Half Yearly Report

RNS Number : 2755N
Dolphin Capital Investors Limited
27 September 2012
 



27 September 2012

 

DOLPHIN CAPITAL INVESTORS LIMITED

("DCI" or "Dolphin" or the "Company"

and together with its subsidiaries the "Group")

 

Trading Update and Half Year Results for the period ended 30 June 2012

Proposed placement of new shares

 

Dolphin, a leading global investor in the residential resort sector in emerging markets and one of the largest real estate companies on AIM in terms of net assets, is pleased to release its unaudited half year results for the six months ended 30 June 2012, provide a trading update, and announce a proposed placement of new shares.

 

A. Transaction highlights since last Trading Update of 12 June 2012:

The Company has recorded significant divestment activity in this period. In summary, the following transactions have been executed:

-    The sale of Dolphin's entire 60% shareholding in Pearl Island's Founders Phase, including a commitment from the buyer to invest in completing the key infrastructure of the island (such as the airstrip, service pier, arterial roads and utilities) and all Founders Phase facilities within two years.

-    The sale of a 75% stake in the Nikki Beach Resort & Spa at Porto Heli, with Dolphin being awarded the contract for the management and construction of the project.

-    The sale of all eight remaining Seafront Villas shell structures in the Porto Heli Collection, including an agreement for the completion of their construction by the Company.

-    Two reservations for large Amanzoe Villas, one of which will occupy two adjacent lots that were originally intended for smaller villas in the masterplan.

-    41 home and plot sales by Aristo in the three month period ending 31 August 2012, representing a significant increase in sales value compared to the corresponding period in the previous year.

-    Two villa reservations at LaVanta, Turkey.

 

During the period, the Group executed c. €53.3 million of asset sales and divestments. Each of the above transactions is being executed at a premium to NAV as at 30 June 2012. Excluding the Aristo and LaVanta sales, the value of these transactions to Dolphin totals €43.5 million, representing a 48% premium over the corresponding NAV of €29.5 million and a 91% premium over the corresponding cost basis of €22.8 million. The total amount of €43.5 million is expected to be received as follows:

•     €11.3million in 2012;

•     €22.2million in 2013;

•     €7.1million in 2014; and

•     €2.9million in 2015.

 

The aggregate consideration will likely be higher than the above reported figures, as these do not include incentive fees, profit sharing potentially payable to the Company and further involvement of the Company into construction and management as per the agreements signed. More details on the above transactions are provided in Section G1 of this announcement.

 

In addition, the Company is currently in discussions relating to a number of other transactions that include:

-    The sale of other components of the Porto Heli Collection;

-    The sale of a number of Amanzoe Villas;

-    A Joint Venture for the Ritz Carlton Reserve phase of Pearl Island; and

-    A Joint Venture for the Aman phase of Playa Grande.

 

B. Operating Highlights since last Trading Update of 12 June 2012:

 

·      The Porto Heli Collection ("PHC" - www.portohelicollection.com), Greece

Amanzoe (www.amanzoe.com)

-    Amanzoe welcomed its first guests on 1 August 2012. The resort has been received with great excitement across the international hotel industry, the Aman clientele and the international press.

-    Since opening, a prestigious set of guests have enjoyed the facilities and services of Amanzoe and the resort has been serving as the perfect platform to showcase the potential of the Company's portfolio to investors, villa buyers and the press. The feedback received so far confirms that Amanzoe redefines the standard for luxury resorts in the Mediterranean.

-    Dolphin's guarantee on the €33 million Amanzoe construction loan and €8 million VAT facility was lifted on 14 September and replaced with a corporate guarantee by Dolphin Capital Holdings One Ltd., the holding company of the Group's 49.8% shareholding in Aristo.

The Nikki Beach Resort & Spa at Porto Heli ("Nikki Beach" - www.nikkibeachhotels.com)

-    Site preparation works for The Nikki Beach Resort & Spa at Porto Heli commenced this summer. Reconstruction works are expected to commence by the end of 2012 and take approximately 18 months, subject to the completion of an €8 million construction financing facility, which is under discussion with an international bank.

 

The Seafront Villas (www.theseafrontvillas.com)

-    Works to complete the construction of four of the eight Seafront Villas sold in August are expected to start later in the year when the designs are finalised, as per the agreement signed with the purchasers, which awarded the construction contract to Dolphin.

 

•     Venus Rock Golf Resort ("Venus Rock" - www.venusrock.com), Cyprus

-   The construction of the new Venus Rock golf course is close to completion. 11 of the course's 18 holes have already been completed to the stage of grass being planted, while, on the remaining seven holes, earth and fine shaping works have been completed, with irrigation installation in progress and grass planting due to commence within the next few weeks. Construction of most of the new course's facilities, such as resting areas and the maintenance area, are also close to completion. The new golf course and all related facilities are expected to be fully operational in spring 2013.

-   The renovated golf course will provide night play areas and the required flood lights have been installed and are ready for use.

-   The upgrade of the main access road leading to the club houses is progressing well and is due to be completed by the end of the year.

-   To date, €21 million has been drawn down from the €50 million construction loan for the project.

 

•    Playa Grande Club & Reserve ("Playa Grande" - www.playagrande.com), Dominican Republic

-    The Aman Hotel value engineering process, which is being undertaken to optimise the construction budget of the hotel, is in its final stages.

-    The project has already secured debt financing for $16 million of the $19 million targeted for the construction of the Aman Hotel from a local bank syndicate, with the remaining $3 million expected to be provided in the near future by regional financial institutions.

-    In order to complete the Aman Golf Resort, including the construction of a 30-room Aman hotel with beach club, the renovation of the golf course and related infrastructure and utilities, and to meet certain other obligations of the project, in addition to the $19 million of targeted debt, Playa Grande will require an estimated $35 million of additional funding over the next two years.

-    The marketing and sales of a limited number of Founder Aman villas will only be launched after the hotel has begun construction.

-    Construction of the first Golf villa was completed in June 2012. The villa is currently available for rent and has already been booked for most of the high season period.

