Latest Results
Interim results
West Pioneer, a developer and operator of shopping malls in west and southern India, announces its interim results for the half-year ended 30 September 2009.
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Highlights
- Highest ever footfall numbers and positive sales trends at Metro Junction Mall in Kalyan
- Leasing improved from 52% in May 2009 to 65% in November 2009, putting the mall on track to be substantially leased by March 2010
- Successful opening of multiplex and food court in the period
- Successful entry into residential market in Kalyan with strong profit potential over 3-4 years
- Active discussions with anchor tenants and Intercontinental Hotel Group for Nashik mall and hotel development
- Balance sheet remains robust as a result of prudent cash management and low gearing with period end cash and cash equivalents of $4.2m
- Continued growth in the Indian economy and organized retail provides opportunity to substantially increase gross leasable area owned or operated by West Pioneer
Commenting on the results, Amit Jatia, Chairman of West Pioneer, said: “Trading conditions in the half of the financial year have shown a genuine recovery from the difficulties experienced last year. Throughout this period West Pioneer has benefited from its strategy of maintaining a high quality, focused portfolio of assets, whilst remaining open to opportunistic and attractive investment opportunities. This has resulted in our successful entry into the residential market and we have been most encouraged by initial sales of apartments in the first two towers at Kalyan. Overall we remain confident in our ability to deliver value to shareholders from our investments in retail, hospitality and residential development.”
Chairman's Statement
In the half-year ended 30 September 2009, West Pioneer achieved revenue and other income of $5.1m (2008: $2.8m), including property rentals and other operating income of $1.5m (2008: $0.6m) reflecting a full period of operations in the lower ground and ground floor at the Kalyan mall. Profit before tax was $2.8m (2008: $1.1m) and basic earnings per share was $0.014 (2008: $0.005). Net assets at the period end were $59.6m, including cash and cash equivalents of $4.2m. These figures reflect a positive property revaluation of $3.3 million, mainly as a result of progress in the residential development at Kalyan. Interest bearing loans and borrowings reduced slightly to $8.1m during the period, inclusive of debt repayments.
Kalyan
I am pleased to announce that after the recent slowdown seen in the Indian retail industry, West Pioneer has regained its growth momentum. The adoption of a flexible approach to our development plans has seen us make a successful entry into the residential market in Kalyan, a suburb of Mumbai where our Metro Junction mall is also located. Metro Junction is now recording its highest ever footfalls which are qualitatively superior to earlier footfall and feedback from our retailers indicate a significant increase in their sales as a confirmation of this. Leasing has improved from 52% of the total gross lease area in May 2009 to 65% in November 2009, including some major new tenants. The multiplex and the food court, which became operational in July and September of this year, have become major attractions for consumers. The volume of current enquiries puts the mall on track to be substantially leased by March 2010.
Bookings for the first of the planned three residential towers, called Metro Residency, opened in mid-September this year and to date we have booked 136 out of the total 178 apartments available. In light of this demand, we released for sale the first 80 apartments of the second tower in November and to date we have booked 41 apartments. The booking prices have exceeded our initial expectations and imply for the Company a total potential booking sales value of $10.88m. This would enable the Company to complete the construction of the first two towers without any requirement for external finance. The ground break for constructing the first tower is scheduled for the end of December 2009 and we are well on track to meet this timetable.
Nashik and Aurangabad
As previously stated, we felt that it would be prudent to monitor retailer sentiment before commencement of any construction activity at Nashik or Aurangabad. In the case of Nashik, our development plan is a 350,000 sq ft mall to be completed in two phases, of which phase 1 will be approximately 180,000 sq ft with a 200 room hotel to be managed by the Intercontinental Hotel Group (IHG) under the Holiday Inn brand. The balance of the land is being considered for a residential complex. While the required permissions for this development plan by the local authorities are in progress, we are in parallel discussions with two large anchor tenants for the retail area. Discussions with IHG have also commenced for the layout and design of the hotel.
Our current development plan for Aurangabad envisages a shopping mall and a hotel. However, we propose to commence this development only after the Nashik plan has been implemented.
Outlook
The fundamentals of the Indian economy are strong and the GDP growth of 7.9% in the July–September quarter of this financial year indicates an annual GDP growth of around 7% in the financial year 2009–2010. We expect the positive correction in the retail sector to continue and strengthen over the coming months leading to a further expansion in the organized retail sector over the long term.
Against this background, the Group remains confident that its flexible approach will help it to realize its long term strategy in retail, hospitality and residential development.
