REG - Sirius Real Estate - Final Results <Origin Href="QuoteRef">SRET.L</Origin> - Part 4
26/06/2017 07:05
- Part 4: For the preceding part double click ID:nRSZ0774Jc
swap contracts and cap contracts designed
to manage the interest rate and liquidity risks of expected cash flows of its
borrowings with the variable rate facilities with Berlin Hyp AG/Deutsche
Pfandbriefbank AG and Bayerische Landesbank. Please refer to note 20 for
details of swap and cap contracts.
Fair value hierarchy
For financial assets or liabilities measured at amortised cost and whose
carrying value is a reasonable approximation to fair value there is no
requirement to analyse their value in the fair value hierarchy.
The table below analyses financial instruments measured at fair value into a
fair value hierarchy based on the valuation technique used to determine fair
value:
Level 1: quoted prices (unadjusted) in active markets for identical assets
or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
Level 1E000 Level 2E000 Level 3E000 TotalE000
2017
Derivative financial instruments - (341) - (341)
Fixed rate borrowings - (288,288) - (288,288)
Floating rate borrowings - (66,059) - (66,059)
2016
Derivative financial instruments - (2,571) - (2,571)
Fixed rate borrowings - (166,570) - (166,570)
Floating rate borrowings - (135,529) - (135,529)
The interest rate swap contract is reset on a quarterly basis. The Company
will settle the difference between the fixed and floating interest rates on a
net basis. The fair value of interest rate swaps is based on broker quotes.
Those quotes are tested for reasonableness by discounting estimated future
cash flows based on the terms and maturity of each contract and using market
interest rates for a similar instrument at the measurement date. The average
interest rate is based on the outstanding balances at the end of the reporting
period. The interest rate swap is measured at fair value with changes
recognised in profit or loss.
Interest rate risk
The following table sets out the carrying amount, by maturity, of the Group's
financial instruments that are exposed to interest rate risk:
2017 Within 1 yearE000 1-2 yearsE000 2-3 yearsE000 3-4 yearsE000 4+ yearsE000 TotalE000
Berlin Hyp AG/Deutsche Pfandbriefbank AG (1,063) (1,063) (1,063) (1,063) (37,188) (41,440)
Cash assets - - - - - -
2016 Within 1 yearE000 1-2 yearsE000 2-3 yearsE000 3-4 yearsE000 4-5 yearsE000 TotalE000
Berlin Hyp AG/Deutsche Pfandbriefbank AG (1,438) (1,725) (52,038) - - (55,201)
Macquarie Bank Limited - - - - - -
Cash assets 19,874 - - - - 19,874
The other financial instruments of the Group that are not included in the
above tables are non-interest bearing or have fixed interest rates and are
therefore not subject to interest rate risk.
23. Issued share capital
Authorised Numberof shares SharecapitalE
Ordinary shares of no par value Unlimited -
As at 31 March 2017 Unlimited -
Issued and fully paid Numberof shares SharecapitalE
Ordinary shares of no par value
As at 31 March 2015 630,338,749 -
Issued ordinary shares 118,040,020 -
Issued Treasury Shares 3,606,118 -
As at 31 March 2016 751,984,887 -
Issued ordinary shares 125,488,040 -
Issued Treasury Shares 313,608 -
As at 31 March 2017 877,786,535 -
Holders of the ordinary shares are entitled to receive dividends and other
distributions and to attend and vote at any general meeting. Shares held in
treasury are not entitled to receive dividends or to vote at general
meetings.
On 26 May 2016, the Company issued 313,608 ordinary shares out of treasury to
the Company's two Executive Directors and some of the Group's Senior
Management Team pursuant to the Company's MSP incentive scheme. This resulted
in the Company's overall issued share capital being 753,360,553 ordinary
shares of which 1,062,058 were held in treasury. The total number of ordinary
shares with voting rights in the Company at this date was 752,298,495.