 

•    Pearl Island, Panama("Pearl Island" - www.pearlisland.com), Panama

-   Following the sale of Pearl Island's Founders Phase- which represents only 7% of the total island size or c. 10% of its total potential profitability - and the signing of an agreement that the buyers of the Founders Phase finance the construction of the key infrastructure of the island (such as the airstrip, service pier, arterial roads and utilities) and complete that phasewithin two years, Dolphin is now focused on developing the next phase of Pearl Island ("Phase 1").

-   Phase 1 will occupy approximately 50 hectares of beachfront land (out of the total 1,440 hectares on the island) contiguous tothe Founders Phase, and is planned to comprise a luxury 80-suite Ritz Carlton Reserve hotel and branded residential units for sale.

 

C. Proposed Placement of New Shares:

 

The Company has signed a subscription agreement for anissue of €45 million worth of new shares at £0.195 per new share to funds managed by Third Point LLC ("Third Point"). A further subscription for €5 million by the Investment Manager constitutes a condition to the Third Point subscription and the Investment Manager intends such subscription is made immediately following the release of this announcement. The aggregate subscriptions for €50 million shall together be referred to as the "Placement".

 

Third Point is an SEC-registered investment adviser based in New York, with over $9 billion in assets under management.

Although the capital raise is underwritten, the Board of the Company has the discretion to accept up to €15 million of subscriptions from certain, limited, categories of investors by scaling down Third Point's allocation to a minimum of €30 million worth of new shares. Members of the public will not be eligible to take part in the Placement and any subscriptions from other investors will be subject to a minimum subscription for new shares per investor of €100,000. Participation in the Placement will only be available to: (i) shareholders in the Company, and (ii) other persons to whom participation in the Placement may be lawfully offered pursuant to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "Financial Promotion Order") including Investment Professionals as defined in article 19(5) and High Net Worth Companies, as defined in article 49(2) of the Financial Promotion Order. Allocation priority will be broadly based on the shareholding position of prospective investors in the Company. Details of the Placement will not be sent to persons who do not fall within any of these categories, who, therefore, should not rely on such a document nor take any action upon it.

 

The maximum number of new shares to be issued in the Placement, based on a EUR/GBP 0.7973 fixed exchange rate, is 204,435,897 shares, bringing the pro-forma total outstanding shares of the Company to 642,440,167.

 

According to the Placement terms, the minimum amount of new shares to be allocated to Third Point is 122,661,530 and the maximum is 183,992,307 implying a 19.09% and 28.64% shareholding in the Company on a pro-forma basis respectively.

 

While the Company has executed a number of exits since the last trading update and continues to advance discussions for further divestments or joint ventures, the corresponding expected cash receipts into the Company are being spread over a period of time. The Investment Manager and the Board therefore consider that it is in the Company's best interest to proceed with a placement of new shares, to ensure that the Company has adequate cash balances to execute its development programme over the next two years which is expected to entail:

 

•      The construction of the first phase of Playa Grande which includes a 30-room Aman Hotel, an Aman Beach Club, a new Golf Club House, fitness, spa and tennis facilities, 38 Aman villas and the renovation of the existing, legendary Robert Trent Jones Senior Golf Course based on new designs by his son, Rees Jones,

•      The development of Phase 1of Pearl Island, the Ritz Carlton Reserve phase,

•      The co-development of the Nikki Beach in a joint venture with the Swiss Development Group, and

•      The progression of the permitting and designing process for the Company's other Major Projects to bring them to Advanced Project status and improve their potential to generate returns for the Company.

 

The Investment Manager will waive its annual Management Fees on the proceeds of the Placement, that would otherwise be payable under the investment management agreement. The Company's Board has agreed that Third Point can appoint either one observer or one independent non-executive Director to the Board as long as their shareholding in Dolphin remains above 15%.

 

The Board of the Company and the Investment Manager believe that securing the Placement proceeds would bring the following strategic benefits:

 

•      Cover the Company's development and operational needs for the coming two years and enable Dolphin to unlock significant potential returns.

•      Conclude definitively that Dolphin has weathered the storm and is fully funded, which represents the major reason for the current depressed share price.

•      Provide a stronger negotiating position to achieve better deals with project investors, joint venture partners, financiers, construction companies, suppliers, and unit buyers. This would enable Dolphin to continue to build on its current strong momentum of sales and joint venture transactions from a position of strength.

 

Given that the proposed issue price is less than the prevailing Net Asset Value per Share, the Company will convene a Shareholder EGM to approve the proposed Placement. The Company has already received support for the Placement from existing shareholders with a combined shareholding in the Company of over 50%.Further details of the Placement will be included in the Circular which is expected to be issued by the Company the week of 1 October 2012.

 

D. Financial highlights: 

 

•     Total Group Net Asset Value ("NAV") as at 30 June 2012 was €683 million and €613 million before and after deferred income tax liabilities ("DITL"), respectively. This represents a decrease of €406 million (37%) and €371 million (38%), respectively from the first quarter of 2012. Out of the total €406 million decrease, approximately 90% or €360 million was due to the Aristo Exchange and the remaining €46 million was due to a decrease in the valuation of certain Greek and Cypriot assets and regular operational expenses, counterbalanced by the value appreciation of the Americas properties in Euro terms (due to the devaluation of Euro against the US dollar). Excluding the Aristo Exchange, the pro-forma decrease in NAV before DITL would have been 4%.

•     Sterling NAV per share as at 30 June 2012 before DITL of 126p and after DITL of 113p. This represents a decrease of 8% and 9% versus 136p and 123p respectively as at 31 March 2012, mainly due to the above reasons and the 3.5% appreciation of Sterling versus Euro over the period.

•     The Company's balance sheet, after the completion of the Aristo Exchange and the deconsolidation of the Aristo balance sheet, is significantly less leveraged:

-     Gross Assets of €909 million.

-     Total Debt of €140 million and Group total debt to asset value ratio of only 15%.

-     No bank debt at the Company level. The Company has only provided corporate guarantees on the $40 million Playa Grande Convertible Bonds, and the servicing of Banco Leon loan interest at Playa Grande.

 

E. Strategic Focus

 

The strategic priorities of the Company are as follows:

•    Complete the €50 million Placement.

•    Implement the already executed sales and collect the future proceeds.

