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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Raven Russia | LSE:RUS | London | Ordinary Share | GB00B0D5V538 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 45.50 | 45.60 | 46.80 | 0.00 | 00:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMRUS
RNS Number : 3639I
Raven Russia Limited
30 August 2016
30 August 2016
Raven Russia Limited ("Raven Russia" or the "Company")
2016 Interim Results
Raven Russia today announces its unaudited results for the six months ended 30 June 2016.
Highlights
-- IFRS earnings after tax $8.8 million (30 June 2015: loss of $20.6 million); -- Underlying earnings after tax $31.5 million (30 June 2015: $34.5 million); -- Basic underlying earnings per share 4.8 cents (30 June 2015: 5.0 cents); -- Adjusted diluted net asset value per share 70 cents (31 December 2015: 70 cents); -- Investment portfolio stable at 82% let; -- Issue of new convertible preference shares completed on 7 July 2016 raising GBP109 million; -- Cash balance today of $331 million; and -- Proposed distribution of 0.5p by way of tender offer buy back of 1 in 80 shares at 40p.
Glyn Hirsch CEO said, "We are getting used to the new business conditions and the market is adapting and stabilising too. With our considerably strengthened balance sheet we feel well placed for the next phase for the Group."
Enquiries
Raven Russia Limited Tel: + 44 (0) 1481 712955
Anton Bilton
Glyn Hirsch
Novella Communications Tel: +44 (0) 203 151 7008
Tim Robertson
Toby Andrews
N+1 Singer Tel: +44 (0) 20 7496 3000
Corporate Finance - James Maxwell / Liz Yong
Sales - Alan Geeves / James Waterlow
Barclays Bank Plc Tel: +44 (0) 20 7623 2323
Tom Boardman / Tom Macdonald
Ravenscroft Tel: +44 (0) 1481 729100
David McGall
This announcement contains forward-looking statements that involve risk and uncertainties. The Group's actual results could differ materially from those estimated or anticipated in the forward-looking statements as a result of many factors. Information contained in this announcement relating to the Company should not be relied upon as a guide to future performance.
About Raven Russia
Raven Russia was founded in 2005 to invest in class A warehouse complexes in Russia and lease to Russian and International tenants. Its Ordinary Shares, Preference Shares and Warrants are listed on the Main Market of the London Stock Exchange and admitted to the official list of the Channel Islands Securities Exchange Authority Limited ("CISEA"). Its Convertible Preference Shares are admitted to the CISEA Official List and trading on the SETSqx market of the London Stock Exchange. The Company operates out of offices in Guernsey, Moscow and Cyprus and has to date completed a portfolio of circa 1.5 million square metres of Grade "A" warehouses in Moscow, St Petersburg, Rostov-on-Don and Novosibirsk. For further information visit the Company's website: www.ravenrussia.com
Financial Summary
Income Statement for the 6 months ended: 30 June 30 June 2015 2016 ------------------------------------------ -------- ------------- Net Rental and Related Income ($m) 77.0 95.5 ------------------------------------------ -------- ------------- Revaluation deficit ($m) (8.5) (50.8) ------------------------------------------ -------- ------------- IFRS Earnings/ (Loss) after tax ($m) 8.8 (20.6) ------------------------------------------ -------- ------------- Underlying Earnings after tax ($m) 31.5 34.5 ------------------------------------------ -------- ------------- IFRS Basic EPS (cents) 1.4 (3.0) ------------------------------------------ -------- ------------- Underlying Basic EPS (cents) 4.8 5.0 ------------------------------------------ -------- ------------- Distribution per share (pence) 0.5 1.0 ------------------------------------------ -------- ------------- Balance Sheet at: 30 June 31 December 2016 2015 ------------------------------------------ -------- ------------- Investment property Market Value ($m) 1,352 1,357 ------------------------------------------ -------- ------------- Adjusted diluted NAV per share (cents) 70 70 ------------------------------------------ -------- ------------- IFRS diluted NAV per share (cents) 72 70 ------------------------------------------ -------- -------------
Letting Summary
The completed logistics portfolio of 1.5 million sqm is 82% let. The table below shows the maturity profile at the period end and how that has changed in the six months to 30 June 2016.
Maturities, '000 2016 2017 2018 2019 2020-2027 Total sqm -------------------------- ----- ----- ----- ----- ---------- ------ Maturity profile at 1 January 2016 228 210 131 225 429 1,223 -------------------------- ----- ----- ----- ----- ---------- ------ Renegotiated and extended (82) (25) 0 (12) 0 (119) -------------------------- ----- ----- ----- ----- ---------- ------ Effect of renegotiations 0 45 33 11 30 119 -------------------------- ----- ----- ----- ----- ---------- ------ Vacated/terminated (78) (6) (3) 0 0 (87) -------------------------- ----- ----- ----- ----- ---------- ------ New lettings 7 3 34 12 29 85 -------------------------- ----- ----- ----- ----- ---------- ------ Maturity profile at 30 June 2016 75 227 195 236 488 1,221 -------------------------- ----- ----- ----- ----- ---------- ------
In addition, 25,000sqm of pre let agreements ("PLAs") and letters of intent ("LOIs") had been signed at 30 June 2016.
Chairman's Message
I am pleased to say that since my last message in March this year there has been a period of relative stability in the Russian market and we have been busy taking some positive steps to recover lost ground.
Business models have adapted to the new market fundamentals following the various macro economic events of the past two years and investment decisions are coming back onto the agenda. Our occupancy levels have stabilised at 82% and we have active discussions on vacant space on most of our projects. Similarly, property valuations have remained relatively flat over the six months with a small deficit of $8.5 million at 30 June 2016 (deficit of $257 million in 12 months to 31 December 2015).
New leases are Rouble denominated and as a result we will continue to have a drop off in US Dollar denominated income as existing US Dollar pegged leases mature. But we now have greater clarity on where that may lead us. The underlying tenant base is strong with the weaker covenants having now vacated and the integrity of our leases, where tested in various court and arbitration procedures, has proved robust.
Following the release of our 2015 Annual Report and with the spectre of a continuing reduction in our net operating income as leases re-align with current market rental levels it became obvious that we should restructure our balance sheet to counter the effects. In a very short window and thanks to the foresight of Anton, our Deputy Chairman, Glyn, our CEO and a supportive shareholder base, we raised GBP109 million through the issue of new convertible preference shares in early July. This has allowed us to start the process of changing the weighting of our secured, amortising debt, reducing it to levels that meet ongoing covenant requirements, extending the maturity periods and significantly reducing the annual amortisation exposure. The effect of this should begin to be seen in 2017, when our cash break even point will fall to a level commensurate with our reduced net operating income.
We still have significant cash resources over and above the new fund raising and following this strengthening of our balance sheet we will look to start rebuilding our top line as acquisition or development opportunities arise.
Although it is our intention to distribute the equivalent of 0.5p per ordinary share (30 June 2015: 1p per ordinary share) by way of a tender offer buy back of 1 in 80 shares at 40p per share, we remain cognisant of how quickly external events can impact on our market and will continue with caution, albeit with a stronger balance sheet.
Richard Jewson
Chairman
29 August 2016
Chief Executive's Review
Results
Results for the first six months of the year have met our expectations. Our net operating and related income continues to reduce to a level commensurate with current market rents, $77 million for the half year compared to $95.5 million in the six months to 30 June 2015.
