28th Sep 2006 07:04
Dawnay, Day Carpathian PLC28 September 2006 Dawnay, Day Carpathian PLC Interim results for the six months ended 30th June 2006 Property Highlights • Property assets: - £227 million as at 30 June 2006 (£262 million as at 28 September 2006) • Approximately £180 million of property assets under advanced due diligence • Acquired six commercial retail assets in three acquisitions during the first 6 months of 2006 and a further 2 commercial retail assets since 30 June 2006. • Opportunities have been identified within the owned portfolio to create an additional income producing area of 55,000 sq m* • Investment progress based on equity invested: - 36% invested as at 30 June 2006 - 44% invested as at 28 September 2006 - On track to be approximately 75% invested by 31 December 2006 * excludes the development opportunity in Antana, Hungary Financial Highlights • NAV per share of 101 pence (31 December 2005: 97 pence) Adjusted NAV* per share of 108 pence (31 December 2005: 101 pence) • Net rental and related income of £4.2 million • Profit before tax of £5.2 million • EPS for the period of 3.1 pence • Interim dividend of 2 pence per share * Adjusted NAV per share excludes the net deferred tax position. Rupert Cottrell, Chairman of Dawnay, Day Carpathian, said: "We have continued tostrengthen our presence within our target markets, having a growing portfolio ofretail assets across Central and Eastern Europe, with excellent growthprospects. Currently, the Company has a pipeline of £180 million of propertyassets under advanced due diligence. The Company is therefore well positioned tobe substantially invested by the end of 2006 with no compromise on the qualityof its acquisitions and is on track to meet its financial targets set at IPO." Enquiries: Dawnay, Day Carpathian PLC Paul Rogers 020 7834 8060 Cardew Group Tim Robertson 020 7930 0777 Catherine Maitland Chairman's Statement I am pleased to be able to report that Dawnay, Day Carpathian PLC ("Dawnay, DayCarpathian" or the "Company") continues to make good progress towards creating a€1 billion (£700 million) geared portfolio of retail properties in Central andEastern Europe. The properties we have acquired are well located, have excellent growthprospects and broad tenant bases. As at 30 June 2006, we had completed thepurchase of £227 million of properties with an annualised rent roll in excess of£18 million and a blended net initial yield of 7.51%. Our investment strategy remains focused on acquiring suitable commercial retailproperties such as shopping centres, supermarkets and retail warehousing inCentral and Eastern Europe. Despite the increasing flow of inward propertyinvestment into Central and Eastern Europe, we are confident that the extensivemarket contacts gained and in-depth sector knowledge held by the growingmanagement team will provide the Company with a competitive edge in thesematuring property markets. Financial Results During the period under review, the Company acquired six retail properties inthree acquisitions for approximately £140 million. The net rental and relatedincome for the period was £4.2 million, and the Company overall generated aprofit before tax of £5.2 million, which excludes any revaluation surplusrelating to the period. Independent valuation of the portfolio is conducted onan annual basis. The basic earnings per share of the Company were 3.1 pence, while the dilutedearnings per share were 3 pence. As at 30 June 2006, the Company's borrowings totalled £163.8 millionrepresenting a loan to value ratio of 72%. The cash balance of the Company was£94.3 million and the net debt was £69.5 million. The Company actively manages its foreign exchange exposure through differentintermediaries. A large majority of the property income is pegged to the euro,while the remaining portion is either pegged to US$ or local currency. The localcurrency portion provides a natural hedge against operational expenses incurredin the same currency. The loans secured against the properties are denominated in euros and have anaverage weighted interest rate of 4.6% for the period. All loan agreements havehedging instruments in place minimising the impact of the interest rate risk. I am pleased to announce an interim dividend of 2p per share. This is inaccordance with the investment objective in the AIM admission document where theDirectors anticipate an equivalent dividend of 6 to 7 percent for 2006 and 10percent once fully invested based upon the Company's