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") UNAUDITED CONDENSED CONSOLIDATED FINANCIAL RESULTS for the nine months ended 31 December 2015 Stenprop Limited, a Bermuda company which has dual primary listings on the Bermuda Stock Exchange ("BSX") and the Johannesburg Stock Exchange ("JSE"), today announces its results for the nine months ended 31 December 2015. The company is required to publish financial results for the nine months ended 31 December 2015 in terms of the rules of the BSX. Accordingly, this announcement presents the unaudited condensed consolidated financial results of the Group in respect of the financial period from 1 April 2015 to 31 December 2015 in a form compliant with the requirements of the BSX. FINANCIAL REVIEW Earnings The basic earnings attributable to ordinary shareholders for the nine-month period to 31 December 2015 were EUR33.5 million (2014 pro forma(1): EUR18.6 million). This equates to a diluted IFRS EPS of 12.06 cents (2014 pro forma: 7.46 cents). The headline earnings were EUR22.3 million (2014 pro forma: EUR16.2 million) equating to a diluted headline EPS of 8.03 cents (2014 pro forma: 6.52 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 for the nine-month period were EUR21.8 million (2014 pro forma: EUR18.3 million), equating to a diluted adjusted EPRA EPS of 7.86 cents (2014 pro forma: 7.34 cents). Net assets The basic and diluted IFRS NAV per share at 31 December 2015 was EUR1.61 (2014: EUR1.45). The basic and diluted EPRA NAV per share was EUR1.66 (2014: EUR1.50). (1) The basis of preparation of the comparative pro forma is explained in note 1 to the financial statements (2) European Public Real Estate Association ACQUISITIONS DURING THE QUARTER As previously reported, the purchase of the Victoria shopping centre for EUR20.6 million 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 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. DIVIDENDS On 26 November 2015, the Company announced an interim dividend of 4.2 cents per share in respect of the six months to 30 September 2015. On 25 January 2016, the Company announced a 41.5% take up of the scrip dividend for which 3,253,857 new Stenprop shares were issued at an issue price of EUR1.49854 per share. 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. Whilst fluctuations in exchange rates used in our forecast may impact earnings, we remain on track to achieve our forecast. Stenprop expects to declare a final dividend in June 2016 of 4.3 cents per share which, together with the interim dividend of 4.2 cents per share, will give a total dividend relating to the current financial year of 8.5 cents per share. This general forecast has been based on the Group's own forecasts and has not been reported on by the external auditors. CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME *Pro forma Unaudited Unaudited Unaudited for the for the for the nine months nine months nine months ended ended ended 31 December 31 December 31 December 2015 2014 2014 Notes EUR'000 EUR'000 EUR'000 Net rental income 29,523 10,624 25,298 Management fee income 2,057 823 890 Operating costs (6,811) (3,106) (5,300) Net operating income 24,769 8,341 20,888 Fair value movement of investment properties 10,249 4,970 16,162 Reversal of provision for selling costs ? ? 5,612 Investment in associates 137 643 1,803 Investment in joint ventures 7,530 442 1,551 Impairment of notional goodwill ? ? (19,374) Profit from operations 42,685 14,396 26,642 Gain on acquisition ? 9,657 ? Other gains and losses ? 