•    Successfully complete the additional divestment negotiations currently underway and initiate new ones to further demonstrate the true value of the portfolio.

•    Continue to sell Amanzoe Villas.

•    Begin vertical construction works at Playa Grande allowing pre-sales and marketing to commence.

•    Start construction of Nikki Beach.

•    Progress Pearl Island's other development phases (such as the Ritz Carlton Reserve phase and the Marina Village phase).

•    Continue the construction of the infrastructure and leisure works at Venus Rock Golf Resort (Cyprus) allowing for the launch of the residential sales of the new phases.

•    Advance the zoning and permitting of Dolphin's other Major Projects, enabling the Company to, either partially or wholly, sell them at a profit, or develop them and realise their full cash return potential.

•    Assist Aristo's management in expanding retail and land sales to existing and new markets, in order for Aristo to eventually start generating cash surpluses again to reduce leverage and distribute dividends to Dolphin.

•    Subject to having excess cash liquidity in the short to medium term, opportunistically buy back DCI shares in an effort to narrow the trading discount to NAV.

 

Commenting, Andreas N. Papageorghiou, Chairman of Dolphin's Board of Directors, said:

"Although the macro-economic environment continues to present challenges, significant value is being generated by the Company on the ground. We are confident that the momentum gained through the opening of the Amanzoe resort at Porto Heli will be sustained throughout the year. We expect that the completion of the equity raising will ensure that Dolphin enters a new cycle of significant growth and the realisation of returns for shareholders."

 

Miltos Kambourides, Founder of Dolphin and Managing Partner of Dolphin Capital Partners, added:

"In the first half of the year we have made strong progress in delivering against our strategy, with good sales and exit momentum across the portfolio demonstrating the true value of our assets. We have overseen the successful opening of Amanzoe, which is now attracting worldwide attention, and are already benefiting from this showcase of our development expertise and the quality of our product. Against this backdrop, we are pleased to invest further into Dolphin, alongside Third Point, and we look forward to realisingsignificant gains from the deployment of the additional capital."

 

 

Conference call for analysts and investors

There will be a conference call at 9.00 a.m. UK time on Thursday, 27 September 2012, which can be accessed using the following dial-in numbers:

 

International dial-in: + 44(0)20 7136 2051

Password:                  6698443



For further information, please contact:

 

Dolphin Capital Partners

Miltos E. Kambourides

Pierre A. Charalambides

Katerina G. Katopis

Eleni Florou

 

 

miltos@dolphincp.com

pierre@dolphincp.com

katerina@dolphincp.com

ef@dolphincp.com

 

 

Panmure Gordon

(Broker)

Richard Gray / Dominic Morley / Andrew Potts

 

 

 

+44 (0) 20 7459 3600

 

 

Grant Thornton Corporate Finance

(Nominated Adviser)

Philip Secrett

 

 

+44 (0) 20 7383 5100

 

FTI Consulting, London

Stephanie Highett

Will Henderson

Daniel O'Donnell

 

+44 (0)20 7831 3113

stephanie.highett@fticonsulting.com

will.henderson@fticonsulting.com

daniel.o'donnell@fticonsulting.com

 

 

Notes to Editors

Dolphin (www.dolphinci.com) is a leading global investor in the residential resort sector in emerging markets and one of the largest real estate investment companies quoted on AIM in terms of net assets. Dolphin seeks to generate strong capital growth for its shareholders by acquiring large seafront sites of striking natural beauty in the eastern Mediterranean, Caribbean and Latin America and developing sophisticated leisure-integrated residential resorts.

Since its inception in 2005, Dolphin has raised €898 million of equity, has become one of the largest private seafront landowners in Greece and Cyprus and has partnered with some of the world's most recognised architects, golf course designers and hotel operators.

Dolphin's portfolio is currently spread over approximately 63 million m2 of prime coastal developable land and comprises 14 large-scale, leisure-integrated residential resorts under development in Greece, Cyprus, Croatia, Turkey, the Dominican Republic and Panama and a 49.8% strategic participation in Aristo Developers Ltd, which is one of the largest holiday home developers in south east Europe with more than 60 smaller holiday home projects in Cyprus.

Dolphin is managed by Dolphin Capital Partners, an independent real estate private equity firm.

 

F. Chairman's Statement

I am pleased to report Dolphin's half year results for the first half of 2012.

 

The opening of Amanzoe on 1 August 2012 demonstrated the Company's ability to create top end, luxury resorts that appeal to the most affluent international travellers. The feedback received from everyone who has visited the resort so far is testament to the quality of the product. This flagship component of the first phase of The Porto Heli Collection is now the first villa-integrated Aman resort in Europe and one of the most exclusive destinations in the Mediterranean.

 

During the period, the Company achieved a high level of sales in spite of the tough economic environment. While the Company continues to advance discussions for further project exits or joint ventures, we consider that it is in the Company's best interests to ensure that Dolphin has adequate cash balances to fully execute its development programme over the next two years by undertaking an equity raise of €50 million. We look forward to welcoming Third Point, a highly regarded international investor, into Dolphin's prestigious shareholding base.

 

The Company's NAV, before and after DITL, as at 30 June 2012 is reported at €683 million and €613 million, respectively, and the NAV per share before and after DITL in Euro terms was €1.56 and €1.40 respectively, representing a 6% decrease from 31 December 2011. This drop was driven principally by reductions in property valuations in Greece and Cyprus, reflecting the challenging economic environment.

 

Despite challenging conditions in the markets and economies in which we operate, three of the Company's four advanced projects - the Porto Heli Collection in Greece, Venus Rock in Cyprus and Pearl Island in Panama - are now on track to complete their first phases, which we believe will establish them as luxury resort destinations and enable them to realise significant sales and returns from both their first and future phases. As Dolphin's real estate portfolio continues to mature, we remain confident in the Company's ability to take advantage of improved market conditions to generate significant returns for shareholders.

 

 

Andreas N. Papageorghiou

Chairman

Dolphin Capital Investors Limited

27 September 2012

 

 

G. Investment Manager's Report

 

Our team's prime focus in 2012 was the successful launch of operations at Amanzoe, as well as the execution of sales, divestments and joint ventures, in order to realise profits from our portfolio and demonstrate its true value. 