flotation price of 100pence per share. The interim dividend will be payable to shareholders on the register on 6October 2006 (ex-dividend date of 4 October 2006) and will be paid on 3 November2006. The current portfolio comprises: +--------------+------------------+---------------------+--------------+|Country |Location |Property |Value* |+--------------+------------------+---------------------+--------------+|Poland |Gdansk |Osowa Centre |20.9 million |+--------------+------------------+---------------------+--------------+| |Lodz |Tulipan |15.9 million |+--------------+------------------+---------------------+--------------+| |Sosnowiec |Geant Centre |2.8 million |+--------------+------------------+---------------------+--------------+| |Torun |Kometa Centre |4.1 million |+--------------+------------------+---------------------+--------------+| |Warsaw |Promenada Shopping & |95.5 million || | |Business Centre | |+--------------+------------------+---------------------+--------------+| |Slupsk |Biedronka Supermarket|0.7 million |+--------------+------------------+---------------------+--------------+| | | Sub-total:|£139.9 million|+--------------+------------------+---------------------+--------------+|Hungary |Budaors |Antana Warehouse Park|15.7 million |+--------------+------------------+---------------------+--------------+| |Pecs |Pecs Plaza |17.3 million |+--------------+------------------+---------------------+--------------+| |Szombathely |Savaria Plaza |4.7 million |+--------------+------------------+---------------------+--------------+| |Sopron |Sopron Plaza |11.9 million |+--------------+------------------+---------------------+--------------+| |Veszprem |Balaton Plaza |9.8 million |+--------------+------------------+---------------------+--------------+| | | Sub-total:|£ 59.4 million|+--------------+------------------+---------------------+--------------+|Czech Republic|Karlovy Vary |Varyada Shopping |28.1 million || | |Centre | |+--------------+------------------+---------------------+--------------+|Lithuania |Panevezys |Babilonas Shopping |22 million || | |Centre | |+--------------+------------------+---------------------+--------------+|Romania |Brasov |Macromall Business |13 million || | |Centre | |+--------------+------------------+---------------------+--------------+| | | Grand Total|£262.4 million|+--------------+------------------+---------------------+--------------+ * Value represents either the fair value at 31 December 2005 or the purchaseprice including costs. Asset Manager Review In anticipation of the enlarged portfolio, the Dawnay, Day Europe assetmanagement team has been expanded to 21 people. This recruitment includes anumber of Eastern European nationals, and strengthens DDE's capabilityparticularly within leasing, project management, facilities management andproperty management. While Dawnay, Day Europe's core activities continue to bedirected from the London head office, in June 2006 they established a Warsawoffice, and expect to open further satellite offices throughout our targetregions. The asset management team is focusing on a number of specific projects: Antana: - Budapest - Hungary The retail development proposals of 55,000 sq m GLA (Gross Lettable Area) havebeen presented to and positively received by the Mayor, Chief Executive andChief Architect for that Municipality. The development requires an increase inthe capacity of the local road infrastructure, requiring a new Master Plan. Thisis a formal requirement of the Hungarian planning process and will add to theproject delivery date by 6 months. We have continued to extend existing leaseson a short term basis and sustained the occupancy rate prior to development. Pecs Plaza: - Hungary The Company has accumulated adjoining land plots totalling 9.5 hectares. Thisland is zoned for commercial and retail use. The land cost of £2.56 millionrepresents £270 per sqm. Plans are being worked up to extend the retailfacilities with larger anchor and discount units and possibly a 3 star hotel.Construction will not commence until substantial pre-lets are achieved. Sopron Plaza: - Sopron - Hungary The Asset Manager is progressing with the Tenant relocation plan the first stageof which will see an existing local occupier of 5 prime units relocate to asingle large upper level store at a rent of 25% in excess of the budget. These 5units will be released from prime locations within the main mall presenting anopportunity to re-lease to a stronger