Underlying earnings after tax for the period remain healthy, given the reduced income, at $31.5 million (30 June 2015: $34.5 million). This is driven mainly by foreign exchange profits through the income statement and reduced administrative expenses.
Administrative expenses benefitted from a recovery in the bad debt charge (a credit of $0.7million in the period compared to a charge of $2.5 million in 2015) and reduced discretionary employee bonuses. The latter is offset by an increased charge for share based payments and other long term incentives following the approval of the new incentive scheme at the AGM on 15 June 2016.
Basic underlying earnings per share are 4.8 cents (30 June 2015: 5.0 cents).
IFRS earnings after tax recovered to $8.8 million (30 June 2015: loss of $20.6 million) with property values remaining relatively stable, generating an unrealised loss on revaluation of $8.5 million in the half year (30 June 2015: loss of $50.8 million).
Fully diluted adjusted net asset value per share remained at 70 cents (31 December 2015: 70 cents). Cash balances at 30 June 2016 were $183 million (31 December 2015: $202 million) increasing to $331 million today following the issue of new convertible preference shares in July.
Occupancy levels have remained at 82% over the period (31 December 2015: 82%). At 30 June 2016, 73% of our let warehouse space had US Dollar denominated leases with an average warehouse rental level of $124 per sqm and a weighted average term to maturity of 3.4 years. Rouble denominated or capped leases account for 27% of our let space with an average warehouse rent of Roubles 5,000 per sqm and a weighted average term to maturity of 2 years. Rouble leases have an average minimum annual indexation of 7%.
The majority of 2016 lease maturities have now been dealt with. This has resulted in 78,000sqm of vacancies in the first six months with a further 62,000sqm of space expected to be vacated in the second half of the year. Letting interest has picked up significantly since the year end and 85,000sqm of vacant space had been re let by 30 June 2016 with a further 25,000sqm of pre let agreements and letters of intent signed.
Financing
On 7 July 2016 the Company completed the placing of new convertible preference shares, raising GBP109 million at a subscription price of GBP1 per share. The convertible preference shares have a 10 year term, a cumulative preference dividend of 6.5p per annum and are redeemable on maturity at GBP1.35. The holders have the right to convert to ordinary shares at the equivalent to approximately 55p per ordinary share (subject to certain adjustments) prior to maturity. The shares were listed on the Channel Islands Securities Exchange and trade on the SETSqx platform of the London Stock Exchange.
This fund raising allows us to restructure our balance sheet by reducing secured, amortising debt facilities, extend the terms of that debt and reduce our annual amortisation. We have agreed terms on 7 of our facilities and expect to pre pay $100 million of debt on these facilities by the end of the current quarter. The two largest near term maturities of $232 million will be extended to 2021 as part of this exercise.
We have commenced discussion on the majority of the remaining facilities to extend terms and reduce amortisation and these are progressing positively. We hope to have all formal arrangements in place on these by the end of the year.
As explained in note 9 to the interim financial statements, a cash sweep mechanism continues on the facility secured on the office block in St Petersburg.
Foreign exchange
Foreign exchange movements in the period have been positive, profit in the income statement of $10.3 million being a factor of the Sterling functional currency of the holding company and its US Dollar cash reserves. Weak Sterling also gave a boost to reserves, reducing the US Dollar value of our Sterling preference shares.
Cash flow
Cash flows in the period show the effect of reduced operating income, dropping $19.9 million to $49.9 million compared to the previous year. Debt amortisation, interest and preference share coupon totalled $76.2 million (30 June 2015: $71.9 million). Distributions to ordinary shareholders for the period were $5.8 million (30 June 2015: $32 million). We did benefit by the sale of ordinary shares held by an Employee Benefit Trust ("EBT"), raising $14.7 million but this is simply a timing difference as the majority of those funds were then used by the EBT in subscribing for new convertible preference shares in early July. Cash outflows for the period before foreign exchange movements were $21.2 million.
Tender offer
The investment world is desperately short of income and despite the issues we have faced our portfolio still generated a healthy operating profit.
Although far from the 6p we have achieved historically, we propose a distribution of the equivalent of 0.5p per ordinary share by way of tender offer buy back of 1 in 80 shares at 40p (30 June 2015: 1p by way of an offer of 1 in 47 shares at 47p).
The distribution demonstrates the resilience of our business and our commitment to providing income for our shareholders.
Outlook
It may not be the bottom of the market but it certainly feels as though things have stopped deteriorating.
We are getting used to the new business conditions and the market is adapting and stabilising too. With our considerably strengthened balance sheet we feel well placed for the next phase for the Group. Significant progress has been made in restructuring our bank loans and we are actively engaged in finding attractive income producing acquisitions which will further enhance cash flow and returns.
In the short to medium term, the stabilising Russian economy may have a positive impact. Inflation is generally forecast to fall to around 5% and interest rates below 7% in the next few years.
What price a warehouse currently yielding 12% in Roubles with annual indexed increases in that scenario? Something to look forward to I hope, as well as the upside potential of any future strengthening of the Rouble against the Dollar.
Glyn Hirsch
Chief Executive Officer
29 August 2016
Corporate Governance
Principal risks and uncertainties
Internal controls and an effective risk management regime are integral to the Group's continued operation. The assessment of risks faced by the Group is set out in the Risk Report on pages 35 to 38 of the Group's 2015 Annual Report. The principal risks and uncertainties to which the Group is subject have remained consistent with those at the 2015 year end.
A summary of the principal risks and uncertainties are as follows:
Financial Risks
Oil Price and Foreign Exchange
The current oil price and Rouble/US Dollar exchange rate levels remain or deteriorate further in the long term, reducing the Group's US Dollar denominated earnings.
Bank Financing and Costs
Reduced access to funding and potential increases in funding costs hinders the Group's ability to refinance maturing facilities. Reduced income and asset values driven by a weak Rouble increases the risk of covenant breaches.
Russian Domestic Risk
Legal and Taxation Frameworks
The Russian legal and taxation frameworks are still developing with large volumes of new legislation being open to interpretation and abuse.
Personnel Risks
Key personnel
The risk of failing to retain key personnel has increased with the downturn in the Russian market. A new incentive scheme was presented to shareholders and approved at the AGM on 15 June 2016.
Political Risk
Ukraine
The situation in Ukraine escalates resulting in increased isolation of Russia from international markets and increased sanctions which exacerbate the slow down in the Russian economy.
Going concern
The financial position of the Group, its cash flows, liquidity and borrowings are described in the Chief Executive's Review and the accompanying financial statements and related notes. During the period the Group had, and continues to hold, substantial cash and short term deposits and is generating underlying profits. Since the half year, additional funds have been raised through the issue of new convertible preference shares. As a consequence, the Directors believe the Group is well placed to manage its business risks.
After making enquiries and examining major areas that could give rise to significant financial exposure, the Board has a reasonable expectation that the Company and the Group have adequate resources to continue its operations for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in the preparation of the accompanying interim financial statements.
Directors' Responsibility Statement
The Board confirms to the best of its knowledge:
The condensed financial statements have been prepared in accordance with IAS 34 as adopted by the European Union, and that the half year report includes a fair review of the information required by DTR 4.2.7R and DTR 4.2.8R.
The names and functions of the Directors of Raven Russia Limited are disclosed in the 2015 Annual Report of the Group.
