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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Globalworth Real Estate Investments Limited | LSE:GWI | London | Ordinary Share | GG00B979FD04 | ORD NPV |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.04 | 1.62% | 2.51 | 2.46 | 2.56 | 0.00 | 16:35:07 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Real Estate Agents & Mgrs | 242.49M | -54.15M | -0.2148 | -11.50 | 622.82M |
From Apr 2019 to Apr 2024
TIDMGWI
RNS Number : 3514K
Globalworth Real Estate Inv Ltd
21 September 2016
21 September 2016
Globalworth Real Estate Investments Limited
Interim Report and Unaudited Condensed Consolidated Financial Statements for the six month period ended 30 June 2016
Globalworth Real Estate Investments Limited ("Globalworth" or the "Company") is pleased to release the Interim Report and Unaudited Condensed Consolidated Financial Statements for the six month period ended 30 June 2016.
Operational highlights
-- Commercial standing GLA increased by c.22% at end of H1-16 to c.370,033sqm
-- Delivered two class "A" office properties in Bucharest increasing the total number of standing properties to 14
- The flagship Globalworth Tower development was delivered in Q1-16, offering c.54,700sqm of class "A" office space
-- Average occupancy of commercial standing GLA of c.80.3% at 30 June 2016 (further increased to 82.3% at 31 August 2016)
-- c.335,500sqm of commercial space let or pre-let with a WALL of c.6.9 years
-- Successfully completed a EUR180m senior secured real estate bond subscribed by the Canada Pension Plan Investment Board (CPPIB) and Cairn Capital
-- Reduced the weighted average cost of debt from 6.2% as at 31 December 2015 to 5.3% at 30 June 2016
Financial highlights
-- Portfolio Open Market Value ("OMV") of EUR962.4m (31 December 2015: EUR931.1m) up 3.4% as compared to 31 December 2015
-- Loan to Value of 43.7 per cent (31 December 2015: 43.9 per cent) down marginally as compared to 31 December 2015
-- Net Asset Value ("NAV") of EUR512.2m (31 December 2015: EUR499.7m) up 2.5% as compared to 31 December 2015
-- NAV per share of EUR8.00 ([1]) (31 December 2015: EUR7.98) up 0.3% as compared to 31 December 2015, affected by the issuance of c.1.4m additional shares during H1-16 to settle outstanding liabilities
-- EPRA ([2]) NAV of EUR581.4m (31 December 2015: EUR568.3m) up 2.3% as compared to 31 December 2015
-- EPRA(2) NAV per share of EUR9.08(1) (31 December 2015: EUR9.08) remaining unchanged from 31 December 2015, affected by the issuance of c.1.4m additional shares during the first six months of 2016 to settle outstanding liabilities
-- Net operating income of EUR19.9m (H1-15: EUR11.8m) up 69% as compared to H1-15 as a result of the addition of five leased properties in the revenues generating properties portfolio
-- Earnings before tax of EUR5.3m (H1-15: EUR39.7m) down 87% as compared to H1-15, mainly due to the significant fair value gain on investment property and gain on acquisition of four subsidiaries of c.EUR39m recorded in H1-15 whereas in H1-16 no acquisitions took place and there was a relatively small increase in the value of investment property generated of EUR5.4m
-- EBITDA ([3]) of EUR24.5m (H1-15: EUR31.7m) down 23% as compared to H1-15, mainly due to the significant gain on fair valuation of completed investment property and investment property under development of c.EUR23.2m recorded in H1-15 whereas in H1-16 only EUR5.4m was recorded
-- Normalised EBITDA ([4]) from ongoing operating activities of EUR16.2m (H1-15: EUR8.8m) up 85% as compared to H1-15
The Interim Report and Unaudited Condensed Consolidated Financial Statements are available in the "Investor Relations" section of the Company's website at www.globalworth.com.
For further information visit www.globalworth.com or contact:
Globalworth Real Estate Investments Limited
Dimitris Raptis Tel: +4(0) 372 800 000
Panmure Gordon (Nominated Adviser and Joint Broker) Tel: +44 20 7886 2500
Andrew Potts
Cantor Fitzgerald Europe (Joint Broker) Tel: +44 20 7894 7000
Rick Thompson
David Foreman
Milbourne (Public Relations) Tel: +44 07903 802545
Tim Draper
About Globalworth
Globalworth Real Estate Investments Limited is a real estate investment company founded by real estate investor and developer Ioannis Papalekas currently focused on taking advantage of investment opportunities in Romania. The Company's shares were admitted to trading on AIM in July 2013.
The Romanian market offers an attractive real estate investment proposition in the medium-to-long term. Globalworth believes that global investor capital flows will gradually move from markets considered as "safe havens" to more peripheral markets such as Romania in search of higher yielding investments. As a result, Romania should, in due course, become a more attractive destination for a wide investor audience. Globalworth anticipates holding an early mover advantage in and benefiting from this gradual shift in investor sentiment.
CHIEF EXECUTIVE'S STATEMENT
In the first half of 2016 we made significant strides in further strengthening Globalworth's position as one of the leading real estate players in Romania and the wider SEE region.
We completed and delivered two class "A" office buildings in Bucharest and continued to invest in our developments, which currently comprise an office project in Bucharest and a light-industrial facility in Timisoara at different stages of development. In the first six months of the year we invested c. EUR25m in our portfolio, with the majority of the capital deployed in our development projects.
At the same time we established new or improved existing relationships with our business partners and further invested in our team of professionals, which has now reached 76 people, and in internal processes to enable us to improve our operational performance. We also continued to invest in the development of our in-house ERP software, which has already raised our operational efficiency and is expected to yield further benefits as our portfolio grows larger.
Romania, our primary country of focus, and its real estate market continue to offer opportunities for us to implement our strategy. The Romanian economy expanded again in the first half of the year, with GDP increasing by 6.0% ([5]) in Q2-16 year-on-year, representing the highest growth rate that has been recorded since Q3-08. This favourable macroeconomic environment has been reflected in the performance ([6]) of Romania's real estate sector, as demonstrated by strong demand for office space (take-up of c.200k sqm in H1-16 vs. 240k sqm for the entire 2015) driven by both national and international tenants. Prime investment yields for office and industrial properties have stabilised at 7.5% and 9.0% respectively, but still remain c.200 base points above those of other CEE core markets (Warsaw, Poland and Prague, Czech Republic).
Globalworth's overall portfolio value as of 30 June 2016 reached c.EUR962.4m, representing an increase of 19.0% and 3.4% over the same period last year and the end of 2015 respectively. This increase in value has been driven mainly by the acquisitions completed in H2-15 and the completion/revaluation of projects under development over the past twelve months.
We remain committed to investing in and developing environmentally friendly properties and in 2016 we increased the number of environmentally accredited buildings to six, with the addition of Green Court Building "B" (LEED Gold). We are exploring the potential for similar accreditations for other properties in our portfolio (both standing and development projects).
While our total debt exposure increased by (+3.0%) from year-end 2015, reaching EUR420.9m as of 30 June 2016, our efforts to improve our capital structure were reflected in the 0.9% decrease in the weighted average of our all-in cost of debt to 5.3% on a run-rate basis, and the de-risking of short term debt maturity exposure from EUR143.0m at 31 December 2015 to EUR12.1m at 30 June 2016. This was achieved through successfully completing the arrangement of three new facilities involving either the refinancing of existing facilities at improved terms or the raising of new debt against unencumbered properties. We are particularly proud to have completed a three-year EUR180.0m secured bond transaction, fully subscribed by the Canada Pension Plan Investment Board ("CPPIB") through its wholly owned subsidiary, CPPIB Credit Investments Inc. (CPPIB Credit), and funds managed by Cairn Capital ("Cairn").
The total annualised contracted rent of the portfolio was c.EUR51.3m (90.6% from standing properties) as at 30 June 2016, representing an increase of c.7.3% compared to year-end 2015, with c.335.5k sqm of commercial GLA and 196 residential units let or pre-let and average occupancy of our standing portfolio of 80.3%. These figures have improved further in the subsequent few months - as at 31 August 2016 - Globalworth had 343.0k sqm and 198 residential units occupied and average occupancy of its standing portfolio of 82.3%.
The total revenue generated by our portfolio in H1 2016 increased to EUR32.0m (from EUR17.6m in H1 2015) as a result of our investment in income-generating assets in 2015, the completion of a number of developments previously under construction (TAP and Globalworth Tower) and active asset management.
Despite the increases in portfolio value as well as total revenue generated by the Company, our EPRA Net Asset Value and EPS figures were impacted by the short term corporate facility (previously in place) and the expenses associated by the repayment of the short term corporate level facility and closing of the EUR180m bond in June '16, which resulted in increased costs and the issue of 1.0m new shares at a EUR6.0 per share. EPRA NAV stood at EUR9.08 per share at the end of H1-16 (remaining unchanged compared to 31 December 2015), while EPS was EUR0.07 per share for the period. We are, however, confident that we will benefit from our improved capital structure in the future and believe we will see increases in both EPRA NAV and EPS metrics going forward.
Looking to the remainder of 2016, we intend to intensify our active management efforts in order to enhance the appeal of our portfolio by making it "greener" and, where necessary, further improve and maintain high occupancy levels across our properties. Furthermore, we will continue to progress with the development of our Globalworth Campus and TAP projects. Finally, we have an active pipeline of new and exciting investment opportunities which we expect will further enhance the Company's growth.
Ioannis Papalekas
Chief Executive Officer
19 September 2016
MANAGEMENT REVIEW H1-16
In the first half of 2016 we focused on organically growing the Company, mainly by concentrating our efforts on our development programme, optimising our capital structure and improving the occupancy of our portfolio. In addition, we continued to invest in the Company's infrastructure in order to allow us to serve our partners and shareholders in the most efficient and effective way.
Progress with Globalworth's Development Programme
Globalworth continues to have a very active development programme. At the beginning of 2016, the Company was in the process of finalising its flagship class "A" Globalworth Tower office property and had two other office buildings under construction, all located in the new CBD of Bucharest. In addition, in February we agreed to further expand our TAP light-industrial complex in Timisoara, with the addition of a new facility pre-let to Valeo.
In the first half of the year we delivered two office buildings, Globalworth Tower and Gara Herastrau, thus increasing our total footprint of standing office GLA by c.66,700sqm. Both class "A" office buildings were completed within their respective timelines and tenants have already moved into their new premises.
We currently have two other active projects at different stages of development. Globalworth Campus, the class "A" office complex located in Bucharest, is currently under construction with Tower I expected to be completed by Q1-17 and Tower II in H2-17. We have also completed all preparatory activities and received the necessary permits for the development of a new c.13,500sqm light-industrial facility, part of the TAP complex, which is expected to be delivered in Q2-17.
We are very pleased that all our developments have either been delivered on time or are on track to be completed within their expected delivery dates. The capabilities of our internal project management team, in conjunction with those of our partners responsible for our development projects, have been key to our successful track record so far.
Optimise Capital Efficiency
Management is focused on allocating capital efficiently both in terms of the types of assets we invest in and balancing how we fund investments between equity and third-party debt.
In 2016 we raised c.EUR219.4m from debt financing providers at an average cost of 6.5%. In total we completed three facilities which involved either the refinancing of existing facilities at improved terms or the raising of new debt against unencumbered properties.
The most notable transaction of H1-16, was the EUR180m senior secured real estate bond, which was directly negotiated / subscribed by the Canada Pension Plan Investment Board (CPPIB) and Cairn Capital and completed in May 2016. Part of the proceeds was used to repay a EUR100m short term corporate level facility expiring in 2016. Other financing transactions completed during the period included the re-financing of our TAP investment by BCR and the financing of the Gara Herastrau office building by Garanti Bank.
Our successful efforts to optimise our capital structure are reflected in the reduction of our weighted average cost of debt from 6.2% as at 31 December 2015 to 5.3% at 30 June 2016. In addition, our consolidated Loan to Value ("LTV") ratio has remained at the moderate levels of 43.7% as at 30 June 2016 (43.9% at 31 December 2015), well below our commitment to maintain LTV below 60% at all times.
High Occupancy Rate in our Portfolio supported by High Quality Long-Term Lease
Our ability to lease space in our properties is one of the key strengths of our Company. Since the beginning of 2016, we have successfully negotiated the take-up or extension of a total of c.51,700sqm of commercial gross leasable area within our buildings, increasing the total over the past 2 1/2 years to 215,400sqm and ranking us as one of the most successful landlords in the Romanian real estate market.
At the end of June 2016, the average occupancy rate of our standing commercial portfolio was 80.3%, while the average duration of our new commercial leases signed in 2016 was 7.0 years, in line with our strategy to agree long-term lease contracts. In addition, during July and August we have managed to further increase the occupancy rate of our standing portfolio to 82.3% and increase the total let or pre-let commercial GLA of our portfolio to 343,000sqm.
Our portfolio boasts a diversified, high-quality tenant mix, comprising some 87 national and multinational corporates from more than 18 different countries.
The remainder of 2016 is a very important period for us as we are involved in a number of negotiations for the take-up of available space in our properties and developments, as well as negotiating extensions for some of our existing leases.
High Quality Team of Professionals Based in Bucharest & Improved Infrastructure
In 2016, we continued to invest in our team of skilled professionals through selected hires mainly within property management, as well as within certain support teams. In addition, we continued to implement the core modules of our new ERP system, with additional modules expected to be operational in Q3 and Q4 of this year.
Our strategic decision to further invest both in our property management team and software has resulted from the fact that with more than 422k sqm of GLA under management (expected to increase further in the next 12 months) and an ever-increasing number of suppliers and customers, our business has reached a critical size. As such, in order to be able to service our counterparties in a more effective way and to improve economies of scale and the efficiency of our operations, in 2015 we initiated this investment/build-up program which we expect to conclude by year-end 2016.
PORTFOLIO REVIEW H1-16
Globalworth's real estate portfolio as of 30 June 2016 comprised 15 investments with a total of 19 assets. All of our real estate properties are currently located in two principal cities in Romania, Bucharest (the capital) and Timisoara (one of the largest logistics hubs of the country), where we focus primarily on managing and developing office properties which account for approximately 81.1% of the appraised value of our investment properties. The majority of Globalworth's real estate portfolio is situated in the capital's new Central Business District ("CBD"), with our remaining assets being positioned in other prime locations.
Standing Properties
Our portfolio of standing assets has increased since the beginning of the year with the addition of our Globalworth Tower and the smaller Gara Herastrau office property developments, which were delivered in Q1-16 and Q2-16 respectively.
As of 30 June 2016, our standing portfolio comprised 14 assets, valued at EUR878.0m. In Bucharest we own 10 office properties and 429 apartments in a residential complex, while in Timisoara we own a light industrial park comprising three facilities.
Globalworth Tower is a landmark office property located in the heart of the new CBD of Bucharest. At a height of 120m it is the second tallest office property in Romania and in the top 10 by size in the CEE / SEE region. Globalworth Tower offers c.54,700sqm of Class "A" office space and as at 30 June 2016 was 66.7% let to high quality national and international tenants including Vodafone (telecoms), Nestor Nestor Diculescu Kingston Petersen (law), Huawei (telecoms), Delhaize / Mega Image (retail-FMCG), Wipro (IT), Bunge (services) and Globalworth (real estate). Occupancy has further increased since the end of June following the take-up of space mainly by Ferrero (confectionery) and Anritsu Solutions (services), having reached 70.7% as at 31 August 2016. The property has been pre-certified with the Green Certification of LEED Platinum and, once obtained, it will be the first building in Romania and the broader SEE region to have received the highest available green accreditation.
