Sirius Real Estate: Update: Difference between revisions

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*We note that the degree of risk associated with an investment in Sirius is relatively 'low', with the shares having an adjusted beta that is 6% above the market (1.06 vs. 1).
*We note that the degree of risk associated with an investment in Sirius is relatively 'low', with the shares having an adjusted beta that is 6% above the market (1.06 vs. 1).
*All-in-all, assuming that a suitable return level in the 12 months is 10% or more, and Sirius Real Estate Limited achieves its expected return level (of 197%), then an investment in the company is considered to be a 'suitable' one.
*All-in-all, assuming that a suitable return level in the 12 months is 10% or more, and Sirius Real Estate Limited achieves its expected return level (of 197%), then an investment in the company is considered to be a 'suitable' one.
*  
{| class="wikitable"
|+Summary financials
!
!31 March 2021 (€000)
!31 March 2022 (€000)
!31 March 2023 (€000)
!31 March 2024 (€000)
|-
|Portfolio value, €-bn
|1.36
|
|2.12
|2.21
|-
|FFO, €-mln
|60.9
|
|90.1
|95.1
|-
|FFO/Shr, €-cents
|5.84
|
|7.75
|8.16
|-
|Div/Shr, €-cents
|3.8
|
|5
|5.3
|-
|Adj. NAV/shr €-cents
|93.8
|
|110.9
|118
|}
*


== Half-Year Results ==
== Half-Year Results ==

Revision as of 23:17, 5 December 2022

Summary

  • Sirius Real Estate has made eight noteworthy announcements since our last report (on 12th April 2022).
  • The key highlights of the announcements are as follows:
    • ccc.
  • Accordingly, we have updated our forecasts, and estimate that the expected return of an investment in Sirius Real Estate Limited over the next 12-months is 197%. In other words, an £100,000 investment in the company is expected to return £196,841 in 12-months time.
  • We note that the degree of risk associated with an investment in Sirius is relatively 'low', with the shares having an adjusted beta that is 6% above the market (1.06 vs. 1).
  • All-in-all, assuming that a suitable return level in the 12 months is 10% or more, and Sirius Real Estate Limited achieves its expected return level (of 197%), then an investment in the company is considered to be a 'suitable' one.
Summary financials
31 March 2021 (€000) 31 March 2022 (€000) 31 March 2023 (€000) 31 March 2024 (€000)
Portfolio value, €-bn 1.36 2.12 2.21
FFO, €-mln 60.9 90.1 95.1
FFO/Shr, €-cents 5.84 7.75 8.16
Div/Shr, €-cents 3.8 5 5.3
Adj. NAV/shr €-cents 93.8 110.9 118

Half-Year Results

On 21st November 2022, the company announced its interim results for the period ended 30th September 2022.

    • High highlights
      • Profit and loss
        • Total revenue, which comprises rent, fee income from Titanium, other income from investment properties and service charge income, increased by 47.7% to €130.6 million (30 September 2021: €88.4 million).
        • Like-for-like annualised rent roll increased by 2.4% in Germany during the period, to €115.2 million (31 March 2022: €112.5 million), and 4.1% in the UK, to £46.5 million (31 March 2022: £44.7 million)
        • Profit before tax of €75.7 million (30 September 2021: €78.2 million) with a 78.7% uplift in underlying profit to €47.9 million (30 September 2021: €26.8 million) when adjusted for €27.8 million of property valuation gains.
        • Adjusted earnings per share, which excludes valuation movements as well as exceptional items, increased 26.6% to 3.71c per share (30 September 2021: 2.93c) reflecting the positive year on year operational development
      • Balance sheet
        • Net current assets
          • Net cash
        • Net assets
          • NAV per share increased 1.8% to 103.90c (31 March 2022: 102.04c) with adjusted NAV per share increasing by 2.0% to 110.72c (31 March 2022: 108.51c).
      • Cash flow
        • CFO
          • 47.0% growth in funds from operations¹ to €48.5 million (30 September 2021: €33.0 million)
        • CFI
          • Valuation increase of €20.3 million and £6.3 million (€7.5 million) representing a 1.8% and 2.1% like-for-like valuation growth in Germany and the UK respectively.
          • Increase in owned investment property to €2,081.4 million (31 March 2022: €2,074.9 million).
        • CFF
          • 32.4% increase in dividend per share to 2.70c (30 September 2021: 2.04c).
      • Other/outlook
        • The company said it continues to expect to trade in-line with consensus and management expectations for the full year.