This responsibility statement was approved by the Board of Directors on the 29 August 2016 and is signed on its behalf by
Mark Sinclair Colin Smith Chief Financial Officer Chief Operating Officer
Independent review report to Raven Russia Limited
We have been engaged by the Company to review the condensed set of financial statements in the Interim Results financial report for the six months ended 30 June 2016 which comprises the Condensed Unaudited Group Income Statement, the Condensed Unaudited Group Statement of Comprehensive Income, the Condensed Unaudited Group Statement of Changes in Equity, the Condensed Unaudited Group Balance Sheet, the Condensed Unaudited Group Cash Flow Statement and the related notes 1 to 18. We have read the other information contained in the Interim Results report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The Interim Results financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the Interim Results financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the Interim Results report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom.
A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the Interim Results report for the six months ended 30 June 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
London
29 August 2016
Condensed Unaudited Group Income Statement For the six months ended 30 June 2016 Six months ended 30 Six months ended 30 June 2016 June 2015 Underlying Capital Underlying Capital Notes earnings and other Total earnings and other Total $'000 $'000 $'000 $'000 $'000 $'000 --------------------- ------ ----------- ----------- --------- ----------- ----------- --------- Gross revenue 2 97,705 - 97,705 118,289 - 118,289 Property operating expenditure and cost of sales (20,701) - (20,701) (22,838) - (22,838) ----------- --------- ----------- ----------- --------- Net rental and related income 2 77,004 - 77,004 95,451 - 95,451 ----------- ----------- --------- ----------- ----------- --------- Administrative expenses 3 (10,471) (544) (11,015) (17,567) (17) (17,584) Share-based payments and other long term incentives 15e (2,231) (4,669) (6,900) - (3,280) (3,280) Foreign currency profits 10,283 - 10,283 1,974 - 1,974 ----------- ----------- --------- ----------- ----------- --------- Operating expenditure (2,419) (5,213) (7,632) (15,593) (3,297) (18,890) Share of profits of joint ventures 697 - 697 717 - 717 Operating profit / (loss) before profits and losses on investment property 75,282 (5,213) 70,069 80,575 (3,297) 77,278 ----------- ----------- --------- ----------- ----------- --------- Unrealised loss on revaluation of investment property 6 - (6,534) (6,534) - (51,901) (51,901) Unrealised (loss) / profit on revaluation of investment property under construction 7 - (1,931) (1,931) - 1,128 1,128 ----------- ----------- --------- ----------- ----------- --------- Operating profit / (loss) 2 75,282 (13,678) 61,604 80,575 (54,070) 26,505 ----------- ----------- --------- ----------- ----------- --------- Finance income 4 1,405 1,776 3,181 1,636 1,965 3,601 Finance expense 4 (41,944) (6,326) (48,270) (42,280) (5,904) (48,184) Profit / (loss) before tax 34,743 (18,228) 16,515 39,931 (58,009) (18,078) ----------- ----------- --------- ----------- ----------- --------- Tax (3,252) (4,495) (7,747) (5,448) 2,919 (2,529) ----------- Profit / (loss) for the period 31,491 (22,723) 8,768 34,483 (55,090) (20,607) =========== =========== ========= =========== =========== ========= Earnings per share: 5 Basic (cents) 1.35 (3.01) Diluted (cents) 1.34 (3.01) Underlying earnings per share: 5 Basic (cents) 4.84 5.04 Diluted (cents) 4.76 4.90 =========== =========== The total column of this statement represents the Group's Income Statement, prepared in accordance with IFRS as adopted by the EU. The "underlying earnings" and "capital and other" columns are both supplied as supplementary information permitted by IFRS as adopted by the EU. Further details of the allocation of items between the supplementary columns are given in note 5. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of the parent company. There are no non-controlling interests. The accompanying notes are an integral part of this statement. Condensed Unaudited Group Statement Of Comprehensive Income For the six months ended 30 June 2016 Six months Six months ended ended 30 June 30 June 2016 2015 $'000 $'000 Profit / (loss) for the period 8,768 (20,607) Items to be reclassified to profit or loss in subsequent periods: Foreign currency translation on consolidation 4,499 (953) Total comprehensive income for the period, net of tax 13,267 (21,560) ============== =========== All income is attributable to the equity holders of the parent company. There are no non-controlling interests. The accompanying notes are an integral part of this statement. Condensed Unaudited Group Balance Sheet As at 30 June 2016 30 June 31 December 2016 2015 Notes $'000 $'000 Non-current assets Investment property 6 1,330,441 1,333,987 Investment property under construction 7 39,775 39,129 Plant and equipment 3,176 3,141 Goodwill 2,036 2,245 Investment in joint ventures 13,579 14,968 Other receivables 7,354 6,145 Derivative financial instruments 1,402 5,585 Deferred tax assets 26,630 25,523 1,424,393 1,430,723 ========== ============ Current assets Inventory 1,258 1,381 Trade and other receivables 54,457 50,264
Derivative financial instruments 82 233 Cash and short term deposits 182,995 202,291 238,792 254,169 ========== ============ Total assets 1,663,185 1,684,892 ========== ============ Current liabilities Trade and other payables 54,112 53,384 Derivative financial instruments 1,451 2,097 Interest bearing loans and borrowings 9 201,702 104,724 257,265 160,205 ========== ============ Non-current liabilities Interest bearing loans and borrowings 9 684,164 814,021 Preference shares 10 141,897 156,558 Other payables 29,095 31,653 Derivative financial instruments 618 1,794 Deferred tax liabilities 61,527 55,619 917,301 1,059,645 ========== ============ Total liabilities 1,174,566 1,219,850 ========== ============ Net assets 488,619 465,042 ========== ============ Equity Share capital 11 12,631 12,776 Share premium 219,049 224,735 Warrants 12 1,166 1,167 Own shares held 13 (7,947) (52,101) Capital reserve (218,362) (210,176) Translation reserve (183,642) (188,141) Retained earnings 665,724 676,782 Total equity 488,619 465,042 ========== ============ Net asset value per share (cents): 14 Basic 73 72 Diluted 72 70 Adjusted net asset value per share (cents): 14 Basic 72 72 Diluted 70 70 ========== ============ The accompanying notes are an integral part of this statement. Condensed Unaudited Group Statement Of Changes In Equity For the six months ended 30 June 2016 Own Share Share Shares Capital Translation Retained Capital Premium Warrants Held Reserve Reserve Earnings Total Notes $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 At 1 January 2015 13,623 267,992 1,195 (63,649) 16,597 (186,388) 647,919 697,289 Loss for the period - - - - - - (20,607) (20,607) Other comprehensive income - - - - - (953) - (953) Total comprehensive income for the period - - - - - (953) (20,607) (21,560) -------- --------- --------- --------- ---------- ------------ --------- --------- Warrants exercised 1 15 (2) - - - - 14 Own shares acquired - - - (76) - - - (76) Ordinary shares cancelled (626) (32,660) - 2,746 - - - (30,540) Own shares allocated - - - 7,056 - - (8,424) (1,368) Share-based payments - - - - - - 3,280 3,280 Transfer in respect of capital