Gara Herastrau was the second of Globalworth's projects to be delivered in 2016. This class "A" office property is also situated in the New CBD and lies adjacent to Green Court Building "A" and some 200 metres from Globalworth Plaza and Globalworth Tower. It extends over 12 floors (with an additional technical floor) and offers c.12,000sqm of GLA. The Gara Herastrau office building was delivered in June 2016 and was c.50.6% leased to ADP, the leading global provider of human capital management solutions. Occupancy in the property has further improved, having reached 59.6% as at 31 August 2016, following the take-up of space by Tripsta (services).
Our total standing GLA since 2015 year-end has increased by 18.6% to 421,700sqm (as at 30 June 2016), of which 370,000 sqm is commercial space, while the appraised value of our standing investment properties increased by 26.3% to EUR878.0m (as of 30 June 2016).
All our properties are modern and have been completed or refurbished since 2008. Approximately 80.6% of our GLA and c.77.3% of our standing portfolio value has been delivered within the past c.6 1/2 years.
The number of 'green' properties owned by the Company has also increased following the receipt of a LEED Gold accreditation by the Green Court Building "B" property. Our portfolio currently comprises six green accredited properties, and we have six others under various stages of green certification which we hope to receive in the next 12 months.
Hot Features
Premium
Green Certified Properties Properties Under Green Certification
Process
------------------------------------------------------------ ------------------------------------------------------------
BOB Globalworth * LEED Platinum
* BREEAM In-use / Excellent and LEED Gold Tower
certifications (for part of the property)
---------- ------------------------------------------------ ------------ ----------------------------------------------
BOC TCI
* BREEAM In-use / Excellent certification * BREEAM Very Good / Excellent
---------- ------------------------------------------------ ------------ ----------------------------------------------
UniCredit Globalworth
HQ * BREEAM Very Good certification Plaza * BREEAM Very Good / Excellent
---------- ------------------------------------------------ ------------ ----------------------------------------------
City Gara
Offices * LEED Gold certification Herastrau * BREEAM Very Good / Excellent
---------- ------------------------------------------------ ------------ ----------------------------------------------
Green Globalworth
Court * LEED Gold certification Campus * BREEAM Very Good / Excellent
"A"
---------- ------------------------------------------------ ------------ ----------------------------------------------
Green Upground
Court * LEED Gold certification Towers * BREEAM Very Good / Excellent (on going)
"B"
---------- ------------------------------------------------ ------------ ----------------------------------------------
In addition to our commercial portfolio, we own 429 apartments at Upground Towers (30 June 2016), a modern two-tower residential complex with a total of 571 apartments benefiting from fine views of the nearby Tei lake. Since the beginning of the year we have sold seven apartments in the complex at an average price of EUR149,700, increasing our total disposals to 21 in the last 14 months. In addition, 198 apartments are currently leased, generating annual rental income of c.EUR1.5m.
Total Standing Properties 31 Dec. 30 June
'15 '16
----------------------------- ---------- ----------
Number of Investments 10 12
----------------------------- ---------- ----------
Number of Assets 12 14
----------------------------- ---------- ----------
GLA (sqm)(7) 355,513 421,738
----------------------------- ---------- ----------
"As Is" Valuation(8) : EUR695.1m EUR878.0m
----------------------------- ---------- ----------
Total Commercial Properties 31 Dec. 30 June
'15 '16
----------------------------- ---------- ----------
Number of Investments 9 11
----------------------------- ---------- ----------
Number of Assets 11 13
----------------------------- ---------- ----------
GLA (sqm)[7] 303,155 370,033
----------------------------- ---------- ----------
"As Is" Valuation[8] EUR595.6m EUR779.3m
----------------------------- ---------- ----------
Occupancy[9] 85.1% 80.3%[10]
----------------------------- ---------- ----------
Contracted Rent9 EUR36.3m EUR45.0m
----------------------------- ---------- ----------
WALL9 6.0yrs 6.6yrs
----------------------------- ---------- ----------
Developments
Following the delivery of the Globalworth Tower and Gara Herastrau office buildings in H1-16, we have two other projects under development, an office park located in the new CBD of Bucharest and a new light-industrial facility in Timisoara.
Bucharest
Our Globalworth Campus project, which upon final completion will offer three Class "A" office towers and total GLA of 88,700sqm, is being developed in two phases. Phase "A" - currently under construction - will comprise two side towers facing Dimitrie Pompeiu Street (main street) with a total GLA of c.57,000sqm on completion, while Phase "B" will comprise one middle tower, which on completion will contribute additional GLA of c.31,800sqm.
The development of Phase "A" is progressing in line with the estimated timeline. Tower-I has reached the 12th floor, with the structural concrete works now completed, and the façade is currently being fitted out with approximately 70% completed with a glazed surface. For Tower-II we have now completed the necessary preparatory activities, including excavations, site preparation etc. Delivery of the two towers is scheduled for Q1-17 and H2-17 respectively.
For both office buildings under development we have adopted a number of environmentally friendly principles and as such we anticipate being able to achieve Green certifications of BREEAM Very Good or Excellent.
Timisoara
In February 2016, Valeo exercised its option to expand further in our Timisoara Airport Park ("TAP") complex, with the development of a new c.13,500sqm light-industrial facility.
This will be the second time that Valeo has expanded within the park since its arrival in 2011 and on delivery of the new facility in the next 15 months it will occupy c.43% of the total standing GLA (c.94,900sqm) of the park at the time.
TAP has proven to be a much sought after location by high quality multinational tenants, as this is the third time within a c.1 1/2 year period that a tenant of a similar profile has decided to lease space in the park.
Continental Automotive and Elster Rometrics, the two other tenants in the complex, moved into TAP in 2015 following the delivery of two new high-quality light industrial facilities with a total of 53,900sqm in Q1 and Q3 of last year. As of 30 June 2016, the complex offered a total of c.81,349 sqm of GLA and was 97.3% occupied.
TAP has the potential for further development reaching to a total GLA of c.123,400sqm as a result of the extension options currently available to the existing tenants of the park.
The appraised value of the Development Projects, as of 30 June 2016 stands at EUR66.4m. On completion, the projects are expected to deliver c.130,680 sqm of new office and light industrial space, with an appraised value of EUR189.7m.
Development Projects 31 Dec. '15 30 Jun. '16
---------------------------------- ------------ ------------
Number of Investments 4 2
---------------------------------- ------------ ------------
Number of Assets to be Developed
[11] 7 5
---------------------------------- ------------ ------------
GLA (sqm)[12] 197,402 130,679
---------------------------------- ------------ ------------
"As is" Valuation EUR217.8m EUR66.4m
---------------------------------- ------------ ------------
Estimated remaining development
Capex[13] EUR131.3m EUR102.6m
---------------------------------- ------------ ------------
"Completion" Valuation12 EUR370.5m EUR189.7m
---------------------------------- ------------ ------------
Development Projects - Under Construction(15) Future Total Development
30 June '16 Development[14]
--------------------------------- ----------------------- ----------------- ------------------
2 investments
developed
Number of Investments 2 2 in stages
--------------------------------- ----------------------- ----------------- ------------------
Number of Assets to be
Developed 3 2 5
--------------------------------- ----------------------- ----------------- ------------------
GLA (sqm)[15] 70,450 60,229 130,679
--------------------------------- ----------------------- ----------------- ------------------
"As is" Valuation EUR47.3m EUR19.0m EUR66.3m
--------------------------------- ----------------------- ----------------- ------------------
Estimated remaining development
Capex EUR54.1m EUR48.5m EUR102.6m --------------------------------- ----------------------- ----------------- ------------------ "Completion" Valuation EUR116.5m EUR73.2m EUR189.7m --------------------------------- ----------------------- ----------------- ------------------
Land for Future Development
Globalworth owns land plots in two prime locations in Bucharest (Herastrau lake and the historical CBD) for future development. These plots represent further opportunities for office or mixed-use developments, which we intend to take advantage of in the future in order to further grow our real estate portfolio.
The total land size for future development in these two locations is c.9,767sqm and had an appraised value of EUR18.1m at 30 June 2016.
Globalworth's value upon "Completion" - 30 June 2016
The appraised value upon Completion of Globalworth's real estate portfolio is expected to increase to EUR1,085.7m following the investment of the remaining estimated c.EUR102.6m of Capex for the completion of our two development projects.
Property Status "As Is" Capex Mark Value upon
Value (EUR to Market "Completion"
(EUR m)(16) m) Uplift (EUR m)[16]
(EUR
m)
----------------- ------------- ------------- ---------- ----------- --------------
Globalworth
Tower Completed EUR157.0m - - EUR157.0m
----------------- ------------- ------------- ---------- ----------- --------------
BOB Completed EUR51.6m - - EUR51.6m
----------------- ------------- ------------- ---------- ----------- --------------
BOC Completed EUR141.2m - - EUR141.2m
----------------- ------------- ------------- ---------- ----------- --------------
Green Court
"A" Completed EUR50.4m - - EUR50.4m
----------------- ------------- ------------- ---------- ----------- --------------
Green Court
"B" Completed EUR52.9m - - EUR52.9m
----------------- ------------- ------------- ---------- ----------- --------------
Globalworth
Plaza Completed EUR56.3m - - EUR56.3m
----------------- ------------- ------------- ---------- ----------- --------------
UniCredit
HQ Completed EUR52.5m - - EUR52.5m
----------------- ------------- ------------- ---------- ----------- --------------
TCI Completed EUR76.5m - - EUR76.5m
----------------- ------------- ------------- ---------- ----------- --------------
City Offices Completed EUR62.0m - - EUR62.0m
----------------- ------------- ------------- ---------- ----------- --------------
Gara Herastrau Completed EUR27.5m - - EUR27.5m
----------------- ------------- ------------- ---------- ----------- --------------
Upground Towers Completed EUR106.6m - - EUR106.6m
----------------- ------------- ------------- ---------- ----------- --------------
TAP Comp./Dev. EUR45.3m EUR12.5m EUR2.7m EUR60.5m
----------------- ------------- ------------- ---------- ----------- --------------
Globalworth
Campus Development EUR64.6m EUR90.1m EUR18.0m EUR172.7m
----------------- ------------- ------------- ---------- ----------- --------------
Luterana Land EUR12.3m - - EUR12.3m
----------------- ------------- ------------- ---------- ----------- --------------
Herastrau
1 Land EUR5.7m - - EUR5.7m
----------------- ------------- ------------- ---------- ----------- --------------
Total EUR962.4m EUR102.6m EUR20.7m EUR1,085.7m
-------------------------------- ------------- ---------- ----------- --------------
Leasing Update 2016 - YTD
Our ability to successfully lease space in our properties has been one of the key strengths of our business. Over the past c.2 1/2 years we have successfully negotiated the take-up or extension of 215,400sqm of commercial GLA within our buildings, confirming Globalworth's position as one of the most successful investors and developers in the Romanian real estate market.
Our leasing strategy has been very successful in 2016 as we have signed 83% more commercial GLA in the first c.8 months of the year than during the whole of 2015. Total take-up for office and logistics space since the beginning of the year has reached c.51,700sqm, with contracts signed at a WALL of 6.9 years.
We are pleased to report that Green Court Building "B" is now 100.0% leased (vs 82.1% at year-end 2015), and that we have made significant progress in the letting of our recently completed Globalworth Tower and Gara Herastrau office properties, which as of 31 August 2016 had occupancy of 70.7% (vs 66.7% as of 30 June 2016 and 51.0% at year-end 2015) and 59.6% (vs 50.6% as of 30 June 2016 and vacant at year-end 2015), respectively.
In addition, we have continued to improve the risk-profile of our portfolio, through the extension and / or expansion of leases with some of our prime tenants, such as Deutsche Bank in BOB and Honeywell and Hewlett Packard Enterprises in BOC, and Cegeka and Hidroelectica in TCI.
Most notable new contracts signed in 2016 included some of the best known national and multinational corporates such as Valeo (TAP) for c.13,500sqm, Deutsche Bank (BOB) for c.6,200sqm, ADP (Gara Herastrau) for c.6,100sqm, Honeywell (BOC) for c.3,800sqm, Hewlett Packard Enterprises (BOC) for c.2,500sqm, Vodafone (Globalworth Tower) for c.2,000sqm, Wipro (Globalworth Tower) for c.1,980sqm, Ericsson (Green Court "B") for c.1,900sqm, Bunge (Globalworth Tower) for c.1,800sqm, Tripsta (Gara Herastrau) for c.1,100sqm, Ferrero and Anritsu (Globalworth Tower) for a total of c.1,800sqm, while in TCI we signed expansion contracts with existing tenants Cegeka, Hidroelectrica and EY for a total of c.3,100sqm.
The average occupancy rate of our standing commercial portfolio as of 30 June 2016 was 80.3%, increasing to 82.3% at 31 August 2016. Average occupancy was impacted (85.1% at year-end) by the addition of the newly delivered Globalworth Tower and Gara Herastrau office properties, which are at their ramp-up stage, and the termination of the Volksbank lease in Globalworth Plaza.
Currently, our portfolio is occupied by 87 different national and multinational corporates from 18 different countries, including some of the most recognisable corporates in their respective industries.
The WALL remaining on the commercial lease space in our portfolio was 6.9 years at 30 June 2016 (and 6.8 at 31 August 2016).
