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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Asian Growth Properties | LSE:AGP | London | Ordinary Share | BMG054131021 | COM SHS USD0.05 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.05 | 0.10 | 2.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMAGP
RNS Number : 7518P
Asian Growth Properties Limited
21 August 2014
21 August 2014
Asian Growth Properties Limited
Immediate Release
Results for the period ended 30 June 2014
Asian Growth Properties Limited (the "Company") (AIM Stock Code: AGP), the Hong Kong based China property development and investment company, announces its unaudited condensed consolidated results for the period ended 30 June 2014 as follows:
Financial Highlights
n Profit attributable to the Company's shareholders of HK$297.5 million (GBP22.4 million) (2013: HK$277.3 million (GBP23.5 million))
n Profit attributable to the Company's shareholders (excluding revaluation surplus net of deferred tax) was HK$65.1 million (GBP4.9 million) (2013: HK$125.3 million (GBP10.6 million))
n Earnings per share for profit attributable to the Company's shareholders of HK33.6 cents (2.5 pence) (2013: HK31.3 cents (2.6 pence))
n Net asset value per share attributable to the Company's shareholders as at 30 June 2014 of HK$14.4 (108.4 pence) (31 December 2013: HK$14.1 (110.0 pence))
Hot Features
Premium
n Geographical location of the Group's property assets were as follow:
30 June 2014 31 December 2013
---------- ---------------------- ----------------------
Hong Kong HK$9,838.6 million HK$9,637.8 million
(GBP740.7 million) (GBP751.9 million)
Mainland HK$4,435.0 million HK$4,355.5 million
China (GBP333.9 million) (GBP339.8 million)
---------- ---------------------- ----------------------
Total HK$14,273.6 million HK$13,993.3 million
(GBP1,074.6 million) (GBP1,091.7 million)
========== ====================== ======================
n Gearing ratio of 8.4% (31 December 2013: 8.9%)
Operational Highlights
n Increased gross rental income generated from Dah Sing Financial Centre in Hong Kong and its occupancy rate remains high.
n The hotel operation results of Crowne Plaza Hong Kong Causeway Bay were satisfactory.
n Major mixed use development projects in Chengdu and Kaifeng, Mainland China are progressing. Site formation works for Phase I of Chengdu project have been completed and superstructure works for Phase IA of Kaifeng project are in progress.
Notes:
1. Figures in Pounds Sterling are translated from Hong Kong dollars based upon the exchange rates prevailing on the latest practicable business day of the respective accounting periods. The relevant exchange rates adopted are stated as follows:
For 30 June GBP1 = HK$13.2822; and 2014: For 31 December GBP1 = HK$12.8184; and 2013: For 30 June GBP1 = HK$11.8152 2013:
2. For Shareholders' information, the exchange rate on 20 August 2014 was GBP1 = HK$12.8950
Miscellaneous
The results included in this announcement are extracted from the unaudited condensed consolidated financial statements of the Company for the six months ended 30 June 2014, which have been approved by the Board of Directors on 21 August 2014.
The 2014 Interim Report is expected to be posted to shareholders and holders of depositary interests in late September 2014.
For further information, please contact:
Lu Wing Chi TEL: +852 2828
6363
Executive Director
Asian Growth Properties
Limited
Richard Gray TEL: +44 207 886
2500
Andrew Potts
Panmure Gordon (UK) Limited
(Nominated Advisor)
Attached:-
1. Chairman's Review; 2. Executive Directors' Review; 3. Condensed Consolidated Statement of Profit or Loss; 4. Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income; 5. Condensed Consolidated Statement of Financial Position; 6. Condensed Consolidated Statement of Changes in Equity; 7. Condensed Consolidated Statement of Cash Flows; and 8. Notes to the Condensed Consolidated Financial Statements.
This announcement can also be viewed on the Company's website at:
http://www.asiangrowth.com/html/eng/news.asp
CHAIRMAN'S REVIEW
I am pleased to present the unaudited consolidated financial results of Asian Growth Properties Limited ("AGP" or the "Company", together with its subsidiaries, the "Group") for the first six months of 2014 to the shareholders of the Company.
Results
AGP reported a profit attributable to the Company's shareholders of HK$297.5 million (GBP22.4 million) for the six months ended 30 June 2014 (2013: HK$277.3 million (GBP23.5 million)). The reported profit included a revaluation surplus on investment properties net of deferred taxation of HK$232.4 million (GBP17.5 million) (2013: HK$152.0 million (GBP12.9 million)). By excluding the net effect of such surplus, the Group's net profit attributable to the Company's shareholders was HK$65.1 million (GBP4.9 million) (2013: HK$125.3 million (GBP10.6 million)).
As at 30 June 2014, the Group's equity attributable to the Company's shareholders amounted to HK$12,715.5 million (GBP957.3 million) (31 December 2013: HK$12,458.7 million (GBP971.9 million)). The net asset value per share as at 30 June 2014 was HK$14.4 (108.4 pence) as compared with HK$14.1 (110.0 pence) as at 31 December 2013.
Figures in Pounds Sterling are translated from Hong Kong dollars based upon the exchange rates prevailing on the latest practicable business day of the respective accounting periods.