losses - - - - (44,852) - 44,852 - At 30 June 2015 12,998 235,347 1,193 (53,923) (28,255) (187,341) 667,020 647,039 ======== ========= ========= ========= ========== ============ ========= ========= At 1 January 2016 12,776 224,735 1,167 (52,101) (210,176) (188,141) 676,782 465,042 Profit for the period - - - - - - 8,768 8,768 Other comprehensive income - - - - - 4,499 - 4,499 Total comprehensive income for the period - - - - - 4,499 8,768 13,267 -------- --------- --------- --------- ---------- ------------ --------- --------- 11 / Warrants exercised 12 - 5 (1) - - - - 4 11 Ordinary shares / cancelled 13 (145) (5,691) - 48 - - - (5,788) Own shares disposed 13 - - - 43,161 - - (28,505) 14,656 Own shares allocated 13 - - - 945 - - (1,003) (58) Share-based payments 15e - - - - - - 1,496 1,496 Transfer in respect of capital losses - - - - (8,186) - 8,186 - At 30 June 2016 12,631 219,049 1,166 (7,947) (218,362) (183,642) 665,724 488,619 ======== ========= ========= ========= ========== ============ ========= ========= The accompanying notes are an integral part of this statement. Condensed Unaudited Group Cash Flow Statement For the six months ended 30 June 2016 Six months Six months ended ended 30 June 30 June 2016 2015 Notes $'000 $'000 Cash flows from operating activities Profit / (loss) before tax 16,515 (18,078) Adjustments for: Depreciation 3 544 946 Provision for bad debts 3 (712) 2,486 Share of profits of joint ventures (697) (717) Finance income 4 (3,181) (3,601) Finance expense 4 48,270 48,184 Loss on revaluation of investment property 6 6,534 51,901 Loss / (profit) on revaluation of investment property under construction 7 1,931 (1,128) Foreign exchange profits (10,283) (1,974) Share-based payments and other long term incentives 15e 4,669 3,280 ----------- ----------- 63,590 81,299 Increase in operating receivables (2,571) (436) Increase in other operating current assets (2) (16) Decrease in operating payables (8,644) (9,269) ----------- ----------- 52,373 71,578 Receipts from joint ventures 694 1,349 Tax paid (3,186) (3,194) Net cash generated from operating activities 49,881 69,733 =========== =========== Cash flows from investing activities Payment for investment property and investment property under construction (4,369) (12,260) Refunds of VAT on construction 172 5,058 Release of restricted cash - 25,392 Purchase of plant and equipment (294) (531) Loans repaid 227 290
Interest received 1,405 1,636 Net cash (used in) / generated from investing activities (2,859) 19,585 =========== =========== Cash flows from financing activities Proceeds from long term borrowings - 65,944 Repayment of long term borrowings (33,698) (28,006) Bank borrowing costs paid (34,639) (34,934) Exercise of warrants 4 14 Ordinary shares purchased (5,846) (31,984) Ordinary shares disposed 14,656 - Dividends paid on preference shares (7,906) (8,938) Purchase of preference shares (780) - Settlement of derivative financial instruments - (3,999) Premium paid for derivative financial instruments - (855) Net cash used in financing activities (68,209) (42,758) =========== =========== Net (decrease) / increase in cash and cash equivalents (21,187) 46,560 =========== =========== Opening cash and cash equivalents 202,291 171,383 Effect of foreign exchange rate changes 1,891 2,969 Closing cash and cash equivalents 182,995 220,912 =========== =========== The accompanying notes are an integral part of this statement. Notes to the Condensed Unaudited Group Financial Statements For the six months ended 30 June 2016 1. Basis of accounting Basis of preparation The condensed unaudited financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards adopted for use in the European Union ("IFRS") and have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting". The condensed financial statements do not include all the information and disclosures required in annual financial statements and should be read in conjunction with the Group's financial statements for the year ended 31 December 2015. Significant accounting policies The accounting policies adopted in the preparation of the condensed financial statements are consistent with those followed in the preparation of the Group's financial statements for the year ended 31 December 2015. The Group has adopted new and amended IFRS and IFRIC interpretations as of 1 January 2016, which did not have any effect on the financial performance, financial position or disclosures in the financial statements of the Group. The Group has not adopted early any standard, interpretation or amendment that has been issued but is not yet effective. Going concern The financial position of the Group, its cash flows, liquidity position and borrowings are described in the Chief Executive's Review and the notes to these interim financial statements. After making appropriate enquiries and examining sensitivities that could give rise to financial exposure, the Board has a reasonable expectation that the Group has adequate resources to continue operations for the foreseeable future. Accordingly, the Group continues to adopt the going concern basis in the preparation of these interim financial statements. 2. Segmental information The Group has three operating segments, which are managed and report independently to the Board of Directors. These comprise: Property investment - acquire, develop and lease commercial property in Russia; Roslogistics - provision of warehousing, transport, customs brokerage and related services in Russia; and Raven Mount - sale of residential property in the UK. (a) Segmental information for the six months ended and as at 30 June 2016 For the six months ended 30 June 2016 Property Raven Segment Central Investment Roslogistics Mount Total Overhead Total $'000 $'000 $'000 $'000 $'000 $'000 Gross revenue 89,614 7,910 181 97,705 - 97,705 Operating costs / cost of sales (17,306) (3,398) 3 (20,701) - (20,701) Net operating income 72,308 4,512 184 77,004 - 77,004 ----------- ------------- ----------- ------------- ------------ ------------ Administrative expenses Running general & administration expenses (5,763) (660) (620) (7,043) (3,428) (10,471) Depreciation (424) (120) - (544) - (544) Share-based payments and other long term incentives (2,447) - - (2,447) (4,453) (6,900) Foreign currency profits 10,276 7 - 10,283 - 10,283 ----------- ------------- ----------- ------------- ------------ ------------ 73,950 3,739 (436) 77,253 (7,881) 69,372 Unrealised loss on revaluation of investment property (6,534) - - (6,534) - (6,534) Unrealised loss on revaluation of investment property under construction (1,931) - - (1,931) - (1,931) Share of profits of joint ventures - - 697 697 - 697 ----------- ------------- ----------- ------------- ------------ ------------ Segment profit / (loss) 65,485 3,739 261 69,485 (7,881) 61,604 =========== ============= =========== ============= ============ ============ Finance income 3,181 Finance expense (48,270) Profit before tax 16,515 ============ As at 30 June 2016 Property Raven Investment Roslogistics Mount Total $'000 $'000 $'000 $'000 Assets Investment property 1,330,441 - - 1,330,441 Investment property under construction 39,775 - - 39,775 Investment in joint ventures - - 13,579 13,579 Inventory - - 1,258 1,258 Cash and short term deposits 177,947 1,378 3,670 182,995 ----------- ------------- ------------ Segment assets 1,548,163 1,378 18,507 1,568,048 =========== ============= ============ ============ Other non-current assets 40,598 Other current assets 54,539 Total assets 1,663,185 ============ Segment liabilities Interest bearing loans and borrowings 885,866 - - 885,866 =========== ============= ============ ============ Capital expenditure Payments for investment property and investment property under construction 4,369 - - 4,369 =========== ============= ============ ============ (b) Segmental information for the six months ended 30 June 2015 Property Raven Segment Central Investment Roslogistics Mount Total Overhead Total $'000 $'000 $'000 $'000 $'000 $'000 Gross revenue 109,905 7,699 685 118,289 - 118,289 Operating costs / cost of sales (19,876) (2,928) (34) (22,838) - (22,838) Net operating