Reaffirmed Investment Rating

On the 7th November 2022, Sirius Real Estate announced that the rating agency Fitch Ratings has reaffirmed the company's BBB investment grade rating with 'Stable Outlook' (Long-Term Issuer Default Rating).

In its rating, Fitch noted that it expects Sirius's income to remain stable, due to an active focus on occupancy and low affordable rents for the company's out-of-town locations. It also highlighted the benefits of the Sirius operating platform and the resilience of its core, high-yielding portfolio. Fitch anticipates that total average portfolio occupancy levels will remain above 80%.

Early refinancing of next major debt expiry

On 6th October 2022, Sirius Real Estate announced that it has completed the early refinancing of the the company's next major debt expiry, a €170 million facility with Berlin Hyp AG, approximately one year in advance of the facility's due date.

The refinancing comprises a new 7-year, €170 million facility at a fixed interest rate of 4.26%, which will replace and redeem the existing facility upon its expiry on 31 October 2023.

As of 30 September 2022, the group had a total of €993 million of outstanding debt, €750 million of which is unsecured. The remaining €243 million comprised mortgage-backed debt, of which the most significant tranche is the newly refinanced €170 million Berlin Hyp AG facility referred to above.

This refinancing facility extends the group's total weighted average debt expiry from 3.8 years to 5.0 years. When the new facility commences just over a year from now, the group's weighted average cost of debt will increase from 1.4% to 1.9%.

The company has €1.6 billion of unencumbered assets and in excess of €138 million of free cash available. Within the next 12 months, Sirius has a total of €35 million of debt expiring, which it is confident of either extending terms with the existing lenders, replacing with new lenders or paying down.

Acquisitions and disposals update

On 4th October 2022, Sirius Real Estate announced that it has completed three acquisitions in Germany, for €44.6 million.

These acquisitions were all notarised prior to the end of June and have been predominantly funded using capital recycled from three strategic disposals in Germany and the UK for a combined €33.6 million.

The disposals have been made at a premium to book value.

The three disposals were of assets that offered limited further growth opportunities due to location and/or condition, and comprised:

The notarisation of a €1.0 million 3,200 sqm non-income producing land plot in Heiligenhaus, Germany which had a book value of €250,000 at the time of notarisation. This asset is being sold to a supermarket chain as part of its expansion plans, with the transaction expected to complete in January 2023.

The three new acquisitions totalling €44.6 million currently generate a combined total of €2.3 million of rental income and €1.6 million of net operating profit annually. The three acquired assets have a combined occupancy of just 54% and offer a range of avenues for Sirius to leverage its significant value creation expertise to grow rental income. The acquired assets comprise:

  1. A €39.8 million (including costs) mixed-use property in Düsseldorf, Germany, situated 2.6 km from the city's international airport. The property comprises mainly office and warehouse/light industrial space and is 55% occupied, offering good value add potential.
  2. A €3.9 million (including costs) primarily warehouse asset located in a well-developed commercial area in Dreieich, Germany, that is strategically adjacent to an existing property owned by Sirius.  We intend to convert the property into a self-storage facility, adding to our existing SmartSpace Self-Storage brand that now exists in 32 locations across Germany.
  3. A €0.9 million (including costs) small 239 sqm vacant office building in Potsdam. The property is placed strategically at the entrance to one of the Company's existing sites and directly adjacent to the world famous Babelsberg Film Studios.