Operations
During the period ended 30 June 2014, the Group has continued the development of various property projects in Hong Kong and Mainland China.
The rental income from investment properties situated in both Hong Kong and Mainland China continue to provide stable returns to the Group. Crowne Plaza Hong Kong Causeway Bay has also performed satisfactorily with improvements in room rate as compared to last year.
For details of the Group's operations, please refer to the Executive Directors' Review.
Outlook
U.S. monetary policy will continue to affect the global economy which should contribute to the economic recovery in the near term. With the exception of the UK, many European economies are experiencing weakness in GDP growth and output and whilst the U.S. Government has started tapering quantitative easing and interest rates may begin to rise in the UK shortly, other major central banks continue to keep low or near zero interest rates which are a necessity to help to improve economic growth. Thus, interest rates are likely to stay at historically low levels for some time to come.
The Chinese President, Mr. Xi Jin Ping, has been consolidating his hold on power with a massive anti-corruption drive. With a slowdown of property pricing growth in many of the regions in Mainland China, economic growth has been slowing down this year. In the past month, there has been some easing of property ownership restrictions and the cost of borrowing money in the bond market has reduced which has relieved the largest and best run property companies from the tight liquidity in the capital markets. In the absence of any major upset within the ruling politburo with retirees, the Group believes that the market in Mainland China will remain relatively steady.
The Group continues to press on with its development projects but will be cautious about the phasing of the development. Our investment properties continue to perform well and are providing stable income to the Group.
Interim Dividend
The Board does not propose the payment of an interim dividend for the period ended 30 June 2014 (2013: Nil).
Change of Directors
On 19 March 2014, Messrs. Lincoln Lu and Sing Tai Lam were appointed as Executive and Non-Executive Directors of the Company and on 30 July 2014, Mr. John David Orchard Fulton was appointed as Independent Non-Executive Director of the Company. The Board would like to extend its warmest welcome to them to join the Board.
On 28 May 2014, Mr. Donald Ian Fletcher resigned as Non-Executive Director of the Company. The Board would like to express its gratitude for his valuable contribution to the Company since 2004.
Acknowledgement
The Board would like to take this opportunity to thank the executive and management team for the execution of the Board's strategy and their ongoing support.
Richard Prickett
Non-Executive Chairman
Hong Kong, 21 August 2014
EXECUTIVE DIRECTORS' REVIEW
FINANCIAL SUMMARY
Turnover for the six months ended 30 June 2014 amounted to HK$327.3 million (GBP24.6 million) (2013: HK$485.7 million (GBP41.1 million)). The turnover was principally attributable to the recognition of rental income from investment properties and revenue from hotel operation.
Profit attributable to the Company's shareholders for the period amounted to HK$297.5 million (GBP22.4 million) (2013: HK$277.3 million (GBP23.5 million)), equivalent to a basic earnings per share of HK33.6 cents (2.5 pence) (2013: HK31.3 cents (2.6 pence)). The reported profit included a revaluation surplus on investment properties net of deferred taxation of HK$232.4 million (GBP17.5 million) (2013: HK$152.0 million (GBP12.9 million)). By excluding the effect of such surplus, the Group's net profit attributable to the Company's shareholders was HK$65.1 million (GBP4.9 million) (2013: HK$125.3 million (GBP10.6 million)), equivalent to HK7.3 cents (0.5 pence) (2013: HK14.1 cents (1.2 pence)) per share.
As at 30 June 2014, the Group's equity attributable to the Company's shareholders amounted to HK$12,715.5 million (GBP957.3 million) (31 December 2013: HK$12,458.7 million (GBP971.9 million)). The net asset value per share attributable to the Company's shareholders as at 30 June 2014 was HK$14.4 (108.4 pence) as compared with HK$14.1 (110.0 pence) as at 31 December 2013.
For Shareholders' information, figures in Pounds Sterling are translated from Hong Kong dollars based upon the exchange rates prevailing on the latest practicable business day of the respective accounting years and the relevant exchange rates adopted are stated as follows:
For 30 June 2014: GBP1 = HK$13.2822; and For 31 December 2013: GBP1 = HK$12.8184; and For 30 June 2013: GBP1 = HK$11.8152
BUSINESS REVIEW
Property Investment and Development
The Group continues to focus on its development and investment projects in Hong Kong and Mainland China. It is the Group's approach to review and optimise the project portfolios from time to time. The Group's core projects located in Hong Kong and Mainland China are listed below.
Hong Kong
The office leasing market was stable during the period. With several tenancies of Dah Sing Financial Centre, a 39-storey commercial building, being renewed at market rates, rental income received during the period increased. The occupancy rate of Dah Sing Financial Centre remains at a high level of approximately 90% as at 30 June 2014.
The negotiation of land premium with the Government for the development project at Fo Tan is in progress. This development project has a site area of approximately 20,000 square metres and envisages, among other facilities, residential units, car parks, educational facilities and a bus terminus. The foundation work of the project has been completed and advanced pile cap work is in progress.
Mainland China
Chengdu, Sichuan Province
During the period, the occupancy rate for the two 30-storey office towers of Plaza Central remained at a high level and its retail podium with a gross floor area of about 29,000 square metres is fully let principally to Chengdu New World Department Store on a long-term lease. As at 30 June 2014, the aggregate occupancy rate for the two office towers and the retail podium was approximately 93%. Leasing activities for the remaining areas of Plaza Central continue.