Pursuant to an equity raise of E30.0 million on 21 June 2016, the Company
issued 56,603,774 ordinary shares at an issue price of E0.53, resulting in the
Company's overall issued share capital being 809,964,327 ordinary shares of
which 1,062,058 were held in treasury. The total number of ordinary shares
with voting rights in the Company at this date was 808,902,269. Costs
associated with the equity raise amounted to E883,000.
On 23 June 2016, the Company announced that the Karoo Investment Fund S.C.A.
SICAV-SIF served notice to convert its E5,000,000 convertible loan notes due
in 2018 in full into, in aggregate, 22,814,731 new ordinary shares at the
conversion price of E0.22 per ordinary share. Following the conversion on 23
June 2016 and the subsequent admission of the shares to AIM on 28 June 2016,
the overall issued share capital was 832,779,058 ordinary shares of which
1,062,058 were held in treasury. The total number of ordinary shares with
voting rights in the Company at this date was 831,717,000.
Pursuant to a scrip dividend offering on 15 July 2016, the Company issued
9,052,233 ordinary shares at an issue price of E0.4822, resulting in the
Company's overall issued share capital being 841,831,291 ordinary shares of
which 1,062,058 were held in treasury. The total number of ordinary shares
with voting rights in the Company at this date was 840,769,233.
Pursuant to a scrip dividend offering on 13 January 2017, the Company issued
11,027,524 ordinary shares at an issue price of E0.5055, resulting in the
Company's overall issued share capital being 852,858,815 ordinary shares of
which 1,062,058 were held in treasury. The total number of ordinary shares
with voting rights in the Company at this date was 851,796,757.
Pursuant to an equity raise of E15.0 million on 7 March 2017, the Company
issued 25,989,778 ordinary shares at an issue price of E0.5771, resulting in
the Company's overall issued share capital being 878,848,593 ordinary shares
of which 1,062,058 were held in treasury. The total number of ordinary shares
with voting rights in the Company at this date was 877,786,535. Costs
associated with the equity raise amounted to E446,000.
The Company holds 1,062,058 of its own shares, which are held in treasury
(2016: 1,375,666). During the year 313,608 shares were issued from treasury.
No shares were bought back in the year.
24. Other reserves
Other distributable reserve
The other distributable reserve was created for the payment of dividends and
for the buyback of shares and is E470,318,000 in total at 31 March 2017 (2016:
E429,094,000).
25. Dividends
In May 2016, the Company announced a dividend of 1.30c per share with a record
date of 17 June 2016 and payable on 15 July 2016. On the record date,
753,360,553 shares were in issue, of which 1,062,058 were held in treasury and
752,298,495 were entitled to participate in the dividend. Holders of
334,125,185 shares elected to receive the dividend in ordinary shares under
the Scrip Dividend Alternative, representing a dividend of E4,344,000, while
holders of 418,173,310 shares opted for a cash dividend with a value of
E5,503,000. The total dividend was E9,847,000.
In November 2016, the Company announced a dividend of 1.39c per share with a
record date of 16 December for UK shareholders and 15 December 2016 for SA
shareholders and payable on 20 January 2017. On the record date, 841,831,291
shares were in issue, of which 1,062,058 were held in treasury and 840,769,233
were entitled to participate in the dividend. Holders of 401,207,527 shares
elected to receive the dividend in ordinary shares under the Scrip Dividend
Alternative, representing a dividend of E5,576,785, while holders of
439,561,706 shares opted for a cash dividend with a value of E6,182,148. The
total dividend was E11,758,933.
The Group's profit attributable to the equity holders of the Company for the
year was E71.8 million (2016: E54.7 million). The Board has declared a final
dividend of 1.53c per share for the year ended 31 March 2017. The final
dividend will be paid on 18 August 2017 with the ex-dividend dates being 12
July 2017 for shareholders on the South African register and 13 July 2017 for
shareholders on the UK register. As has been reported previously, both the
interim and final dividends represent 65% of FFO* for the first and second
halves of the year ended 31 March 2017, respectively. It is intended that
dividends will continue to be paid on a semi-annual basis and offered to
shareholders in cash or scrip form.