Tenant % of % of Selected Tenants of Commercial
Origin: Contracted Contracted Portfolio
Rent Rent
31 Jun. 31 Aug.
16 16
--------------- ------------ ------------ -----------------------------------------
Multinational 87.6% 88.1% Abbott Laboratories, Adecco, ADP,
Anritsu Solutions, Bayer, BCR,
Billa, BRD, Bunge, Carrefour, Cegeka,
Clearanswer, Colgate-Palmolive,
Continental, Credit Agricole Bank,
Delhaize Group, Deutsche Bank,
Deutsche Telekom, EADS, Elster
Rometrics, Ericsson, EY, Ferrero,
GfK, Honeywell, Hewlett Packard
Enterprise, Huawei, Intel, Mood
Media, NBG Group, Nestle, Oracle,
Orange, Piraeus Bank, Saipem, Sanofi,
Schneider Electric, Skanska, Starbucks,
Stefanini, Subway, UniCredit, Valeo,
Vodafone, Wipro, Worldclass
--------------- ------------ ------------ -----------------------------------------
CITR, GlobalVision, NNDKP, NX Data,
National 6.8% 6.5% RINF, Creative Media
--------------- ------------ ------------ -----------------------------------------
State
Owned Hidroelectrica, Ministry of European
Entities 5.6% 5.4% Funds
--------------- ------------ ------------ -----------------------------------------
Portfolio Snapshot 30 June 2016 - Standing properties
# Property Status GLA Contracted Occupancy (%) WALL Selected Tenants
(sqm) NOI (EURm) (yrs)
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
1 Globalworth Tower Standing 54,686 EUR7.7m 66 .7% 10.2 yrs Vodafone, Huawei, Delhaize Gr
oup, NNDKP, Wipro, Bunge, Fer
rero, Anritsu, Globalworth
(Aug: 70.7%)
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
Deutsche Bank, Stefanini, Sai
2 BOB Standing 22,391 EUR3.5m 95.9% 5.1 yrs pem, NX
Data, NBG Group, Clearanswer
(Aug: 97.3%) Europe
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
3 BOC Standing 56,962 EUR9.2m 92.9% 5.9 yrs Honeywell, NBG Group, Hewlett
Packard Enterprises, GfK, In
tel, Nestle, EADs, Deutsche T
elekom,
Vodafone, Stefanini
(Aug: 99.5%)
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
4 Green Court "A" Standing 19,589 EUR3.4m 100.0% 5.8 yrs Orange, Schneider Electric,
CITR, Skanska
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
5 Green Court "B" Standing 18,369 EUR3.5m 100.0% 4.7 yrs Carrefour, Sanofi, Colgate,
Rinf, Adecco, Abbott,
Ericsson
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
Globalworth
6 Plaza[17] Standing 24,020 EUR2.1m 44.3% 1.1 yrs Oracle, Bayer
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
7 Unicredit HQ Standing 15,500 EUR3.8m 100.0% 5.9 yrs UniCredit Bank
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
8 TCI Standing 22,453 EUR5.0m 99.7% 4.4 yrs Ernst & Young (EY),
Hidroelectrica, Cegeka,
Deutsche Bank, Ministry of
European Funds,
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
9 City Office Standing 35,968 EUR1.4m 21.3% 4.8 yrs Vodafone, Delhaize Group, Max
Bet, Billa, BCR,
Piraeus Bank, Credit Agricole
Bank, Germanos
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
10 GaraHerastrau Standing 12,037 EUR1.0m 50.6% 7.0 yrs ADP, Tripsta
(Aug: 59.6%)
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
11 Upground Towers Standing 58,606 EUR2.3m Retail: 99.3% 7.6 yrs WorldClass, Delhaize Group,
Resi: 44.4% 1.3 yrs Marfin Bank, Subway,
Starbucks, Sensiblue
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
12 TAP Standing. 81,349 EUR3.5m 97.3% 11.6 yrs Continental, Valeo, Elster
--- ------------------ ---------- ------- ------------- -------------- --------- ------------------------------
FINANCIAL REVIEW
A. Highlights
-- Portfolio Open Market Value ("OMV") ([18]) of EUR962.4m (31 December 2015: EUR931.1m) up 3.4% as compared to 31 December 2015
-- Loan to Value of 43.7 per cent (31 December 2015: 43.9 per cent) down marginally as compared to 31 December 2015
-- Net Asset Value ("NAV") of EUR512.2m (31 December 2015: EUR499.7m) up 2.5% as compared to 31 December 2015
-- NAV per share of EUR8.00 (31 December 2015: EUR7.98) up 0.3% as compared to 31 December 2015, affected by the issuance of c.1.4m additional shares during H1-16 to settle outstanding liabilities
-- EPRA NAV of EUR581.4m (31 December 2015: EUR568.3m) up 2.3% as compared to 31 December 2015
-- EPRA NAV per share of EUR9.08 (31 December 2015: EUR9.08) remaining unchanged from 31 December 2015, affected by the issuance of c.1.4m additional shares during the first six months of 2016 to settle outstanding liabilities
-- Net operating income of EUR19.9m (H1-15: EUR11.8m) up 69% as compared to H1-15 as a result of the addition of five leased properties in the revenues generating properties portfolio
-- Earnings before tax of EUR5.3m (H1-15: EUR39.7m) down 87% as compared to H1-15, mainly due to the significant fair value gain on investment property and gain on acquisition of four subsidiaries of c.EUR39m recorded in H1-15 whereas in H1-16 no acquisitions took place and there was a relatively small increase in the value of investment property generated of EUR5.4m
-- EBITDA ([19]) of EUR24.5m (H1-15: EUR31.7m) down 23% as compared to H1-15, mainly due to the significant gain on fair valuation of completed investment property and investment property under development of c.EUR23.2m recorded in H1-15 whereas in H1-16 only EUR5.4m was recorded
-- Normalised EBITDA ([20]) from ongoing operating activities of EUR16.2m (H1-15: EUR8.8m) up 85% as compared to H1-15
B. Analysis of results for the six month period ended 30 June 2016 1. Revenues and profitability
-- Revenues and NOI increased significantly in H1-16 compared to H1-15, reaching a total of EUR32.0m and EUR19.9m, respectively (from EUR17.6m and EUR11.8m, respectively, in H1-15), positively impacted by the acquisition of four ([21]) leased properties in March 2015, June 2015 and December 2015. The revenues and NOI recorded in H1-16 reflect for the whole six month period the contribution of these four leased properties, whereas the H1-15 results reflected only for Q2-15 the revenues and NOI derived from the two leased properties that were acquired at the end of March 2015. In addition, in August 2015 we delivered to Elster Rometrics the part of the TAP property that was pre-leased to this tenant, which has also contributed to the increase in revenues and NOI in H1-16 as compared to H1-15, and the Continental part of the same property contributes to H1-16 revenues and NOI for the entire six month period whereas in H1-15 only for Q2-15.
-- Administrative expenses in H1-16 increased by 24.0% as compared to H1-15, mainly as a result of the addition of five new subsidiaries administered by the Group during the entire six month period to 30 June 2016, the higher number of employees and total operating cost of the Globalworth platform.
-- EBITDA, as normalised ([22]) to reflect the ongoing operating activities of the Group, increased substantially in H1-16 (+85%) compared to the same period a year ago, in line with the Group's total Revenue and NOI uplifts, benefiting from a larger pool of income generating properties (five additional assets contributed to the results of H1-16 compared to H1-15).
-- Financing costs in H1-16 increased 2 1/4 times, mainly due to the higher level of interest charged on financing arrangements over the period. The total level of interest bearing loans increased for the Group from c.EUR204m ([23]) on 1 January 2015 to c.EUR411m(23) on 30 June 2016, though consolidated LTV remained at moderate levels (43.7%). Increased cost of debt was also impacted by a short term corporate facility which has now been repaid, as well as one-off costs associated with the repayment of the short term corporate level facility and closing of EUR180m bond in June 16, and the amortisation of the arrangement and settlement fees of our interest-bearing facilities. It has to be noted that following the successful completion of the EUR180m bond in June 2016, which resulted in the refinancing of our short term corporate facility, the weighted average cost of debt of the group at 30 June 2016 decreased to 5.3% from 6.2% at 31 December 2015.
2. Portfolio valuation, shareholders and equity and NAV
-- During H1-16 our landmark Globalworth Tower and Gara Herastrau class "A" office properties, were completed and we also continued the construction of our Globalworth Campus (Phase "A"). In addition we completed all preparatory activities and received the necessary permits for the development of a new c.13,500sqm light-industrial facility, part of TAP complex.
-- EUR25.0m of capex on properties under development and completed properties during H1-16, contributing to an increase in the OMV of our properties portfolio of c.EUR31m.
-- The number of shares in issue increased during H1-16 by c.1.4m, without impacting EPRA NAV per share, which remained at EUR9.08 per share as at 30 June 2016 (EUR9.08 per share as at 31 December 2015), despite the increase in equity / NAV by c.EUR12.5m. 1 m additional shares were issued in June 2016 as part of the settlement of a EUR6m liability otherwise payable by the Company to an affiliate of York Capital Management Global Advisors, LLC, York Global Finance Offshore BDH (Luxembourg) S.à r.l. ("York") under the EUR100m short term corporate level facility.
3. Results and dividends
The results for the period are set out in the consolidated statement of comprehensive income on page 22. The Board of Directors has concluded that at this juncture the Company is best served by retaining its current cash reserves to support its investment strategy. Consequently, the Directors do not recommend the payment of an interim dividend for the period ended 30 June 2016.
4. Financing activities
In the first half of 2016 the Group managed to successfully secure a total of c.EUR 219.4m debt financing, the majority of which in order to refinance and / or extend existing loan facilities, as well as reduce the weighted average interest rate charged. As a result, the weighted average cost of debt was reduced from 6.2% at 31 December 2015 to 5.3% at 30 June 2016.
A short outline of the financing transactions that took place in this period are as follows:
-- In March 2016 the Group signed a c.EUR29.1m long-term debt facility agreement with Banca Comerciala Romana ("BCR") in Romania (Erste Bank Group) in order to refinance the existing secured loan facilities related to the TAP light industrial park in Timisoara, and to fund the development of an extension to this property. This facility is secured on the TAP property and matures in year 2031;
-- In May 2016 the Group signed a EUR10.3m long-term debt facility agreement with Garanti Bank in Romania in order to refinance equity and to fund the remaining development costs of the Gara Herastrau office building. This facility is secured on the land and completed building and matures in the 1st quarter of 2026; and
-- At the end of May 2016 the Group secured a EUR180m three-year bond (the "Bond"). The bond was provided by Matisse Funding B.V. (an orphan SPV) which issued EUR180m of senior secured Notes to institutional investors. The proceeds of such issuance was on-lent to the Group in order to refinance the EUR100m short term corporate level facility obtained in 2015 from funds managed by York Capital and Oakhill Advisors and three secured debt facilities at the level of three of its Romanian subsidiaries. The bond is secured on the properties of these Romanian subsidiaries as well as the shares of their holding companies. Drawdown under the bond was concluded in June 2016.
The total debt portfolio of the Group ranges between short and medium to long-term debt, denominated mostly in EUR, with a small portion denominated in Romanian Lei ("RON"). They are secured with real estate mortgages, pledges on shares, receivables and loan subordination agreements in favour of the financing banks.
In terms of applicable financial covenants observed, the most notable are the Debt Service Cover Ratio ("DSCR"), with values ranging from 100% to 125%, and the Loan to Value ratio ("LTV"), with values ranging from 50% up to 85% (versus the significantly lower overall LTV of the Group at 30 June 2016 of 43.7%), with no actual deviations occurring during the period from the aforementioned values.
5. Cash flows
-- Net cash resources raised during the six months ended 30 June 2016 from new debt financing of EUR14.9m.
-- Proceeds from disposal of subsidiary in Greece (Mycre Investment S.A.), net of cash disposed, of EUR11m.
-- Cash used on completed properties (mainly on fit-out works for tenants) and three properties under development in H1-16 of EUR30.4m.
-- Cash inflows from operating activities of EUR8.1m during the six month period ended 30 June 2016, more than double the amount generated in prior year's comparable period (EUR3.6m).
6. Liquidity
Our Group seeks to maintain, at all times, sufficient liquidity to enable it to finance its ongoing, planned property investments, whilst maintaining flexibility to quickly capture attractive new investment opportunities.
During the first six months of 2016, as outlined above, a total of c.EUR14.9m additional debt financing was secured (excluding the refinanced or extended debt), c.EUR5.5m of which remained available to be drawn subsequent to 30 June 2016.
7. Principal Risks and Uncertainties
The key risks which may have a material impact on the Group's performance, together with the corresponding mitigating actions, are presented on pages 86 to 92 of the Annual Report for the year ended 31 December 2015, which is available at www.globalworth.com.
These risks comprise the following:
-- Exposure to the economic environment in Romania and changes in the political or regulatory framework in Romania or the European Union;
-- Inability to execute planned acquisition of properties and lack of available financing; -- Counterparty credit risk; -- Risk of changes in interest rates and exchange rates; -- Risk of negative changes in the valuation of portfolio; -- Inability to lease space and renew expiring leases; -- Inability to complete projects under development on time; -- Risk of breach of loan covenants; -- Risk of change in fiscal and tax regulations; and -- Compliance with fire, structural or other health and safety regulations.
There has been no significant change in these risks during the six month period ended 30 June 2016, and these risks are expected to continue to remain relevant during the second half of 2016.
8. Going Concern
The Directors have considered the Company's ability to continue to operate as a going concern based on the Management's cash flow projections for the 12 months subsequent to the date of approval of the unaudited interim condensed consolidated financial statements. The Directors believe that the Company would have sufficient cash resources to meet its obligations as they fall due and continue to adopt the going concern basis in preparing the unaudited interim condensed consolidated financial statements as of and for the six months ended 30 June 2016.
GLOBALWORTH REAL ESTATE INVESTMENTS LIMITED
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIODED 30 JUNE 2016
INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE SIX MONTHSED 30 JUNE 2016
30 June 2016 30 June 2015
(Unaudited) (Unaudited)
Note EUR'000 EUR'000
---------------------------------------------- ----- ------------- -------------
Revenue 6 32,035 17,648
Operating expenses 7 (12,147) (5,892)
Net operating income 19,888 11,756
---------------------------------------------- ----- ------------- -------------
Administrative expenses (3,774) (3,046)
Acquisition costs (21) (340)
Fair value gain on investment property 3 5,420 23,209
Gain on acquisition of subsidiaries - 15,780
Gain on sale of subsidiary 19 272 -
Share based payment expense 16 (11) (62)
Foreign exchange gain/(loss) (82) 64
Other operating expenses (431) -
Other operating income 3,166 -
---------------------------------------------- ----- ------------- -------------
4,539 35,605
---------------------------------------------- ----- ------------- -------------
Profit before net financing cost 24,427 47,361 ---------------------------------------------- ----- ------------- ------------- Finance cost 8 (19,249) (8,425) Finance income 146 715 ---------------------------------------------- ----- ------------- ------------- Profit before tax 5,324 39,651 ---------------------------------------------- ----- ------------- ------------- Income tax expense 9 (631) (5,158) ---------------------------------------------- ----- ------------- ------------- Profit for the period 4,693 34,493 ---------------------------------------------- ----- ------------- ------------- Other comprehensive income - - ---------------------------------------------- ----- ------------- ------------- Attributable to equity holders of the parent 4,693 34,493 ---------------------------------------------- ----- ------------- ------------- Earnings per share (basic and diluted) 10 EUR0.07 EUR0.64
INTERIM CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
30 June 2016 31 December 2015
(Unaudited) (Audited)
-------------------------------------------------------------- ----- ------------- -----------------
Note EUR'000 EUR'000
-------------------------------------------------------------- ----- ------------- -----------------
ASSETS
Non-current assets
Investment property 3 966,153 937,119
Goodwill 12,349 12,349
Advances for investment property 2,322 3,993
Other long term assets 736 661
Other receivables 2,193 2,193
Prepayments 1,077 1,020
-------------------------------------------------------------- ----- ------------- -----------------
984,830 957,335
-------------------------------------------------------------- ----- ------------- -----------------
Current assets
Trade and other receivables 11,806 13,193
Income tax receivable 372 583
Prepayments 2,274 1,638
Cash and cash equivalents 13 31,061 37,036
Investment property held for sale 19 - 10,353
-------------------------------------------------------------- ----- ------------- -----------------
45,513 62,803
-------------------------------------------------------------- ----- ------------- -----------------
Total assets 1,030,343 1,020,138
-------------------------------------------------------------- ----- ------------- -----------------
EQUITY AND LIABILITIES
Total equity
Issued share capital 15 350,125 341,784
Share based payment reserve 16 2,116 2,655
Retained earnings 159,935 155,242
-------------------------------------------------------------- ----- ------------- -----------------
Equity attributable to ordinary equity holders of the parent 512,176 499,681
-------------------------------------------------------------- ----- ------------- -----------------
Non-current liabilities
Interest-bearing loans and borrowings 12 398,936 261,287
Deferred tax liability 9 70,812 70,413
Guarantees retained from contractors 1,355 957
Finance lease liabilities - 5
Deposits from tenants 1,963 1,485
Trade and other payables 2,509 3,278
-------------------------------------------------------------- ----- ------------- -----------------
475,575 337,425
-------------------------------------------------------------- ----- ------------- -----------------
Current liabilities
Interest-bearing loans and borrowings 12 12,070 143,024
Trade and other payables 25,920 35,552
Other current financial liabilities 14 4,123 3,935
Finance lease liabilities 13 18
Deposits from tenants 401 75
Income tax payable 65 428
-------------------------------------------------------------- ----- ------------- -----------------
42,592 183,032
-------------------------------------------------------------- ----- ------------- -----------------
Total equity and liabilities 1,030,343 1,020,138
-------------------------------------------------------------- ----- ------------- -----------------
NAV per share 11 EUR8.00 EUR7.98
EPRA NAV per share 11 EUR9.08 EUR9.08
These unaudited interim condensed consolidated financial statements were approved by the Board of Directors on 19 September 2016 and were signed on its behalf by:
John Whittle
Director
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHSED 30 JUNE 2016
Equity attributable
to equity holders
of the parent
------------------------------------------
Issued Share Retained Total Non-controlling Total
share based earnings interests equity
capital payment
reserve
Note EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
-------------------------------- ----- --------- --------- ---------- -------- ---------------- --------
As at 1 January 2015
(audited) 288,740 180 103,815 392,735 6 392,741
Fair value of option
warrants issued for
executive share scheme - 62 - 62 - 62
Acquisition of non-controlling
interests - - 6 6 (6) -
Profit for the period - - 34,493 34,493 - 34,493
-------------------------------- ----- --------- --------- ---------- -------- ---------------- --------
As at 30 June 2015 (unaudited) 288,740 242 138,314 427,296 - 427,296
-------------------------------- ----- --------- --------- ---------- -------- ---------------- --------
As at 1 January 2016
(audited) 341,784 2,655 155,242 499,681 - 499,681
Shares issued to the
executive directors
and other senior management
employees 16.2 2,350 (2,350) - - - -
Shares issued for settlement
of interest-bearing
liability 15 6,000 - - 6,000 - 6,000
Transaction costs on
issuance of shares 15 (9) - - (9) - (9)
Fair value of option
warrants issued for
executive share scheme 16.1 - 11 - 11 - 11
Reclassification from liabilities to equity 16.2 - 1,800 - 1,800 - 1,800 Profit for the period - - 4,693 4,693 - 4,693 -------------------------------- ----- --------- --------- ---------- -------- ---------------- -------- As at 30 June 2016 (unaudited) 350,125 2,116 159,935 512,176 - 512,176 -------------------------------- ----- --------- --------- ---------- -------- ---------------- --------
INTERIM CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHSED 30 JUNE 2016
30 June 30 June
2016 2015
(Unaudited) (Unaudited)
Note EUR'000 EUR'000
----------------------------------------- ----- ------------- --------------
Profit before tax 5,324 39,651
Adjustments to reconcile profit before
tax to net cash flows
Fair value gain on investment property 3 (5,420) (23,209)
Gain on acquisition of subsidiaries - (15,780)
Gain on sale of subsidiaries 19 (272) -
Share based payment expense 16 11 62
Depreciation on other long term assets 101 77
Other operating expenses 393 -
Foreign exchange (gain)/loss 82 (64)
Net financing costs 19,103 7,710
----------------------------------------- ----- ------------- --------------
Operating profit before changes in
working capital 19,322 8,447
Decrease in trade and other receivables 228 3,409
Decrease in trade and other payables (564) (3,355)
Interest paid (10,861) (4,659)
Interest received 14 43
Income tax paid (46) (280)
----------------------------------------- ----- ------------- --------------
Cash flows from operating activities 8,093 3,605
----------------------------------------- ----- ------------- --------------
Investing activities
Expenditure on investment property (30,360) (18,541)
Advances for investment property - (2,000)
Proceeds from sale of subsidiary
less cash disposed 19 11,000 -
Proceeds from sale of investment
property 848 -
Payment for acquisition of subsidiaries
less cash acquired - (68,827)
Acquisition of other long term assets (176) (132)
----------------------------------------- ----- ------------- --------------
Cash flows used in investing activities (18,688) (89,500)
----------------------------------------- ----- ------------- --------------
Financing activities
Payment of transaction costs on issue
of shares ([24]) 15 (9) -
Proceeds from interest bearing loans
and borrowings ([25]) 209,678 109,087
Repayment of interest bearing loans
and borrowings (200,844) (6,550)
Payment of loan arrangement fees (5,479) (3,091)
Payment of other financing costs (4,814) -
----------------------------------------- ----- ------------- --------------
Cash flows from/(used in) financing
activities (1,468) 99,446
----------------------------------------- ----- ------------- --------------
Net increase/(decrease) in cash and
cash equivalents (12,063) 13,551
----------------------------------------- ----- ------------- --------------
Cash and cash equivalents at the
beginning of the period 13 37,036 21,957
----------------------------------------- ----- ------------- --------------
Cash and cash equivalents at the
end of the period 13 24,973 35,508
----------------------------------------- ----- ------------- --------------
SECTION I: BASIS OF PREPARATION
This section contains the Group's significant accounting policies that relate to the unaudited interim condensed consolidated financial statements ("financial statements") as a whole. Significant accounting policies and related management's estimates, judgements and assumptions in application of those policies specific to one note and are included within that note. Accounting policies relating to non-material items are not included in these financial statements.