 

The opening of Amanzoe this summer was, as expected, a very gratifying and important stage in the Company's development, representing the first of our luxury resorts to come to market. The resort is already serving as a showcase of Dolphin's development capabilities, profit potential and vision.

 

Following the opening of Amanzoe, the Investment Manager is organising a DCI Investor Conference to be held at the resort on 1 and 2 October 2012. This event will be an excellent opportunity for Dolphin's existing and new investors to experience Amanzoe, visit the other components of the Porto Heli Collection, better understand the profit potential of the Dolphin portfolio, spend time with the management and discuss Dolphin's next steps and future objectives.

 

As further described below, sales activity has gained momentum in recent months, with a number of transactions executed, each at a premium to both cost and NAV, which further strengthens our confidence in the value of our portfolio.

 

The proposed Placement of the new shares will ensure that the Company has adequate cash balances to execute its development programme. We consider that this decisive strengthening of cash balances will allow the Company to make faster progress across its real estate portfolio and to negotiate future sales from a stronger and more strategic position. On the back of the momentum we have built in our market, our robust liquidity position and balance sheet, and the support of Third Point, we plan to revive the Dolphin story to the worldwide investor community.

 

G1. Investments and Divestments

 

In line with our previously stated strategy, no new investments were made in 2012.

 

During 2012, the Group executed c. €69.2 million of asset sales and divestments, bringing the total asset sales by Dolphin since its inception to €468 million.

 

•     The Porto Heli Collection (www.portohelicollection.com), Greece

Amanzoe

-   The level of interest in the Aman Villas is increasing as potential buyers experience Amanzoe. A number of potential buyers have visited and stayed at the hotel, resulting in two further reservations of Aman Villas for a total base price of €14 million, depending on the final designs. There are currently advanced discussions for more Villa sales.

 

Nikki Beach

-   Following the Memorandum of Understanding signed on 10 May 2012, Dolphin signed an agreement on 24 September 2012 with an affiliate of Swiss Development Group ("SDG"), an international luxury resort investor (www.sdg.ch), for the sale of a 75% stake in the resort.

-   The transaction comprises an upfront fixed payment of €3.15 million, a variable payment relating to the amount of the construction loan achieved, a 20% promote on the returns realized by SDG from the project in excess of a 20% IRR, and the award to Dolphin of the contract for the management and construction of the Nikki Beach.

-   The total expected consideration, excluding the promote, is €6.8 million, implying an asset valuation of €9.1 million versus a NAV of €7.7 million and a cost basis of €5 million.

-   A €225,000 deposit has already been received. A further €1 million is due on 30 September and a €1.9 million payment is due on 31 October 2012. The balance of the consideration is payable in stages depending on the conclusion of the development loan and the pace of the project construction.

 

The Seafront Villas

-   Dolphin signed an agreement for the sale of the eight remaining Seafront Villa shell structures on 6 August 2012 with a group of international individual investors. The total minimum net consideration agreed for this sale is €12 million versus a NAV of €11.1 million and a cost basis of €8.4 million. Dolphin is entitled to a 35% profit participation over and above a €2 million profit on the sales generated by the purchasers from the further sale of four of the eight villas. Moreover it is agreed that Dolphin will undertake the construction contract for the completion of the Villas. A €1 million deposit has been paid upon signing, a payment of €2 million is due by 6 November 2012, a payment of €3 million is due upon the release of the existing mortgages on the Villas, a payment of €4 million is due on completion of the construction of the Villas and the €2 million balance is due at the sale of the Villas or at maximum on the third anniversary signing the deal. Following this sale, only the show villa remains unsold from this phase of The Porto Heli Collection.

 

•     Pearl Island

-   Dolphin sold its 60% shareholding in Pearl Island's Founders Phase, to a regional investor group led by Mr. Alberto Vallarino, one of Panama's most reputable investors and owner of the Bristol Hotel, Panama City and the Buena Aventura Resort, the most established resort on mainland Panama. The consideration for the sale was a cash payment of $6 million (50% paid at closing on 14 September 2012 and 50% one year from closing) and a commitment to invest an additional c. $35 million of development capital within a maximum period of 2 years in order to complete the Founders Phase and the island's basic infrastructure.

-   The Founders Phase, spread over 105.5 hectares of land, represents only 7% of the Pearl Island land area and only c. 10% of the project's potential profitability generation, and involves the development of a beach club, recreation centre, 40-berth marina, approximately 200 residential units for sale and associated infrastructure and utilities.

-   Approximately $13 million capital from the $35 million Founders Phase budget is committed to be invested in common facilities and infrastructure such as airstrip, service pier, roads and utilities on the remaining 93% of the island that Dolphin continues to own and control.

-   The $6 million cash payment for 60% of the Founders Phase and the purchaser's commitment to invest c. $13 million capital into the area of the island remaining under Dolphin ownership, imply an exit valuation of $23 million for the Founders Phase, which represents a premium of 46% to its pro-rata NAV of c. $16 million and a premium of 87% to its allocated cost basis of c. $12 million.

-   The prominence of the new investor and its network of sales within Panama is expected to help establish Pearl Island as the premier luxury island resort in Central America and enable Dolphin to realise significant profits from the development and sale of the remaining phases of the island, where it continues to retain a 60% shareholding.

 

•     Aristo Developers (www.aristodevelopers.com), Cyprus

-   114 homes and plots were sold by Aristo in the eight month period ending 31 August 2012 for €25 million, representing a 23% increase in value, and a 28% increase in the number of units compared to the corresponding period in the previous year.

 

•     Mediterra Resorts (www.mediterraresorts.com), Turkey

-   Two new villa reservations were made during the period for a consideration of €0.4 million, in addition to the two villa sales executed previously in 2012 for an additional €0.4 million.

 

 

G2. Updated Portfolio characteristics and cash generation potential

 

Cash Generation Potential of the Dolphin portfolio:

 

Following the exits achieved during the period, the forecast cash generation potential of Dolphin's real estate portfolio has been updated accordingly.

