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West Pioneer Props (WPR)

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Wednesday 21 July, 2010

West Pioneer Props

Preliminary Results

RNS Number : 6541P
West Pioneer Properties Limited
21 July 2010
 



Press Release                                                  

21 July 2010

 

West Pioneer Properties Limited

("West Pioneer" or the "Company")

Preliminary Results

 

West Pioneer, a leading developer and operator of shopping malls and mixed use developments in west and southern India, announces its preliminary results for the year ended 31 March 2010.

Highlights

·    

Continuing strong footfall numbers and positive sales trends at Metro Junction Mall in Kalyan, with footfall more than doubling year on year

·    

Leasing remains at approximately 65 per cent., however following an increase in income and reduction in costs during the year, mall now operationally profitable and generating surplus cash

·    

Active discussions regarding leasing remaining units, with focus on quality of tenants and tenant mix

·    

Residential development at Kalyan progressing well with over 65 per cent. of units already sold. Units are now being sold at prices approximately 38 per cent. higher than launch price

·    

Planned development of commercial office space to maximize return from remaining land at Kalyan

·    

Total developed area of Kalyan Project now expected to be 1.1m square feet, 29% more than previously envisaged to encompass commercial and residential opportunities

·    

Discussions with prospective anchor tenants for the Nashik development have begun and are progressing well

·    

Balance sheet remains robust as a result of prudent cash management and low gearing with year end cash and short term deposits of US$3.96m

·    

Appointment of Ajay Gupta as Chief Executive Officer in March 2010

·    

Management actively exploring opportunities to generate value in the retail, residential, leisure and commercial spaces

 

Commenting on the results, Amit Jatia, Chairman of West Pioneer, said: "West Pioneer's key objective is to continue to be a leading developer and operator of retail-led mixed use developments in west and southern India, to continue developing a brand representing quality and attractive pricing and to generate attractive returns for shareholders from sales of units, growth in income and asset value. I remain confident that continued progress will be made in these areas in the current financial year."

 

-Ends-

For further information:

Evolution Securities


Jeremy Ellis / Chris Clarke

Tel: +44 (0) 20 7071 4300

 

Media enquiries:

Abchurch Communications


Heather Salmond / Mark Dixon

Tel: +44 (0) 20 7398 7704

heather.salmond@abchurch-group.com

www.abchurch-group.com

 



Chairman's Statement

In the year ended 31 March 2010, West Pioneer achieved revenue and other income of US$7.9m (2009: US$12.3m), including property rentals and other operating income of US$3.2m (2009: US$2.6m). Profit before tax was US$3m (2009: US$6.4m) and basic earnings per share was US$0.016 (2009: US$0.03). Net assets at the year end were US$63.3m (2009: US$53.9m), including cash and short term deposits of US$3.9m (2009: US$6.6m). Interest bearing loans and borrowings reduced from US$8.1m to US$7.6m during the period, inclusive of debt repayments.

Kalyan

The Metro Junction mall in Kalyan continues to experience strong growth in footfalls with more than 6m visitors to the mall during the year. During the second half of the year the numbers have more than doubled from the comparable period in 2009 rising from 1.8m to 4m for the six month period.  Particularly encouraging is the increasing number of people visiting by car which typically reflects the relative affluence of the customer as well as their intention to purchase.

The economic climate for retailers has also improved over the last six months. Confidence appears to have returned to the sector with retailers once again looking to open new stores.

Leasing remains consistent with last reported levels of 65 per cent. The Company has had opportunities to lease additional vacant units during the period, but not on terms that it considered commercially acceptable or with suitable tenants. Given that the mall is now trading profitably, partly as a result of active mall management, the Company has decided to prioritise maximising rental values and the quality of tenants and tenant mix rather than short-term occupancy. The Company has also been seeking to maximise other revenue streams for the mall including income from car-parking, advertising and kiosks.

The residential development at Kalyan has progressed well during the period, with two towers on the 500,000 square foot development now under construction. Each tower comprises 178 apartments and to date a total of 231 apartments have been sold, with the most recent sale prices attracting 3,600 rupees per square foot, a 38 per cent. increase from launch price. The Company will be able to complete the residential development without the need for external finance.

In addition, following extensive market research the Company has decided to convert 68,000 square feet of the remaining land at Kalyan into commercial office space which will be sold as opposed to being leased. The Company has finalised plans for this space known as Metro Plaza and will commence pre sales in September 2010. This is in line with management's strategy to take advantage of opportunities where premium value can be generated. Current indications are that the price per square foot of the commercial space for sale will be significantly higher than that of the residential space.

The residential and commercial developments have marked a change in emphasis for the Company that involves marketing and selling directly to the consumer as opposed to indirectly through retailers in the mall. West Pioneer with its McDonalds background and real estate execution capability in India is well placed to pursue such opportunities. It will also seek to develop other opportunities to provide real estate products and services directly to the Indian consumer. The project also shows the benefits and synergies of mixed use developments and the Company will look to follow this model in other developments.