1. General
Corporate Information
Globalworth Real Estate Investments Limited ("the Company") is a company with liability limited by shares and incorporated in Guernsey as a non-cellular company with liability limited by shares on 14 February 2013, with registered number 56250. The Company was successfully admitted to trading on the AIM market of the London Stock Exchange ("AIM") in July 2013, with the Ordinary shares of the Company trading under the ticker "GWI". The registered office of the Company is Ground Floor, Dorey Court, Admiral Park, St Peter Port, Guernsey GY1 2HT.
Directors
The Directors of the Company are:
-- Geoff Miller, Non-executive, Chairman of the Board and member of the Audit and Remuneration Committees
-- Ioannis Papalekas, Chief Executive Officer
-- Dimitris Raptis, Deputy Chief Executive Officer and Chief Investment Officer
-- Eli Alroy, Non-executive, member of the Remuneration Committee
-- John Whittle, Non-executive, Chairman of the Audit and Remuneration Committees
-- Andreea Petreanu, Non-executive, member of the Audit Committee
-- Akbar Rafiq, Non-executive, and
-- Alexis Atteslis, Non-executive
The Group had 76 employees as of 30 June 2016 (67 as of 31 December 2015).
Basis of Preparation and Compliance
The financial statements of the Group for the six months ended 30 June 2016 have been prepared in accordance with International Accounting Standard (IAS) 34 "Interim Financial Reporting". These financial statements are prepared in Euro ("EUR" or "EUR"), rounded to the nearest thousand, being the functional currency and presentation currency of the Company. These financial statements have been prepared on a historical cost basis, except for investment property and derivatives which are measured at fair value.
The Directors believe that it is appropriate to adopt the going concern basis in preparing the financial statements. The Directors based their assessment on the Group's detailed cash flow projections for the period of 12 months subsequent to the date of approval of these financial statements. These projections take into account the latest contracted rental income, anticipated additional rental income from anticipated renewal of existing lease agreements, secured debt financing facilities, as well as contacted debt financing, CAPEX, and other commitments. The projections show that in the 12 months subsequent to the date of approval of these financial statements, the Company has sufficient resources to continue to fund its ongoing operations and asset development without the need to raise any additional debt or equity financing or the need to reschedule existing debt facilities or other commitments.
These financial statements have been prepared on a historical cost basis, except for investment property and derivatives which are measured at fair value. The significant accounting policies adopted are set out in the relevant notes to the financial statements and consistently applied throughout the periods presented except for the new and amended IFRSs, see note 22, which were adopted on 1 January 2016.
Accounting policies
These financial statements apply the same accounting policies, presentation and methods of calculation as those followed in the preparation of the Group's consolidated financial statements for the year ended 31 December 2015, which were prepared in accordance with International Financial Reporting Standards ('IFRS') as adopted by the European Union ('EU') and the Companies (Guernsey) Law 2008, as amended. These financial statements included in this Interim Report should be read in conjunction with the consolidated financial statements for the year ended 31 December 2015. On 1 January 2016, the Group adopted certain new accounting policies where necessary to comply with amendments to IFRS, none of which had a material impact on the consolidated results, financial position or cash flows of the Group (see note 22).
Basis of Consolidation
These financial statements comprise the financial statements of the Company and its subsidiaries ("the Group") as of and for the six months ended 30 June 2016. Subsidiaries are fully consolidated (refer to note 18) from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date when such control ceases (refer to note 19). The financial statements of the subsidiaries are prepared for the period from the date of obtaining control to 30 June, using consistent accounting policies. All intra-group balances, transactions and unrealised gains and losses resulting from intra-group transactions are eliminated in full. Non-controlling interests represent the portion of profit or loss and net assets not held by the Group and are presented separately in the statement of comprehensive income and within equity in the consolidated statement of financial position, separately from net assets and profit and loss attributable to equity holders of the parent.
2. Critical Accounting Judgments, Estimates and Assumptions
The preparation of financial statements in conformity with IAS 34 requires management to make certain judgements, estimates and assumptions that effect reported amounts of revenue, expenses, assets and liabilities, and the accompanying disclosures and the disclosures of contingent liabilities.
Selection of Functional Currency
The Company and its subsidiaries used their judgment, based on the criteria outlined in IAS 21 "The Effects of Changes in Foreign Exchanges Rates", and determined that the functional currency of all the entities is the EUR.
Further additional critical accounting judgements, estimates and assumptions are disclosed in the following notes to the financial statements.
-- Investment Property, see note 3 and Fair value measurement and related estimates and judgements, see note 4
-- Commitments (operating lease commitments - Group as lessor), see note 5
-- Taxation, see note 9
-- Investment in subsidiaries, see note 18
SECTION II: INVESTMETN PROPERTY
This section focuses on the assets in the statement of financial position of the Group which form the core of Globalworth's business activities. This includes investment property and related disclosures on fair valuation inputs, advances for investment properties and commitments for future property development. This section quantifies the property portfolio valuations and movements for the year.
Further information about each property is described in the portfolio review section of the Interim Report.
3. Investment Property
Completed investment Investment property Land bank for further
property under development development Total
EUR'000 EUR'000 EUR'000 EUR'000
------------------------ ------------------------ ------------------------ ------------------------ --------
At 1 January 2015
(audited) 460,010 91,387 47,860 599,257
------------------------ ------------------------ ------------------------ --------
Business acquisitions 159,600 - - 159,600
Subsequent expenditure 1,504 23,008 2,317 26,829
Capitalised borrowing
costs - 46 - 46
Disposal during the
period (153) - - (153)
Fair value adjustment 1,961 21,664 (416) 23,209
Transfer to completed
investment property 18,844 (18,844) - -
------------------------ ------------------------ ------------------------ --------
Movement in the period 181,756 25,874 1,901 209,531
------------------------ ------------------------ ------------------------ ------------------------ --------
At 30 June 2015
(unaudited) 641,766 117,261 49,761 808,788
------------------------ ------------------------ ------------------------ ------------------------ --------
Business acquisitions 50,200 - - 50,200
Transfer to investment
property under
development - 32,049 (32,049) -
Subsequent expenditure 2,917 40,913 - 43,830
Other additions - 6,021 - 6,021
Capitalised borrowing
costs - 3,069 - 3,069
Disposal during the
period (1,002) - - (1,002)
Fair value adjustment (5,636) 31,361 488 26,213
Transfer to completed
investment property 8,156 (8,156) - -
------------------------ ------------------------ ------------------------ --------
Movement in the period 54,635 105,257 (31,561) 128,331
------------------------ ------------------------ ------------------------ ------------------------ --------
At 31 December 2015
(audited) 696,401 222,518 18,200 937,119
------------------------ ------------------------ ------------------------ ------------------------ --------
Subsequent expenditure 10,824 14,130 2 24,956
Unwinding of lease
incentive (2,262) (2,262)
Capitalised borrowing
costs - 2,073 - 2,073
Disposal during the
period (1,153) - - (1,153)
Fair value adjustment (7,446) 13,018 (152) 5,420
Transfer to completed
investment property 180,600 (180,600) - -
------------------------ ------------------------ ------------------------ --------
Movement in the period 182,825 (153,641) (150) 29,034
------------------------ ------------------------ ------------------------ ------------------------ --------
At 30 June 2016
(unaudited) 879,226 68,877 18,050 966,153
------------------------ ------------------------ ------------------------ ------------------------ --------
4. Fair Value Measurement and Related Estimates and Judgements
Investment property measured at fair value
The Group's investment properties were valued by CBAR Research & Valuation Advisors S.R.L. ("Coldwell Banker"), independent professionally qualified valuers who hold a recognised relevant professional qualification and have recent experience in the locations and segments of the investment properties valued, using recognised valuation techniques.
Our Property Valuation Approach and Process
The Group's investment department includes a team that reviews the valuations performed by the independent valuers for financial reporting purposes. This team reports directly to the Chief Financial Officer ("CFO"), the Chief Investment Officer ("CIO") and the Chief Executive Officer ("CEO"). Discussions of valuation processes and results are held between the CFO, CIO, CEO, the valuation team and the independent valuers twice in a financial year.
The fair value hierarchy levels are specified in accordance with IFRS 13 "Fair Value Measurement". Some of the inputs to the valuations are defined as "unobservable" by IFRS 13 and these are analysed in the tables below. Any change in valuation technique or fair value hierarchy (transfer between Level 1, 2 or 3) is analysed at each reporting date or as of the date of the event or variation in the circumstances that caused the change. During the period, the Group transferred two investment properties valued at EUR180.6m from Investment Property Under Development to Completed Investment Property and its valuation method was changed accordingly from residual method to discounted cash flow. There were no transfers from Level 1 to other categories or vice versa.
For each independent valuation performed the investment team along with the finance department:
-- verifies all major inputs to the independent valuation report;
-- assesses property valuation movements when compared to the initial valuation report at acquisition or latest period end valuation report; and
-- holds discussions with the independent valuer.
Valuation Techniques, Key Inputs and Underlying Management's Estimations and Assumptions
Valuation techniques comprise the discounted cash flow, the sales comparison approach and residual value method.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur.
Key information about fair value measurements using significant unobservable inputs (Level 3) are disclosed below:
Carrying value Range
---------------------- ----------- ---------- ------------------------------------------
31
30 June December
2016 2015
Fair
Class of Valuation value
property EUR'000 EUR'000 technique hierarchy Input 30 June 2016 31 December 2015
------------- ---------- ---------- ----------- ---------- ---------- -------------------- --------------------
Completed Rental
investment Discounted value
property 772,660 589,060 cash flow Level 3 (sqm) EUR2.77 - EUR65 EUR2.77 - EUR65
Discount 7.30% - 9.90% 7.30% - 9.00%
rate
Exit 6.65% - 9.20% 6.65% - 8.75%
yield
----------- ---------- ---------- -------------------- --------------------
Sales
Sales value
106,566 107,341 comparison Level 3 (sqm) EUR 1,949[27] EUR 1,190
---------- ---------- ----------- ---------- ---------- -------------------- --------------------
879,226 696,401
---------- ---------- ----------- ---------- ---------- -------------------- --------------------
Investment
property Rental
under Residual value
development 68,877 222,518 method Level 3 (sqm) EUR12.50 EUR12.50- EUR35.00
-------------
Discount 8.20% 7.40% - 8.50%
rate
-------------
Exit 7.25% 7.00% - 7.25%
yield
Capex
(EURm) EUR16.32 EUR53.6
------------- ---------- ---------- ----------- ---------- ---------- -------------------- --------------------
Land bank - Sales
for further Sales value
development 18,050 18,200 comparison Level 3 (sqm) EUR1,819 - EUR1,864 EUR1,833 - EUR1,872
------------- ---------- ---------- ----------- ---------- ---------- -------------------- --------------------
TOTAL 966,153 937,119
------------- ---------- ---------- ----------- ---------- ---------- -------------------- --------------------
The fair value gain on investment property recognised in the statement of comprehensive income for an amount of EUR5.4m (2015: EUR23.2m) represents fair value measurements as of the statement of financial position date related to investment properties categorised within Level 3 of the fair value hierarchy.
In arriving at estimates of market values as at 30 June 2016 and 31 December 2015, the independent valuation experts used their market knowledge and professional judgement and did not rely solely on historical transactional comparables. In these circumstances, there was a greater degree of uncertainty in estimating the market values of investment properties than would have existed in a more active market.