The shopping arcade of New Century Plaza with a gross floor area of about 16,300 square metres is fully let to a furniture retailer on a medium-term lease.
The master layout plan of the Longquan project (known as "Chengdu Nova City"), which has a site area of 506,000 square metres, was approved by the local government in January 2014. Preliminary site works and site formation works for Phase I of the project have been completed. Superstructure works for Phase I are scheduled to commence in the fourth quarter of 2014.
Kaifeng, Henan Province
The Kaifeng project, known as "Kaifeng Nova City", is situated in Zheng-Kai District, a new town in Kaifeng and envisages shopping mall, premium offices, exhibition hall, hotel, serviced apartments and residential towers. This project has a site area of 735,000 square metres and for providing better living environment, the gross floor area of the development will vary from 2,000,000 to 2,500,000 square metres only. The master layout plan has been approved by the local government and foundation work for Phase I of the residential has been completed. The superstructure works for Phase IA of the residential are in progress and scheduled to be completed in the first quarter of 2015. Pre-sale consent for Phase IA was issued and the sales program has commenced.
Guangzhou, Guangdong Province
As at 30 June 2014, the occupancy rate of the 14-storey office tower of Westmin Plaza Phase II of about 16,100 square metres was approximately 91% with more than one-third of the total office space being leased to AIA. Leasing activities for the 3-storey shopping arcade of Westmin Plaza Phase II with a total gross floor area of about 26,400 square metres are in progress.
Huangshan, Anhui Province
The project in Huangshan has a site area of about 337,000 square metres comprising of development land of about 117,000 square metres and landscape land of 220,000 square metres. The master layout plan for the development of the project comprising a hotel, serviced apartments and resort villas in the integrated resort site has been approved by the local government and site formation work for phase I of the project is planned to commence in the fourth quarter of 2014.
Chi Shan, Nanjing, Jiangsu Province
The Group has established two 51%-owned joint venture companies to participate in the tenant relocation arrangements and excavation and infrastructure works on certain pieces of land in Chi Shan. The Group intends to acquire such lands through land auctions by different stages.
Hotel Operation
Crowne Plaza Hong Kong Causeway Bay is a 29-storey five-star hotel comprising 263 guest rooms with ancillary facilities and is managed by the InterContinental Hotels Group. It has achieved satisfactory occupancy and room rates for the period under review.
AGREEMENT FOR COST-SHARING ARRANGEMENT WITH RELATED PARTY
The Company and South-East Asia Investment And Agency Company, Limited ("SEAI"), a wholly-owned subsidiary of S E A Holdings Limited (the holding company of the Company), had entered into a Management Agreement on 18th September 2006 (the "Management Agreement") for the appointment of SEAI as manager for the provision of corporate, project and property management services to the Group. The Management Agreement was terminated with effect from 1st January 2014.
Subsequent to the termination of the Management Agreement and the consideration of alternative structures to provide the necessary resources to the Group, the Company and various subsidiaries of the Company (together, the "AGP Service Recipients") entered into an agreement with SEAI on 29 July 2014 whereby in consideration of SEAI making available its personnel and facilities to the Group, the AGP Service Recipients agreed to pay their proportionate share of the costs incurred by SEAI (the "Net Costs") for the use of SEAI's personnel and facilities from 1 January 2014.
The Net Costs is the proportion of staff costs and indirect costs to be borne by the AGP Service Recipients and will be calculated by reference to the time spent by SEAI's personnel on the services to each of the AGP Service Recipients (with a mark-up of 5%), plus the reimbursable costs incurred by SEAI on behalf of the AGP Service Recipients (on a dollar-for-dollar basis). Each of the AGP Service Recipients should bear and pay its proportion of the Net Costs.
WORKING CAPITAL AND LOAN FACILITIES
As at 30 June 2014, the Group's total cash balance was HK$2,273.0 million (GBP171.1 million) (31 December 2013: HK$1,766.4 million (GBP137.8 million)) and unutilised facilities were HK$1,452.5 million (GBP109.4 million) (31 December 2013: HK$855.0 million (GBP66.7 million)).
The gearing ratio as at 30 June 2014, calculated on the basis of net interest bearing debts minus cash and restricted and pledged deposits as a percentage of total property assets, was 8.4% (31 December 2013: 8.9%).
As at 30 June 2014, the maturity of the Group's outstanding borrowings was as follows:
30 June 2014 31 December 2013
HK$' million HK$' million
---------------- ------------------------- ----------------
Due
Within 1 year 422.5 1,291.8
1-2 years 1,350.8 395.2
3-5 years 1,102.7 1,082.9
Over 5 years 608.4 256.6
---------------- ------------------------- ----------------
3,484.4 3,026.5
Less: Front-end
fee (18.6) (13.7)
---------------- ------------------------- ----------------
3,465.8 3,012.8
================ ========================= ================
Pledge of Assets
For the Company's subsidiaries operating in Hong Kong and Mainland China, the total bank loans drawn as at 30 June 2014 amounted to HK$3,465.8 million (31 December 2013: HK$3,012.8 million) which comprise secured bank loans of HK$3,315.8 million (31 December 2013: HK$2,894.8 million) and unsecured bank loans of HK$150.0 million (31 December 2013: HK$118.0 million). The secured bank loans were secured by properties valued at HK$11,715.3 million (31 December 2013: HK$11,343.7 million) and note receivables of HK$54.3 million (31 December 2013: HK$54.3 million).