The company said that it has identified a number of asset management initiatives within the three newly acquired properties which will allow us to grow rental income and occupancy by leasing into markets where we see continued strong demand for our products.

The company added that it expects to slow its acquisition pipeline. We will also continue to seek to dispose of non-core or mature assets as and when we feel the timing is right.

Change of Chief Financial Officer

On the 16th August 2022, Sirius Real Estate announced that for personal reasons, Diarmuid Kelly has decided to step down as the company's Chief Financial Officer.

Alistair Marks, the Chief Investment Officer and former CFO of the company, has stepped in as the interim CFO. The company has begun the search for a new CFO.

Sale of Bizspace Camberwell

On 16th May 2022, Sirius Real Estate announced the sale of a business park asset for £16 million, representing a 94% premium to the valuation that the asset was initially acquired by the company in November 2021 (i.e. in less than eight months). The proceeds will be used to invest in higher yielding UK opportunities.

Key features of the asset include:

  • It's located in Camberwell, London.
  • It's multi-tenanted.
  • It comprises approx. 34,700 sq. ft. of industrial and office space, and is 91% occupied.
  • The sale price represents a net initial yield (NIY), which is the current annualised rent, net of costs, expressed as a percentage of capital value, after adding notional purchaser's costs, of around 2.0%.

Board changes

On 13th June 2022, the company announced two board changes.

Caroline Britton was appointed to succeed James Peggie as the Senior Independent Director. Caroline has been a non-executive Director of Sirius since June 2020 and chairs the Audit Committee and is a member of the Nomination Committee of the Board.

Joanne Kenrick was appointed to succeed James Peggie as the chair of the Remuneration Committee. Joanne has been a non-executive Director of Sirius since September 2021 and is a member of the Nomination and Sustainability and Ethics Committees of the Board.

James Peggie will continue as a non-executive Director and a member of the Audit, Nomination and Remuneration Committees of the Board.

Final results

On 13th June 2022, the company announced its full year results for the year ended 31st March 2022.

During the 12-month period, revenue increased by 27% to €210 million (FY2021: €165 million), and the gain on revaluation of investment properties jumped by 41% to €210 million (FY2021: €165 million); however, mainly due to an impairment charge, higher administrative expenses and interest expenses, the net profit remained more-or-less unchanged at €147 million (FY 2021: €147 million).

In terms of the financial position of the company, the net current assets increased by more than 3x to €55 million (FY 2021: €17 million), and the net asset value (NAV) rose by by 28% to €1.19 billion (FY 2021: €0.93 billion).

Cash flows from operating activities increased by 15% to €82 million (from €71 million), and mainly due to the acquisition of a subsidiary and purchase of investment properties, cash flows used in investing activities increased by almost 6x to €430 million (from €74 million). Cash flows from financing activities swung to €431 million (from negative €54 million), driven by the proceeds of loans and the issue of share capital. The total dividend per share for the year increased by 16% to 4.41 cents (from 3.80%).

Funds From Operations (FFO) increased by 22.5% to €74.6 million (2021: €60.9 million).