Judgement Used In The Classification of Investment Property
Investment property comprises land and buildings which are not occupied substantially for use by, or in the operations of, the Group, nor for sale in the ordinary course of business, but are held primarily to earn rental income and for capital appreciation. The Group considers that when the property is in a condition which will allow the generation of cash flows from its rental that the property is no longer a property under development or refurbishment but an investment property. If the property is kept for sale in the ordinary course of business then it is classified as inventory property.
Investment property under development include EUR3.8m (2015: EUR6.0m) of unamortised lease incentives (a similar corresponding amount was recorded in trade and other payables as payables for tenant lease incentives) representing the Group's estimated net cost for undertaking existing operating leases in properties owned by third parties, as well as for the commitment to undertake additional operating lease expense, under certain conditions, related to one of the Group's tenants. The net cost is estimated by deducting from the operating lease expenses the revenues from sub-letting the respective properties to third parties selected by the Group, for the unexpired portion of their leases.
Sensitivity Analysis on Significant Inputs
The assumptions on which the Property Valuation Reports have been based include, but are not limited to, rental value per sqm, discount rate, exit yield, cost to complete, comparable market transactions for land bank for further development, tenant profile for the rented properties and the present condition of the properties. These assumptions are market standard and in line with the International Valuation Standards ("IVS"). Generally, a change in the assumption made for the rental value (per sqm per annum) is accompanied by a similar change in the rent growth per annum and discount rate (and exit yield) and an opposite change in the other inputs.
A quantitative sensitivity analysis, in isolation, of the most sensitive inputs used in the independent valuations, performed, as of the statement of financial position date are set out below:
EUR0.5 change in EUR50 (2015: EUR25)
rental value per 25 bps change in change in sales prices
month, per sqm market yield 5% change in Capex per sqm
--------------------- ---------------------- --------------------- -------------------------
Increase Decrease Increase Decrease Increase Decrease Increase Decrease
--------- ---------- ---------- ---------- ---------- --------- --------- --------------
Class of
Property Year EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
------------- ------ --------- ---------- ---------- ---------- ---------- --------- --------- --------------
Completed
investment
property 2016 26,800 (26,790) (19,070) 20,280 - - 2,348 (2,346)
------------- ------ --------- ---------- ---------- ---------- ---------- --------- --------- --------------
2015 21,330 (21,320) (14,150) 15,080 - - 1,940 (1,937)
-------------------- --------- ---------- ---------- ---------- ---------- --------- --------- --------------
Investment
property
under
development 2016 5,060 (5,060) (4,060) 4,030 (3,060) 3,060
------------- ------ --------- ---------- ---------- ---------- ---------- --------- --------- --------------
2015 9,720 (9,520) (8,560) 9,390 (4,439) 4,439
-------------------- --------- ---------- ---------- ---------- ---------- --------- --------- --------------
Land bank -
for further
Development 2016 500 (480)
------------- ------ --------- ---------- ---------- ---------- ---------- --------- --------- --------------
2015 450 (530)
-------------------- --------- ---------- ---------- ---------- ---------- --------- --------- --------------
For properties valued under the DCF method, if the vacancy rate in perpetuity per property increases or decreases by 2.5% then completed investment property will decrease or increase by EUR15.9m or EUR14.2m (2015: EUR11.7m or EUR10.6m) and investment property under development will decrease or increase by EUR2.9m or EUR2.7m (2015: EUR7.2m or EUR6.3m) respectively.
Interest-bearing loans and borrowings are secured on investment property, see note 12 for details.
5. Commitments
Commitments for Investment Property Under Construction
As at 30 June 2016, the Group had agreed construction contracts with third parties and is consequently committed to future capital expenditure in respect of investment property under construction of EUR17.6m (2015: EUR32.1m), and had committed with tenants to carry out fit-out works of EUR0.4m (2015: EUR1.6m).
Operating Leases Commitments- Group as Lessor
Judgements made for Properties under Operating Leases
The Group has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of the investment properties leased to third parties, therefore, accounts for these leases as operating leases. The duration of these leases is one year or more (2015: one year or more) and rentals are subject to annual upward revisions based on the consumer price index.
The future aggregate minimum rentals receivable under non-cancellable operating leases are as follows:
30 June 2016 31 December 2015
EUR'000 EUR'000
---------------------------------------------- ------------- -----------------
Not later than 1 year 38,726 35,100
Later than 1 year and not later than 5 years 169,218 162,200
Later than 5 years 103,318 109,200
---------------------------------------------- ------------- -----------------
311,262 306,500
---------------------------------------------- ------------- -----------------
SECTION III: FINANCIAL RESULTS
This section includes the results and performance of the Group, including the net asset value and EPRA net asset value. This section also includes details of the Group's tax credits in the period and deferred tax assets and liabilities held at the period end.
This section also quantifies the financial impact of the operations for the period; further analysis on operations is described in the financial review.
6. Revenue
30 June 2016 30 June 2015
EUR'000 EUR'000
------------------------------- ------------- -------------
Rental income 20,845 13,072
Service charge income 7,530 3,709
Property development services 3,660 867
------------------------------- ------------- -------------
32,035 17,648
------------------------------- ------------- -------------
The total contingent rents recognised as income during the period amount to EUR0.02m (2015: EUR0.09m).
In order to determine if the Group is acting as principal or agent it assess the primary responsibility for providing the goods or services, inventory risk, discretion in establishing prices and who bears the credit risk. The Group has concluded that it is acting as a principal in all of the above mentioned revenue arrangements.
7. Operating Expenses
30 June 2016 30 June 2015
EUR'000 EUR'000
------------------------------------------------------------ ------------- -------------
Property management, utilities and insurance 8,505 4,914
Property development services costs 3,333 725
Property maintenance costs and other non-recoverable costs 309 253
------------------------------------------------------------ ------------- -------------
12,147 5,892
------------------------------------------------------------ ------------- -------------
Operating expenses analysis by revenue and non-revenue generating properties 30 June 2016 30 June 2015
EUR'000 EUR'000
-------------------------------------------------------------------------------------- ------------- -------------
Property expenses arising from investment property that generate rental income 8,748 5,014
Property expenses arising from investment property that did not generate rental
income 66 153
Property development services costs 3,333 725
-------------------------------------------------------------------------------------- ------------- -------------
12,147 5,892
-------------------------------------------------------------------------------------- ------------- -------------
8. Finance Cost
30 June 2016 30 June 2015
EUR'000 EUR'000
-------------------------------------- ------------- -------------
Interest on secured loans 6,266 4,932
Interest on corporate level facility 3,034 1,683
Debt issue cost amortisation 9,949 1,810
-------------------------------------- ------------- -------------
19,249 8,425
-------------------------------------- ------------- -------------
9. Taxation
30 June 2016 30 June 2015
Income tax expense EUR'000 EUR'000
------------------------------ ------------- -------------
Current income tax expense 232 19
Deferred income tax expense 399 5,139
------------------------------ ------------- -------------
631 5,158
----------------------------- ------------- -------------
The Company has obtained an exempt company status in Guernsey under the terms of the Income Tax (Exempt Bodies) Ordinance, 1989. The Directors intend to conduct the Company's affairs so that it remains eligible for exemption. The subsidiaries in Romania, the Netherlands and Cyprus are subject to income taxes in respect of local sources of income. The income tax rate applicable to the Company in Guernsey is nil. The current income tax charge of EUR0.2m (30 June 2015: EUR0.02m) represents tax charges on profit arising in Romania and Cyprus in a few subsidiaries. Tax charges on profit arising in Romania, the Netherlands and Cyprus are subject to corporate income tax at the rate of 16%, 25% (20% for tax on profit up to EUR0.2m), and 12.5%, respectively.
The Group's subsidiaries registered in Cyprus and Netherlands need to comply with the Cyprus and the Netherlands tax regulations, however, the Group does not expect any taxable income, other than dividend and interest income, which are the most significant future sources of income of the Group companies registered in these countries. Dividend income is exempt or taxed at 0% in Cyprus and the Netherlands, respectively, however, interest income is subject to corporate income tax at the rate of 12.5% in Cyprus and ranges from 20% to 25%, depending on total taxable profit (20% for tax on profit up to EUR0.2m), in the Netherlands.
Judgements and Assumptions Used in the Computation of Current Income Tax Liability
Uncertainties exist, particularly in Romania where the Group has significant operations, with respect to the interpretation of complex tax regulations, changes in tax laws, and the amount and timing of future taxable income. Differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective company's domicile. In Romania, the tax position is open to further verification for 5 years and no subsidiary in Romania has had a corporate income tax audit in the last 5 years.
Consolidated statement of financial Consolidated statement of comprehensive
position income
-------------------------------------------- ----------------------------------------------
30 June 2016 31 December 2015 30 June 2016 30 June 2015
Deferred tax
liability EUR'000 EUR'000 EUR'000 EUR'000
---------------------- -------------------- ---------------------- ---------------------- ----------------------
Acquired under
business
combinations: - 12,456 - -
-------------------- ---------------------- ---------------------- ----------------------
Recognised
unused tax
losses - (50) - -
Deferred tax
liability - 12,506 - -
-------------------- ---------------------- ---------------------- ----------------------
Valuation of
investment property
at fair value 75,800 60,003 2,758 5,074
Deductible temporary
differences (298) (467) (1) (7)
Discounting of tenant
deposits and long
term deferred costs 258 164 62 (35)
Share issue cost
recognised in equity (7) (7) - -
Valuation of
financial
instruments at fair
value (660) 110 (35) 107
Recognised unused tax
losses (4,281) (1,846) (2,385) -
---------------------- -------------------- ---------------------- ---------------------- ----------------------
70,812 70,413 399 5,139
---------------------- -------------------- ---------------------- ---------------------- ----------------------
In Romania, the Group has unused assessed tax losses carried forward of EUR71.1m (2015: EUR68.3m) that are available for offsetting against future taxable profits of the respective entity in Romania, in which the losses arose, within 7 years from the year of origination. As of the statement of financial position date the Group had recognised deferred tax assets of EUR4.3m (2015: EUR1.9m) out of the total available deferred tax assets of EUR11.4m (2015: EUR10.9m) calculated at the corporate income tax rate of 16%.
All amounts in EUR'000
Expiry year 2017 2018 2019 2020 2021 2022 2023 TOTAL ------------------------------- ----- ----- ------ ------ ------ ------ ------ ------- Fiscal year 2010 2011 2012 2013 2014 2015 2016 ------------------------------- ----- ----- ------ ------ ------ ------ ------ ------- Available deferred tax assets 737 562 1,978 1,745 1,530 3,200 1,625 11,377 ------------------------------- ----- ----- ------ ------ ------ ------ ------ -------
10. Earnings Per Share
The following table reflects the data used in the calculation of basic and diluted earnings per share:
Number of shares issued Weighted average
----------------
Date Event Note (in thousand) % of the period (in thousand)
------------------ ----------------------- ------ ------------------------ ---------------- -----------------
1 January 2015 At the beginning of the year 53,645 100 53,645
Shares in issue at the period
30 June 2015 end 53,645 100 53,645
------------------ -------------------------------- ----------------------- ---------------- -----------------
1 October 2015 Shares issued for cash 8,972 25 2,243
------------------ -------------------------------- ----------------------- ---------------- -----------------
31 December 2015 Shares in issue at year end 62,617 55,888
------------------ -------------------------------- ----------------------- ---------------- -----------------
1 January 2016 At the beginning of the year 62,617 100 62,617
Shares issued to the executive directors and other senior
25 January 2016 management employees 15 407 86.7 353
8 June 2016 Shares issued for equity settled transaction 15 1,000 12.2 122
----------------- ------------------------------------------------------------------- --- ------- ----- -------
30 June 2016 Shares in issue at period end 64,024 63,092
----------------- ------------------------------------------------------------------- --- ------- ----- -------
30 June 2016 30 June 2015
EUR'000 EUR'000
---------------------------------------------------------------------------------- --------------- ---------------
Profit attributable to equity holders of the parent for basic and diluted
earnings per share 4,693 34,493
---------------------------------------------------------------------------------- --------------- ---------------
Number Number
(in thousand) (in thousand)
---------------------------------------------------------------------------------- --------------- ---------------
Weighted average number of ordinary shares for basic and diluted earnings per
share 63,092 53,645
---------------------------------------------------------------------------------- --------------- ---------------
Earnings per share (basic and diluted) EUR0.07 EUR0.64
---------------------------------------------------------------------------------- --------------- ---------------
As there are no dilutive instruments outstanding at the period end, basic and diluted earnings per share are identical. There were no shares issued after the reporting period end that would have changed the number of ordinary shares outstanding at the end of the period had the related transactions occurred before the end of the reporting period.
11. Net Assets Value Per Share ("NAV")
NAV Per Share
The following reflects the net assets and number of shares data used in the NAV per share computations:
Note 30 June 31 December 2015
2016
EUR'000 EUR'000
----------------------------------------------------------- ----- --------------- -----------------
Net assets attributable to equity holders of the parent 512,176 499,681
----------------------------------------------------------- ----- --------------- -----------------
Number Number
(in thousand) (in thousand)
----------------------------------------------------------- ----- --------------- -----------------
Ordinary shares outstanding at the end of the year/period 10 64,024 62,617
----------------------------------------------------------- ----- --------------- -----------------
NAV per share EUR8.00 EUR7.98
----------------------------------------------------------- ----- --------------- -----------------
EPRA NAV Per Share
The following reflects the net assets and number of shares data used in the EPRA NAV per share computations:
Note 30 June 31 December 2015
2016
EUR'000 EUR'000
--------------------------------------------------------- ----- --------------- -----------------
Net assets attributable to equity holders of the parent 512,176 499,681
Exclude:
Deferred tax liability 9 70,812 70,413
Fair value of interest rate swap instrument 14 4,123 3,935
Goodwill as a result of deferred tax (5,697) (5,697)
--------------------------------------------------------- ----- --------------- -----------------
EPRA NAV attributable to equity holders of the parent 581,414 568,332
--------------------------------------------------------- ----- --------------- -----------------
Number Number
(in thousand) (in thousand)
Ordinary shares outstanding at the end of the year 10 64,024 62,617
--------------------------------------------------------- ----- --------------- -----------------
EPRA NAV per share EUR9.08 EUR9.08
--------------------------------------------------------- ----- --------------- -----------------
EPRA NAV includes properties and other investment interests at fair value and excludes certain items not expected to crystallise in a long-term investment property business model.
SECTION IV: FINANCIAL ASSETS AND LIABILITIES
This section focuses on financial instruments, together with the working capital position of the Group and financial risk management of the risks that the Group is exposed to at period end.
12. Interest-Bearing Loans and Borrowings
This note describes information on the material contractual terms of the Group's interest bearing loans and borrowings. For more information about the Group's exposure to market risk, currency risk and liquidity risks, see note 14.