12 42 Net gain/(loss) from fair value of financial liabilities 1,231 (128) 86 Net finance costs (8,418) (2,709) (7,481) Net foreign exchange gain/(loss) 2 (52) (36) Profit for the period before taxation 35,500 21,176 19,253 Taxation (1,784) (16) (633) Profit for the period after taxation 33,716 21,160 18,620 Profit attributable to: Equity holders 33,506 21,124 18,584 Non-controlling interest 210 36 36 Other comprehensive income Items that may be reclassified subsequently to profit or loss: Fair value movement on interest rate swaps 519 (48) (48) Foreign currency translation reserve (4,253) 232 2,773 Total comprehensive profit for the period 29,982 21,344 21,345 Total comprehensive profit attributable to: Equity holders 29,772 21,344 21,309 Non-controlling interest 210 36 36 Earnings per share IFRS EPS (cents) 2 12.09 8.49 7.47 Diluted IFRS EPS (cents) 2 12.06 8.48 7.46 EPRA EPS (cents) 2 7.33 2.44 6.58 Diluted EPRA EPS (cents) 2 7.31 2.44 6.57 Adjusted EPRA EPS (cents) 2 7.88 2.70 7.35 Diluted adjusted EPRA EPS (cents) 2 7.86 2.70 7.34 * 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 Unaudited Unaudited Audited as at as at as at 31 December 31 December 31 March 2015 2014 2015 Notes EUR'000 EUR'000 EUR'000 ASSETS Investment properties 748,159 558,341 695,196 Investment in associates 39,235 35,193 39,652 Investment in joint ventures 40,545 9,390 8,506 Investments ? 332 ? Other debtors 7,449 ? ? Property, plant and equipment 3 5 2 Total non-current assets 835,391 603,261 743,356 Cash and cash equivalents 37,367 46,068 80,430 Accounts receivable 3,369 1,553 2,634 Other debtors 617 1,588 3,910 Prepayments 1,994 873 1,519 Assets held for sale ? 60,918 ? Total current assets 43,347 111,000 88,493 Total assets 878,738 714,261 831,849 Equity and liabilities Capital and reserves Share capital 4 ? ? ? Share premium 4 385,036 339,825 374,127 Equity reserve 303 ? ? Retained earnings 47,665 21,087 37,561 Foreign currency translation reserve 17,890 325 22,143 Cash flow hedge reserve ? (136) (519) Total equity attributable to equity shareholders 450,894 361,101 433,312 Non-controlling interest 2,025 1,758 1,815 Total equity 452,919 362,859 435,127 Non-current liabilities Bank loans 272,609 283,316 296,873 Derivative financial instruments 3,448 4,732 5,108 Other loan and interest 30 369 23 Deferred tax 8,429 6,075 7,230 Total non-current liabilities 284,516 294,492 309,234 Current liabilities Bank loans 109,582 24,993 68,058 Derivative financial instruments 562 ? 1,273 Accounts payable and accruals 31,159 14,161 18,157 Liabilities directly associated with assets classified as held for sale ? 17,756 ? Total current liabilities 141,303 56,910 87,488 Total liabilities 425,819 351,402 396,722 Total equity and liabilities 878,738 714,261 831,849 IFRS net asset value per share 3 1.61 1.45 1.59 EPRA net asset value per share 3 1.66 1.50 1.65 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/(loss) for the period ? ? ? 33,506 (4,253) 519 29,772 210 29,982 Ordinary dividends ? ? ? (23,402) (23,402) ? (23,402) Balance at 31 December 2015 ? 385,036 303 47,665 17,890 ? 450,894 2,025 452,919 Balance at 1 April 2014 ? 21,131 ? (37) ? 5 21,099 ? 21,099 Issue of share capital ? 320,854 ? ? ? ? 320,854 ? 320,854 Listing costs ? (2,160) ? ? ? ? (2,160) ? (2,160) Novation of swap contract ? ? ? ? 93 (93) ? ? ? Total comprehensive profit/(loss) for the period ? ? 21,124 232 (48) 21,308 36 21,344 Adjustments arising from change in non- controlling interest ? ? ? ? ? ? ? 1,722 1,722 Balance at 31 December 2014 ? 339,825 ? 21,087 325 (136) 361,101 1,758 362,859 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Unaudited Unaudited for the for the nine months nine months ended ended 31 December 31 December 2015 2014 EUR'000 EUR'000 Operating activities Profit from operations 42,685 14,396 Share of loss in associates (137) (643) Increase in fair value of investment property (10,249) (4,970) Increase in fair value of joint venture (7,530) (442) Exchange rate gains/(losses) 2 (52) Decrease/(increase) in trade and other receivables 371 (1,313) (Decrease)/increase in trade and other payables (102) 641 Interest paid (8,040) (2,500) Interest received 768 8 Net tax paid (342) (260) Net cash from operating activities 17,426 4,865 Investing activities Dividends received from trading activities ? 3 Dividends received from associates 1,388 562 Dividends received from joint ventures 315 ? Purchase of investment properties (45,797) ? Capital expenditure on investment properties (2,790) (783) Acquisition of investment in joint venture (26,782) ? Cash obtained on acquistion of subsidiaries ? 