Financials

Consolidated income statement
Year ended 31 March 2021 (€000) Year ended 31 March 2022 (€000) Year ended 31 March 2023 (€000) Year ended 31 March 2024 (€000)
Revenue 165,361 210,182 154,500 159,000
Direct costs (71,541) (87,689)
Net operating income 93,820 122,493
Gain on revaluation of investment properties 99,585 140,884
(Loss)/gain on disposal of properties 54 (623)
Recoveries from prior disposals of subsidiaries 65 94
Administrative expenses (27,823) (40,718)
Goodwill impairment - (40,906)
Share of profit of associates 4,977 6,940
Operating profit 170,678 188,164
Finance income 2,712 2,986
Finance expense (9,869) (23,219)
Change in fair value of derivative financial instruments 136 996
Net finance costs (7,021) (19,237)
Profit before tax 163,657 168,927 91,570 95,770
Taxation (16,097) (20,935)
Profit for the year after tax 147,560 147,992 95,500 97,950
Profit attributable to:
Owners of the Company 147,451 147,873 95,500 97,950
Non-controlling interest 109 119
147,560 147,992
Earnings per share
Basic earnings per share 14.16c 13.48c 8.00c 8.00c
Diluted earnings per share 13.96c 13.29c 8.00c 8.00c
Consolidated statement of financial position
Year ended 31 March 2021 (€000) Year ended 31 March 2022 (€000)
Non-current assets
Investment properties 1,362,192 2,100,004
Plant and equipment 2,682 5,492
Intangible assets 6,568 4,283
Right of use assets 1,919 14,996
Other non-current financial assets 44,960 48,330
Investment in associates 17,202 24,142
Total non-current assets 1,435,523 2,197,247
Current assets
Trade and other receivables 18,731 24,571
Derivative financial instruments 70 329
Cash and cash equivalents 65,674 150,966
Total current assets 84,475 175,866
Assets held for sale - 13,750
Total assets 1,519,998 2,386,863
Current liabilities
Trade and other payables (50,527) (89,335)
Interest-bearing loans and borrowings (9,114) (19,630)
Lease liabilities (5,857) (1,090)
Current tax liabilities (2,063) (10,423)
Derivative financial instruments (414) -
Total current liabilities (67,975) (120,478)
Non-current liabilities
Interest-bearing loans and borrowings (458,940) (961,863)
Lease liabilities (9,130) (37,571)
Derivative financial instruments (797) -
Deferred tax liabilities (56,331) (75,893)
Total non-current liabilities (525,198) (1,075,327)
Total liabilities (593,173) (1,195,805)
Net assets 926,825 1,191,058
Equity
Issued share capital - -
Other distributable reserve 449,051 570,369
Own shares held (2,903) (6,274)
Foreign currency translation reserve - (1,701)
Retained earnings 480,385 628,258
Total equity attributable to the owners of the Company 926,533 1,190,652
Non-controlling interest 292 406
Total equity 926,825 1,191,058
Consolidated statement of cash flows
Year ended 31 March 2021 (€000) Year ended 31 March 2022 (€000)
Operating activities
Profit for the year after tax 147,560 147,992
Taxation 16,097 20,935
Profit for the year before tax 163,657 168,927
Loss/(gain) on disposal of properties (54) 623
Recoveries from prior disposals of subsidiaries (65) (94)
Net exchange differences - (1,975)
Share-based payments 3,148 4,173
Gain on revaluation of investment properties (99,585) (140,884)
Change in fair value of derivative financial instruments (136) (996)
Depreciation of property, plant and equipment 669 1,167
Amortisation of intangible assets 897 1,164
Depreciation of right of use assets 521 843
Goodwill impairment - 40,906
Share of profit of associates (4,977) (6,940)
Finance income (2,712) (2,986)
Finance expense 9,869 23,219
Changes in working capital
Increase in trade and other receivables (2,518) (5,196)
Increase in trade and other payables 2,913 3,470
Taxation paid (632) (3,671)
Cash flows from operating activities 70,995 81,750
Investing activities
Purchase of investment properties (35,484) (162,844)
Prepayments relating to new acquisitions - (1,860)
Proceeds from loss on control of subsidiaries (net of cash disposed) 65 94
Capital expenditure on investment properties (31,104) (23,786)
Purchase of plant and equipment and intangible assets (2,718) (3,540)
Acquisition of a subsidiary (net of cash acquired) - (254,730)
Proceeds on disposal of properties (including held for sale) 30 15,297
Increase in loans receivable due from associates (5,950) (1,124)
Interest received 1,627 2,986
Cash flows used in investing activities (73,534) (429,507)
Financing activities
Proceeds from issue of share capital - 159,926
Transaction costs on issue of shares - (6,219)
Shares purchased (1,613) (5,545)
Payment relating to exercise of share options - (3,519)
Dividends paid to owners of the Company (24,248) (30,815)
Dividends paid to non-controlling interest (63) (5)
Proceeds from loans 20,000 750,000
Repayment of loans (33,753) (399,431)
Payment of principal portion of lease liabilities (5,681) (5,871)
Exit fees/prepayment of financing penalties - (5,335)
Capitalised loan issue cost (134) (14,369)
Finance charges paid (7,558) (7,067)
Cash flows from/(used in) financing activities (53,050) 431,750
Increase/(decrease) in cash and cash equivalents (55,589) 83,993
Net exchange difference - 1,299
Cash and cash equivalents as at the beginning of the year 121,263 65,674
Cash and cash equivalents as at the year end 65,674 150,966