30 June 2016 31 December 2015
EUR'000 EUR'000
---------------------------------- ------------- -----------------
Current
Current portion of secured loans 12,070 42,681
Corporate level facility - 100,343
------------------------------------ ------------- -----------------
12,070 143,024
Non-current
Secured loans 398,936 261,287
------------------------------------ ------------- -----------------
411,006 404,311
---------------------------------- ------------- -----------------
Terms and conditions of outstanding loans were as follows:
30 June
2016 31 December 2015
---------- ---------- -----------------------
Nominal
Secured Contract interest Maturity Face Carrying Face Carrying
facility date Currency rate date Value value Value value
----------- ----------- ---------- ---------- ------------ ---------- ---------- ---------- ----------
EUR'000 EUR'000 EUR'000 EUR'000
ROBOR 3M+
Loan 3 Nov-13 RON margin Feb 2016 - - 423 423
EURIBOR
3M+
Loan 6 Mar-13 EUR margin Mar 2019 13,228 13,018 13,768 13,518
EURIBOR
3M+
Loan 7 Aug-08 EUR margin Dec 2016 - - 30,000 29,938
EURIBOR
3M+
Loan 8 May-08 EUR margin Dec 2018 33,177 33,177 33,626 33,626
EURIBOR
3M+
Loan 9 May-08 EUR margin Dec 2018 81,551 81,551 82,505 82,505
EURIBOR
3M+
Loan 11 Sep-14 EUR margin Oct 2032 24,832 24,472 25,317 24,909
EURIBOR
3M+
Loan 13 Jun-15 EUR margin Jun 2022 - - 7,885 7,660
EURIBOR
3M+
Loan 14 Jun-15 EUR margin Jun 2022 - - 8,905 8,905
EURIBOR
1M+
Loan 15 Aug-08 EUR margin Dec 2017 27,953 27,953 28,398 28,398
EURIBOR
1M+
Loan 16 Mar-10 EUR margin Jun 2022 21,227 21,227 21,907 21,907
ROBOR 1M+
Loan 17 Mar-10 RON margin Apr 2019 616 616 718 718
ROBOR 3M+
Loan 18 Aug-15 RON margin Aug 2018 4,039 4,013 4,872 4,845
EURIBOR
3M+
Loan 19 Jun-15 EUR margin Jul 2035 - - 27,165 26,849
EURIBOR
3M+
Loan 20 Dec-15 EUR margin Dec 2030 - - 20,022 19,767
Corporate
level
facility Jun-15 EUR Fixed rate Jul 2016 - - 103,067 100,343
EURIBOR
3M+
Loan 21 Mar-16 EUR margin Mar 2031 24,932 24,405 - -
EURIBOR
3M+
Loan 22 May-16 EUR margin Nov 2026 8,765 8,588 - -
Loan 23 May-16 EUR Fixed rate Jun 2019 180,595 171,986 - -
----------- ----------- ---------- ----------- ----------- ---------- ---------- ---------- ----------
Total 420,915 411,006 408,578 404,311
-------------------------------------------------------------- ---------- ---------- ---------- ----------
Secured bank loans
On 9 March 2016, the Group signed a c.EUR29.1m long-term debt facility (Loan 21) agreement with Banca Comerciala Romana ("BCR") in Romania (Erste Bank Group) in order to refinance the existing secure loan facilities (Loans 13 and 14) related to the TAP light industrial park in Timisoara, and to fund the development of an extension to this property. This facility is secured on the TAP property and matures in year 2031.
On 19 May 2016, the Group signed a EUR10.3m long-term debt facility (Loan 22) agreement with Garanti Bank in Romania in order to refinance equity and to fund the remaining development costs of the Gara Herastrau office building. This facility is secured on the land and completed building and matures in year 2026.
The Group secured a EUR180m three-year bond (the "bond"). The bond was provided by Matisse Funding B.V. (an orphan SPV) which issued EUR180m of senior secured Notes to institutional investors. The proceeds of such issuance were on-lent to the Group in order to refinance the EUR100m short term corporate level facility obtained in 2015 from funds managed by York Capital and Oakhill Advisors and three secured debt facilities at the level of three of its Romanian subsidiaries. The bond is secured on the properties of these Romanian subsidiaries as well as the shares of their holding companies. Drawdown under the Bond was completed in June 2016.
Secured bank loans are secured by investment properties with a carrying value of EUR890.0m at 30 June 2016 (2015: EUR692.6m) and also carry pledges on rent receivable balances of EUR5.8m (2015: EUR3,0m), tenant deposits of EUR2.4m (2015: EUR1,9m), VAT receivable balances of EUR7.3m (2015: EUR3.3m) and a moveable charge on the bank accounts.
Other Disclosures
The loans are subject to certain financial covenants, which are calculated based on data derived individual financial statements and cash flow projections of the respective subsidiaries, or data derived from combined financial statements and cash flows of certain Group companies. The Group is in compliance with all financial covenants and there was no defaults for payments during the six month period ended 30 June 2016. Financial covenants mainly include the loan-to-value ratio ("LTV") which ranges from 50% - 85% and the debt service cover ratio ("DSCR") that ranges from 1.0 - 1.25. LTV is calculated as the loan value divided by the market value of the relevant property (for a calculation date), and DSCR (historical and/or projected, as the case may be, for a 12 month period) is calculated as net operating income divided by the debt service. As of 30 June 2016, the Group had undrawn borrowing facilities of EUR5.5m (2015: EUR2,0m).
13. Cash and Cash Equivalents
30 June 2016 31 December 2015
Note EUR'000 EUR'000
Cash at bank and in hand 19,826 25,778
Short term deposits 5,147 5,258
------------------------------------------------------------------ ----- ------------- -----------------
Cash and cash equivalents as per statement of cash flows 24,973 31,036
Corporate level facility - cash reserve - 6,000
Bond - cash reserve 12 6,088 -
------------------------------------------------------------------ ----- ------------- -----------------
Cash and cash equivalents as per statement of financial position 31,061 37,036
------------------------------------------------------------------ ----- ------------- -----------------
Details of cash and cash equivalents denominated in foreign currencies are disclosed in note 14.
Short term deposits are made for varying periods depending on the immediate cash requirements of the Group and the Group earned interest at rates ranging from 0.05% to 0.45% per annum for RON and 0.02% to 0.5% per annum for EUR dominated deposits (2015: 0.05% to 0.1%). Cash at bank and in hand includes restricted cash balances of EUR4,9m (2015: EUR11,8m).
14. Financial Risk Management - Objective and Policies
The Group is exposed to the following risks from its use of financial instruments:
- market risk (including currency risk, interest rate risk); - credit risk; and - liquidity risk.
Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Group's market risks arise from open positions in (a) foreign currencies and (b) interest-bearing assets and liabilities, to the extent that these are exposed to general and specific market movements.
Foreign Currency risk
The Group has entities registered in several EU countries, with the majority of operating transactions arising from its activities in Romania. Therefore, the Group is exposed to foreign exchange risk, primarily with respect to the Romanian Lei (RON). Foreign exchange risk arises in respect of those recognised monetary financial assets and liabilities that are not in the functional currency of the Group. The Group's exposure to foreign currency risk was as follows (based on nominal amounts):
30 June 2016 31 December 2015
------------------ --------------------
RON GBP USD RON GBP USD
------------------------------------------------------ ------ ----- --- ------- ------ ---
All amounts are presented in EUR'000 equivalent value denominated denominated
------------------------------------------------------ ------------------ --------------------
ASSETS
Cash and cash equivalents 12,488 12 106 13,561 14 80
Trade and other receivables 13,241 - - 13,757 - -
Income tax receivable 583 - - 583 - -
------------------------------------------------------ ------ ----- --- ------- ------ ---
Total 26,312 12 106 27,901 14 80
------------------------------------------------------ ------ ----- --- ------- ------ ---
LIABILITIES
Interest-bearing loans and borrowings 4,628 - - 5,987 - -
Trade and other payables 12,791 885 2 15,459 994 -
Income tax payable 13 - - 1 - -
Deposits from tenants 858 - - 1,094 - -
------------------------------------------------------ ------ ----- --- ------- ------ ---
Total 18,290 885 2 22,541 994 -
------------------------------------------------------ ------ ----- --- ------- ------ ---
Net exposure 8,338 (873) 104 5,360 (980) 80
------------------------------------------------------ ------ ----- --- ------- ------ ---
Foreign Currency Sensitivity Analysis
As of the statement of financial position date, the Group is exposed to foreign exchange risk in respect of the exchange rate of the RON, USD and GBP. The following table details the Group's sensitivity (impact on profit before tax and equity) to a 5% devaluation in RON, USD and GBP exchange rates against the EUR, on the basis that all other variables remain constant.
The 5% sensitivity rate represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the year-end for a 5% appreciation in the EUR against other currencies.
30 June 2016 31 December 2015
--------------------------- ---------------------------
All amounts in EUR'000 Profit before tax Equity Profit before tax Equity
------------------------ ------------------ ------- ------------------ -------
RON (391) (391) (268) (268)
GBP 44 44 49 49
USD (5) (5) (4) (4)
------------------------ ------------------ ------- ------------------ -------
A 5% devaluation of the EUR against the above currencies would have had an equal but opposite impact on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
Interest Rate Risk
Interest rate price risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates relative to the interest rate that applies to the financial instrument. Interest rate cash flows risk is the risk that the interest cost will fluctuate over time.
The Group's interest rate risk principally arises from interest bearing loans and borrowings. As at 30 June 2016 58% (2015: 75%) of the total outstanding borrowings carried variable interest rates (including the 1M and 3M EURIBOR and 1M ROBOR as bases) which expose the Group to cash flow interest rate risk. In order to minimise this risk, the Group hedged 21% (2015:19%) of such variable interest rate borrowings with fixed-variable interest rate swap and interest rate cap instruments.
An increase or decrease of 25 basis points in the EURIBOR or ROBOR will result in an increase or decrease (net of tax) in the result for the period of EUR1.0m (2015: EUR0.7m), with a corresponding impact on equity for the same amount. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group's policy is to trade with recognised and creditworthy third parties. The Group's exposure is continuously monitored and spread amongst approved counterparties.
The Group's maximum exposure to credit risk, by class, of financial asset is equal to their carrying values at the statement of financial position date.
30 June 2016 31 December 2015
EUR'000 EUR'000
-------------------------------------- ------------- -----------------
Trade receivables - net of provision 5,896 3,399
Other receivables 425 836
VAT and other taxes receivable 7,601 10,821
Cash and cash equivalents 31,061 37,036
-------------------------------------- ------------- -----------------
44,983 52,092
-------------------------------------- ------------- -----------------
Trade Receivables - Net of Provision
There is no significant concentration of credit risk with respect to trade receivables, as the Group has a large number of tenants, a few of which are part of multinational groups, internationally dispersed, as disclosed in the portfolio review section of the Interim Report. For related parties it is assessed that there is no significant risk of non-recovery.
Estimates and Assumptions Used for Impairment of Trade Receivables
The Group assesses when there is sufficient objective evidence to require the impairment of individual trade receivables. It does this on the basis of the age of the relevant receivables, external evidence of the credit status of the counterparty and the status of any disputed amounts. The movements in the provision for impairment of receivables during the respective periods were as follows:
30 June 2016 31 December 2015
EUR'000 EUR'000
----------------------------------- ------------- -----------------
Opening balance 2,542 2,313
Impairment during the year/period 59 229
Write off during the period (260) -
----------------------------------- ------------- -----------------
Closing balance 2,341 2,542
----------------------------------- ------------- -----------------
The analysis by credit quality of financial assets, cumulated for rent, service charge and property management, is as follows:
Neither past due nor impaired Past due but not impaired TOTAL
------------------------------ ----------------------------------- ------
< 90 days < 120 days <365 days
---------------------------- ------------------------------ ---------- ----------- ---------- ------
30 June 2016 (EUR'000) 3,114 1,989 134 659 5,896
---------------------------- ------------------------------ ---------- ----------- ---------- ------
31 December 2015 (EUR'000) 2,602 228 554 15 3,399
---------------------------- ------------------------------ ---------- ----------- ---------- ------
The customer balances which were overdue but not provisioned are due to the fact that the related customers committed and started to pay the outstanding balances subsequent to the period end. Further, deposits payable to tenants may be withheld by the Group in part or in whole if receivables due from the tenant are not settled or in case of other breaches of contract.
VAT and Other Taxes Receivable
This balance relates to corporate income tax paid in advance, VAT and other taxes receivable from the Romanian tax authorities. The balances are not considered to be subject to significant credit risk as all the amounts receivable from Government authorities are secured under sovereign warranty.
Cash and Cash Equivalents
The credit risk on cash and cash equivalents is very small, since the cash and cash equivalents are held at reputable banks in different countries. The most significant part of cash and the cash equivalents balance is kept at the parent (the Company) with credit rating of A-2 and in subsidiaries in Romania in local branches of reputable international banks with credit rating of BBB.
Liquidity risk
The Group's policy on liquidity is to maintain sufficient liquid resources to meet its obligations as they fall due. Ultimate responsibility for liquidity risk management rests with management. The Group manages liquidity risk by maintaining adequate cash reserves and planning and close monitoring of cash flows. The Group expects to meet its financial liabilities through the various available liquidity sources, including a secure rental income profile, further equity raises, undrawn committed borrowing facilities and, in the medium-term, debt refinancing.
The table below summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted payments.
All amounts in Contractual payment Difference Carrying
EUR'000 from amount
carrying
amount
---------------------------------------------------------- ------------ -------------
30 June 2016 < 3 months 3 months - 1-5 years >5 years Total
1 year
--------------------- ----------- ------------ ---------- --------- -------- ------------ -------------
Interest-bearing
loans and
borrowings 7,970 28,422 394,275 63,566 494,233 (83,227) 411,006
Deposits from
tenants 422 427 1,247 634 2,730 (366) 2,364
Finance lease
liabilities 6 7 - - 13 - 13
Trade payables
(excluding advances
from customers) 12,830 5,845 2,509 - 21,184 - 21,184
Income tax payable 65 - - - 65 - 65
Other payables 12 2,338 - - 2,350 - 2,350
--------------------- ----------- ------------ ---------- --------- -------- ------------ -------------
Total 21,305 37,039 398,031 64,200 520,575 (83,593) 436,982
--------------------- ----------- ------------ ---------- --------- --------
All amounts in Contractual payment Difference Carrying
EUR'000 from carrying amount
amount
31 December 2015 < 3 months 3 months - 1 1-5 years >5 years Total
year
Interest-bearing
loans and
borrowings 8,891 152,517 205,175 103,320 469,903 (65,592) 404,311
Deposits from
tenants 164 263 1,450 447 2,324 (411) 1,913
Finance lease
liabilities 6 14 4 - 24 (1) 23
Trade payables
(excluding advances
from customers) 15,863 11,798 3,278 - 30,939 - 30,939
Income tax payable 75 - - - 75 - 75
Other payables 743 3,143 - - 3,886 - 3,886
--------
Total 25,742 167,735 209,907 103,767 507,151 (66,004) 441,147
--------
The tables above present the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay, and includes both interest and principal cash flows. As the amount of contractual undiscounted cash flows related to bank borrowings is based on variable rather than fixed interest rates, the amount disclosed is determined by reference to the conditions existing at the year or period end, that is, the actual spot interest rates effective at the end of the year or period are used for determining the related undiscounted cash flows.
Financial Instruments for which Fair Values are Disclosed
Set out below is a comparison by class of the carrying amounts and fair values of the Group's financial instruments, other than those with carrying amounts that are reasonable approximations of their fair values.
Year Carrying Fair value hierarchy TOTAL
All amounts in EUR'000 Note amount Level 1 Level 2 Level 3
Interest-bearing loans and borrowings 12 2016 411,006 - 411,006 - 411,006
2015 404,311 - 404,311 - 404,311
Other current financial liabilities 14 2016 4,123 - 4,123 - 4,123
2015 3,935 - 3,935 - 3,935
Finance lease obligations 2016 13 - 13 - 13
2015 23 - 23 - 23
The fair value of financial liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. When determining the fair values of interest bearing loans and borrowings and finance lease obligations the Group used the DCF method with inputs such as discount rate that reflects the issuer's borrowing rate as at the statement financial position date. The own non-performance risk at the statement of financial position date was assessed to be insignificant.
