West Pioneer Properties Limited Trading Update (9087G)
04 Juli 2012 - 1:17PM
UK Regulatory
TIDMWPR
RNS Number : 9087G
West Pioneer Properties Limited
04 July 2012
Press Release 4 July 2012
West Pioneer Properties Limited
("West Pioneer" or "the Company")
Trading Update
West Pioneer Properties Limited (AIM:WPR), a leading developer
and operator of shopping centres and mixed use developments in west
and south India, provides the following trading update ahead of its
preliminary results for the 12 months ended 31 March 2012 which
will be released in mid July 2012.
As indicated in the interim results announced in December 2011,
the Company's performance has continued to be impacted by a number
of factors as outlined below:
Indian Economy
Whilst the macro-economic fundamentals of the Indian economy
have remained and continue to remain attractive, persistently high
inflation rates and ensuing tightening of monetary policy by the
Central Bank are contributing to lower than expected rates of
growth. The Central Bank has, since the release of the Company's
interim results revised the growth estimate for India downward from
7.6% to 6.5% for the financial year 2011/12.
Impact on change of discount rate
The Board has, as a result of the increased risk free rate in
the country, kept under review the appropriateness of the discount
rates it is using in valuing the Company's investment properties.
As a result of an increase in the discount rate from 13% to 14%
there has been a material impairment in the carrying value of these
properties being recognised in the 31 March 2012 results.
Impact of depreciation of Rupee
During the current financial year the Indian Rupee has fallen in
value significantly depreciating by more than 5% against the US
Dollar, falling from 49.7 rupees to the US Dollar as at 30
September 2011 to 52.08 rupees as at 31 March 2012. This has also
materially impacted the Company's reported Net Asset Value during
the 12 months ended 31 March 2012. The Indian Rupee has continued
to depreciate since the year end which will further impact on the
Net Asset Value going forward.
General Trading
Trading conditions have deteriorated during the latter half of
the financial year, however as previously reported, West Pioneer's
low gearing and operational efficiencies have mitigated the impact
on the Company's cash flows.
As previously reported, the Company has continued to focus its
efforts on positioning the Kalyan mall as a leading value shopping
and lifestyle destination. This has led to re-engineering the
tenant mix towards larger lifestyle retailers which has had a short
term impact on rental income, however the Board believes the
benefits will flow through in the longer term.
As a result of the impact of each of the above, the Company
expects to report that revenues and profits are substantially down
on market expectations.
The Company is encouraged by the strong progress made across
some of its key projects and the Board remains confident in its
long term ability to deliver growth from retail, residential and
commercial developments.
-Ends-
For further information:
West Pioneer Properties Limited
Nitin Dattani, Executive Director Tel: +44 (0) 20 8424
0690
Shore Capital & Corporate Limited
Anita Ghanekar / Edward Mansfield Tel: +44 (0) 20 7408
4090
Media enquiries:
Abchurch Communications
Sarah Hollins / Joanne Shears Tel: +44 (0) 20 7398
7709
joanne.shears@abchurch-group.com www.abchurch-group.com
Notes to Editors
West Pioneer Properties Limited (AIM:WPR) is a leading developer
and operator of retail-led, mixed use developments in west and
southern India, primarily in Tier II cities. West Pioneer was
established to capitalise on the virtually unpenetrated organised
retail environment in India, the rapidly increasing middle class,
greater transparency in the property market, and improved
infrastructure development which provides access to the market.
The retail side to West Pioneer acquires the land and then
develops, leases and manages the shopping malls. The residential
development segment develops and sells residential property. West
Pioneer currently has three developments in Kalyan, Aurangabad and
Nashik.
West Pioneer's first shopping mall, The Metro Centre, in Kalyan,
30 miles north-east of Mumbai is fully operational. Leasing at the
mall stands at approximately 74 per cent, and the mall is
operationally profitable and generating surplus cash. The
residential development at Kalyan currently consists of two towers,
which are under construction. Each tower consists of 178 apartments
and as of 31 January 2011, a total of 267 apartments have been
sold. The Company is nearing completion on the design of Metro
Plaza, the commercial office space development at Kalyan.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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