited Unaudited
as at as at as at
30 September 31 March 2 October
2015 2015 2014
EUR'00 EUR'000 EUR'000
Opening balance 695,196 33,281 35,239
Properties acquired through the acquisition of subsidiaries 24,485 661,151 577,545
Capitalised expenditure 2,417 3,414 ?
Disposals through the sale of property ? (65,273) ?
Foreign exchange movement in foreign operations (11,963) 44,667 ?
Net fair value gains on investment property 11,982 17,956 1,305
Closing balance 722,117 695,196 614,089
* Readers are referred to note 1 where the basis of preparation of the pro forma information is explained.
Acquisitions
The acquisition of a retail centre known as Hermann Quartier for a purchase price of EUR22.7 million completed on
24 August 2015. The property is on a high street location of Berlin's central suburb of Neukolln with excellent public transport
links, including an underground station inside the shopping centre. The acquisition was financed 50% by debt at an all-in
interest rate of 1.42% per annum. The return on equity on this investment exceeded 7.5% per annum at inception.
9. 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
incorporation activity subsidiary
Stenham European Shopping Centre Fund Limited ("SESCF") Guernsey Fund 28.42
Stenham Berlin Residential Fund Limited Guernsey Fund 10.44
28.16% of the investment in the underlying property is held through Stenham European Shopping Centre Fund Limited
("SESCF"), and 0.26% of the property investment is held via a wholly-owned subsidiary, Leatherback Property Holdings
Limited incorporated in BVI.
Summarised financial information in respect of the Group's associates is set out below
Total Total
30 September 31 March
2015 2015
EUR'000 EUR'000
Non-current assets 318,760 328,121
Current assets 14,171 16,903
Non-current liabilities (161,636) (160,288)
Current liabilities (3,197) (11,662)
Equity attributable to owners of the company 168,098 173,074
Revenue 10,000 22,281
(Loss)/profit from continuing operations and total comprehensive income (3,351) 5,599
Reconciliation of the above summarised financial information to the carrying amount
of the interest in the associates recognised in the financial statements:
Opening balance 39,652 ?
Reclassification of associate as joint venture (41)
Share in associates acquired during the period 365 41,146
Share of associates profit (1,016) 456
Distribution received from associates (875) (1,960)
Foreign exchange movement in foreign operations ? 10
Closing balance 38,085 39,652
10. INVESTMENT IN JOINT VENTURES
Details of the Group's joint ventures at the end of the reporting period are as follows:
% equity
Place of Principal owned by
incorporation activity subsidiary
Elysion S.A. Luxembourg Holding 50
Company
Stenpark Management Limited Guernsey Management 50
Company
Stenprop Argyll Limited BVI Holding 50
Company
Summarised financial information in respect of the Group's joint ventures is set out below
Total Total
30 September 31 March
2015 2015
EUR'000 EUR'000
Investment property 145,009 33,563
Net working capital 953 140
Assets 145,962 33,703
Bank loans (73,695) (23,776)
Shareholder loan third party (25,494) ?
Shareholder loan Group (39,214) (13,524)
Deferred tax (196) (153)
Financial liability (1,973) (1,268)
Liabilities (140,572) (38,721)
Net assets/(liabilities) of joint ventures 5,390 (5,018)
Net assets of joint ventures excluding loans due to Group 44,605 8,506
Revenue 4,548 2,796
Profit from continuing operations and total comprehensive income excluding interest 11,720 1,314
due to Group
Share of joint ventures profit due to the Group 6,410 778
Reconciliation of the above summarised financial information to the carrying amount
of the interest recognised in the consolidated financial statements:
Opening balance 8,506 ?
Reclassification of associate to joint venture 41 ?
Share in joint ventures acquired during the period 25,494 8,948
Share of joint venture profit 6,410 778
Distribution received from joint venture (690) (1,220)
Foreign exchange movement in foreign operations (151) ?
Closing balance 39,610 8,506
On 20 May 2015, the Group acquired a 50% interest in Regent Arcade House Holdings Limited ("RAHHL"), which owns the
property known as 25 Argyll Street. The acquisition cost of this interest was #18.9 million which was based on a valuation of
the property of #75 million. RAHHL refinanced the property with an interest-only bank loan of #37.5 million at an all-in rate of
2.974% per annum, with a term of five years.