Other current financial liabilities represent the market-to-market value of an interest rate swap, obtained from the counterparty financial institution, at EUR4.1m (2015: EUR3.9m) at 30 June 2016. The fair value of derivative was developed in accordance with the requirements of IFRS 13. Bog'Art Offices S.R.L "Bog'Art", a wholly owned subsidiary, entered into an arrangement with the lender (a local financial institution), for risk management purposes, in 2011 at a notional amount of EUR22.8m which has been transferred to the Group, as a consequence of the acquisition of Bog'Art. Under the terms of the swap agreement, the Group is entitled to receive a floating rate of 1 month EURIBOR on the above referred notional amount and is required to pay a fixed rate of interest of 3.62% p.a. on the said notional amount in four quarterly instalments, with maturity date of June 2022. The movement in fair value recognised in the statement of comprehensive income in the year was a financial expense of EUR0.2m (31 December 2015: financial income of EUR0.7m).
On 30 June 2016, the Group had interest rate cap instruments valued market-to-market at EURnil m (31 December 2015: for EUR0.2m) for secured bank loans 6, 11 and 22 (see note 12) under which the Group capped EURIBOR at 1.25% for 50% of the notional loan facilities. These derivative financial instruments were fair valued (level 2) at each reporting date and any change in fair value is recognized in the consolidated statements of income within finance cost. The change in the fair value during the period ended 30 June 2016 was a loss of EUR0.2m (31 December 2015: financial expense of EUR0.2m).
The Group assessed that the fair values of other financial assets and financial liabilities, such as trade and other receivables, cash and cash equivalents, income tax receivable and payables, trade and other payables and deposits from tenants, approximate their carrying amounts largely due to short term maturities and low transaction costs of these instruments as of the statement of financial position date.
SECTION V: SHARE CAPITAL AND RESERVES
The disclosures in this section focus on the issued share capital, the share schemes in operation and the associated share-based payment charge to profit or loss. Other mandatory disclosures, such as details of capital management can also be found here.
15. Issued Share Capital
Note 30 June 2016 31 December 2015
Number Number
EUR'000 (in thousand) EUR'000 (in thousand)
At 1 January 341,784 62,617 288,740 53,645
Shares issued for cash - - 53,830 8,972
Transaction costs on issue of shares (9) - (786) -
Shares issued to the executive directors and
other senior management employees 16.2 2,350 407 - -
Shares issued for settlement of interest-bearing
liability 6,000 1,000 - -
At end of the year/period 350,125 64,024 341,784 62,617
Ordinary shares carry no right to fixed income but are entitled to dividends as declared from time to time. Each Ordinary share is entitled to one vote at meetings of the Company. There is no limit on the authorised share capital of the Company. The Company can issue no par value and par value shares as the shareholders see fit for the five year period following the incorporation of the Company (unless renewed, revoked or varied by a general meeting). This authority has not been revoked by the shareholders.
Under Guernsey Company Law there is no distinction between distributable and non-distributable reserves, requiring instead that a company passes a solvency test in order to be able to make distributions to shareholders. Similarly, share premium for issuance of shares above their par value per share is recognised directly under share capital and no separate share premium reserve account is recognised.
Shares issued for settlement of interest-bearing liability
On 8 June 2016, the Company issued 1.0m shares for the settlement of EUR6.0m, an aggregate amount payable by the Company to lenders of a short term corporate level facility ("Facility"), in respect of a prepayment fee payable by the Company under the Facility which was prepaid in full during the period, see note 12. The ordinary shares have been issued at EUR6.00 per ordinary share as the placing price at the last fundraising by the Company in September 2015, and equates to a premium of 18 per cent. to the closing middle--market price on 8 June 2016. The 1.0m new shares rank pari passu with the existing shares of the Company.
16. Share Based Payment Reserve
Note 30 June 2016 31 December 2015
Share based payments reserve balance EUR'000 EUR'000
Executive share option plan 16.1 316 305
Executive directors and other senior management employees share settlement 16.2 1,800 2,350
Closing balance 2,116 2,655
16.1 Executive Share Option Plan
Under the plan, the Directors of the Group were awarded share options warrants as remuneration of the services performed. The share options granted to the Directors of the Group are equity settled.
During 2013, the Group granted warrants to the Founder and the Directors which entitle each holder to subscribe for ordinary shares in the Company at an exercise price of EUR5.00 per share if the market price of an ordinary share, on a weighted average basis over 60 consecutive days, exceeds a specific target price and the holder is employed on such date. The contractual term of each warrant granted is ten years. There are no cash settlement alternatives and the Group does not have the intention to offer cash settlement for these warrants.
The following table analyses the total cost of the executive share option plan (Warrants), together with the number of options outstanding.
30 June 2016 31 December 2015
Cost Number Cost Number
EUR'000 (thousand) EUR'000 (thousand)
At 1 January 305 4,635 180 4,635
Share scheme expense during the year/period 11 - 125 -
At 30 June 316 4,635 305 4,635
Weighted average remaining contractual life (years) 7.08 7.58
The fair value of the warrants was estimated at the grant date (i.e. July 2013) at EUR0.073 per share. There have been no cancellations or modifications to any of the plans during the year.
16.2 Executive directors and other senior management employees shares settlement
30 June 2016 31 December 2015
EUR'000 EUR'000
At 1 January 2,350 -
Shares issued to the executive directors and other senior management employees (2,350) -
Reclassification from liabilities to equity 1,800 2,350
At 30 June 1,800 2,350
Shares issued to the executive directors and other senior management employees
On 25 January 2016, the Company issued 0.4m ordinary shares (ordinary shares of no par value) and delivered them to the Executive Directors and other senior management employees from share based payment reserve, on behalf of its subsidiary GIAL, in order to settle a liability of EUR2.4m owed by the Company to its subsidiary, related to the fees charged by GIAL to the Company pursuant to the Investment Advisory Agreement concluded between the Company and GIAL. The 0.4m new shares rank pari passu with the existing shares of the Company. The ordinary shares have been issued at EUR5.77 per ordinary share, representing the volume--weighted average market price over the 90 trading days prior to the date of allotment.
Reclassification from Liabilities to Equity
On 8 April 2016, the Board approved the award of an additional fee of EUR3.6m to GIAL for the services rendered to the Company during the year ended 31 December 2015, which in turn GIAL will utilise in order reward its Executive Directors and other senior management employees for the work carried out for GIAL during the year ended 31 December 2015. The Board also agreed that 50% of the amount payable by GIAL to the Executive Directors and other senior management employees, or EUR1.8m, recorded as a liability as at 31 December 2015, will be settled in the form of ordinary shares in the Company, which the Company will deliver within September 2016 to GIAL in settlement of 50% of the additional fee awarded to it as outlined above, following a decision of the Board of the Company on 19 September 2016. The ordinary shares to be issued shortly will rank pari passu with the existing shares of the Company.
17. Capital Management
The Company has no legal capital regulatory requirement. The Group's policy is to maintain a strong equity capital base so as to maintain investor, creditor and market confidence and to sustain the continuous development of its business. The Board considers from time to time whether it may be appropriate to raise new capital by a further issue of shares.
The Group monitors capital primarily using a loan-to-value ratio, which is calculated as the amount of outstanding debt divided by the open market value of its investment property portfolio as certified by external valuers. As at 30 June 2016 the loan-to-value ratio was 43.7% (2015: 43.9%).
SECTION VI: OTHER DISCLOSURES
This section provides details about Globalworth's subsidiaries, segments, the transactions with related parties, new standards and amendments adopted during the period, contingencies that existed at the period end and details on significant events which occurred subsequent to the date of the financial statements.
18. Investment in Subsidiaries
Details on all direct and indirect subsidiaries of the Company, over which the Group has control and were consolidated as of 30 June 2016 and 2015, are disclosed in the table below. There are no other subsidiaries which were not consolidated.
As of 30 June 2016, the Group held a 100% shareholding interest (31 December 2015: 100%) in the following subsidiaries, being holding companies as principal activities.
Subsidiary Place of incorporation Globalworth Investment Advisers Limited, Globalworth Finance Guernsey Limited Guernsey, Channel Islands GWI Finance B.V., Globalworth Holding B.V., GW Real Estate Finance B.V. Netherlands Globalworth Holdings Cyprus Limited, Zaggatti Holdings Limited, Tisarra Holdings Limited, Cyprus Ramoro Limited, Vaniasa Holdings Limited, Serana Holdings Limited, Kusanda Holdings Limited, Kifeni Investments Limited, Casalia Holdings Limited, Pieranu Enterprises Limited, Dunvant Holding Limited, Oystermouth Holding Limited, Saniovo Holdings Limited
As of 30 June 2016, the Group held a 100% shareholding interest (31 December 2015: 100%) in the following subsidiaries, who own real estate assets in Romania being asset holding companies as their principal activities except for Globalworth Building Management S.R.L. a building management company.
Corinthian Five S.R.L., Tower Center International S.R.L., Upground Estates S.R.L., BOB Development Romania S.R.L., BOC Real Property S.R.L., Netron Investment S.R.L., SEE Exclusive Development S.R.L., Aserat Properties S.R.L., Corinthian Tower S.R.L., Bog'Art Offices S.R.L., SPC Beta Property Development Company S.R.L., SPC Gamma Property Development Company S.R.L., Globalworth Building Management S.R.L.
On 24 February 2016, the Group disposed its 100% shareholding in (31 December 2015: 100%) and control of Mycre Investment S.A., (a subsidiary owning real estate asset in Greece), see notes 19 and 21.
19. Gain on Sale of Subsidiary
On 24 February 2016, the Group disposed its 100% shareholding in and control of Mycre Investment S.A. for total consideration of EUR11.3m, in cash, and ceased to have control over this entity by transferring the title of the shares to the Buyer.
The following table presents the amount of the assets and liabilities in the disposed subsidiary on the disposal date, summarised by each major category.
ASSETS EUR'000 LIABILITIES EUR'000 Investment property held for sale 10,353 Loan payable to the Group 8,497 Trade and other receivables 387 Trade and other payables 12 Cash and cash equivalents 300 Total assets 11,040 Total liabilities 8,509 Net assets of the subsidiary on disposal date (total assets minus total liabilities per the above table) 2,531 Loan payable to the Group 8,497 Total assets disposed 11,028 Disposal consideration (11,300) (Gain) on sale of subsidiary (272)
Cash flows from the disposal:
Cash received 11,300 Cash balance of the subsidiary at disposal date (300) Net cash inflows from the disposal 11,000
20. Segmental Information
Based on a review of information provided to the chief operating decision makers, the Group has identified three reportable operating segments, the Offices segment (acquires, develops, leases and manages office and ancillary spaces, such as parking spaces), the Residential segment (acquires, develops and leases apartments and ancillary spaces, which as parking and storage spaces) and the Other segment (acquires, develops, leases and manages light industrial spaces and Group corporate office operations). The share based payments expense is not allocated to individual segments as the underlying instruments are managed at group basis.
Assets and liabilities reported to the executive management on a segmental basis are set out below:
Six months ended 30 June 2016 Six months ended 30 June 2015
Segments Office Residential Other Inter-segment Total Office Residential Other Inter-segment Total
eliminations eliminations
EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Revenue 26,843 2,913 3,176 (897) 32,035 18,224 1,383 1,131 (3,090) 17,648
Operating
expenses (9,931) (725) (1,572) 81 (12,147) (6,305) (990) (135) 1,538 (5,892)
Segment NOI 16,912 2,188 1,604 (816) 19,888 11,919 393 996 (1,552) 11,756
Administrative
expenses (2,207) (329) (2,054) 816 (3,774) (2,628) (451) (1,785) 1,818 (3,046)
Acquisition
costs - - (21) - (21) (338) - - (2) (340)
Change in fair
value of
investment
property 4,451 333 636 - 5,420 22,398 266 545 - 23,209
Gain on
acquisition of
subsidiary - - - - - 15,780 - - - 15,780
Foreign
exchange
gain/(loss) (12) (86) 16 - (82) 52 (9) 21 - 64
Other operating
expenses (21) (410) - - (431) - - - - -
Other operating
income 3,166 - - - 3,166 - - - - -
Finance cost (17,556) (1,243) (450) - (19,249) (4,334) (962) (3,266) 137 (8,425)
Finance Income 145 1 - - 146 714 1 - - 715
Segment results 4,878 454 (269) - 5,063 43,563 (762) (3,489) 401 39,713
Share based
payment
expense - - (11) - (11) - - (62) - (62)
Gain on sale of
subsidiary - - 272 - 272 - - - - -
Profit before
tax 4,878 454 (8) - 5,324 43,563 (762) (3,551) 401 39,651
Revenues are derived from a large number of tenants and no tenant contributes more than 10% of the Group's rental revenues for the period ended 30 June 2016 (30 June 2015: nil).
30 June 2016 31 December 2015
Office Residential Other Inter-segment Total Office Residential Other Inter-segment Total
eliminations eliminations
Segments EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000 EUR'000
Non-current
assets 828,272 106,979 49,579 - 984,830 804,218 108,760 44,391 (34) 957,335
Total assets 861,885 109,599 60,327 (1,468) 1,030,343 844,212 110,246 67,140 (1,460) 1,020,138
Total
liabilities 450,173 37,777 31,685 (1,468) 518,167 356,458 38,686 126,685 (1,493) 520,336
Additions to
non-current
assets 26,985 44 - - 27,029 70,982 24 8,789 - 79,795
None of the Group's non-current assets are located in Guernsey except for goodwill (there are no employment benefit plan assets, deferred tax assets or rights arising under insurance contracts) recognised on business combination.
21. Transactions with Related Parties
The Group's related parties are Ioannis Papalekas, the Company's other Directors, as well as all companies controlled by them or under their joint control, or under significant influence by Ioannis Papalekas.
The Group's major shareholder is Mr. Ioannis Papalekas (the Founder) who at 30 June 2016 owned 36.02% (2015: 36.1%) of the Company's Ordinary shares. The remaining 63.98% (2015: 63.9%) of the Ordinary shares are held by several shareholders.
The related party transactions are set out in the table below:
Statement of comprehensive income Statement of Financial Position
Income /(expense) Amounts owing (to) / from
All amounts in EUR'000 30 June 2016 30 June 2015 30 June 2016 31 December 2015
Nature of
transactions/balance
Name amounts EUR'000 EUR'000 EUR'000 EUR'000
Asia CCF Investment Corporate level
S.à r.l facility (994) (154) - (11,337)
CDP ESCF Investment Corporate level
S.à r.l. facility (1,364) (278) - (15,563)
ESCF Investment Corporate level
S.à r.l. facility (1,867) (511) - (21,300)
York Global Finance
Offshore BDH
(Luxembourg) S.à Corporate level
r.l. facility (3,011) (561) - (34,356)
SPFC Investment Corporate level
S.à r.l facility (533) (179) - (6,081)
Indiana Public Corporate level
Retirement System facility (361) - - (4,123)
Centre Street
Investments S.à Corporate level
r.l. facility (723) - - (8,245)
OCA OHA Credit Fund Corporate level
LLC facility (181) - - (2,061)
Mr. Ioannis Papalekas Advances to directors - - - 650
Advances from
Mr. Ioannis Papalekas directors - - (100) -
On 24 February 2016, the Group disposed its 100% shareholding in and control of Mycre Investment S.A. for total consideration of EUR11.3m, in cash, to Bakaso Holdings Limited, a company controlled by the Founder, see notes 18 and 19.
During the period ended 30 June 2016, the Group recorded in the statement of comprehensive income EUR0.8m (30 June 2015: EUR0.7m) Directors' emoluments for the Executive and non-Executive members of the Board of Directors.
22. New and Amended Standards
During the period, the Group adopted following new and amended standards and interpretations following The European Commission "EU" endorsement announcements. The new standards and amendments had no impact on the Group's financial position and performance.