Risks

As with any investment, investing in Sirius carries a level of risk. Overall, based on the company's market beta (i.e. 1.06), the degree of risk associated with an investment in Sirius is 'low'. For us, currently, the biggest risk to the group is changes in inflation and interest rates movements, ultimately leading the company to breach its loan facility covenants.

Risk area Principal risk(s)
Financing Availability and pricing of debt
Compliance with loan facility covenants
Availability and pricing of equity capital
Reputational risk
Valuation Property inherently difficult to value
Susceptibility of property market to change in value
Markets Participation within two geographically diverse markets
Reliance on specific industries and the SME market
Reduction in occupancy
Acquisitive growth Decrease in number of acquisition opportunities coming to market
Failure to acquire suitable properties with desired returns
Organic growth Failure to deliver capex investment programmes
Failure to refuel capex investment programmes
Failure to achieve targeted returns from investments
Customer Decline in demand for space
Significant tenant move-outs or insolvencies
Exposure to tenants' inability to meet rental and other lease commitments
Tenant affordability
Regulatory and tax Non-compliance with tax or regulatory obligations
People Inability to recruit and retain people with the appropriate skillset to deliver the Group strategy
Systems and data System failures and loss of data
Security breaches
Data protection
Macro-economic Impact of the Covid-19 pandemic
Inflationary pressure leading to increased costs
Interest rate movements impacting the commercial real estate market
Delays in cash collection and tenant insolvencies
Energy supply shortages caused by a variety of economic and geopolitical factors
ESG Unforeseen costs relating to physical and transition risks associated with climate change
Reputational risk
Failure to meet shareholder and societal requirements or expectations
Restricted access to financing market due to higher requirements ("green financing")
Foreign currency Financial impact of uncontrollable foreign currency fluctuation on earnings and net asset value

Valuation

Research suggests that in terms of estimating the expected return of an investment over a period of 12-months or less, the approach that is more accurate is the relative valuation approach, so that's the approach that we suggest using to determine the estimated value of the company.

What's the expected return of an investment in Sirius using the relative valuation approach?

Accordingly, Stockhub estimates that the expected return of an investment in Sirius Real Estate Limited over the next 12-months is 197%. In other words, an £100,000 investment in the company is expected to return £196,841 in 12-months time. The assumptions used to estimate the return figure can be found in the table below.

Assuming that a suitable return level in the 12 months is 10% and Sirius Real Estate Limited achieves its expected return level (of 197%), then an investment in the company is considered to be a 'suitable' one.

What are the assumptions used to estimate the return figure?

Key inputs
Description Value Commentary
Which type of multiple do you want to use? P/FFO REIT property sales and capital expenditure tends to result in material differences in the profitable of the REIT across its lifespan. Accordingly, we suggest valuing the company using the Price to Funds From Operations (P/FFO) ratio.
In regards to the P/FFO multiple, for the FFO figure, which year to you want to use? Year 1 Research suggests that when using the relative valuation approach, it's best to use a time period of 12 months or less. Accordingly, for the FFO figure, we suggest using Year 1.
In regards to the P/FFO multiple, what multiple figure do you want to use? 18x According to Bloomberg, Sirius Real Estate Limited closest peers trade on a multiple of 18x.
Which financial forecasts to use? Consensus Here, we have used the consensus forecasts.
What's the current value of the Stockhub company? £981.20 million As at 22nd November 2022, the current value of its company at £981.20 million.
Which time period do you want to use to estimate the expected return? Between now and one year time Research suggests that when using the relative valuation approach, it's best to estimate the expected return of the company between now and one year time.