line-up and variety of retailers at higherrents. Savaria Plaza This centre, substantially vacant with a Developers income guarantee expiring 31December 2007, now has terms agreed for anchor stores of a 2,000 sqm supermarketand 650 sq m children's wear store. Varyada: - Kalovy Vary - Czech Republic The Asset Manager has identified an opportunity to increase GLA by approximately500 sq m with an increased annual rental income of £41,500 to provide a newanchor store for a major international fashion retailer who wishes to occupypremises. Promenada Centre: - Warsaw - Poland Terms have been agreed with Peek and Kloppenberg for a new 2,800 sqm store,subject to planning. Consent is currently awaited for this extension whichtotals 7,600 sqm comprising 4,778 sqm retail, 2,823 sqm offices, 1,790 sqmleisure. Investment Pipeline The asset managers, Dawnay Day Europe and the Company have a well establishedprofile in the target markets. This is leading to a steady stream ofopportunities being presented to the Company often from private vendors in offmarket transactions. Dawnay, Day Carpathian continues to generate manyacquisition opportunities, and there are still a large number of potential dealsthat meet our investment criteria. Since the half-year ended 30 June 2006, we have completed the purchase of twoacquisitions in two new territories with a total value of £35 million bringingthe total portfolio value to over £262 million. In respect of the currentidentified pipeline, we are in the advanced stages of due diligence work onfurther £180 million of transactions. In addition, we are also at a well progressed stage on both large single assetand portfolio negotiations with many further opportunities under discussion. Wesee 2007 as being a year during which we will focus on the consolidation andperformance of the assets acquired and consider how we may pursue further theopportunities that continue to present themselves. Outlook We believe we are establishing an excellent portfolio of assets and a reputationfor successfully executing complex transactions. We are not prepared todisregard issues uncovered in due diligence, and are creative and commercial inseeking fair adjustment when material problems arise. The Company is substantially on track to meet its targets set at the time of theIPO and we look forward to the future with confidence. We remain focused onincome producing retail assets and we are also seeing a rising level of newdevelopments providing opportunities to invest which are being pursued in waysso as to minimise our exposure to the associated development risks. Rupert CottrellChairman Dawnay, Day Carpathian PLCUnaudited Consolidated Income StatementFor the six months ended 30 June 2006 31-Dec-05 30-Jun-06 Group Group Notes £ £ Gross rental income 1,485,519 4,635,089Service charge income 494,073 1,449,000Service charge expense (424,650) (1,355,159)Property operating expenses (394,614) (490,606) ---------- ----------Net rental and related income 1,160,328 4,238,324 Changes in fair value of investment property 2,468,706 - Changes in fair value of financial liability - (173,822) Excess of acquirer's interest in the net fair value of acquiree's identifiable assets,liabilities and contingent liabilities over cost 69,941 - Net Foreign Exchange (Loss) / gain 608,639 (340,723) Administrative expenses (701,102) (910,768) Net other income 32,433 183,688 ---------- ----------Net operating profit before net financing income 3,638,945 2,996,699 ---------- ----------Financial income 3,007,062 3,677,791Financial expense (1,009,461) (1,498,004) ---------- ----------Net financing income 1,997,601 2,179,787 ---------- ----------Net profit before tax 5,636,546 5,176,486 Income tax expense (702,796) (618,028) ---------- ----------PROFIT FOR THE PERIOD 4,933,750 4,558,458 ========== ========== Attributable to:Equity holders of the Company 4,909,679 4,459,592Minority Interests 24,071 98,866 Basic and diluted earnings per share for profitattributable to the equity holders of theCompany during the year(expressed as Pence per share) Basic earnings per share 3 4.8 3.1Diluted earnings per share 3 4.7 3.0 Dawnay, Day Carpathian PLCUnaudited Consolidated Balance SheetFor the six months ended 30 June 2006 31-Dec-05 30-Jun-06 Group Group £ £ASSETSNon current assetsInvestment property 87,054,370 226,003,568Land - 1,454,884Goodwill 3,698,346 9,726,917Deferred income tax assets 127,305 734,110 ----------- ------------ 90,880,021 237,919,479 ----------- ------------Current