Amit Jatia
Chairman of West Pioneer Properties
7 December 2009
Consolidated Income Statement
for the half-year ended 30 September 2009
| For the six months ended 30th September |
||
| 2009 | 2008 | |
| Unaudited | ||
| $ | $ | |
| Revenue | ||
| Property Rentals | 802,836 | 570,195 |
| Other operating income | 745,591 | - |
| Property revenue | 1,548,427 | 570,195 |
| Property Revaluation | 3,326,515 | 1,623,023 |
| Finance income | 235,429 | 591,325 |
| Total revenue | 5,110,371 | 2,784,543 |
| Expenses | ||
| Other income | 56,988 | 37,273 |
| Direct operating expenses for rent-earning properties | (742,316) | - |
| Administrative expenses | (810,744) | (1,171,627) |
| Selling and distribution costs | (247,462) | (38,624) |
| Finance costs | (563,536) | (505,285) |
| Total expenses | (2,307,070) | (1,678,263) |
Profit before tax |
2,803,302 | 1,106,280 |
| Income tax expense | (1,684,814) | (727,766) |
| Profit after tax | 1,118,488 | 378,514 |
| Attributable to: Equity holders |
1,118,488 | 378,514 |
| Earnings per share (attributable to equity holders) | ||
| Basic | 0.0139 | 0.005 |
| Diluted | 0.0139 | 0.005 |
Consolidated Statement of Comprehensive Income
for the half-year ended 30 September 2009
| For the six months ended 30th September |
||
| 2009 | 2008 | |
| Unaudited | ||
| $ | $ | |
| Profit for the period | 1,118,488 | 378,514 |
| Exchange gain/(loss) on translation of foreign operations | 4,530,854 | (9,785,344) |
| Other comprehensive income (loss) for the period, net of tax | 4,530,854 | (9,785,344) |
| Total comprehensive income for the period, net of tax | 5,649,342 | (9,406,830) |
| Attributable to: | ||
| Equity holders | 5,649,342 | (9,406,830) |
| 5,649,342 | (9,406,830) | |
Consolidated Balance Sheet
for the half-year ended 30 September 2009
| 30th September | 31st March | |||
| 2009 | 2008 | 2009 | ||
| Unaudited | Audited | |||
| $ | $ | $ | ||
| Assets | ||||
| Non current assets | ||||
| Property, plant and equipment | 314,764 | 10,433,892 | 2,008,412 | |
| Investment properties | 67,584,666 | 26,400,493 | 39,670,517 | |
| Intangible assets | 22,717 | 14,918 | 24,872 | |
| Prepayments | 3,499,628 | 24,718,668 | 23,605,311 | |
| Other financial assets | 268,634 | 245,423 | 214,337 | |
| Advance income tax | 297,883 | 39,444 | 218,064 | |
| 71,988,292 | 61,852,838 | 65,741,513 | ||
| Current assets | ||||
| Inventories | 4,219,763 | - | - | |
| Investments – held for trading | 1,041,132 | 2,826,861 | 1,126,832 | |
| Trade and other receivables | 1,177,714 | 758,878 | 768,528 | |
| Prepayments | 122,037 | 46,985 | 32,686 | |
| Cash and short-term deposits | 4,242,867 | 12,319,092 | 6,645,093 | |
| 10,803,513 | 15,951,816 | 8,573,139 | ||
| Total assets | 82,791,805 | 77,804,654 | 74,314,652 | |
| Equity and liabilities | ||||
| Equity attributable to the equity holders | ||||
| Issued capital | 7,996,130 | 7,996,130 | 7,996,130 | |
| Share premium | 45,717,870 | 45,717,870 | 45,717,870 | |
| Retained earnings | 13,039,405 | 9,578,112 | 11,920,916 | |
| Employee equity benefits reserve | 582,789 | 407,588 | 515,474 | |
| Foreign currency translation reserve | (7,694,039) | (6,214,270) | (12,224,893) | |
| 59,642,155 | 57,485,430 | 53,925,497 | ||
| Non current liabilities | ||||
| Interest bearing loans and borrowings | 6,154,425 | 8,032,251 | 6,516,618 | |
| Other financial liabilities | 786,905 | 653,764 | 663,681 | |
| Other non financial liabilities | 68,688 | - | 55,582 | |
| Employee benefit liability | 27,977 | 20,519 | 34,452 | |
| Deferred tax liability | 9,467,886 | 4,985,365 | 7,196,150 | |
| 16,505,881 | 13,691,899 | 14,466,483 | ||
| Current liabilities | ||||
| Trade and other payables | 3,725,101 | 4,759,968 | 3,591,567 | |
| Interest bearing loans and borrowings | 1,965,279 | 1,795,234 | 1,629,155 | |
| Other financial liabilities | 891,519 | 72,123 | 651,610 | |
| Other non financial liabilities | 61,870 | - | 50,340 | |