11. BORROWINGS
Unaudited Audited
30 September 31 March
2015 2015
EUR'000 EUR'000
Opening balance 364,931 12,586
Acquisitions 11,050 313,643
Loan repayments (29,874) (17,774)
New loans 37,143 40,453
Amortisation of loan (5,055) (5,416)
New transaction fees (898) (622)
Amortisation of transaction fees 167 22
Foreign exchange movement in foreign operations (6,025) 22,039
Total borrowings 371,439 364,931
Amount due for settlement within 12 months 10,791 68,058
Amount due for settlement between 1 to 3 years 214,276 232,201
Amount due for settlement between 3 to 5 years 137,372 56,132
Amount due for settlement after 5 years 9,000 8,540
371,439 364,931
The facilities are secured by debentures and legal charges over the properties to which they correspond. There is no cross-
collaterisation of the facilities.
Weighted Weighted
average average
Property Loan Loan to interest duration to
value Value value rate expiry
Property/portfolio EUR'000 EUR'000 % % (years)
United Kingdom 346,495 (146,654) 42.3 3.22 4.10
Switzerland 156,820 (88,817) 56.6 2.80 1.50
Germany 218,802 (135,968) 62.1 2.12 2.13
Total 722,117 (371,439) 51.4 2.72 2.76
Held in associate and joint venture:
Stenprop Argyll Limited 55,634 (25,098) 45.1 2.97 4.64
Nova Eventis 75,313 (45,123) 57.8 4.00 0.82
Care Homes Portfolio 33,558 (23,499) 70.0 2.61 2.86
Potfolio total 886,622 (465,159) ? ? ?
Less minority interest (6,217) 4,327 ? ? ?
Portfolio total (excluding minorities) 880,405 (460,832) 52.2 2.86 2.79
12. 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. The risks faced by the Group have not significatly changed compared to those
disclosed in the consolidated financial statements for the year ended 31 March 2015.
Fair value of financial instruments
The following table summarises the Group's financial assets and liabilities into categories required by IFRS7 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 Held at carrying
through other fair value Held at amount
comprehensive through amortised 30 September
income profit and loss cost 2015
EUR'000 EUR'000 EUR'000 EUR'000
30 September
Financial assets
Cash and cash equivalents ? ? 45,420 45,420
Accounts receivable ? ? 2,362 2,362
Other debtors ? ? 9,759 9,759
? ? 57,541 57,541
Financial liabilities
Loans ? ? 371,439 371,439
Other loans and interest ? ? 23 23
Interest rate swaps ? 5,362 ? 5,362
Accounts payable ? ? 18,441 18,441
? 5,362 389,903 395,265
Held at Total
fair value Held at carrying
through other fair value Held at amount
comprehensive through amortised 31 March
income profit and loss cost 2015
EUR'000 EUR'000 EUR'000 EUR'000
31 March 2015
Financial assets
Cash and cash equivalents ? ? 80,430 80,430
Accounts receivable ? ? 2,634 2,634
Other debtors ? ? 3,910 3,910
? ? 86,974 86,974
Financial liabilities
Loans ? ? 364,931 364,931
Other loans and interest 23 23
Interest rate swaps 519 5,862 ? 6,381
Accounts payable ? ? 18,157 18,157
519 5,862 383,111 389,492
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
recognised at fair value
at fair value Level 1 Level 2 Level 3
EUR'000 EUR'000 EUR'000 EUR'000
30 September 2015
Assets
Investment properties 722,117 ? ? 722,117
Total assets 722,117 ? ? 722,117
Liabilities
Derivative financial liabilities 5,362 ? 5,362 ?
Total liabilities 5,362 ? 5,362 ?
31 March 2015
Assets
Investment properties 695,196 ? ? 695,196
Total assets 695,196 ? ? 695,196
Liabilities
Derivative financial liabilities 6,381 ? 6,381 ?
Total liabilities 6,381 ? 6,381 ?
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.