Treasury Policies
The Group adheres to prudent treasury policies. As at 30 June 2014, all of the Group's borrowings were raised through its wholly-owned or substantially controlled subsidiaries on a non-recourse basis.
International Financial Reporting Standards ("IFRSs")
The Group has adopted IFRSs and the unaudited condensed consolidated financial statements accompanying this Review have been prepared in accordance with IFRSs.
OUTLOOK
Mainland China's economy is expected to maintain steady growth in this year. With the actual achieved GDP growth of 7.4% for the first half of year 2014, China is on track to achieve its target of doubling the GDP from year 2010 to year 2020. Amending certain policies such as relaxing the one-child policy and abolition of dual-household registration system will boost the domestic housing demand in the long run.
In Hong Kong, the property market has remained relatively stable with some diminution in land values but ever increasing development construction costs. Interest rates remain low and sales of newly built flats are attracting the best take up in the past six months. However, it remains to be seen what impact the "Occupy Central Movement" will have on Hong Kong's business confidence. The polarization of the democrat camp and that of the "Anti-occupy Central Movement" with their differing stance on the appointment of new Hong Kong Chief Executive could impact the property market adversely in the latter part of the year.
Negotiation of the land premium of our Fo Tan project is still in progress. This is a lengthy process with the Government and the Group is expecting a more realistic land premium to be offered. For the Kaifeng project, the pre-sales for Phase IA of the residential development has commenced and will continue during the year.
On behalf of the Executive Directors
Lu Wing Chi
Executive Director
Hong Kong, 21 August 2014
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
Six months ended
30 June
NOTES 2014 2013
HK$'000 HK$'000
(unaudited) (unaudited)
Revenue 4 327,274 485,698
Interest income 7,590 8,772
Other income 4,693 8,167
Costs:
Property and related costs 5 (22,868) (110,364)
Staff costs (43,176) (41,188)
Depreciation and amortisation (37,317) (42,424)
Other expenses 6 (109,246) (134,127)
- - - - - -
- - - - - -
- - - - - -
- -
(212,607) (328,103)
---------------- ----------------
Profit from operations
before fair value changes
on properties 126,950 174,534
Fair value changes on
investment properties 240,840 162,700
---------------- ----------------
Profit from operations
after fair value changes
on properties 367,790 337,234
Gain on disposal of assets
classified as held
for sale - 21,640
Finance costs 7 (41,366) (38,349)
---------------- ----------------
Profit before taxation 8 326,424 320,525
Income tax expense 9 (31,469) (44,365)
---------------- ----------------
Profit for the period 294,955 276,160
========= =========
Attributable to:
Company's shareholders 297,514 277,309
Non-controlling interests (2,559) (1,149)
---------------- ----------------
294,955 276,160
========= =========
HK cents HK cents
Earnings per share for
profit attributable to
the Company's shareholders 10
- Basic 33.6 31.3
========= =========
Earnings per share excluding
fair value changes on
properties net of deferred
tax
- Basic 10 7.3 14.1
========= =========
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 30 JUNE 2014
Six months ended
30 June
2014 2013
HK$'000 HK$'000
(unaudited) (unaudited)
Profit for the period 294,955 276,160
---------------- ----------------
Other comprehensive (expense)
income:
Items that may be subsequently
reclassified to profit or loss:
Exchange differences arising
on translation of foreign operations (41,206) 70,915
Release of translation reserve
upon disposal of assets classified
as held for sale - (2,480)
---------------- ----------------
(41,206) 68,435
---------------- ----------------
Total comprehensive income
for the period 253,749 344,595
========= =========
Total comprehensive income
(expense) attributable to:
Company's shareholders 256,794 344,866
Non-controlling interests (3,045) (271)
---------------- ----------------
253,749 344,595
========= =========
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 30 JUNE 2014
NOTES 30.6.2014 31.12.2013
HK$'000 HK$'000
(unaudited) (audited)
Non-current assets
Investment properties 12 9,965,163 10,216,706
Property, plant and equipment 12 1,461,026 1,016,607
Properties for development 13 1,283,623 1,350,813
loans receivable 5,876 7,072
Note receivables 54,251 54,279
Other receivable 14 381,143 384,794
Restricted bank deposits 6,299 6,360
---------------- ----------------
13,157,381 13,036,631
---------------- ----------------
Current assets
Properties held for sale
Completed properties 479,785 484,531
Properties under development 1,122,128 966,684
Other inventories 1,026 1,119
loans receivable 417 463
Trade receivables, deposits
and prepayments 15 120,323 124,536
Tax recoverable 921 940
Amounts due from non-controlling
interests 16 900 265
Bank balances and cash 2,266,721 1,760,007
---------------- ----------------
3,992,221 3,338,545
---------------- ----------------
Current liabilities
Payables, deposits and
accrued charges 17 314,719 290,079
Sales deposits 28,662 -
Tax liabilities 137,280 133,024
Amounts due to non-controlling
interests 16 98,893 96,985
Bank borrowings - due
within one year 18 421,600 1,290,658
---------------- ----------------
1,001,154 1,810,746
---------------- ----------------
Net current assets 2,991,067 1,527,799
---------------- ----------------
Total assets less current
liabilities 16,148,448 14,564,430
========= =========
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION - continued
AT 30 JUNE 2014
NOTES 30.6.2014 31.12.2013
HK$'000 HK$'000
(unaudited) (audited)
Capital and reserves
Share capital 19 345,204 345,204
Reserves 12,370,275 12,113,481
---------------- ----------------
Equity attributable to
the Company's shareholders 12,715,479 12,458,685