income 90,029 4,771 651 95,451 - 95,451 ----------- ------------- ----------- ------------- ------------ ------------ Administrative expenses Running general & administration expenses (13,781) (699) (601) (15,081) (2,486) (17,567) Other acquisition / abortive project costs 929 - - 929 - 929 Depreciation (812) (132) (2) (946) - (946) Share-based payments and other long term incentives (1,979) - - (1,979) (1,301) (3,280) Foreign currency profits 1,797 177 - 1,974 - 1,974 ----------- ------------- ----------- ------------- ------------ 76,183 4,117 48 80,348 (3,787) 76,561 Unrealised loss on revaluation of investment property (51,901) - - (51,901) - (51,901) Unrealised profit on revaluation of investment property under construction 1,128 - - 1,128 - 1,128 Share of profits of joint ventures - - 717 717 - 717 Segment profit / (loss) 25,410 4,117 765 30,292 (3,787) 26,505 =========== ============= =========== ============= ============ ============ Finance income 3,601 Finance expense (48,184) Loss before tax (18,078) ============ (c) Segmental information as at 31 December 2015 Property Raven Investment Roslogistics Mount Total $'000 $'000 $'000 $'000 Assets Investment property 1,333,987 - - 1,333,987 Investment property under construction 39,129 - - 39,129 Investment in joint ventures - - 14,968 14,968 Inventory - - 1,381 1,381 Cash and short term deposits 196,861 691 4,739 202,291 Segment assets 1,569,977 691 21,088 1,591,756 =========== ============= ============ ============ Other non-current assets 42,639 Other current assets 50,497 Total assets 1,684,892 ============ Segment liabilities Interest bearing loans and borrowings 918,745 - - 918,745 =========== ============= ============ ============ Capital expenditure Payments for investment property under construction 20,028 - - 20,028 =========== ============= ============ ============ 3. Administrative expenses Six Six months months ended ended 30 June 30 June 2016 2015 $'000 $'000 Employment costs 5,521 9,154 Directors' remuneration 1,788 1,760 Bad debts (712) 2,486 Office running costs and insurance 1,691 2,139 Travel costs 799 901 Auditors' remuneration 335 343 Abortive project costs - (929) Legal and professional 754 560 Depreciation 544 946 Registrar costs and other administrative expenses 295 224 11,015 17,584 ============ ============ 4. Finance income and expense Six Six months months ended ended 30 June 30 June 2016 2015 Finance income $'000 $'000 Total interest income on financial assets not at fair value through profit or loss Income from cash and short term deposits 1,405 1,636 Other finance income Change in fair value of open interest rate derivative financial instruments 177 557 Change in fair value of foreign currency embedded derivatives 1,599 1,408 Finance income 3,181 3,601 ============ ============ Finance expense Interest expense on loans and borrowings measured at amortised cost 35,378 35,085 Interest expense on preference shares 8,759 9,278 ------------ ------------ Total interest expense on financial liabilities not at fair value through profit or loss 44,137 44,363 Change in fair value of open forward currency derivative financial instruments 1,676 848 Change in fair value of open interest rate derivative financial instruments 2,457 2,973 Finance expense 48,270 48,184 ============ ============ 5. Earnings measures In addition to reporting IFRS earnings the Group adopts the European Public Real Estate Association ("EPRA") earnings measure, as set out in their Best Practice Policy Recommendations document issued in December 2014 and also reports its own underlying earnings measure. EPRA earnings The EPRA earnings measure excludes investment property revaluations and gains or losses on disposal of investment property, intangible asset movements, gains and losses on derivative financial instruments and related taxation. Underlying earnings Underlying earnings consist of the EPRA earnings measure, with additional group adjustments. Adjustments include share-based payments and other long term incentives, the accretion of premiums payable on redemption of preference shares, material non-recurring items, depreciation and amortisation of loan origination costs. Six Six months months ended ended 30 June 30 June
The calculation of basic and diluted earnings per share is based on the following data: 2016 2015 $'000 $'000 Earnings Earnings for the purposes of basic and diluted earnings per share being the profit / (loss) for the period prepared under IFRS 8,768 (20,607) Adjustments to arrive at EPRA earnings: Unrealised loss on revaluation of investment property 6,534 51,901 Unrealised loss / (profit) on revaluation of investment property under construction 1,931 (1,128) Change in fair value of open forward currency derivative financial instruments 1,676 848 Change in fair value of open interest rate derivative financial instruments 2,280 2,416 Change in fair value of foreign currency embedded derivatives (1,599) (1,408) Movement on deferred tax thereon 2,033 (3,054) EPRA earnings 21,623 28,968 Abortive project costs - (929) Share-based payments and other long term incentives 4,669 3,280 Premium on redemption of preference shares and amortisation of issue costs 278 317 Depreciation 544 946 Amortisation of loan origination costs 1,915 1,766 Tax charge on unrealised foreign exchange movements in loans 2,462 135 Underlying earnings 31,491 34,483 ============ ============ 30 June 30 June 2016 2015 Number Number Number of shares '000 '000 Weighted average number of ordinary shares for the purpose of basic EPS (excluding own shares held) 650,946 683,750 Effect of dilutive potential ordinary shares: Warrants 6,351 12,310 ERS 43 298 LTIP 1,111 2,566 CBLTIS 2012 - 3,885 CBLTIS 2015 2,231 - Weighted average number of ordinary shares for the purposes of diluted EPS (excluding own shares held) 660,682 702,809 ============ ============ Six Six months months ended ended 30 June 30 June 2016 2015 Cents Cents EPS basic 1.35 (3.01) Effect of dilutive potential ordinary shares: Warrants (0.01) - ERS - - LTIP - - CBLTIS 2012 - - CBLTIS 2015 - - Diluted EPS 1.34 (3.01) ------------ ------------ EPRA EPS basic 3.32 4.24 Effect of dilutive potential ordinary shares: Warrants (0.03) (0.08) ERS - - LTIP (0.01) (0.02) CBLTIS 2012 - (0.02) CBLTIS 2015 (0.01) - EPRA diluted EPS 3.27 4.12 ------------ ------------ Underlying EPS basic 4.84 5.04 Effect of dilutive potential ordinary shares: Warrants (0.05) (0.09) ERS - - LTIP (0.01) (0.02) CBLTIS 2012 - (0.03) CBLTIS 2015 (0.02) - Underlying diluted EPS 4.76 4.90 ------------ ------------ 6. Investment property Asset class Logistics Logistics Logistics Office 30 June St St Location Moscow Petersburg Regions Petersburg 2016 Fair value hierarchy Level Level Level Level * 3 3 3 3 Total $'000 $'000 $'000 $'000 $'000 Market value at 1 January 2016 1,043,952 139,106 148,649 25,140 1,356,847 Property improvements and movement in completion provisions 3,174 203 54 (85) 3,346 Unrealised (loss) / profit on revaluation (1,943) (2,279) (3,882) 151 (7,953) ------------- ----------- ------------- ------------ ------------ Market value at 30 June 2016 1,045,183 137,030 144,821 25,206 1,352,240 Tenant incentives and contracted rent uplift balances (16,305) (5,320) (1,176) (371) (23,172) Head lease obligations 1,373 - - - 1,373 ------------- Carrying value at 30 June 2016 1,030,251 131,710 143,645 24,835 1,330,441 ------------- ----------- ------------- ------------ ------------ Revaluation movement in the period ended 30 June 2016 Gross revaluation (1,943) (2,279) (3,882) 151 (7,953) Effect of tenant incentives and contracted rent uplift balances 242 12 142 1,023 1,419 Revaluation reported in the Income Statement (1,701) (2,267) (3,740) 1,174 (6,534) ------------- ----------- ------------- ------------ ------------ Asset class Logistics Logistics Logistics Office 31 December St St Location Moscow Petersburg Regions Petersburg 2015 Fair value hierarchy Level Level Level Level