assetsTrade and other receivables 2,036,675 5,462,298Cash and cash equivalents 126,144,770 94,349,757Financial assets 399,323 2,034,753 ----------- ------------ 128,580,768 101,846,808 ----------- ------------TOTAL ASSETS 219,460,789 339,766,287 =========== ============ EQUITY Issued Capital 1,454,300 1,454,300Share Premium 125,556,323 125,556,323Retained Earnings 14,674,546 19,134,138Foreign Exchange Movement (95,033) 672,072 ----------- ------------Total equity attributable to equity holders of the parent 141,590,136 146,816,833 ----------- ------------ Minority Interest 229,773 328,639 ----------- ------------TOTAL EQUITY 141,819,909 147,145,472 LIABILITIESNon-current liabilitiesBank loans 60,971,511 159,726,201Deferred income tax liabilities 4,943,082 11,586,335 ----------- ------------ 65,914,593 171,312,536 ----------- ------------Current liabilitiesTrade and other payables 4,887,286 17,096,873Bank loans 2,476,101 4,037,584Dividends payable 4,362,900 -Financial liabilities - 173,822 ----------- ------------ 11,726,287 21,308,279 ----------- ------------TOTAL LIABILITIES 77,640,880 192,620,815 ----------- ------------TOTAL EQUITY AND LIABILITIES 219,460,789 339,766,287 =========== ============ Dawnay, Day Carpathian PLCUnaudited consolidated statement of changes in equityFor the six months ended 30 June 2006 Foreign Share Share Minority Exchange Retained Capital Premium Interest Movement Earnings Total GROUP £ £ £ £ £ £ --------- ----------- -------- --------- --------- ----------- Issue of share capital 1,454,300 144,468,545 - - - 145,922,845Costs of issue of shares - (5,389,998) - - - (5,389,998) Recognition of share-basedpayments - 605,543 - - - 605,543Acquisition ofsubsidiaries - - 205,702 - - 205,702Profit for the period - - - - 4,933,750 4,933,750Minority interest - - 24,071 - (24,071) -Share premium release - (14,127,767) - - 14,127,767 - Dividend declared - - - - (4,362,900) (4,362,900)Translation intopresentationcurrency - - - (95,033) - (95,033) --------- ----------- -------- --------- ---------- ----------- Balance as at 31 December 2005 1,454,300 125,556,323 229,773 (95,033) 14,674,546 141,819,909 ========= =========== ======== ========= ========== =========== Balance as at 1 January 2006 1,454,300 125,556,323 229,773 (95,033) 14,674,546 141,819,909Profit for the period - - - - 4,558,458 4,558,458Minority interest - - 98,866 - (98,866) -Translation into presentationcurrency - - - 767,105 - 767,105 --------- ----------- -------- --------- --------- ----------- Balance as at 30 June 2005 1,454,300 125,556,323 328,639 672,072 19,134,138 147,145,472 ========= =========== ======== ========= ========== =========== Dawnay, Day Carpathian PLCUnaudited consolidated cash flow statementFor the six months ended 30 June 2006 31-Dec-05 30-Jun-06 Group Group Notes £ £ Cash flows from operating activitiesCash generated from operations 4 2,706,408 1,280,051 ------------ ------------Net cash generated from operating activities 2,706,408 1,280,051 ------------ ------------Cash flows from investing activitiesCapital expenditure on investment property (22,849) (105,726)Acquisition of Investment property - (726,278)Purchases of Land - (1,454,884) Interest received 2,470,348 2,598,338 Acquisition of subsidiaries (6,483,768) (6,823,545)Loans advanced to Subsidiaries before acquisition (10,342,575) (19,459,543) ------------ ------------Net cash used in investing activities (14,378,844) (25,971,637) ------------ ------------ Cash flows from financing activitiesDividends Paid - (4,362,900) Proceeds on issue of shares, net of share issuance costs 139,381,406 -Interest paid (778,495) (1,504,701)Repayments of borrowings (294,846) (1,765,633) ------------ ------------Net (cash used in) / generated from financing activities 138,308,065 (7,633,234) ------------ ------------Net (decrease) / increase in cash and cash equivalents 126,635,629 (32,324,820) Cash and cash equivalents at the beginning of the period - 126,144,770Exchange gains / (losses) on cash and cash equivalents (490,859) 529,807 ------------ ------------ Cash and cash equivalents at the end of the period 126,144,770 94,349,757 ------------ ------------ Notes to the Consolidated financial statement 1. General information Dawnay, Day Carpathian PLC (The "Company") is a company incorporated anddomiciled in the Isle of Man on 2 June 2005 for the purpose of investing in theretail property market in Central and Eastern Europe. The interim report of Dawnay, Day