* Adjusted profit before tax adjusted for depreciation, amortisation of
financing fees and current tax receivable/incurred
The dividend per share was calculated as follows:
31 March 2017E million 31 March 2016E million
Reported profit before tax 76.4 57.1
Adjustments for:
Surplus on revaluation (49.8) (44.2)
Gain of disposals (0.1) -
Other adjusting items1 8.9 9.5
Change in fair value of financial derivatives (0.1) 0.5
Adjusted profit before tax 35.3 22.9
Adjustments for:
Depreciation 0.9 0.6
Amortisation of financing fees 1.2 1.3
Current taxes (incurred)/receivable (see note 10) (0.3) 0.2
Funds from Operations, year ended 31 March 37.1 25.0
Funds from Operations, six months ended 30 September 17.1 9.9
Funds from Operations, six months ended 31 March 20.0 15.0
Dividend pool, six months ended 30 September 11.7 6.9
Dividend pool, six months ended 31 March2 13.4 9.8
Dividend per share, six months ended 30 September 1.39c 0.92c
Dividend per share, six months ended 31 March 1.53c 1.30c
1 Includes the net effect of main market move costs, refinancing costs,
management LTIP rewards and expected selling costs associated with the
notarised assets accounted for as held for sale in the period. See note 11 for
details.
2 Calculated as 65% of FFO of 2.38c per share (31 March 2016: 2.01c per
share) based on average number of shares outstanding of 846,641,989 (31 March
2016: 749,229,846).
26. Related parties
On 22 March 2013, the Company issued E5.0 million convertible loan notes due
in 2018 (the "Loan Notes"). The entire issue of E5.0 million was taken up by
the Karoo Investment Fund S.C.A. SICAV-SIF and the Karoo Investment Fund II
S.C.A. SICAV-SIF both of which are advised by Wessel Hamman, a Non-executive
Director of the Company. The Loan Notes were issued at par and carried a
coupon rate of 5% per annum. The Loan Notes were convertible by the holder
into ordinary shares of the Company at an original conversion price of 0.24c.
The majority of the proceeds from the issue of the Loan Notes were used to
reduce debt levels. On 23 June 2016, the Company announced that the Karoo
Investment Fund S.C.A. SICAV-SIF served notice to convert its E5.0 million
convertible loan notes due in 2018 in full into, in aggregate, 22,814,731 new
ordinary shares at the conversion price of E0.22 per ordinary share. Interest
on the Loan Notes was Enil in the period ended 31 March 2017 (31 March 2016:
E250,000). The Directors considered that the terms of this transaction were
fair and reasonable insofar as its shareholders were concerned.
Key management personnel compensation
Fees paid to people or entities considered to be key management personnel of
the Group during the year include:
2017E000 2016E000
Directors' fees 231 170
Salary and employee benefits 2,759 2,704
Share-based payments 3,926 1,549
Total 6,916 4,423
The share-based payments relating to key management personnel for the year
ended 31 March 2017 include an accrued expense of E3,404,000 (2016:
E1,225,000) for the granting of shares under the LTIP (see note 8).
Information on Directors' emoluments is given in the remuneration report on
pages 51 to 58.
27. Capital and other commitments
The Group's commitments derived from office rental contracts are as follows:
2017E000 2016E000
Less than one year 528 497
Between one and five years 1,959 1,938
More than five years 245 727
2,732 3,162
As at 31 March 2017, the Group had contracted capital expenditure on existing
properties of E5,951,000 (2016: E4,636,000).
These were committed but not yet provided for in the financial statements.
28. Operating lease arrangements
Group as lessor
All properties leased by the Group are under operating leases and the future
minimum lease payments receivable under non-cancellable leases are as
follows:
2017E000 2016E000
Less than one year 63,375 51,669
Between one and five years 102,176 81,813
More than five years 23,140 24,467
188,691 157,949
The Group leases out its investment properties under operating leases. Most
operating leases are for terms of one to ten years.
29. List of subsidiary undertakings
The Group consists of 70 subsidiary companies. All subsidiaries are
consolidated in full in accordance with IFRS.