 

The Advanced Projects are spread over 3,627 hectares of land, of which 590 hectares represent the first phases of these developments. The total unsold residential capacity of these projects is approximately 710,000 buildable m2, of which circa 290,000 m2 are planned for their first phases. In addition to the built product and leisure facilities, the four Advanced Projects have the potential to sell over 2.9 million m2 of land in the form of land plots.

 

The Advanced Projects are planned to include 11 luxury hotels and four 18-hole championship golf courses and one marina, of which the following are included in their first phases:

 

•    The first Aman residential resort in Europe (Amanzoe), the first Aman golf-integrated resort worldwide (Playa Grande), the first Nikki Beach resort in the eastern Mediterranean, and the first Ritz Carlton Reserve resort in Central America (Pearl Island); and,

•    Two golf courses in Venus Rock designed by Tony Jacklin and one in Playa Grande designed by Robert Trent Jones, Senior and renovated by his son Rees Jones.

 

As summarised in the table below, the Investment Manager estimates that the Advanced Projects alone have the potential to generate for Dolphin the following returns (all the figures per share in this section are on the basis of the pro-forma outstanding shares following the Placement):

 

•    More than €530 million of net cash returns or circa 64p per share, from the development and sale of their first phases alone (which represents circa 37% of their estimated total profitability) over an average period of approximately six years.

•    Over €1.4 billion of cash, or circa 175p per share, through the development and sale of all their planned residential units and retail land plots and the sales and operational profits of their leisure components (hotels, golf courses, marinas etc.) over an estimated period of 12 years (2012-2023).

 

Dolphin's remaining portfolio includes:

•    10 major leisure-integrated residential resort projects, spread over 2,160 hectares of land and conservatively expected to build and sell c. 662,000 residential buildable m2, representing only a circa 3% building coefficient. These projects are expected to further increase in book value as they complete their permitting and design phase and reach Advanced Project status. The Investment Manager estimates their cash generation potential to be in excess of €1.27 billion, or circa 153p per share, spread over the next 12 years.

•    Residual developable land, as under the current plans not all the land of the Major Projects will be developed in the next 12 years. Such land is estimated to have a residual building coefficient of circa 1.45 million buildable m2 and a future value of circa €1.16 billion (based on an estimated average value of €800 per buildable m2).

•    Aristo Developers, the largest developer and private land owner in Cyprus, with currently c. 45,000 buildable m2 of residential product in stock or under construction and c. 324,000 m2 in the form of readily available land plots with a total listed sales potential of over €170 million. In addition, Aristo holds an additional vast portfolio of land assets with the potential to sell over 680,000 residential buildable m2 once fully developed. Dolphin retains a strategic 49.8% participation in Aristo. The Investment Manager estimates that, upon market recovery, Aristo will have a dividend capacity in excess of €30 million per year.

 

Based on the above, the Investment Manager estimates Dolphin's total portfolio cash generation potential to be in approximately €4.15 billion, or c. 500p per share, over the next 12 years. This cash generation estimate is summarised in the following table.

 

 

 


Residential Units

Land Plots

Leisure




(€ million)

Sales

Costs

Sales

Leisure Net Operating Income

Leisure Terminal Values

Leisure Construction Costs

Project Cash

 Advanced Projects








The Porto Heli Collection

100%







First phase

 220

 83

 23

 13

 46

 42

 176

Other phases

 541

 269

 33




 305


 761

 352

 56

 13

 46

 42

 481

Venus Rock

49.8%







First phase

 384

 196

 -

 1

 21

 21

 190

Other phases

 211

 101

 -




 110


 595

 297

 -

 1

 21

 21

 300

Playa Grande

99%







First phase

 146

 76

 2

 11

 57

 22

 118

Other phases

 274

 143

 170




 301


 420

 219

 172

 11

 57

 22

 419

Pearl Island

60%







First phase

 49

 14

 -

 6

 14

 7

 47

Other phases

 368

 243

 80




 204


 417

 258

 80

 6

 14

 7

 252

TOTAL

 2,193

 1,125

 308

 30

 138

 92

 1,451









 Major Projects & Aristo








Greece

 1,853

 927

 -

 -

 -

 -

 926

Triopetra

 44

 23

 -

 -

 -

 -

 21

AmanKea

 187

 76

 -

 -

 -

 -

 111

Plaka Bay Resort

 147

 93

 -

 -

 -

 -

 55

Scorpio Bay Resort

 306

 146

 -

 -

 -

 -

 160

Sitia Bay Resort

 560

 276

 -

 -

 -

 -

 284

Lavender Bay Resort

 521

 264

 -

 -

 -

 -

 257

Douneika

 78

 44

 -

 -

 -

 -

 34

Syros

 10

 5

 -

 -

 -

 -

 5

Cyprus

 495

 258

 -

 -

 -

 -

 237

Eagle Pine Golf Resort

 164

 78

 -

 -

 -

 -

 86

Apollo Heights Polo Resort

 330

 180

 -

 -

 -

 -

 150

Turkey

 81

 31

 -

 -

 -

 -

 50

Mediterra

 81

 31

 -

 -

 -

 -

 50

Croatia

 143

 84

 -

 -

 -

 -

 59

Livka

 143

 84

 -

 -

 -

 -

 59









TOTAL

 2,571

 1,300

 -

 -

 -

 -

 1,272









Residual Land Value

 1,163

 -

 -

 -

 -

 -

 1,163

Aristo Developers (49.8%)








Dividends and Terminal Value

 -

 -

 -

 -

 -

 -

 269

PORTFOLIO GRAND TOTAL

 5,927

 2,425

 308

 30

 138

 92

 4,154

 

 

Basic Assumptions

•     All cost assumptions cover future development, marketing, sales, branding and agency costs and do not include already incurred expenses for land acquisition and development.

•     The above cash returns do not include annual management and performance fees at the DCI level.

•     For the Other Phases of the Advanced Projects and for the Major Projects, the above cash returns do not include financial costs.

•     Following the sale of the Founders Phase of Pearl Island, the first phase of Pearl Island is the Ritz Carlton Reserve phase.

•     No inflation adjustments have been made.

•     Cash returns are calculated on a before corporate income tax basis. Actual taxes would depend on the jurisdiction of each project and the structure of each specific sale transaction.