* 3 3 3 3 Total $'000 $'000 $'000 $'000 $'000 Market value at 1 January 2015 1,222,101 170,074 191,576 28,852 1,612,603 Property improvements and movement in completion provisions (2,768) (1,194) 114 (266) (4,114) Unrealised loss on revaluation (175,381) (29,774) (43,041) (3,446) (251,642) ------------- ----------- ------------- ------------ ------------ Market value at 31 December 2015 1,043,952 139,106 148,649 25,140 1,356,847 Tenant incentives and contracted rent uplift balances (16,547) (5,332) (1,318) (1,394) (24,591) Head lease obligations 1,731 - - - 1,731 Carrying value at 31 December 2015 1,029,136 133,774 147,331 23,746 1,333,987 ------------- ----------- ------------- ------------ ------------ *Classified in accordance with the fair value hierarchy. There were no transfers between fair value hierarchy in 2015 or 2016. At 30 June 2016 the Group has pledged investment property with a value of $1,340 million (31 December 2015: $1,348 million) to secure banking facilities granted to the Group (note 9). 7. Investment property under construction Assets under Asset class construction Land Bank 30 June Location Moscow Regions Moscow St Petersburg Regions 2016 Fair value hierarchy Level Level Level Level Level * 3 3 Sub-total 3 3 3 Sub-total Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Market value at 1 January 2016 27,700 7,300 35,000 - 413 2,714 3,127 38,127 Costs incurred 124 12 136 - 474 160 634 770 Effect of foreign exchange rate changes 1,181 714 1,895 - 54 395 449 2,344 Unrealised loss on revaluation (1,305) (626) (1,931) - - - - (1,931) -------- -------- ---------- ------- -------------- -------- ---------- ------------ Market value at 30 June 2016 27,700 7,400 35,100 - 941 3,269 4,210 39,310 Head lease obligations 465 - 465 - - - - 465 -------- ---------- ------- -------------- -------- ---------- Carrying value at 30 June 2016 28,165 7,400 35,565 - 941 3,269 4,210 39,775 -------- -------- ---------- ------- -------------- -------- ---------- ------------ Assets under Asset class construction Land Bank 31 December Location Moscow Regions Moscow St Petersburg Regions 2015 Fair value hierarchy Level Level Level Level Level * 3 3 Sub-total 3 3 3 Sub-total Total $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Market value at 1 January 2015 34,000 9,500 43,500 - - 3,216 3,216 46,716 Costs incurred 789 - 789 - 413 283 696 1,485 Effect of foreign exchange rate changes (2,369) (1,570) (3,939) - - (785) (785) (4,724) Unrealised loss on revaluation (4,720) (630) (5,350) - - - - (5,350) -------- -------- ---------- ------- -------- ---------- ------------ Market value at 31 December 2015 27,700 7,300 35,000 - 413 2,714 3,127 38,127 Head lease obligations 1,002 - 1,002 - - - - 1,002 -------- -------- ---------- ------- -------------- -------- ---------- ------------ Carrying value at 31 December 2015 28,702 7,300 36,002 - 413 2,714 3,127 39,129 -------- -------- ---------- ------- -------------- -------- ---------- ------------ *Classified in accordance with the fair value hierarchy Six months Six months ended ended 30 June 30 June 2016 2015 $'000 $'000 Revaluation movement in the period Unrealised (loss) / profit on revaluation of assets carried at external valuations (1,931) 1,128 Unrealised loss on revaluation of assets carried at directors' valuation - - -------- ------------------------ (1,931) 1,128 -------- ------------------------ No borrowing costs were capitalised in the period (31 December 2015: $nil). At 30 June 2016 the Group has pledged investment property under construction with a value of $35.1 million (31 December 2015: $35.0 million) to secure banking facilities granted to the Group (note 9). 8. Valuation assumptions and key inputs Class of property Carrying amount Range 30 June 31 December 30 June 31 December Valuation 2016 2015 technique Input 2016 2015 $'000 $'000 Completed investment property Long term Moscow - ERV per sqm Logistics 1,030,251 1,029,136 Income for $90 to $90 to capitalisation existing tenants $110 $110 Short term ERV per sqm for vacant space Rub4,300 Rub4,500 Initial 2.18% 11.2% yield to 15.1% to 14.9% Equivalent 10.9% 10.8% yield to 12.5% to 12.7% Vacancy 6% to 13.9% rate 77% to 100.0% Passing rent $70 to $62 to per sqm $158 $158 Passing rent Rub3,500 Rub4,500 per sqm to Rub6,744 to Rub6,300 Long term St Petersburg ERV per sqm - Logistics 131,710 133,774 Income for capitalisation existing tenants $75 $75 Short term ERV per sqm
for vacant space Rub3,800 Rub4,000 Initial 12.3% 13.3% yield to 13.5% to 14.1% Equivalent 12.3% 12.7% yield to 12.6% to 13.3% Vacancy 2% to 11.7% rate 19% to 40.0% Passing rent $105 $80 to per sqm to $136 $133 Passing rent Rub3,500 Rub3,060 per sqm to Rub4,968 to Rub4,600 Long term Regional ERV per sqm - Logistics 143,645 147,331 Income for capitalisation existing tenants $74 $75 Short term ERV per sqm for vacant space Rub3,800 Rub4,000 Initial 12.9% 12.2% yield to 13.9% to 13.1% Equivalent yield 12.5% 12.7% Vacancy 17% to 13.0% rate 21% to 21.0% Passing rent $101 $101 to per sqm to $129 $128 Passing rent Rub3,900 Rub3,060 per sqm to Rub6,547 to Rub4,600 St Petersburg ERV per - Office 24,835 23,746 Income sqm $235 $235 Initial capitalisation yield 17.9% 15.8% Equivalent yield 13.0% 13.0% Vacancy rate 0% 0% Passing rent per sqm $293 $294 Range Other key information Description 30 June 31 December 2016 2015 Moscow - 34% - 31% - Logistics Land plot ratio 65% 65% 1 to 1 to 11 Age of building 12 years years Outstanding costs (US$'000) 5,873 6,931 St Petersburg 51% - 51% - - Logistics Land plot ratio 57% 57% 2 to 1 to 7 Age of building 8 years years Outstanding costs (US$'000) 1,092 743 Regional 48% - 48% - - Logistics Land plot ratio 61% 61% Age of building 7 years 6 years Outstanding costs (US$'000) 487 81 St Petersburg - Office Land plot ratio 320% 320% Age of building 10 years 9 years Outstanding costs (US$'000) - 53 Carrying amount Range 30 June 31 December 30 June 31 December Investment property Valuation under construction 2016 2015 technique Input 2016 2015 $'000 $'000 Value per Moscow - ha $0.30 $0.29 Logistics 28,165 28,702 Comparable ($m) - $0.62 - $0.61 Value per Regional ha - Logistics 7,400 7,300 Comparable ($m) $0.29 $0.29 In preparing their valuations at 30 June 2016, JLL have again made reference to the uncertainty caused in the market by the low oil price, weak rouble and continuing sanctions. This was the case at 31 December 2015 and the impact of this on the valuation process is set out more fully in note 13 of the 2015 Annual Report. 9. Interest bearing loans and borrowings 30 June 31 December 2016 2015 $'000 $'000 Loans due for settlement within 12 months 201,702 104,724 Loans due for settlement after 12 months 684,164 814,021 ------------- ------------- 885,866 918,745 ============= ============= The Group's borrowings have the following maturity profile: On demand or within one year 201,702 104,724 In the second year 158,597 162,222 In the third to fifth years 411,371 527,861 After five years 114,196 123,938 ------------- 885,866 918,745 ============= ============= The amounts above include unamortised loan origination costs of $9.7 million (31 December 2015: $11.3 million) and interest accruals of $1.6 million (31 December 2015: $2.3 million). The principal terms of the Group's interest bearing loans and borrowings on a weighted average basis are summarised below: As at 30 June 2016 Interest Maturity