Sensitive analysis

The two main inputs that result in the greatest change in the expected return of the Sirius Real Estate Limited investment are, in order of importance (from highest to lowest):

  1. The P/FFO multiple (the default multiple is 18x); and
  2. The year-one FFO forecast (the default forecast is $xxx million); and

The impact of a 10% change in those main inputs to the expected return of the Sirius Real Estate Limited investment is shown in the table below.

Sirius investment expected return sensitive analysis
Main input 10% worse Unchanged 10% better
The P/FFO multiple
The year-one FFO forecast

Appendix

Peers
Company name Bloomberg ticker Primary exchange Classification Industry Market capitalisation (GBP) BF P/FFO Yield (%)
Sirius Real Estate Ltd SRE LN United Kingdom Multi Asset Class Own & Develop Real Estate Owners & Developers 979,494,700 11.5111 4.39%
FastPartner AB FPARA SS Sweden Multi Asset Class Own & Develop Real Estate Owners & Developers 1,170,459,785 -- 2.99%
Cibus Nordic Real Estate AB CIBUS SS Sweden Multi Asset Class Own & Develop Real Estate Owners & Developers 57,4491,440 -- 6.84%
Shaftesbury PLC SHB LN United Kingdom Multi Asset Class Own & Develop Real Estate Owners & Developers 1,385,308,138 33.7009
Intershop Holding AG ISN SW Switzerland Multi Asset Class Own & Develop Real Estate Owners & Developers 1,011,223,384 -- 4.08%
WCM Beteiligungs- und Grundbes WCMK GR Germany Multi Asset Class Own & Develop Real Estate Owners & Developers 497,815,111 -- 2.89%
Metrovacesa SA MVC SM Spain Multi Asset Class Own & Develop Real Estate Owners & Developers 874,166,035 25.1504 14.02%
Brack Capital Properties NV BCNV IT Italy Multi Asset Class Own & Develop Real Estate Owners & Developers 601,880,806 --
TLG Immobilien AG TLG GR Germany Multi Asset Class Own & Develop Real Estate Owners & Developers 1,949,040,400 23.0976 5.00%
GAG Immobilien AG GWK3 GR Germany Multi Asset Class Own & Develop Real Estate Owners & Developers 1,097,732,888 -- 0.63%
Gateway Real Estate AG GTY GR Germany Multi Asset Class Own & Develop Real Estate Owners & Developers 498,775,280 --