Non-controlling interests 54,661 57,706
---------------- ----------------
Total equity 12,770,140 12,516,391
---------------- ----------------
Non-current liabilities
Bank borrowings - due
after one year 18 3,044,182 1,722,108
Deferred taxation 20 334,126 325,931
---------------- ----------------
3,378,308 2,048,039
---------------- ----------------
16,148,448 14,564,430
========= =========
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2014
Attributable to the Company's
shareholders
----------------------------------------------------------------------------------------------------------
Non-
Share Share Translation Other Retained controlling
capital premium reserve reserves profits Total interests Total
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
At 1 January
2013 (audited) 345,204 4,836,225 404,870 766,370 5,508,688 11,861,357 57,995 11,919,352
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Profit for
the period - - - - 277,309 277,309 (1,149) 276,160
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Exchange
differences
arising on
translation
of foreign
operations - - 70,037 - - 70,037 878 70,915
Release of
translation
reserve upon
disposal of
assets
classified
as held for
sale - - (2,480) - - (2,480) - (2,480)
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Other
comprehensive
income for
the period - - 67,557 - - 67,557 878 68,435
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Total
comprehensive
income
(expense)
for the period - - 67,557 - 277,309 344,866 (271) 344,595
--------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 30 June
2013
(unaudited) 345,204 4,836,225 472,427 766,370 5,785,997 12,206,223 57,724 12,263,947
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Profit for
the period - - - - 197,234 197,234 1,866 199,100
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Exchange
differences
arising on
translation
of foreign
operations - - 55,228 - - 55,228 682 55,910
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Other
comprehensive
income for
the period - - 55,228 - - 55,228 682 55,910
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Total
comprehensive
income for
the period - - 55,228 - 197,234 252,462 2,548 255,010
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Dividends paid
to
non-controlling
interests - - - - - - (2,566) (2,566)
--------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 31 December
2013 (audited) 345,204 4,836,225 527,655 766,370 5,983,231 12,458,685 57,706 12,516,391
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Profit for
the period - - - - 297,514 297,514 (2,559) 294,955
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Exchange
differences
arising on
translation
of foreign
operations - - (40,720) - - (40,720) (486) (41,206)
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Other
comprehensive
expense for
the period - - (40,720) - - (40,720) (486) (41,206)
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - -
- - - - - - - -
Total
comprehensive
(expense)
income
for the period - - (40,720) - 297,514 256,794 (3,045) 253,749
--------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
At 30 June
2014
(unaudited) 345,204 4,836,225 486,935 766,370 6,280,745 12,715,479 54,661 12,770,140
========= ========= ========= ========= ========= ========= ========= =========
Other reserves comprise (i) a discount on acquisition/assumption of certain assets and liabilities from the intermediate holding company, S E A Holdings Limited ("SEA") and the excess of the consideration over the market closing price of the shares issued for the acquisition. The amounts attributable to those assets and liabilities derecognised in subsequent years will be recognised in profit or loss; and (ii) the excess of the consideration paid for acquisition of an additional interest in a subsidiary from a non-controlling shareholder over the carrying amount of the non-controlling interests acquired.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
Six months ended
30 June
2014 2013
HK$'000 HK$'000
(unaudited) (unaudited)
Net cash from operating activities 68,536 118,714
---------------- ----------------
Investing activities
Purchase of property, plant
and equipment (771) (923)
Net proceeds received on disposal
of property, plant and equipment 30 64
Consideration received on disposal
of assets classified as held
for sale - 21,250
Acquisition of and additional
costs on properties for development (29,520) (45,003)
Increase in bank deposits (214,166) (327,607)
Pledged bank deposits refunded - 59,295
Bank deposits refunded 455,340 -
Increase in other receivable (2,826) (7,213)
Decrease in loans receivable 1,242 1,367
Interest received 15,697 9,605
---------------- ----------------
Net cash from (used in) investing
activities 225,026 (289,165)
---------------- ----------------
Financing activities
Draw down of bank loans 1,631,697 467,265
Repayments of bank loans (1,165,881) (100,955)
Payment of front-end fee (7,500) (2,100)
Advances from non-controlling
interests 2,837 195
Advances to non-controlling
interests (635) (929)
---------------- ----------------
Net cash from financing activities 460,518 363,476
---------------- ----------------
Net increase in cash and cash
equivalents 754,080 193,025
Cash and cash equivalents at
beginning of period 1,304,667 1,330,574
Effect of foreign exchange
rate changes (6,192) 9,442
---------------- ----------------
Cash and cash equivalents at
end of period 2,052,555 1,533,041
========= =========
Represented by:
Bank balance and cash 2,266,721 1,854,423
Less: Fixed deposits with original
maturity date more than 3 months (214,166) (321,382)
---------------- ----------------
2,052,555 1,533,041
========= =========
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2014
1. GENERAL
The Company is a public company incorporated in the British Virgin Islands with limited liability and its shares are admitted for trading on the AIM Market of London Stock Exchange plc.