Company name Countryof incorporation Ownership at31 March 2017% Ownership at31 March 2016%
Curris Facilities & Utilities Management GmbH Germany 100.00 100.00
DDS Aspen B.V. Netherlands 100.00 100.00
DDS Bagnut B.V. Netherlands 100.00 100.00
DDS Bramble B.V. Netherlands 100.00 100.00
DDS Business Centers B.V. Netherlands 100.00 100.00
DDS Conferencing & Catering GmbH Germany 100.00 100.00
DDS Edelweiss B.V. Netherlands 100.00 100.00
DDS Elm B.V. Netherlands 100.00 100.00
DDS Fir B.V. Netherlands 100.00 100.00
DDS Hawthorn B.V. Netherlands 100.00 100.00
DDS Hazel B.V. Netherlands 100.00 100.00
DDS Hyacinth B.V. Netherlands 100.00 100.00
DDS Lark B.V. Netherlands 100.00 100.00
DDS Lime B.V. Netherlands 100.00 100.00
DDS Maple B.V. Netherlands 100.00 100.00
DDS Mulberry B.V. Netherlands 100.00 100.00
DDS Rose B.V. Netherlands 100.00 100.00
DDS Walnut B.V. Netherlands 100.00 100.00
DDS Yew B.V. Netherlands 100.00 100.00
LB² Catering and Services GmbH Germany 100.00 100.00
Marba Holland B.V. Netherlands 100.00 100.00
Marba Willstätt B.V. Netherlands 100.00 100.00
SFG NOVA Construction and Services GmbH Germany 100.00 100.00
Sirius Alder B.V. Netherlands 100.00 100.00
Sirius Ash B.V. Netherlands 100.00 100.00
Sirius Beech B.V. Netherlands 100.00 100.00
Sirius Coöperatief U.A. Netherlands 100.00 100.00
Sirius Corporate Services B.V. Netherlands 100.00 100.00
Sirius Facilities (UK) Limited UK 100.00 100.00
Sirius Facilities GmbH Germany 100.00 100.00
Sirius Finance (Guernsey) Ltd. Guernsey 100.00 100.00
Sirius Four B.V. Netherlands 100.00 100.00
Sirius Gum B.V. Netherlands 100.00 100.00
Sirius Ivy B.V. Netherlands 100.00 100.00
Sirius Juniper B.V. Netherlands 100.00 100.00
Sirius Laburnum B.V. Netherlands 100.00 100.00
Sirius Lily B.V. Netherlands 100.00 100.00
Sirius Management One GmbH Germany 100.00 100.00
Sirius Management Two GmbH Germany 100.00 100.00
Sirius Mannheim B.V. Netherlands 100.00 100.00
Sirius Oak B.V. Netherlands 100.00 100.00
Sirius One B.V. Netherlands 100.00 100.00
Sirius Orchid B.V. Netherlands 100.00 100.00
Sirius Pine B.V. Netherlands 100.00 100.00
Sirius Tamarack B.V. Netherlands 100.00 100.00
Sirius Three B.V. Netherlands 100.00 100.00
Sirius Two B.V. Netherlands 100.00 100.00
Sirius Willow B.V. Netherlands 100.00 100.00
Marba Bonn B.V. Netherlands 99.73 99.73
Marba Bremen B.V. Netherlands 99.73 99.73
Marba Brinkmann B.V. Netherlands 99.73 99.73
Marba Catalpa B.V. Netherlands 99.73 99.73
Marba Cedarwood B.V. Netherlands 99.73 99.73
Marba Chestnut B.V. Netherlands 99.73 99.73
Marba Dandelion B.V. Netherlands 99.73 99.73
Marba Dutch Holdings B.V. Netherlands 99.73 99.73
Marba Foxglove B.V. Netherlands 99.73 99.73
Marba HAG B.V. Netherlands 99.73 99.73
Marba Hornbeam B.V. Netherlands 99.73 99.73
Marba Königswinter B.V. Netherlands 99.73 99.73
Marba Maintal B.V. Netherlands 99.73 99.73
Marba Marigold B.V. Netherlands 99.73 99.73
Marba Merseburg B.V. Netherlands 99.73 99.73
Marba Mimosa B.V. Netherlands 99.73 99.73
Marba Regensburg B.V. Netherlands 99.73 99.73
Marba Saffron B.V. Netherlands 99.73 99.73
Marba Troisdorf B.V. Netherlands 99.73 99.73
Sirius Administration One GmbH & Co KG Germany 94.80 94.80
Sirius Administration Two GmbH & Co KG Germany 94.80 94.80
Verwaltungsgesellschaft Gewerbepark Bilderstöckchen GmbH Germany 94.15 94.15
30. Post balance sheet events
On 1 April 2017, the Group acquired a property located in Frankfurt. Total
acquisition costs are expected to be E4.5 million. The property is a single
building comprising office and basement space and has a net lettable area of
4,064sqm. The property is 28% occupied and let to six tenants, producing an
annual income of E153,000 and having a weighted average remaining lease term
of 1.5 years.