Narrow scope amendments and new Standards Effective date Annual improvements to IFRSs 2010-2012 cycle Feb-15 IAS 19 Defined Benefit Plans (Amended): Employee Contributions Feb-15 IFRS 11 Joint arrangements (Amendment): Accounting for Acquisitions of Interests in Joint Operations Jan-16 IAS 16 Property, Plant & Equipment and IAS 38 Intangible assets (Amendment): Clarification of Acceptable Methods of Depreciation and Amortisation Jan-16 IAS 27 Separate Financial Statements (amended) Jan-16 IAS 1 Disclosure Initiative (Amendment) Jan-16 Annual improvements to IFRSs 2012-2014 cycle Jan-16
Standards issued but not yet effective as per EU endorsement status and not early adopted by the Group are presented in the table below. The management believes that there will be no significant impact in the Group's consolidated financial statements, except for IFRS 15 "Revenue from Contracts with Customers" and IFRS 16 "Leases", for which the Group is in process of assessing the impact.
Narrow scope amendments and new Standards IASB Effective date
Jan-16
IFRS 10, IFRS 12 and IAS 28: Investment Entities: Applying the Consolidation Exception (Amendments) (not yet endorsed by EU)
IAS 12 Income taxes (Amendments): Recognition of Deferred Tax Assets for Unrealised Losses Jan-17
IAS 7 Statement of Cash Flows (Amendments): Disclosure Initiative Jan-17
IFRS 9 Financial Instruments: Classification and Measurement Jan-18
IFRS 15 Revenue from Contracts with Customers Jan-18
Amendments to IFRS 2: Classification and Measurement of Share based Payment Transactions Jan-18
IFRS 16 Leases Jan-19
EU postponed until final
IFRS 14 Regulatory Deferral Accounts standard
IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures:
Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Not yet announced
23. Contingencies
Taxation
All amounts due to State authorities for taxes have been paid or accrued at the statement of financial position date. The Romanian tax system undergoes a consolidation process and is being harmonised with the European legislation. Different interpretations may exist at the level of the tax authorities in relation to the tax legislation that may result in additional taxes and penalties payable. Where the State authorities have findings from reviews relating to breaches of Romania's tax laws, and related regulations these may result in: confiscation of the amounts in case; additional tax liabilities being payable; fines and penalties (that are applied on the total outstanding amount). As a result the fiscal penalties resulting from breaches of the legal provisions may result in a significant amount payable to the State. The Group believes that it has paid in due time and in full all applicable taxes, penalties and penalty interests in the applicable extent.
Transfer Pricing
According to the applicable relevant Romanian tax legislation, the tax assessment of related party transactions is based on the concept of market value for the respective transfers. Following this concept, the transfer prices should be adjusted so that they reflect the market prices that would have been set between unrelated companies acting independently (i.e. based on the "arm's length principle"). It is likely that transfer pricing reviews will be undertaken in the future in order to assess whether the transfer pricing policy observes the "arm's length principle" and therefore no distortion exists that may affect the taxable base of the Romanian tax payer.
24. Subsequent Events
Date Description
7 September 2016 The Group signed an agreement with Libra Internet Bank S.A. for the increase of the facility
provided in August 2015 by RON 7.0m (equivalent to c.EUR1.6m). At the same time the term of
the outstanding amount on this loan was extended by 12 months up to August 2019.
14 September 2016 The Group signed an amendment to the existing long term facility agreement with Banca Comerciala
Romana S.A. (Erste Bank Group) for the increase of the existing loan facility by EUR3.0m.
glossary
Accounting Return
It is the growth in EPRA NAV plus dividend paid, and this can be expressed as a percentage of EPRA NAV per share at the beginning of the period.
AIC Code
The Association of Investment Companies Code of Corporate Governance.
Bargain Purchase Gain
Any excess between the fair value of net assets acquired and consideration paid, in accordance with IFRS 3 "Business Combination".
BREEAM
Building Research Establishment Assessment Method, which assesses the sustainability of the buildings against a range of criteria.
CAPEX
Represents the estimated Capital Expenditure to be incurred for the completion of the development projects.
Capitalisation Rates
Based on actual location, size and quality of the properties and taking into account market data at the valuation date.
CBD
Central Business District
Commercial Properties
Comprises the office, light-industrial and retail properties or areas of the portfolio.
Completed Investment Property
Completed developments consist of those properties that are in a condition which will allow the generation of cash flows from its rental.
Completion Dates
The date when the properties under development will be completed and ready to generate rental income after obtaining all necessary permits and approvals.
Costs to Complete
It represents additional costs to complete the property under development.
Debt Service Cover Ratio ("DSCR")
It is calculated as net operating income for the year as defined in specific loan agreements with the respective lenders, divided by the principal plus interest due over the same year.
Discount Rates
The discount rate is the interest rate used to discount a stream of future cash flows to their present value.
Discounted Cash Flow Analysis ("DCF")
Valuation method that implies income projections of the property for a discrete period of time, usually between 5-10 years. The DCF method involves the projection of a series of periodic cash flows either to an operating property or a development property. Discounted cash flow projections based on significant unobservable inputs taking into account the costs to complete and completion date.
Earnings Per Share ("EPS")
Profit after tax divided by the basic/diluted weighted average number of shares in issue during the year.
EBITDA
Earnings before finance cost, tax, depreciation, amortisation of other non-current assets and purchase gain on acquisition of subsidiaries.
EBITDA (normalised)
Earnings before interest, depreciation, bargain purchase gain, fair value gain on investment property and other non-operational and / or non-recurring income and expense items.
EPRA
The European Public Real Estate Association is a non-profit association representing Europe's publicly listed property companies.
EPRA NAV Per Share
EPRA NAV divided by the basic/diluted number of shares outstanding at the year or period end.
EPRA Net Assets ("EPRA NAV")
Net assets per the statement of financial position, excluding the mark-to-market on effective cash flow hedges and related debt adjustments and deferred taxation on revaluations excluding goodwill.
Estimated Rental Value ("ERV")
ERV is the external valuers' opinion as to the open market rent which, on the date of valuations, could reasonably be expected to be obtained on a new letting or rent review of a property.
Estimated Vacancy Rates
Represent vacancy rates computed based on current and expected future market conditions after expiry of any current lease.
EURIBOR
The Euro Interbank Offered Rate: the interest rate charged by one bank to another for lending money, often used as a reference rate in bank facilities.
Financial Year
Period from 1 January to 31 December.
Future Rental Cash Inflows
Future rental cash inflows computed based on the actual location, type and quality of the properties and supported by the terms of any existing lease, other contracts or external evidence such as current market rents for similar properties.
GLA
Gross leasable area.
IFRS
International Financial Reporting Standards as adopted by the European Union.
Income Capitalisation Method
Valuation method that takes into consideration the income that a property is expected to generate if leased out assuming a stabilised occupancy level, and applying to that income a capitalisation rate reflecting the investors' interest in a property of this kind.
Property Under Development
Properties that are in development process that do not meet all the requirements to be transferred to completed investment property.
Property Under Refurbishment
Properties that are in the process of being refurbished and do not meet all the requirements to be transferred to completed investment property.
IPO
Admission to the AIM Market of the London Stock Exchange.
Land Bank for Further Development
Land bought for further development but for which the Group did not obtain all the legal documentations and authorisation permits in order to start the development process.
LEED
Leadership in Energy & Environmental Design, a green building certification programme that recognises best-in-class building strategies and practices.
Like-for-like Property Value ("LTLV")
LTLV is the change in fair value over a period of one year on the standing and underdevelopment investment properties.
Loan to Value ("LTV")
Calculated as the total outstanding debt excluding amortised cost as of financial position date divided by the appraised value of owned assets as of financial position date.
Maintenance Costs
Including necessary investments to maintain functionality of the property for its expected useful life.
Net Assets Value ("NAV")
Equity attributable to shareholders of the Company and/or net assets value.
Net Asset Value ("NAV") Per Share
Equity attributable to owners of the Company divided by the number of Ordinary shares in issue at the period end.
Net Operating Income ("NOI")
Net operating income (being the gross operating income less operating expenses that are not paid by or rechargeable to tenants, excluding funding costs, depreciation and capital expenditure).
Non-Controlling Interest ("NCI")
The equity in a subsidiary not attributable, directly or indirectly, to the parent.
Occupancy Rate
The estimated rental value of let sqm as a percentage of the total estimated rental value of the portfolio, excluding development properties. It includes spaces under offer or subject to asset management (where they have been taken back for refurbishment and are not available to let as of financial position date).
Passing Rent
It is the gross rent, less any ground rent payable under the head leases.
Portfolio Open Market Value ("OMV")
Portfolio open market value means the fair value of the Group's investment properties determined by CBAR Research & Valuation Advisors S.R.L. (Coldwell Banker), independent professionally qualified valuers who hold a recognised relevant professional qualification and have recent experience in the locations and segments of the investment properties valued, using recognised valuation techniques.
Property Valuation "As Is"
Represents the appraised value for standing and operational properties (owned and announced), properties under development and land, performed by Coldwell Banker as of financial position date.
Property Valuation on "Completion"
Represents the appraised value for standing and operational properties (owned and announced), properties under development and land, performed by Coldwell Banker as of financial position date, assuming that the properties under development were completed as of the date of valuation. The estimated appraised values on completion are subject to risks and uncertainties that could cause actual outcomes to differ materially from those expressed or implied by the relevant statements; they are not guarantees of future performance and there can be no assurance that these estimated values on completion can or will be achieved.
Residual Value Method
Valuation method that estimated the difference between the market value of the building upon completion that can be built on the plot of land and all the building's construction costs, as well as the developer's profit. This method relies on the contribution concept by estimating from the future income of the building, the amount that can be distributed to the land.
Sales Comparison Approach
Valuation method that compares the subject property with quoted prices of similar properties in the same or similar location.
SEE
South-Eastern Europe, in alphabetical order, Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Greece, Kosovo, Moldova, F.Y.R. Macedonia, Montenegro, Romania, Serbia, Slovenia and Turkey.
SPA
Share sale purchase agreement.
SQM
Square metres.
Stabilised Vacancy
It represents the reasonably estimated vacancy rate registered by the building with the proper marketing, management and maintenance conditions.
Terminal Value
The value of an asset at a specified, future valuation date, taking into account factors such as discount rates and the current value of the asset, and assuming a stable growth rate. Terminal value refers to the value of an entire property at a specified future valuation date. The common approach used to evaluate the terminal value of an asset is the "exit approach."
The Company or the Group
Globalworth Real Estate Investments Limited and its subsidiaries.
The Investment Adviser
Globalworth Investment Advisers Limited, a wholly owned holding subsidiary incorporated in Guernsey.
The Asset Manager
Globalworth Asset Managers S.R.L., an Asset Holding and Asset Manager wholly owned subsidiary incorporated in Romania.
WALL
Represents the remaining weighted average lease length of the contracted leases as of the financial position date, until the lease contracts full expiration.
Weighted Average Interest Rate
The average of the interest rate charged on the Group's loans, weighted by the relative outstanding balance of each loan at the year or period end.
REGISTERED OFFICE
Ground Floor
Dorey Court
Admiral Park
St Peter Port
Guernsey
GY1 2HT
Nominated Adviser and Joint Broker
Panmure Gordon (UK) Limited
One New Change
London
EC4M 9AF
United Kingdom
Investment Adviser ([28])
Globalworth Investment Advisers Limited
Ground Floor
Dorey Court
Admiral Park
St Peter Port
Guernsey
GY1 2HT
Auditors
Ernst & Young LLP
Royal Chambers
St. Julians Avenue
St. Peter Port
Guernsey
GY1 4AF
Registrar
Capita Registrars (Guernsey) Limited
Mont Crevalt House
Bulwer Avenue
St. Sampson
Guernsey
GY2 4LH
Public Relations
Milbourne
1 Ropemaker Street
London
EC2Y 9AW
United Kingdom
Administrator and Company Secretary
JTC (Guernsey) Limited
PO Box 156
Ground Floor
Dorey Court
Admiral Park
St Peter Port
Guernsey
GY1 4EU
Joint Broker
Cantor Fitzgerald Europe
One Churchill Place
Canary Wharf
London E14 5RB
Asset Manager ([27])
Globalworth Tower
26th floor
201 Barbu Vacarescu Boulevard
2nd district
Bucharest 020276
Romania
Legal Adviser - English Law and US Law
Sidley Austin LLP
Woolgate Exchange
25 Basinghall Street
London
EC2V 5HA
United Kingdom
Advocates - Guernsey Law
Carey Olsen
PO Box 98
Carey House
Les Banques
St. Peter Port
Guernsey
GY1 4BZ
Legal Adviser - Romanian Law
Nestor Nestor Diculescu Kingston Petersen
Globalworth Tower
18th floor
201 Barbu Vacarescu Boulevard
2nd district
Bucharest 020276
Romania
Globalworth Real Estate Investments Limited
Ground Floor, Dorey Court
Admiral Park, St Peter Port
Guernsey, GY1 2HT
Email: enquiries@globalworth.com
www.globalworth.com
[1] The number of ordinary shares used to calculate Net Assets Value "NAV" per share and EPRA Net Assets Value "EPRA NAV" per share as of 30 June 2016 were 64,023,987 (31 December 2015: 62,616,691).
[2] "EPRA" The European Public Real Estate Association is a non-profit association representing Europe's publicly listed property companies.
[3] Calculated as earnings before interest, depreciation and bargain purchase gain.
[4] Calculated as earnings before interest, depreciation, bargain purchase gain, fair value gain on investment property and other non-operational and / or non-recurring income and expense items.
Note all numbers in this announcement are unaudited.
[5] Source: Institute of National Statistics "INS"
[6] Source: CBRE, JLL, Colliers
[7] Includes c.52,358sqm and c.51,705 sqm of residential space in 31 December 2015 and 30 June 2016 respectively.
[8] Appraised valuations as of 31 December 2015 and 30 June 2016 respectively.
[9] Occupancy / Contracted Rent and WALL represent only Commercial spaces and exclude c.EUR1.5m of rental income received from residential.
[10] Reduction in overall occupancy mainly impacted by the delivery of Globalworth Tower and Gara Herastrau which are in the ramp-up phase.
[11] Number of Assets represent the total number of buildings to be developed upon delivery of all phases of the developments.
[12] GLA assuming all phases of development projects are being constructed.
[13] Remaining Capex as of 30 June '16.
[14] "Future Development"; data as of 30 June 2016 comprises, Globalworth Campus Phase II and other expansion options available at TAP
[15] "Under Construction"; data as of 30 June 2016 comprises, Globalworth Campus Phase I and TAP expansion for Valeo.
[16] Appraised valuations as of 30 June 2016
[17] Globalworth Plaza, formerly known as Nusco Tower
[18] Portfolio OMV is based on an external valuation at 30 June 2016.
[19] Calculated as earnings before interest, depreciation and bargain purchase gain.
[20] Calculated as earnings before interest, depreciation, bargain purchase gain, fair value gain on investment property and other non-operational and / or non-recurring income and expense items.
[21] Includes UniCredit HQ and Nusco Tower buildings acquired on 31 March 2015. Green Court Buildings "A" and "B" were acquired on 30 June 2015 and 22 December 2015 and hence did not impact the results for H1-15. Also the TAP-Continental and TAP-Ester parts of the TAP property started to generate revenues during H1-15 and H2-15, respectively.
[22] Calculated as earnings before interest, depreciation, bargain purchase gain, fair value gain on investment property and other non-operational and / or non-recurring income and expense items.
[23] Carrying value per the consolidated statement of financial position.
[24] 0.4m shares issued for EUR2.4m being a non-cash transaction, see note 15.
[25] Net of the EUR6.1m cash reserves, see note 13.
[26] 1.0m shares issued for EUR6.0m being a non-cash transaction, see note 15.
[27] EUR1,949 build area and EUR1,200 net area (2015: EUR1,190 net area)
[28] Wholly owned subsidiaries of the Company
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BXGDCIBDBGLG
(END) Dow Jones Newswires
September 21, 2016 02:00 ET (06:00 GMT)
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