The Company acts as an investment holding company. The principal subsidiaries of the Company are engaged in property investment, property development and the operation of a hotel.
2. BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting" issued by the International Accounting Standards Board (the "IASB").
3. PRINCIPAL ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared on the historical cost basis except for investment properties, which are measured at fair values, as appropriate.
Except as described below, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2014 are the same as those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2013.
In the current interim period, the Group has applied, for the first time, the following interpretation and amendments to International Financial Reporting Standards ("IFRSs") issued by the IASB and the IFRS Interpretations Committee of IASB that are relevant for the preparation of the Group's condensed consolidated financial statements.
Amendments to IFRS Investment Entities 10, IFRS 12 and IAS 27 Amendments to IAS Offsetting Financial Assets 32 and Financial Liabilities Amendments to IAS Recoverable Amount Disclosures 36 for Non-Financial Assets Amendments to IAS Novation of Derivatives and 39 Continuation of Hedge Accounting IFRIC - Int 21 Levies
The application of the above interpretation and amendments to IFRSs in the current interim period has had no material effect on the amounts reported in these condensed consolidated financial statements and/or disclosures set out in these condensed consolidated financial statements.
4. SEGMENT INFORMATION
Information reported to the executive directors of the Company, being the chief operating decision makers, for the purposes of resource allocation and assessment of segment performance is mainly focused on the property development, property investment and hotel operation. No operating segments identified by the chief operating decision makers have been aggregated in arriving at the reportable segments of the Group.
Property investment and development activities are in Hong Kong and the People's Republic of China (the "PRC") whereas the hotel operation is in Hong Kong.
The following is an analysis of the Group's revenue and results by reportable segment:
Six months ended 30 June 2014
Property Property Hotel
development investment operation Eliminations Consolidated
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
SEGMENT REVENUE
External sales 520 195,311 131,443 - 327,274
Inter-segment - - - - -
sales
---------------- ---------------- ---------------- ---------------- ----------------
Total 520 195,311 131,443 - 327,274
========= ========= ========= ========= =========
SEGMENT RESULTS
Segment (loss)
profit (64,131) 388,848 38,593 363,310
========= ========= =========
Interest income 7,590
Corporate
income less
expenses (3,110)
Finance costs (41,366)
----------------
Profit before
taxation 326,424
=========
Six months ended 30 June 2013
Property Property Hotel
development investment operation Eliminations Consolidated
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
SEGMENT REVENUE
External sales 177,000 185,984 122,714 - 485,698
Inter-segment
sales - 290 - (290) -
---------------- ---------------- ---------------- ---------------- ----------------
Total 177,000 186,274 122,714 (290) 485,698
========= ========= ========= ========= =========
SEGMENT RESULTS
Segment profit 58,301 273,640 18,878 350,819
========= ========= =========
Interest income 8,772
Corporate
income less
expenses (717)
Finance costs (38,349)
----------------
Profit before
taxation 320,525
=========
Inter-segment sales are at mutually agreed terms.
4. SEGMENT INFORMATION - continued
The Group does not allocate interest income, corporate income less expenses and finance costs to individual reportable segment profit or loss for the purposes of resource allocation and performance assessment by the chief operating decision makers.
The accounting policies adopted in preparing the reportable segment information are the same as the Group's accounting policies.
No segment assets and liabilities are presented as the information is not reportable to the chief operating decision makers in the resource allocation and assessment of performance.
5. PROPERTY AND RELATED COSTS
Six months ended
30 June
2014 2013
HK$'000 HK$'000
Changes in completed properties
held for sale 613 83,078
Selling and marketing expenses 1,116 3,405
Direct operating expenses
on investment properties 21,139 23,881
---------------- ----------------
22,868 110,364
========= =========
6. OTHER EXPENSES
Six months ended
30 June
2014 2013
HK$'000 HK$'000
Included in other expenses
are:
Fees/management fees paid
to a related company (note
22(a)) 46,522 75,142
Less: Amount capitalised
to property development
project (7,349) (1,898)
---------------- ----------------
39,173 73,244
Hotel operating expenses 32,491 29,589
Legal and professional fees 2,538 3,994
========= =========
7. FINANCE COSTS
Six months ended
30 June
2014 2013
HK$'000 HK$'000
Interest on:
Bank borrowings wholly repayable
within 5 years 19,095 18,401
Bank borrowings not wholly
repayable within 5 years 22,430 19,350
---------------- ----------------
41,525 37,751
Less: Amount capitalised
to property development
project (3,934) (2,085)
---------------- ----------------
37,591 35,666
Front end fee 2,510 1,912
Other charges 1,265 771
---------------- ----------------
41,366 38,349
========= =========
8. PROFIT BEFORE TAXATION
Six months ended
30 June
2014 2013
HK$'000 HK$'000
Profit before taxation has
been arrived at after charging:
Net exchange loss 4,398 -
and crediting:
Interest earned on bank
deposits 7,424 8,105
Interest income from second
mortgage loans 166 211
Other interest income - 456
Net exchange gain - 3,879
========= =========
9. INCOME TAX EXPENSE
Six months ended
30 June
2014 2013
HK$'000 HK$'000
Current tax
Hong Kong Profits Tax 14,906 29,995
PRC Enterprise Income Tax 5,631 4,253
---------------- ----------------
20,537 34,248
---------------- ----------------
Deferred tax 10,932 10,117
---------------- ----------------
31,469 44,365
========= =========
Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profits for each of the periods.