•     Residential units are assumed to be developed on a "sell and build basis", apart from minor investments in "show" units.

•     No interim project exits have been assumed.

•     Dividends are assumed to be distributed upon Aristo achieving significant positive cashflows from 2014 onwards and are assumed to stabilize at €30 million (for 100%). The Aristo Terminal Value is calculated at 8X on its estimated annual dividends. These dividends exclude the financial returns of Venus Rock and Eagle Pine.

•     Net Operating Income is calculated over a period ranging from 6 to 10 years depending on the project. The sale of the Leisure components ("Leisure Sales") assumes that the hotels, golf courses and other leisure components are sold in years 6 to 10 at a multiple to their NOI ranging from 8X to 10X.

•     All statements are based on future expectations rather than on historical facts and are forward looking statements that involve a number of assumptions, risks and uncertainties. The Company and the Investment Manager cannot give any assurance that such statements will prove to be correct. Any forward looking statements made by or on behalf of the Company are made only on a best estimate basis as of the date they are made and they do not constitute future earnings, revenues or profits forecasts or guidance. Neither the Company nor the Investment Manager undertake to update forward looking statements to reflect any changes in expectations, events, conditions or circumstances upon which such statements are made.

 

 

G3. Advanced Projects development update

 

1.    The Porto Heli Collection, Greece

Website:

www.portohelicollection.com

Area Size:

347 hectares

Composition:

First Phase

•   Amanzoe, a 38-pavilion hotel and spa designed by Ed Tuttle, opened on 1 August 2012

•   The Aman Beach Club, opened on 1 August 2012

•   The Aman Villas, serviced by the Aman hotel

•   The Nikki Beach Resort & Spa at Porto Heli, which will include hotel suites as well as apartments for sale

•   The Seafront Villas

Other Phases (including, but not limited to)

•   The Chedi with 102 hotel rooms, spa, 40 club suites and 40 residences Jack Nicklaus Signature Golf Course

•   Golf boutique hotel, golf clubhouse and c. 225 golf residences

•   Equestrian centre, tennis academy, kids' club, beach club.

 

Progress within 2012:

 

Construction of Amanzoe was completed on budget at the end of June and the resort welcomed its first guests on 1 August 2012. The feedback to date has been overwhelmingly positive, both for the facilities and the level of the services provided, and a number of supportive newspaper and magazine articles have been published during the summer.

 

Since opening, many prestigious guests have enjoyed the facilities and services of Amanzoe and the hotel has been serving as the perfect platform to showcase the potential of the Company's portfolio to public market and real estate investors, villa buyers and the press.

 

The operations team comprises to date over 190 people, mostly from the local community and Amanzoe is the first resort featured in the Aman Resorts' web site (www.amanresorts.com).

 

The introductory rates range between €825 to €925 per room per night (excluding taxes) and those are expected to increase in the 2013 season.

 

After receiving the first 50% subsidy payment in early March 2012, the Company filed an application for the remaining 50% of the total approved subsidies of €7.8 million on 30 March 2012. The required inspection of the Project and confirmation of its completion is expected to take place in October so that the subsidy can be collected by the end of 2012.

 

On 3 August 2012 Dolphin received a Conversion Notice from Archimedia to convert 6.43% of its shares in Amanzoe in exchange for an Aman Villa, and is in the process of finalising the relevant documentation for the completion of the conversion. Following the conversion, Archimedia's shareholding in Amanzoe will be reduced from 14.29% to 7.86%.

 

To date, seven Aman villas have been sold or reserved, two of which were reserved after the opening of Amanzoe. Construction of three villas is ongoing and construction for the remaining villas sold will be initiated as soon as the final designs are dispatched by Ed Tuttle, the project's architect, following consultation with the future owners. One of the villas newly reserved will be constructed on two adjacent lots planned for smaller villas so in effect eight out of the total 36 lots have been sold.

 

Site preparation works commenced this summer for Nikki Beach, where Dolphin retains a 25% shareholding. Reconstruction works are expected to commence within 2012, subject to securing the appropriate debt financing facility, and complete within approximately 18 months.

 

Following the recent sale of eight Seafront Villas, works for their construction are set to start later in the year when the designs are finalised, as per the agreement signed by the new owners of the properties.


 

2.    Venus Rock Golf Resort, Cyprus

Website:

www.venusrock.com

Area size:

1,000 hectares with 850m of beachfront

Composition:

First Phase

•     Two 18-hole Golf Courses designed by Tony Jacklin

•     Two Golf Club Houses

•     A Nikki Beach Club

•     Approximately 1,000 Villas and 261 Plots

Other Phases (including, but not limited to)

•    More than 2,000 residential units

•    Retail, commercial and leisure facilities

•    A 5-star hotel with spa and branded villas operated by Nikki Beach

•    Marina and other sport facilities.

 

Progress within 2012:

 

Venus Rock new golf course construction is close to completion and expected to be operational in spring 2013. 11 new holes out of the 18 have already been planted, while earth and fine shaping works on the remaining seven holes have been completed, with irrigation installation in progress and planting due to commence within the following weeks. Most of the new course facilities construction, such as the resting areas, and the maintenance area are also close to completion.

 

The renovated golf course will provide night play areas and the necessary flood lights have been installed and are ready for use. Finally, the infrastructure construction effort focuses on the upgrade of the main access road leading to the club houses and is expected to be complete by the end of the year.

 

During 2012 so far, ten units have been sold at Venus Rock for a total consideration of €3.8 million, six of which were bought by Chinese clients.

 

To date, €21 million has been drawn from the €50 million construction loan for the project.


 

3.    Playa Grande Club & Reserve, Dominican Republic

Website:

www.playagrande.com

Area size:

Approximately 11km of seafront, spread over approximately 950 hectares of land

Composition:

First Phase

•   A 30-room Aman Hotel designed by John Heah (the first Aman Resort in the Dominican Republic and the first Aman golf-integrated resort in the world)

•   The Playa Grande Aman Beach Club

•   A new Golf Club House, fitness, spa and tennis facilities

•   38 Aman Villas serviced by the Aman Hotel

•   The renovation of the existing, legendary Robert Trent Jones, Snr. Golf Course based on new designs by his son Rees Jones

Other Phases (including, but not limited to)

•    Approximately 400 additional residential units (beachfront, hill-top and cliff villas)

•    Tennis, spa, beach and equestrian clubs.