42,256 Net cash (used in)/from investing activities (73,666) 42,038 Financing activities Repayment of borrowings (37,796) (2,046) Dividends paid (8,198) ? Listing costs paid ? (989) Financing fees paid (1,090) (6) Unutilised facility fee paid ? (43) Payments made on swap break (571) ? New bank loans raised 60,369 ? New other loans ? 346 Net cash from/(used in) financing activities 12,714 (2,738) Net (decrease)/increase in cash and cash equivalents (43,526) 44,165 Effect of foreign exchange rate changes 463 232 Cash and cash equivalents at beginning of the period 80,430 1,671 Cash and cash equivalents at end of the period 37,367 46,068 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. BASIS OF PREPARATION These unaudited condensed consolidated financial results (the "IFRS Statements") for the nine months ended 31 December 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"), and the listings 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. These financial results have not been audited or reviewed by the Company's external auditors. They have been prepared by, and are the responsibility of the directors of Stenprop. 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 nine months ended 31 December 2014. The comparative pro forma statement, which is denominated in EUR, is for illustration purposes only and may not fairly represent the Group's results of operations. The main difference between the comparative pro forma statement and the comparative IFRS statement 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 statement use the completion date of the acquisition (date that control passes), being 2 October 2014, to account for these investments. The comparative pro forma statement of comprehensive income therefore separately shows trading profits, property revaluations and other adjustments for the nine months ended 31 December 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. 2. EARNINGS PER ORDINARY SHARE Reconciliation of profit for the period to adjusted EPRA earnings *Pro forma Unaudited Unaudited Unaudited for the for the for the nine months nine months nine months ended ended ended 31 December 31 December 31 December 2015 2014 2014 EUR'000 EUR'000 EUR'000 Earnings per IFRS income statement attributable to shareholders 33,506 21,124 18,584 Adjustments to calculate EPRA earnings, exclude: ? Changes in fair value of investment properties (10,249) (4,970) (16,162) Reversal of provision for selling costs ? ? (5,612) Reversal of gain on acquisition ? (9,657) ? Reversal of impairment of goodwill ? ? 19,374 Changes in fair value of financial instruments (1,231) 128 (86) Deferred tax in respect of EPRA adjustments 1,347 (468) 106 Adjustments above in respect of joint ventures and associates: Changes in fair value (3,004) (90) 207 Deferred tax in respect of EPRA adjustments (66) 13 (32) EPRA earnings attributable to shareholders 20,303 6,080 16,379 Further adjustments to arrive at adjusted EPRA earnings Straight-line unwind of purchased swaps 1,536 636 1,909 Adjusted EPRA earnings attributable to shareholders 21,839 6,716 18,288 Weighted average number of shares in issue 277,112,787 248,902,812 248,902,812 Share-based payment award 652,799 291,563 291,563 Diluted weighted average number of shares in issue 277,765,586 249,194,375 249,194,375 Earnings per share IFRS EPS (cents) 12.09 8.49 7.47 Diluted IFRS EPS (cents) 12.06 8.48 7.46 EPRA EPS (cents) 7.33 2.44 6.58 Diluted EPRA EPS (cents) 7.31 2.44 6.57 Adjusted EPRA EPS (cents) 7.88 2.70 7.35 Diluted adjusted EPRA EPS (cents) 7.86 2.70 7.34 Straight-line unwind of purchased swaps A further adjustment was made to the EPRA earnings attributable to shareholders and relates 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 breaks 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 *Pro forma Unaudited Unaudited Unaudited for the for the for the nine months nine months nine months ended ended ended 31 December 31 December 31 December 2015 2014 2014 EUR'000 EUR'000 EUR'000 Earnings per IFRS income statement attributable to shareholders 33,506 21,124 18,584 Adjustments to calculate headline earnings, exclude: Changes in fair value of investment properties (10,249) (4,970) (16,162) Reversal of provision for selling costs ? ? (5,612) Reversal of gain on acquisition ? (9,657) ? Reversal of impairment of goodwill ? ? 