PRC Enterprise Income Tax is calculated at 25% of the estimated assessable profits for each of the periods.
10. EARNINGS PER SHARE
The calculation of the basic earnings per share attributable to the Company's shareholders is based on the following data:
Six months ended
30 June
2014 2013
HK$'000 HK$'000
Earnings for the purpose
of basic earnings per share
Profit for the period attributable
to the Company's shareholders 297,514 277,309
========= =========
2014 2013
Number of ordinary shares
for the purpose of basic
earnings per share 886,347,812 886,347,812
========= =========
No diluted earnings per share is presented as the Company did not have any potential ordinary shares in issue during both periods or at the end of each reporting period.
10. EARNINGS PER SHARE - continued
For the purpose of assessing the performance of the Group, the directors are of the view that the profit for the period should be adjusted for the fair value changes on properties recognised in profit or loss and the related deferred taxation in arriving at the "adjusted profit attributable to the Company's shareholders". A reconciliation of the adjusted earnings is as follows:
Six months ended
30 June
2014 2013
HK$'000 HK$'000
Profit for the period attributable
to the Company's shareholders
as shown in the condensed
consolidated statement of
profit or loss 297,514 277,309
fair value changes on investment
properties (240,840) (162,700)
Deferred tax thereon 8,460 10,675
---------------- ----------------
Adjusted profit attributable
to the Company's shareholders 65,134 125,284
========= =========
Basic earnings per share
excluding fair value changes
on investment properties HK7.3 HK14.1
net of deferred tax cents cents
========= =========
The denominators used in the calculation of adjusted earnings per share are the same as those detailed above.
11. DIVIDENDS
No dividends were paid, declared or proposed during the reported period. The directors do not recommend the payment of any interim dividend.
12. INVESTMENT PROPERTIES AND PROPERTY, PLANT AND EQUIPMENT
In estimating the fair value of investment properties, the Group uses market-observable data to the extent it is available. The Group engages third party qualified valuers to perform the valuation of the Group's investment properties. At the end of each reporting period, the Group works closely with the qualified external valuers to establish and determine the appropriate valuation techniques and inputs to the model.
The fair values of investment properties as at 30 June 2014 and 31 December 2013 were arrived at on the basis of valuations carried out at those dates by Savills Valuation and Professional Services Limited ("Savills"), a firm of Chartered Surveyors not connected to the Group, recognised by The Hong Kong Institute of Surveyors, that has appropriate qualifications and recent experience in the valuation of properties in the relevant locations.
12. INVESTMENT PROPERTIES AND PROPERTY, PLANT AND EQUIPMENT - continued
The valuation, which conforms to the appropriate sections of both the current Practice Statements, and United Kingdom Practices Statements contained in the RICS Valuation Standards published by the Royal Institution of Chartered Surveyors in the United Kingdom (the "Red Book"), was arrived at by reference to market evidence of transaction prices or by capitalisation of future rental which is estimated by reference to comparable rental as available in the relevant markets. In the valuation, the market rentals of all lettable units as well as those of similar properties are made by reference to the rentals achieved by the Group in the lettable units as well as those of similar properties in the neighbourhood. The capitalisation rate adopted is by reference to the yield rates observed by the valuer for similar properties in the locality and adjusted for the valuer's knowledge of factors specific to the respective properties.
The resulting increase in the fair value of investment properties of HK$240,840,000 (1.1.2013 - 30.6.2013: HK$162,700,000) has been recognised directly in the condensed consolidated statement of profit or loss.
During the current interim period, the Group changed the usage of certain properties from investment properties to owner occupation. Accordingly, the relevant portion of the properties was transferred from investment properties to property, plant and equipment at their fair values on the date of transfer of HK$469,587,000 which were determined by the directors of the Company with reference to the valuation carried out on 31 December 2013 by Savills.
13. PROPERTIES FOR DEVELOPMENT
The carrying amount represents the Group's interest in certain pieces of land located in the PRC to be held for future development.
The carrying amount is amortised on a straight-line basis over the lease terms ranging from 40 to 70 years.