On 21 April 2017, the Group notarised the sale of a mature asset located in
Kiel for E7.0 million that was originally acquired in 2007. The sale is at an
EPRA net operating yield of 7.4%. The asset is a multi-let mixed-use business
park generating E0.56 million of net operating income with occupancy of 92%
over a net lettable area of around 10,000sqm.
On 30 April 2017, the Group completed the sale of the site at Munich Rupert
Mayer Strasse for E85.0 million, a business park of around 72,000sqm of office
and warehouse space which was originally acquired in 2008. The sale has been
structured as a sale and leaseback with a lease of six years and a rent
payable of c. E5.0 million per annum for the first five years and then in the
final year at a cost equal to the net operating income of the site. The
leaseback enables the Group to retain the difference between the rent it pays
and the income from the site in addition to an annual management fee of
E100,000 per annum for the term of the lease.
On the 3 May 2017, the Group notarised the acquisition of a property in
Grasbrunn, near Munich. Total acquisition costs are expected to be E18.1
million. The property is located in a well-developed commercial area close to
Munich. The property comprises four office buildings and has a gross lettable
area of 14,791sqm. The property is 3.5% occupied and let to one tenant,
producing an annual income of E100,000 and having a weighted average remaining
lease term of 1.7 years.
On 19 May 2017, the Group completed the sale of a mature asset located in
Düsseldorf for E11.0 million that was originally acquired in 2008. The sale is
at a 25% premium to the last reported book value at 30 September 2016. The
asset is a mixed-use business park generating E0.85 million of net operating
income with occupancy of 96% over a net lettable area of 16,600sqm.
On the 23 May 2017, the Group notarised the acquisition of a property located
in Neuss, near Düsseldorf. Total acquisition costs are expected to be E15.8
million. The property comprises one office building and has a net lettable
area of 18,258sqm. The property is 38.3% occupied and let to six tenants,
producing an annual income of E670,000 and having a remaining weighted average
lease term of 5.1 years.
On the 23 May 2017, the Group notarised the acquisition of a property located
in Neu-Isenburg, near Frankfurt. Total acquisition costs are expected to be
E9.7 million. The property is an office building with basement space and has a
net lettable area of 7,996sqm. The property is 41.3% occupied and let to one
tenant, producing an annual income of E472,000 and having a remaining weighted
average lease term of 1.5 years.
On 1 June 2017, the Group acquired a property located in Cologne. Total
acquisition costs are expected to be E22.9 million. The property comprises two
connected multi-let office buildings and has a net lettable area of 20,342sqm.
The property is 99.5% occupied and let to 17 tenants, producing an annual
income of E2.0 million and having a weighted average remaining lease term of
2.4 years.
On 1 June 2017, the Group notarised the acquisition of a property located in
Berlin Mahlsdorf. Total acquisition costs are expected to be E6.4 million. The
property is a mixed use business park and has a net lettable area of
12,912sqm. The property is 63.9% occupied and let to 21 tenants, producing an
annual income of E530,000 and having a remaining weighted average lease term
of 6.2 years.
This information is provided by RNS
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