| 6,643,769 | 6,627,325 | 5,922,672 | ||
| Total liabilities | 23,149,650 | 20,319,224 | 20,389,155 | |
| Total equity and liabilities | 82,791,805 | 77,804,654 | 74,314,652 | |
Consolidated Statement of Changes in Equity
for the half-year ended 30 September 2009
| Attributable to equity holders of the parent | ||||||
| Issued capital |
Share premium |
Retained earnings |
Employee equity benefits reserve |
Foreign currency translation reserve |
Total 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 | 1,118,488 | 1,118,488 | ||||
| Other comprehensive income( loss ) | 4,530,854 | 4,530,854 | ||||
| Total comprehensive income | 1,118,488 | 4,530,854 | 5,649,342 | |||
| Share based payment | 67,315 | 67,315 | ||||
| Balance as at 30th September 2009 (Unaudited) | 7,996,130 | 45,717,870 | 13,039,404 | 582,789 | (7,694,039) | 59,642,154 |
| Balance as at 1st April 2008 | 7,996,130 | 45,717,870 | 9,199,598 | - | 3,571,074 | 66,484,672 |
| Net Profit for the period | - | - | 378,514 | - | - | 378,514 |
| Other comprehensive income( loss ) | - | - | - | - | (9,785,344) | (9,785,344) |
| Total comprehensive income | - | - | 378,514 | - | (9,785,344) | (9,406,830) |
| Share based payment | - | - | - | 407,586 | - | 407,586 |
| Balance as at 30th September 2008 (Unaudited) | 7,996,130 | 45,717,870 | 9,578,112 | 407,586 | (6,214,270) | 57,485,428 |
Consolidated Cash Flow Statement
for the half-year ended 30 September 2009
Interim consolidated cash flow statement
for the six months ended 30th September 2009
| 2009 |
2008 | |
| Unaudited | ||
| $ | $ | |
| Profit before tax | 2,803,302 | 1,106,280 |
| Adjustments to reconcile profit before tax to net cash flows | ||
| Depreciation and amortisation | 16,388 | 12,494 |
| Share based payments expense | 67,315 | 407,588 |
| Share issue expenses w/off | 6,564 | - |
| (Increase) in fair value of investment properties | (3,326,515) | (1,623,023) |
| Net gain on sale of investments | (57) | (22,574) |
| Dividend income | (7,336) | (236,370) |
| (Increase)/decrease in fair value of investment | (157,303) | 55,764 |
| Interest Income | (62,938) | (354,955) |
| Interest expense | 559,680 | 449,521 |
| (Increase) in other assets (non-current) | (84,935) | (7,375) |
| (Increase) in prepayments (current) | (87,440) | (1,561,169) |
| (Increase) trade and other receivables | (343,367) | (556,242) |
| (Decrease) in trade and other payables | (352,272) | (1,586,001) |
| Increase/(decrease) in other liabilities current | 187,531 | (81,544) |
| Increase in other liabilities non current | 69,082 | 322,629 |
| Income tax paid | (13,487) | (10,774) |
| Net cash flows used in operating activities | (725,788) | (3,685,751) |
| Investing activities | ||
| Proceeds from sale of held-for-trading investments | 409,745 | 8,925,341 |
| Purchase of property, plant and equipment & intangible assets | (6,034) | (23,977) |
| Purchase of held-for-trading investments | (44,878) | (264,509) |
| (Increase) in prepayments | (497,144) | (2,612,179) |
| Increase/(decrease) in trade & other payables relating to construction costs | - | (339,596) |
| Investment in construction costs | (1,058,371) | (2,249,136) |
| Dividend income | - | 236,370 |
| Interest received | 63,192 | 354,955 |
| Net cash flows (used in)/ from investing activities | (1,133,490) | 4,027,269 |
| Financing activities | ||
| Transaction costs of issue of shares | (6,564) | - |
| Proceeds from borrowings | 203,993 | 702,235 |
| Repayment of borrowings | (866,968) | (994,834) |
| Interest paid | (559,680) | (449,521) |
| Net cash flows (used in) financing activities | (1,229,219) | (742,120) |
| Net (decrease) in cash and cash equivalents | (3,088,496) | (400,602) |
| Net foreign exchange difference | 590,927 | (2,007,241) |
| Cash and cash equivalents at 1st April 2009 | 5,443,352 | 13,320,738 |
| Cash and cash equivalents at 30th September 2009 | 2,945,783 | 10,912,895 |
Page last up-dated: 7 December 2009