Nashik and Aurangabad the Group expects to advance its plans for the Nashik site during the current financial year. The development plans comprise a mall, commercial space and a hotel. Pre-leasing discussions are taking place with prospective anchor tenants for the mall and corporates for commercial space.

Development of Aurangabad will follow development of the Nashik site. The plans also include retail space, commercial units and a hotel. A management agreement with InterContinental Hotels Group remains in place for the development of a Holiday Inn hotel at both sites.

Board and Management

On 3 March 2010, West Pioneer announced the appointment of Ajay Gupta as Chief Executive Officer of the Company. Mr Gupta has been associated with West Pioneer since early 2009 as a valued member of the management committee involved in leading the Company's strategic planning process. He also has extensive experience within the retail sector having been associated with Hardcastle Restaurants, the McDonald's India joint venture in the west and south of the country, as well as with Global Trendz Ltd, the Master franchise for Disney Kids Wear in India. In his most recent role as Chief Executive Officer of Astrum Consulting, a management and strategic consultancy business which he co-founded in April 2000, Mr Gupta helped increase the client base to include some of the world's leading blue chip businesses, including HSBC, Vodafone, Astra Zeneca and Unilever.


Outlook

Trading conditions in the last financial year have continued to be challenging. However, the organised retail sector is expected to grow from 6% of total retail to 11% by 2013 (Source: Knight Frank).

West Pioneer's key objectives are to continue to be a leading developer and operator of retail-led mixed use developments in west and southern India; to continue developing a brand representing quality and attractive pricing; to generate attractive returns for shareholders from sales of units, growth in income and asset value. I remain confident that continued progress will be made in these areas in the current financial year.



CONSOLIDATED INCOME STATEMENT

For the year ended 31st March 2010



Year ended 31st March



2010

2009

                        


 $

 $

Revenue




Property Rentals


              1,612,256

               1,314,714

Other operating income


              1,656,311

               1,277,845



              3,268,567

               2,592,559

Property Revaluation


              3,897,005

               8,872,574

Finance and other income


                  831,174

                  820,351

Total revenue


              7,996,746

            12,285,484





Expenses




Direct operating expenses for  rent-earning properties


             (1,671,845)

             (1,346,453)

Administrative expenses


             (1,812,504)

             (2,356,818)

Selling and distribution costs


                (364,523)

                (163,475)

Finance costs


             (1,109,192)

             (2,043,127)

Total expenses


             (4,958,065)

             (5,909,873)





Profit before tax


              3,038,680

               6,375,611

Income tax expense


             (1,767,376)

             (3,686,386)





Profit after tax


              1,271,304

               2,689,225





Attributable to:




Equity holders


              1,271,304

               2,689,225





Earnings per share ( attributable to equity holders)




Basic


                      0.016

                       0.033

Diluted


                      0.016

                       0.033

 



CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME

For the year ended 31st March 2010



Year ended 31st  March



2010

2009



 $

 $





Profit for the period


               1,271,304

             2,689,225





Exchange gain/ (loss) on translation of foreign operations


               7,992,191

         (15,795,967)





Other comprehensive income/ (loss) for the period, net of tax


               7,992,191

         (15,795,967)





Total comprehensive income for the period, net of tax


               9,263,495

         (13,106,742)





Attributable to:




Equity holders


               9,263,495

         (13,106,742)

 



CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31st March 2010



As at 31st  March



2010

2009



$

$

ASSETS




 Non current assets




 Property, plant and equipment


                   371,496

            2,008,412

 Investment Properties


             73,059,060

         39,670,517

 Intangible assets


                     21,984

                 24,872

 Prepayments


               3,276,953

         23,605,311

 Other financial assets


                   306,572

               214,337



             77,036,065

         65,523,449

 Current assets




 Inventories


               5,382,043

                    6,012

 Investments - Held for trading


                   639,615

            1,126,832

 Trade and Other receivables


               1,450,130

               768,528

 Prepayments


                     70,450

                 26,674

 Advance tax


                   355,305

               218,064

 Cash and short-term deposits


               3,966,039

            6,645,093



             11,863,581

            8,791,203

 TOTAL ASSETS


             88,899,646

         74,314,652

 EQUITY AND LIABILITIES




 Equity attributable to the equity holders




 Issued capital


               7,996,130

            7,996,130

 Share premium


             45,717,870

         45,717,870

 Retained earnings


             13,192,220

         11,920,917

 Employee Equity Benefits Reserve


                   650,152

               515,474

 Foreign currency translation reserve


              (4,232,702)

        (12,224,893)