 

Progress within 2012:

 

The Aman Hotel value engineering process to optimise the construction budget of the hotel is in its final stages.

 

The project has already secured debt financing for $16 million out of the $19 million targeted debt facility for the construction of the Aman Hotel from a local bank syndicate, with the remaining $3 million expected to be provided in the near future by regional financial institutions.

 

In order to complete the Aman Golf Resort, comprising a 30-key Aman hotel with beach club, the renovation of the golf course and related infrastructure and utilities, and to meet certain other obligations of the project, in addition to the $19 million of targeted debt, Playa Grande requires c. $35 million of additional funding to be invested over the next two years.

 

The marketing and sales of a limited number of Founder Aman villas will only be launched after the hotel has begun construction to maximise sales success. Following the completion of Dolphin's new proposed equity placement, such construction is expected to be initiated by the end of 2012, starting with the award of the Aman Resort's infrastructure contract.

 

Construction of the first Golf villa has been concluded in June 2012. The villa is currently available for lease and has already been booked for most of the high season period, indicating the significant level of interest for luxury residential product in the area.



 4.    Pearl Island, Panama

Website:

www.pearlisland.com

Area size:

1,440 hectares with a total seafront of 30km and 14 private sandy beaches

Composition:

Founders Phase (7% of the island) - sold

·     Beach club, spa and other leisure facilities

·     A 40-berth and 30 dry-dock marina

·     Approximately 200 residential units (villas and plots)

·     Private landing strip

 

First Phase - Ritz Calrton Reserve (3% of the island)

·     80-key Ritz Carlton Reserve hotel with beach club and related amenities

·     Approximately 80 branded residential units

 

Other Phases (90% of the island)

·     Development potential for over 425,000m2 of buildable residential space or approximately 945 residential units and lots for sale

·     Up to four additional luxury 5-star hotels

·     Marina with up to 500 berths and retail facilities

·     Recreational and sports facilities, including scuba diving, whale watching, fishing, over 40 kilometres of natural biking and hiking trails, equestrian centre

·     International airport.

 

 

Progress within 2012:

 

As summarised in section G1, Dolphin sold its 60% shareholding in Pearl Island's Founders Phase, to a regional investor group for a consideration of $6 million and a commitment to invest an additional c. $35 million of development capital within a maximum period of two years in order to complete some of the island's key infrastructure and to complete the Founders Phase.

 

Dolphin will maintain its 60% ownership in Zoniro, the project's development company, thus continuing its involvement in infrastructure and utilities master development, both for the Founders Phase and the entire island.

 

Following the sale of the Founders Phase, Dolphin is now focused on completing the architectural designs, permitting, budgeting and financing for Phase 1 of Pearl Island, which is intended to comprise a luxury an 80-suite Ritz Carlton Reserve hotel together with a branded residential product for sale. Dolphin is progressing joint venture discussions with regional investors to co-invest in this phase and remains very optimistic about the potential return generation of Phase 1 and other future phases now that the Founders Phase is on track to be completed over the next two years, establishing Pearl Island as a destination.

 

 

G4. Aristo Developers

 

In the first eight months of 2012, Aristo continued to navigate challenging market conditions by focusing on expanding its sales programme in to new markets, restructuring its financial obligations and growing its market share in Russia.

 

In 2012, China emerged as a strong new market as a result of a recent change in legislation introduced by the Cypriot Government which entitles any person (and their immediate family) who buys a property of a value exceeding €300,000 to a Cyprus permanent residence and providing them an entry point to the European Union. Due to the depth of the Chinese market, this is expected to unlock significant profit potential, and Aristo has intensified its sales effort in China with:

•    The opening in June of a second sales office in China, based in Beijing, in addition to the one operating in Shanghai;

•    The creation of a dedicated Chinese language section in its website (http://www.aristodevelopers.com/cn/); and ,

•    The preparation of high quality marketing material in Mandarin.

 

Despite the adverse economic conditions and the financial uncertainty in Cyprus, traditional markets such as Russia continued to make residential purchases. Additionally, the political unrest in the Middle East created a surge of demand from the region, and Aristo is putting additional effort to increase its presence in the region.

 

Sales performance

During the first eight months of 2012, Aristo generated €25 million of gross retail sales through the sale of 114 residential units and plots. This represents a 23% increase compared to the corresponding period last year in terms of gross revenues and a 28% increase in terms of homes and lots sold.

 

Despite the challenging economic environment, the Cypriot real estate market has experienced some recovery during the past few months, with demand shifting back from local to overseas buyers.

 

Over 2012, the company has witnessed an encouraging increase in sales from key international markets including Russia, China and the Middle East and plans to further capitalise on this momentum during the remainder of the year.

 


Eight

Eight

 months to

 months to


31/08/2012

31/08/2011

SALES RESULTS



New sales booked

24,904,018

20,212,511

% change

23%


Average selling price per m2 (% change)

9%


Units sold

114

89

% change

28%





CLIENT ORIGIN



UK

4.48%

8.48%

Russia

39.23%

48.31%

China

22.37%

0.00%

Other overseas

18.12%

12.17%

Cyprus

15.79%

31.03%

 

 

Aristo Developers Restructuring

As announced on 28 March 2012, Dolphin and Mr. Theodore Aristodemou, at that time Dolphin's largest shareholder with a 34.89% holding and the CEO of Aristo Developers ("Aristo"), Dolphin's 100% owned and largest subsidiary, agreed to the exchange of Mr. Aristodemou's 34.14% shareholding in Dolphin for a direct 50.25% participation in Aristo (the "Aristo Exchange").

The Aristo Exchange was completed on 22 June 2012 resulting in Dolphin's shareholding in Aristo being reduced from 100% to 49.8%, and Mr. Aristodemou's shareholding in Dolphin, reduced from c. 232 million shares to c. 5 million shares (representing 1.14% of the reduced Dolphin share capital). As part of the Aristo Exchange, Dolphin retained 100% of the small operations and asset portfolio of Aristo in Greece, and Mr. Aristodemou acquired ownership of 256 residential plots within Aristo's Venus Rock project.