Rate (years) $'000 Secured on investment property and investment property under construction 7.1% 3.5 864,616 Unsecured facility of the Company 8.6% 4.2 21,250 885,866 ------------- As at 31 December 2015 Secured on investment property and investment property under construction 7.2% 4.0 894,995 Unsecured facility of the Company 8.5% 4.7 23,750 918,745 ------------- The interest rates shown above are the weighted average cost, including US LIBOR, as at the Balance Sheet dates. As previously disclosed, the facility secured on the office block in St Petersburg continued to be in technical breach of its debt service covenant ratio and thus the cash sweep has also continued. In accordance with accounting standards, the amount outstanding of $32 million has been included in loans due for settlement within 12 months. 10. Preference shares 30 June 31 December 2016 2015 $'000 $'000 Authorised share capital: 400,000,000 preference shares of 1p each 5,981 5,981 ============= ============= 30 June 31 December 2016 2015 Issued share capital: Number Number At 1 January 98,328,017 98,012,427 Purchased in the period / year (450,000) - Scrip dividends 202,877 315,590 At 30 June / 31 December 98,080,894 98,328,017 ============= ============= Shares in issue 98,567,943 98,365,066 Held by the Company's Employee Benefit Trusts (487,049) (37,049) At 30 June / 31 December 98,080,894 98,328,017 ============= ============= 30 June 31 December 2016 2015 Issued share capital $'000 $'000 At 1 January 156,558 164,300 Purchased in the period / year (780) - Premium on redemption of preference shares and amortisation of issue costs 278 614 Scrip dividends 335 643 Effect of foreign exchange rate changes (14,494) (8,999) At 30 June / 31 December 141,897 156,558 ============= ============= 11. Share capital 30 June 31 December 2016 2015 $'000 $'000 Authorised share capital: 1,500,000,000 ordinary shares of 1p each 27,469 27,469 ============= ============= 30 June 31 December 2016 2015 Issued share capital: $'000 $'000 At 1 January 12,776 13,623 Issued in the period / year for cash on warrant exercises - 7 Repurchased and cancelled in the period / year (145) (854) At 30 June / 31 December 12,631 12,776 ============= ============= 30 June 31 December 2016 2015 Issued share capital: Number Number At 1 January 682,560,376 737,598,353 Issued in the period / year for cash on warrant exercises 12,165 457,589 Repurchased and cancelled in the period / year (10,236,175) (55,495,566) At 30 June / 31 December 672,336,366 682,560,376 ============= ============= Of the authorised ordinary share capital at 30 June 2016, 25.0 million (31 December 2015: 25.0 million) ordinary shares are reserved for warrants. Details of own shares held are given in note 13. 12. Warrants 30 June 31 December 2016 2015 Number Number At 1 January 25,008,823 25,466,412 Exercised in the period / year (12,165) (457,589) At 30 June / 31 December 24,996,658 25,008,823 ============= ============= 30 June 31 December 2016 2015 $'000 $'000 At 1 January 1,167 1,195 Exercised in the period / year (1) (28) At 30 June / 31 December 1,166 1,167 ============= ============= 13. Own shares held 30 June 31 December 2016 2015 Number Number At 1 January 38,456,594 49,048,873 Acquisition - 98,040 Disposal (30,937,631) - Cancelled (40,047) (3,395,130) Allocation to satisfy ERS options exercised (note 15a) (62,755) (237,146) Allocation to satisfy LTIP options exercised (note 15a) - (828,515) Allocation to satisfy CBLTIS 2012 awards vesting (note 15b) - (6,229,528) Allocation to satisfy CBLTIS 2015 awards vesting (note 15c) (729,608) - At 30 June / 31 December 6,686,553 38,456,594 ============= ============= 30 June 31 December 2016 2015 $'000 $'000 At 1 January (52,101) (63,649) Acquisition - (76) Disposal 43,161 - Cancelled 48 3,692
Allocation to satisfy ERS options exercised (note 15a) 68 258 Allocation to satisfy LTIP options exercised (note 15a) - 901 Allocation to satisfy CBLTIS 2012 awards vesting (note 15b) - 6,773 Allocation to satisfy CBLTIS 2015 awards vesting (note 15c) 877 - At 30 June / 31 December (7,947) (52,101) ============= ============= Allocations are transfers by the Company's Employee Benefit Trusts to satisfy ERS and LTIP options exercised in the period and the vesting of CBLTIS 2012 and CBLTIS 2015 awards. The amounts shown for share movements are net of the Trustees' participation in tender offers during the period from grant to exercise. Details of outstanding ERS and LTIP options, which are vested but unexercised, are given in note 15a. 14. Net asset value per share 30 June 31 December 2016 2015 $'000 $'000 Net asset value 488,619 465,042 Goodwill (2,036) (2,245) Goodwill in joint venture (4,656) (5,134) Unrealised foreign exchange (profits) / losses on preference shares (9,538) 4,956 Excess liabilities over assets on non-recourse secured debt 7,050 - Fair value of interest rate derivative financial instruments (10) (2,289) Fair value of embedded derivatives 1,633 3,231 Fair value of foreign exchange derivative financial instruments (1,038) (2,869) Adjusted net asset value 480,024 460,692 Assuming exercise of all potential ordinary shares - Warrants (note 12) 8,354 9,215 - ERS (note 15) - - - LTIP (note 15) 1,461 1,611 - CBLTIS 2015 (note 15) - - Adjusted fully diluted net asset value 489,839 471,518 ============= ============= 30 June 31 December 2016 2015 Number Number Number of ordinary shares (note 11) 672,336,366 682,560,376 Less own shares held (note 13) (6,686,553) (38,456,594) 665,649,813 644,103,782 Assuming exercise of all potential ordinary shares - Warrants (note 12) 24,996,658 25,008,823 - ERS (note 15) - 75,000 - LTIP (note 15) 4,372,973 4,372,973 - CBLTIS 2015 (note 15) - 2,993,670 Number of ordinary shares assuming exercise of all potential ordinary shares 695,019,444 676,554,248 ============= ============= 30 June 31 December 2016 2015 Cents Cents Net asset value per share 73 72 Diluted net asset value per share 72 70 Adjusted net asset value per share 72 72 Adjusted diluted net asset value per share 70 70 ============= ============= Where the quantum of non-recourse secured debt exceeds the value of the relevant assets upon which it is secured, the excess will be added back to arrive at the Group's adjusted net asset value. This is to reflect that the Group does not have an obligation to make good this shortfall to the relevant lender. Six months 15. Share-based payments and other ended Six months ended long term incentives 30 June 2016 30 June 2015 Weighted Weighted (a) Movements in Executive