14. OTHER RECEIVABLE
At 30 June 2014, the Group had incurred a total amount of RMB321,060,000 (31.12.2013: RMB321,052,000) equivalent to HK$404,472,000 (31.12.2013: HK$408,346,000) for the tenant relocation arrangements, excavation and infrastructure work on certain pieces of land in Nanjing, the PRC. The amount, together with further costs to complete the work, are wholly refundable from the relevant PRC local government either by deduction against the consideration payable if the Group is successful in bidding for the land or out of the proceeds received by the relevant PRC local government from another successful tenderer. The directors estimated that, based on the Group's development plan, the time schedule for auction of the relevant land will be initiated before the end of 2016 and by then the full amount will be recovered.
The balance of HK$381,143,000 (31.12.2013: HK$384,794,000) represents the Hong Kong dollar equivalent of the present value of the original amount of RMB321,060,000 (31.12.2013: RMB321,052,000) expected to be recovered in 2016 discounted at the rate of 2% per annum.
15. TRADE RECEIVABLES, DEPOSITS AND PREPAYMENTS
30.6.2014 31.12.2013
HK$'000 HK$'000
Trade receivables 8,008 9,114
Accrued income 97,486 92,234
Deposits and prepayments 14,829 23,188
---------------- ----------------
120,323 124,536
========= =========
Trade receivables mainly represent rental receivable from tenants for the use of the Group's properties and receivables from corporate customers and travel agents for the use of hotel facilities. No credit is allowed to tenants. Rentals are payable upon presentation of demand notes. An average credit period of 30 days is allowed to corporate customers and travel agents.
16. AMOUNTS DUE FROM/TO NON-CONTROLLING INTERESTS
The balances are unsecured, interest-free and repayable on demand.
17. PAYABLES, DEPOSITS AND ACCRUED CHARGES
30.6.2014 31.12.2013
HK$'000 HK$'000
Trade payables 1,726 2,609
Rental deposits 112,162 113,185
Rental received in advance 13,476 12,052
Other payables, other deposits
and accrued charges 187,355 162,233
---------------- ----------------
314,719 290,079
========= =========
Included in other payables is an aggregate amount of HK$87,707,000 (31.12.2013: HK$87,876,000) payable to contractors for the cost in relation to the tenant relocation arrangements, excavation and infrastructure work on certain pieces of land as detailed in note 14.
Included in rental deposits are deposits to be settled after twelve months from the end of the reporting period based on the respective lease terms which amounted to HK$96,356,000 at 30 June 2014 (31.12.2013: HK$87,302,000).
18. BANK BORROWINGS
During the current interim period, the Group repaid bank loans amounting to HK$1,165,881,000 (1.1.2013 - 30.6.2013: HK$100,955,000) and drew bank loans which carry interest at variable rates amounting to HK$1,631,697,000 (1.1.2013 - 30.6.2013: HK$467,265,000).
19. SHARE CAPITAL
30.6.2014 31.12.2013
US$'000 US$'000
Authorised:
1,300,000,000 ordinary shares
of US$0.05 each 65,000 65,000
========= =========
US$'000 US$'000
Issued and fully paid:
886,347,812 ordinary shares
of US$0.05 each 44,317 44,317
========= =========
HK$'000 HK$'000
Shown in the condensed consolidated
financial statements as 345,204 345,204
========= =========
20. deferred TAXATION
The balance at the end of reporting period mainly represents deferred tax liabilities recognised on the fair value changes of the investment properties amounting to HK$298,808,000 (31.12.2013: HK$292,909,000).
21. PLEDGE OF ASSETS
At the end of the reporting period, the Group had pledged the following assets to secure banking facilities granted to the Group:
(a) Fixed charges on investment properties and property, plant and equipment with an aggregate carrying value of HK$9,691,544,000 (31.12.2013: HK$9,486,635,000) together with a floating charge over all the assets of the properties owning subsidiaries and benefits accrued to the relevant properties.
(b) Fixed charges on hotel properties with an aggregate carrying value of HK$960,814,000 (31.12.2013: HK$974,569,000) together with a floating charge over all the assets of the property owning subsidiaries and benefits accrued to the relevant properties.
(c) Fixed charges on properties under development held for sale with an aggregate carrying value of HK$943,054,000 (31.12.2013: HK$882,479,000).
(d) Fixed charges on properties for development with an aggregate carrying value of HK$119,856,000 (31.12.2013: Nil).
(e) Note receivable of HK$54,251,000 (31.12.2013: HK$54,279,000). 22. RELATED PARTY BALANCES AND TRANSACTIONS
(a) For the six months ended 30 June 2013, the Group paid management fees of HK$75,142,000 to South-East Asia Investment And Agency Company, Limited ("SEAI"), a wholly-owned subsidiary of S E A Holdings Limited (an intermediate holding company of the Company), pursuant to a management agreement dated 18 September 2006 entered into between the Company and SEAI for rendering management services for the Group's property portfolio. This management agreement was terminated with effect from 1 January 2014.
For the six months ended 30 June 2014, the Group paid fees of HK$46,522,000 to SEAI pursuant to a new agreement entered into between the Company, certain subsidiaries of the Company and SEAI for using the SEA's personnel and facilities on a cost-sharing basis to carry out the Group's business activities from 1 January 2014.
(b) The remuneration of directors who are the Group's key management personnel during the period amounted to HK$1,884,000 (1.1.2013 - 30.6.2013: HK$1,460,000).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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