Carpathian PLC for the six months ended 30June 2006 comprises the Company and its subsidiaries (together referred to asthe "Group"). The Company's registered address is IOMA House, Hope Street, Douglas, Isle ofMan. The Company was admitted to the AIM of the London Stock Exchange and commencedtrading its shares on 26 July 2005. The Company raised approximately GBP 140m(before admission costs). The functional currency of the consolidated financial statements is the Euro asit is the currency of the primary economic environment in which the Groupoperates. The consolidated financial statements are presented in pounds sterling(presentation currency) for the convenience of readers. The translation betweenthe functional and presentation currency is in accordance with the Group'saccounting policies. Comparatives for the corresponding six months ended 30 June 2005 have not beendisclosed as the Company was admitted to the AIM of the London Stock Exchange on26 July 2005; the directors feel that such information would not be relevant ormeaningful information. 2. Significant accounting policies The interim report for the six months ended 30 June 2003 is unaudited and hasbeen prepared based on the accounting policies set out in the statutory accountsfor the year ended 31 December 2005. 3. Earnings per share Basic earnings per share The calculation of basic earnings per share at 30 June 2006 was based on theprofit attributable to ordinary shareholders of £ 4,459,592 and a weightedaverage number of ordinary shares outstanding during the six month period ended30 June 2006 of 145,430,015. 31-Dec-05 30-Jun-06 Group Group £ £Profit attributable to ordinary shareholders Profit for the period 4,933,750 4,558,458Minority interest (24,071) (98,866) ----------- -----------Profit attributable to ordinary shareholders 4,909,679 4,459,592 =========== ===========Weighted average number of ordinary shares Founder shares converted on incorporation - 2 June 2005 10,000 -Effect of shares issued on 1 August 2005 100,377,358 -Effect of shares issued on 16 October 2005 1,382,649 -Effect of shares issued on 16 November 2005 331,801 -Shares in Issue at 31 December 2005 and 30 June 2006 - 145,430,015 ----------- -----------Weighted average number of ordinary shares 102,101,808 145,430,015 =========== ===========Basic earnings per share (expressed as Pence per share) 4.8 3.1 Diluted earnings per share The calculation of diluted earnings per share at 30 June 2006 was based on theprofit attributable to ordinary shareholders of £ 4,459,592 and a weightedaverage number of ordinary shares outstanding during the period ended 30 June2006 of 147,419,621 Profit attributable to ordinary shareholders (diluted) £ £ Profit for the period 4,933,750 4,558,458Minority interest (24,071) (98,866) ----------- -----------Profit attributable to ordinary shareholders 4,909,679 4,459,592 =========== ===========Weighted average number of ordinary shares Weighted average number of ordinary shares 102,101,808 145,430,015Numis options 1,254,807 1,750,125Plaza Profit reinvestment - 274,492Promenada profit reinvestment - 1,002,570Adjustment to purchase consideration of Gumtree S.a.r.l - (1,034,772)Adjustment to purchase consideration of BHA Czech s.r.o - 440,771Adjustment to purchase consideration of LarchSilver Hungary Kft - (443,581) ----------- -----------Weighted average number of ordinary shares (diluted) 103,356,615 147,419,621 =========== ===========Diluted earnings per share (expressed as Pence per share) 4.7 3.0 4. Notes to the cash flow statement 31-Dec-05 30-Jun-06 Group Group £ £Cash generated from operations Profit for the period 4,933,750 4,558,458Adjustments for:Excess of acquirer's interest in the net fair value of acquiree's identifiable assets, liabilities and contingent liabilities over cost (69,941) -Increase in fair value of interest rate swaps (200,290) (1,624,254)Increase/ (decrease) in fair value of bank loans (336,424) 173,822Net other finance income (1,460,887) (555,533)Increase in fair value of investment property (2,468,706) -Income tax expense 702,796 618,028 ----------- -----------Operating cash flows before movements in working capital 1,100,298 3,170,521 ----------- -----------Decrease in receivables 5,864,791 1,577,328Decrease in payables (4,258,681) (3,467,798) ----------- -----------Cash generated from operations 2,706,408 1,280,051 ----------- ----------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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