Share Option Schemes average No of average exercise options exercise No of options price price Outstanding at the beginning of the period 4,447,973 25p 5,708,784 24p Exercised during the period - ERS (75,000) 0p (75,000) 0p - LTIP - 25p (200,000) 25p Outstanding at the end of the period 4,372,973 25p 5,433,784 24p ========== ========= ============= ============= Represented by: - ERS - 250,000 - LTIP 4,372,973 5,183,784 4,372,973 5,433,784 ========== ============= Exercisable at the end of the period 4,372,973 25p 5,433,784 24p ========== ========= ============= ============= (b) Movements in Combined Bonus and Long Term Incentive Scheme 2012 Awards ("CBLTIS 2012") Six months Six months ended ended 30 June 30 June 2016 2015 No. of No. of award award shares shares Awards of Ordinary shares: Outstanding at the beginning of the period - 7,401,158 - Vested during the period - (7,401,158) Outstanding at the end of the period - - ============= ============= (c) Movements in Combined Bonus and Long Term Incentive Scheme 2015 Awards ("CBLTIS 2015") Six months Six months ended ended 30 June 30 June 2016 2015 No of No of award award shares shares Awards of Ordinary shares: Outstanding at the beginning of the period 34,800,000 - - Granted during the period - 34,800,000 - Waived during the period (20,900,625) - - Vested during the period (791,435) - - Lapsed during the period (6,207,940) - - Cancelled during the
period (6,900,000) - Outstanding at the end of the period - 34,800,000 ============= ============= (d) 2016 Retention Scheme Awards During the period the Group terminated the CBLTIS 2015 and the Company's shareholders approved the introduction of the 2016 Retention Scheme. Awards under the scheme have been made to the executive directors of the Company and two senior managers of the Group. The awards entitle the participants to three equal payments each equivalent to 150% of their basic salary. The first instalment was payable upon approval of the scheme and the second and third instalments will be payable on 31 December 2017 and 31 March 2019. The sole condition for each instalment being paid is the continuing employment of the participant at the relevant payment date. Participants will receive payment of an instalment in a combination of the Company's listed securities and cash. The number of listed securities to be issued to satisfy such payments will be calculated with reference to the average price of the relevant security prior to the payment date. On 13 July 2016 an employment benefit trust of the Company transferred 2,148,375 convertible preference shares (see note 18) to participants of the scheme in satisfaction of the first instalment. It is intended that convertible preference shares held by an employment benefit trust will also be used to satisfy the proportion of the second and third instalments that are to be settled in listed securities. Six months Six months ended ended (e) Income statement charge 30 June 30 June for the period 2016 2015 $'000 $'000 CBLTIS 2015 1,496 3,320 CBLTIS 2012 - (40) 2016 Retention Scheme 5,404 - 6,900 3,280 ============= ============= To be satisfied by allocation of: Ordinary shares (IFRS 2 expense) 1,496 3,280 Convertible preference shares (IFRS 2 expense) 3,173 - Cash 2,231 - 6,900 3,280 ============= ============= 16. Ordinary dividends The Company did not declare a final dividend for the year ended 31 December 2015 (2014: none) and instead implemented a tender offer buy back for ordinary shares on the basis of 1 in every 40 shares held and a tender price of 40 pence per share, the equivalent of a final dividend of 1 pence per share. (2014: 1 in every 15 shares at 52p per share the equivalent of 3.5p per share). 17. Financial instruments Set out below is a comparison of the carrying amounts and fair value of the Group's financial instruments as at the balance sheet date: 30 June 2016 31 December 2015 Carrying Fair Carrying Fair Value Value Value Value $'000 $'000 $'000 $'000 Non-current assets Loans receivable 349 296 606 567 Security deposits 4,000 4,000 2,391 2,391 Derivative financial instruments 1,402 1,402 5,585 5,585 Current assets Trade receivables 41,471 41,471 38,683 38,683 Security deposits 2,393 2,393 2,041 2,041 Other current receivables 264 264 202 202 Derivative financial instruments 82 82 233 233 Cash and short term deposits 182,995 182,995 202,291 202,291 Non-current liabilities Interest bearing loans and borrowings 684,164 549,314 814,021 623,340 Preference shares 141,897 166,024 156,558 184,705 Derivative financial instruments 618 618 1,794 1,794 Rent deposits 27,264 20,775 28,932 21,999 Other payables 1,831 1,831 2,721 2,721 Current liabilities Interest bearing loans and borrowings 201,702 201,702 104,724 104,724 Derivative financial instruments 1,451 1,451 2,097 2,097 Rent deposits 8,324 8,324 6,827 6,827 Other payables 8,029 8,029 6,090 6,090 Fair value hierarchy The following table shows an analysis of the fair values of financial instruments recognised in the balance sheet by level of the fair value hierarchy*: Total Fair Level Level Level Value 1 2 3 As at 30 June 2016 $'000 $'000 $'000 $'000 Assets measured at fair value Investment property - - 1,330,441 1,330,441 Investment property under construction - - 39,775 39,775 Derivative financial instruments - 1,484 - 1,484 Liabilities measured at fair value Derivative financial instruments - 2,069 - 2,069 As at 31 December 2015 Assets measured at fair value Investment property - - 1,333,987 1,333,987 Investment property under construction - - 39,129 39,129 Derivative financial instruments - 5,818 - 5,818 Liabilities measured at fair value Derivative financial instruments - 3,891 - 3,891 *Explanation of fair value hierarchy Level 1 - Quoted prices in active markets for identical assets or liabilities that can be accessed at the balance sheet date. Level 2 - Use of a model with inputs that are directly or indirectly observable market data. Level 3 - Use of a model with inputs that are not based on observable market data. The Group's foreign currency derivative financial instruments are call options and are measured based on spot exchange rates, the yield curves of the respective currencies as well as the currency basis spreads between the respective currencies. The Group's interest rate derivative financial instruments comprise swap contracts and interest rate caps. These contracts are valued using a discounted cash flow model and where not cash collateralised consideration is given to the Group's own credit risk. 18. Placing of Convertible Preference Shares On 7 July 2016 the Company created and issued 108,689,501 convertible preference shares at a subscription price of GBP1 per share. The convertible preference shares entitle the holders to a cumulative annual dividend of 6.5 pence per share and are redeemable by the Company on 6 July 2026 at GBP1.35 per share. The convertible preference shares are convertible to ordinary shares at the holder's request at any time prior to redemption at a rate of 1.818 ordinary shares for each convertible preference share. One of the Company's employee benefit trusts subscribed for 8,000,000 convertible preference shares and has subsequently transferred 2,148,375 to participants of the 2016 Retention Scheme (see note 15d).
This information is provided by RNS
The company news service from the London Stock Exchange
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August 30, 2016 02:01 ET (06:01 GMT)
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