             63,323,671

         53,925,497

 Non current liabilities




 Interest bearing loans and borrowings


               5,662,879

            6,516,618

 Other financial liabilities


               3,352,652

               663,681

Other non financial liabilities


88,755

55,582

 Employee benefit liability


                     48,113

                 34,452

Deferred Tax Liability


             10,199,789

            7,196,150



             19,352,188

         14,466,483

 Current liabilities




 Trade and other payables


               3,421,657

            3,591,567

 Interest bearing loans and borrowings


               1,931,473

            1,629,155

 Other financial liabilities


                   828,629

               651,610

Other non financial liabilities


42,029

50,340



               6,223,788

            5,922,672

 TOTAL LIABILITIES


             25,575,975

         20,389,155

 TOTAL EQUITY & LIABILITIES


             88,899,646

         74,314,652


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31st March 2010


Attributable to equity holders of the parent


Issued

Share

Retained

Employee equity benefits

Foreign currency translation

Total


capital

premium

earnings

reserve

 reserve

equity


$

$

$

$

$

$

Balance as at 1st April 2009

         7,996,130

       45,717,870

       11,920,916

            515,474

      (12,224,893)

        53,925,497

Profit for the period

                        -  

                        -  

         1,271,304

                        -  


          1,271,304

Other comprehensive income


                        -  



          7,992,191

          7,992,191

Total comprehensive income

                        -  

                        -  

         1,271,304

                        -  

          7,992,191

          9,263,495

Share based payment

                        -  

                        -  

                        -  

            134,678

                         -  

              134,678

Balance as at 31st March 2010

         7,996,130

       45,717,870

       13,192,219

            650,152

         (4,232,702)

        63,323,670








Balance as at 1st April 2008

         7,996,130

       45,717,870

         9,199,598

                        -  

          3,571,074

        66,484,672

Profit for the period

                        -  

                        -  

         2,689,225

                        -  

 -

          2,689,225

Other comprehensive income

                        -  

                        -  

 -

                        -  

      (15,795,967)

      (15,795,967)

Total comprehensive income 

                        -  

                        -  

         2,689,225

                        -  

      (15,795,967)

      (13,106,742)

Share based payment

                        -  

                        -  

                        -  

            547,567

                         -  

              547,567

Transfer to retained earnings on options forfeited

                        -  

                        -  

               32,093

             (32,093)

                         -  

                         -  

Balance as at 31st March 2009 (Audited)

         7,996,130

       45,717,870

       11,920,916

            515,474

      (12,224,893)

        53,925,497
















CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31st March 2010


Year ended 31st  March


2010

2009


$

$

Operating activities



Profit before tax

        3,038,680

       6,375,610

Adjustments to reconcile profit before tax to net cash flows



Depreciation and amortisation

             34,501

            26,876

Share based payments expense

           134,678

          547,567

(Increase) in fair value of investment properties

      (3,897,005)

     (8,872,574)

(Increase)/decrease in value of investments held-for-sale

         (171,994)

          107,934

Net (Gain) / loss on sale of investment

                 (113)

            30,108

Dividend Income

            (18,121)

        (228,813)

Interest Income

         (142,679)

        (529,659)

Interest expense

        1,101,125

          935,870

(Increase) in other assets (non-current)

            (54,919)

           (36,256)

(Increase) in prepayments (current)

            (39,829)

           (15,833)

(Increase) in trade and other receivables

         (555,231)

        (668,384)

(Increase) in Inventories-Residential

         (728,977)

                      -  

(Increase) in Inventories - Mall

            (68,186)

                      -  

(Decrease) in trade and other payables

         (423,660)

     (1,838,132)

Increase  in Statutory dues

           123,656

                      -  

(Decrease) in other payables

         (108,481)

                      -  

Increase in other liabilities current

             15,475

          617,615

Increase in other liabilities non current

        2,467,476

          464,215

Income tax paid

            (14,922)

        (205,721)

Net cash flows from /(used) in operating activities

           691,475

     (3,289,577)




Investing activities



Proceeds from sale of held-for-trading investments

           850,384

    11,349,958

Purchase of property, plant and equipment and intangible assets

            (13,189)

           (36,645)

Purchase of held-for-trading investments

            (96,346)

     (1,944,851)

(Increase) in prepayments

         (510,438)

     (3,516,974)

(Increase) in Investment Property

         (288,426)

                      -  

Investment in construction costs

         (928,476)

     (5,545,800)

Dividend income

             94,591

          228,813

Interest received

             69,111

          529,659

Net cash flows (used in )/from investing activities

         (822,789)

       1,064,160




Financing activities



Proceeds from borrowings

                       -  

          651,754

Repayment of borrowings

      (1,738,948)

     (1,777,930)

Interest paid

   (1,101,125)

        (935,870)

Net cash flows (used in) financing activities

      (2,840,073)

     (2,062,046)

Net (decrease) in cash and cash equivalents

      (2,971,387)

     (4,287,463)

Net foreign exchange difference

           101,457

     (2,018,494)

Cash and cash equivalents at 1st April 2009

        5,443,352

    11,749,309

Cash and cash equivalents at 31st March, 2010

        2,573,422

       5,443,352   

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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