19,374 Changes in fair value of financial instruments 519 (48) (48) Deferred tax in respect of headline earnings adjustments 1,347 (468) 106 Adjustments above in respect of joint ventures and associates Changes in value of investment properties (2,431) ? ? Deferred tax (399) ? ? Headline earnings attributable to shareholders 22,293 5,981 16,242 Earnings per share Headline EPS (cents) 8.04 2.40 6.53 Diluted headline EPS (cents) 8.03 2.40 6.52 * Readers are referred to note 1 where the basis of preparation of the pro forma information is explained. 3. NET ASSET VALUE PER ORDINARY SHARE Net asset value per share Unaudited Unaudited Audited as at as at as at 31 December 31 December 31 March 2015 2014 2015 EUR'000 EUR'000 EUR'000 Net assets attributable to equity shareholders 450,894 361,101 433,312 Adjustments to arrive at EPRA net asset value: Derivative financial instruments 4,010 4,732 6,381 Deferred tax 8,429 6,075 7,230 Adjustments above in respect of non-controlling interests 2,291 2,559 2,504 EPRA net assets attributable to shareholders 465,624 374,467 449,427 Number of shares in issue 279,720,942 248,902,812 272,236,146 Share-based payment awards 652,799 291,563 291,563 Diluted number of shares in issue 280,373,741 249,194,375 272,527,709 Net asset value per share IFRS net asset value per share (cents) 1.61 1.45 1.59 Diluted IFRS net asset value per share (cents) 1.61 1.45 1.59 EPRA net asset value per share (cents) 1.66 1.50 1.65 Diluted EPRA net asset value per share (cents) 1.66 1.50 1.65 Unaudited Unaudited Audited as at as at as at 31 December 31 December 31 March 2015 2014 2015 EUR EUR EUR 4. SHARE CAPITAL Authorised 1,000,000,000 ordinary shares with a par value of EUR0.000001258 each 1,258 1,258 1,258 Unaudited Unaudited Audited for the for the for nine months nine months the year ended ended ended 31 December 31 December 31 March 2015 2014 2015 Issued share capital Opening balance 272,236,146 15,986,003 15,986,003 Issue of new shares 7,484,796 232,916,809 256,250,143 Closing number of shares issued 279,720,942 248,902,812 272,236,146 Share capital Share premium (EUR 000) 387,895 341,985 376,985 Less: Acquisition/transaction costs (EUR 000) (2,859) (2,160) (2,858) Total share premium (EUR 000) 385,036 339,825 374,127 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. With effect from 5 October 2015, the Johannesburg Stock Exchange ("JSE") approved the transfer of Stenprop's listing from the JSE's AltX to the JSE's Main Board. The transfer does not affect the Company's current listing on the Bermuda Stock Exchange ("BSX"). The Company has 279,720,942 (March 2015: 272,236,146) ordinary shares in issue at the reporting date which are dual listed on the BSX and the JSE. 5. EVENTS AFTER THE REPORTING PERIOD On 26 November 2015, the Company announced an interim distribution of 4.2 cents per share in respect of the six months to 30 September 2015 and offered shareholders the option to receive in respect of all or a part of their Stenprop shareholding either a scrip dividend by way of an issue of new Stenprop shares (of the same class as existing shares) credited as fully paid up or a cash dividend. On 25 January 2016, the Company announced a 41.5% take up of the scrip dividend, for which 3,253,857 new Stenprop shares have been issued at a price of EUR1.49854 per share, resulting in the number of shares in issue, at the date of this announcement, being 282,974,799. There were no changes to the board of directors during the period. Stenprop has dual primary listings on the BSX and the JSE. Date: 10 March 2016 South African corporate advisor and JSE sponsor Java Capital BSX sponsor Appleby Securities (Bermuda) Limited