13. 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
30 September 2015.
Share Incentive Plans
Deferred Share Share Purchase
Bonus Plan Plan Loans
Executive directors EUR Number of shares EUR Number of shares
Paul Arenson 256,350 179,266 3,813,333 2,666,667
Patsy Watson 205,080 143,413 3,122,166 2,183,333
Neil Marais 20,508 14,341 157,912 110,428
481,938 337,020 7,093,411 4,960,428
Deferred Share Bonus Plan
Share options vest in three equal tranches. The first tranche of 125,353 shares was granted on 10 June 2015 and vested on
11 June 2015. Subsequent tranches will vest in accordance with the rules of the Deferred Share Bonus Plan on 31 March 2016
and 31 March 2017.
On 30 June, Neil Marais, an executive director of Stenprop, exercised options on 4,780 shares for a total value of EUR6,835.
Share Purchase Plan
Shares were issued on 30 June 2015 in relation to the Share Purchase Plan. All three executive directors listed above took
their full entitlement of shares under the Share Purchase Plan, as detailed above. At the same date loans were advanced by
Stenprop 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 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 paid to such employees (or
their nominees) 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.
Director share dealings
Other than to elect to receive a scrip dividend in accordance with the circular issued to shareholders on 19 June 2015,
no directors have had dealings in the shares of the Company in the period.
Acquisition of 25 Argyll Street
During the period, the Group acquired a 50% interest in Regent Arcade House Holdings Limited ("RAHHL"), which owns
the property known as 25 Argyll Street. The acquisition cost of this interest was #18.9 million. Both the vendor and RAHHL
were, and continue to be, managed by the Group and the Group will continue to earn property management fees for
managing the 50% currently owned by a third party.
14. EVENTS AFTER THE REPORTING PERIOD
The JSE approved the transfer of the Company's listing from AltX to the Main Board with effect from 5 October 2015.
The transfer will not affect the Company's current listing on the Bermuda Stock Exchange.
The purchase of the Victoria Shopping Centre for EUR20.6 million was notarised on 18 June 2015 and completed on
24 November 2015. The property is located in the Lichtenberg district of Berlin, approximately 15 minutes by underground
from the city centre and is comprised of two buildings. The investment is anchored by Kaufland (a hypermarket chain) on a
new 17-year lease. The return on equity on this investment exceeded 8% per annum at inception.
CORPORATE INFORMATION
REGISTERED OFFICE OF THE COMPANY POSTAL ADDRESS OF THE COMPANY
Stenprop Limited Kingsway House
(Registration number 47031) Havilland Street
20 Reid Street St Peter Port, GY1 2QE
3rd Floor, Williams House Guernsey
Hamilton, HM11
Bermuda SOUTH AFRICAN CORPORATE ADVISOR
Java Capital Proprietary Limited
COMPANY SECRETARY (Registration number 2012/089864/07)
Apex Corporate Services Ltd. 6A Sandown Valley Crescent
(Registration number 33832) Sandown
3rd Floor, Williams House Sandton, 2196
20 Reid Street South Africa
Hamilton HM11, Bermuda (PO Box 2087, Parklands, 2121)
(PO Box 2460 HM JX, Bermuda)
BSX SPONSOR
JSE SPONSOR Appleby Securities (Bermuda) Ltd.
Java Capital (Registration number 25105)
6A Sandown Valley Crescent Canon's Court
Sandown 22 Victoria Street
Sandton, 2196 Hamilton, HM12, Bermuda
South Africa (Postal address the same as the physical address above)
(PO Box 2087, Parklands, 2121)
BERMUDIAN REGISTRARS
SA TRANSFER SECRETARIES Computershare Investor Services (Bermuda) Limited
Computershare Investor Services (Proprietary) Limited (Company number 41776)
(Registration number 2004/003647/07) Corner House
70 Marshall Street 20 Parliament Street
Johannesburg, 2001 Hamilton, HM12
South Africa Bermuda
Correspondence address Correspondence address
PO Box 61763 2nd Floor, Queensway House
Marshalltown, 2107 Hilgrove Street
South Africa St. Helier
Jersey JE1 1ES Channel Islands
LEGAL ADVISORS
Berwin Leighton Paisner LLP AUDITORS
Adelaide House Deloitte LLP
London Bridge Regency Court
London, EC4R 9HA Glategny Esplanade
United Kingdom St Peter Port, GY1 3HW, Guernsey
Channel Islands
www.stenprop.com