Appendix

Condensed consolidated income statement
Six months ended 30 September 2021 (€000) Six months ended 30 September 2022 (€000)
Revenue 88,352 130,558
Direct costs (38,843) (57,350)
Net operating income 49,509 73,208
Gain on revaluation of investment properties 48,414 26,812
Gain/(loss) on disposal of properties (400) 4,801
Recoveries from prior disposals of subsidiaries 94 -
Administrative expenses (12,311) (24,809)
Share of profit of associates 2,463 2,597
Operating profit 87,769 82,609
Finance income 1,596 1,129
Finance expense (11,347) (9,249)
Change in fair value of derivative financial instruments 160 1,244
Net finance costs (9,591) (6,876)
Profit before tax 78,178 75,733
Taxation (10,386) (5,673)
Profit for the period after tax 67,792 70,060
Profit attributable to:
Owners of the Company 67,738 70,008
Non-controlling interest 54 52
67,792 70,060
Earnings per share
Basic earnings per share 6.44c 6.00c
Diluted earnings per share 6.33c 5.92c
Condensed consolidated statement of financial position
Six months ended 30 September 2021 (€000) Six months ended 30 September 2022 (€000)
Non-current assets
Investment properties 2,100,004 2,105,046
Plant and equipment 5,492 7,199
Intangible assets 4,283 4,129
Right of use assets 14,996 15,259
Other non-current financial assets 48,330 48,409
Investment in associates 24,142 26,739
Total non-current assets 2,197,247 2,206,781
Current assets
Trade and other receivables 24,571 24,420
Derivative financial instruments 329 1,573
Cash and cash equivalents 150,966 162,098
Total current assets 175,866 188,091
Assets held for sale 13,750 1,000
Total assets 2,386,863 2,395,872
Current liabilities
Trade and other payables (89,335) (76,993)
Interest-bearing loans and borrowings (19,630) (37,243)
Lease liabilities (1,090) (1,458)
Current tax liabilities (10,423) (4,978)
Total current liabilities (120,478) (120,672)
Non-current liabilities
Interest-bearing loans and borrowings (961,863) (943,176)
Lease liabilities (37,571) (37,233)
Deferred tax liabilities (75,893) (81,220)
Total non-current liabilities (1,075,327) (1,061,629)
Total liabilities (1,195,805) (1,182,301)
Net assets 1,191,058 1,213,571
Equity
Issued share capital - -
Other distributable reserve 570,369 544,419
Own shares held (6,274) (8,329)
Foreign currency translation reserve (1,701) (21,243)
Retained earnings 628,258 698,266
Total equity attributable to the owners of the Company 1,190,652 1,213,113
Non-controlling interest 406 458
Total equity 1,191,058 1,213,571
Condensed consolidated statement of cash flow
Six months ended 30 September 2021 (€000) Six months ended 30 September 2022 (€000)
Operating activities
Profit for the period after tax 67,792 70,060
Taxation 10,386 5,673
Profit for the period before tax 78,178 75,733
(Gain)/loss on disposal of properties 400 (4,801)
Net exchange differences - (309)
Share-based payments 1,403 1,947
Gain on revaluation of investment properties (48,414) (26,812)
Change in fair value of derivative financial instruments (160) (1,244)
Depreciation of property, plant and equipment 349 1,027
Amortisation of intangible assets 564 629
Depreciation of right of use assets 260 1,141
Share of profit of associates (2,463) (2,597)
Finance income (1,596) (1,129)
Finance expense 11,347 9,249
Changes in working capital
Decrease/(increase) in trade and other receivables (2,598) 3,786
Decrease in trade and other payables (2,053) (5,848)
Taxation paid (256) (2,717)
Cash flows from operating activities 34,961 48,055
Investing activities
Purchase of investment properties (20,221) (832)
Prepayments relating to new acquisitions (75,771) (3,639)
Capital expenditure on investment properties (10,494) (11,904)
Purchase of plant and equipment and intangible assets (1,461) (3,210)
Proceeds on disposal of properties (including held for sale) - 18,593
Increase in loan receivable due from associates (1,124) (74)
Interest received 1,596 1,129
Cash flows from/(used in) investing activities (107,475) 63
Financing activities
Shares purchased - (2,389)
Payment relating to exercise of share options (2,020) (1,686)
Dividends paid to owners of the Company (11,381) (26,211)
Dividends paid to non-controlling interest (5) -
Proceeds from loans 400,000 -
Repayment of loans (173,791) (2,699)
Payment of principal portion of lease liabilities (2,931) (775)
Exit fees/prepayment of financing penalties (3,697) -
Capitalised loan issue cost (7,559) -
Finance charges paid (4,170) (2,747)
Cash flows (used in)/from financing activities 194,446 (36,507)
Increase in cash and cash equivalents 121,932 11,611
Net exchange difference - (479)
Cash and cash equivalents as at the beginning of the period 65,674 150,966
Cash and cash equivalents as at the period end 187,606 162,098

References and notes