 

G5. Market Dynamics

 

Despite the non-favorable economic climate, according to the 2012 UNWTO World Tourism Barometer, international tourist arrivals worldwide grew at a rate of 5% in the first four months of 2012, building on the continued growth trend that started in 2010.

 

In general, the most important observations for the countries we are invested in are as follows:

 

•     Tourist arrivals in Greece from January to August 2012 remained at par with 2011. While in anticipation of the year-end figures for 2012, it is apparent that, despite the negative economic climate, tourism, one of the country's main profit-generating sectors, has remained intact.

•     For a second year in a row, Cyprus has seen an increase in tourist arrivals of 3.5% for the period January to August 2012. Amongst the factors contributing to the increase are the unsettled political situation in the Middle East and North African region and the continuing strong presence of Russian and Chinese travellers.

•     In Turkey, tourist arrivals in the first quarter of 2012 fell by 6%, compared to the previous year. The drop in tourism chiefly derives from a decline in the number of tourists from North America and Western Europe - regions which previously composed the majority of the Turkish tourism clientele. While the number of tourists from Western countries falls, more and more tourists from Arab countries visit Turkey every year.

•     Tourist arrivals in Panama from January to May 2012, reached almost 950,000, an increase of 4.7% from the same period last year. Panama is one of Latin America's top-performing economies and the focus remains on sectors in which the government has competitive advantages, including tourism - which is currently the single largest contributor to the country's GDP. The country's economy has expanded by 7.5% during the January to May period, based on data published by the National Institute of Statistics and Census, after growing at 10.6 % in 2011.

•     The number of tourists visiting the Dominican Republic by air from January to August 2012 has reached 3.3 million, an increase of 7.3% from the same period last year and GDP has expanded by 4.5% in 2012 to date. The Dominican Republic now ranks as the second most popular destination, after Cancun (Mexico), for USA travellers headed to the Caribbean and Latin America.

More relevant to the Dolphin business is the growth of high net worth individuals, the potential buyers of high end villas. According to the report by Wealth-X, the global UHNWI intelligence due diligence firm, the world's UHNWI (individuals with net worth in excess of $30 million) population grew to a figure of 187,500. It is forecast that in the next five years the world's UHNW population will grow by an annual average of c. 4% and the wealth attributable to them is expected to grow by 5.5% per annum.

 

In that respect, according to Bain & Company, global luxury goods sales are defying initial concerns over Eurozone turmoil and fears of a cool down in emerging markets, and are expected to exceed €200 billion in 2012, representing a growth of 6% over 2011.

 

G6. Strategic Outlook

 

With the newly opened Amanzoe hotel establishing itself as the best luxury hotel in Greece and probably the entire Eastern Mediterranean, and with good momentum in the execution of a number of sales or joint ventures, we remain optimistic for the remainder of 2012 and beyond.

 

Our objectives for the remainder of 2012 are to:

 

·   Complete Dolphin's proposed Placement of €50 million to ensure the Company can complete its development program and accelerate returns to shareholders;

·   Begin construction of Nikki Beach;

·   Begin construction at Playa Grande;

·   Pursue the sale and construction of additional Amanzoe Villas;

·   Potentially execute the sale of one or more components from the Porto Heli Collection;

·   Conclude more Joint Ventures for Pearl Island or Playa Grande;

·   Conduct additional investor events and roadshows both in Europe and in the USA to revive interest in the Dolphin stock.

 

Our longer term objectives remain in line with our past stated strategy to:

1.  Complete the first phases of the Advanced Projects to establish them as luxury resort destinations and act as a catalyst for both retail sales of homes, and potential project joint ventures or exits;

2.  Advance the zoning, permitting, design and branding of the other Major Projects to turn them into Advanced projects and improve their profit generation or exit potential;

3.  Partially or wholly sell the other Major Projects or the additional phases of the Advanced Projects or develop them and realise their full cash return potential;

4.  Make Dolphin a cashflow positive company with organic growth potential;

5.  Return capital to shareholders through share buybacks or dividends;

6.  Reduce Dolphin's current trading discount to NAV and improve the liquidity of its shares ;

7.  Expand the Dolphin portfolio and create more synergies;

8.  Realize the most of the c. €4.15 billion cash return potential of the portfolio; and

9.  Create goodwill value for the Dolphin brand. 

 

Miltos Kambourides

Managing Partner

Dolphin Capital Partners

27 September 2012

Pierre Charalambides

Founding Partner

Dolphin Capital Partners

27 September 2012

 


H. The Portfolio

 

A summary of Dolphin's current investments is presented below. As of 31 August 2012, the net invested amount is €525 million.


Project

Land site (hectares)

DCI's stake

Investment Cost *

Debt

Real Estate Value

Loan to real estate asset value (%)





( €million)

( €million)

( €million)


Advanced Projects







1

The Porto Heli Collection

347


 147

 42




The Aman at Porto Heli

 96

86%

 52

 40




The Nikki Beach Resort at Porto Heli

 1

100%

 5

 <1




The Seafront Villas**

 4

100%

 8

 1




The Chedi and Jack Nicklaus Signature Golf Course

 246

100%

 82

 -



2

Venus Rock

 1,000

50%

 82

 -



3

Playa Grande

 950

99%

 24

 49



4

Pearl Island

 1,440

60%

 30

 -




Total

 3,737


 284

 91

 526

17%


Major projects







5

Sitia Bay

 280

78%

 16

 -



6

Kea Resort

 65

67%

 9

 -



7

Scorpio Bay

 172

100%

 14

 -



8

Lavender Bay

 310

100%

 23

 -



9

Plaka Bay

 440

60%

 7

 -



10

Triopetra

 11

100%

 4

 -



11

Livka Bay

 63

100%

 24

10



12

Apollo Heights

 461

100%

 11

21



13

Eagle Pine-Aristo

 319

50%

 17

 -



15

Aristo Hellas

 27

100%

 0.5

11



16

Mediterra Resorts

 12

100%

 30

7




Kundu

 4

100%

 15

2




LaVanta

 8

100%

 15

5




Total

 2,160


 156

 49

 286

17%


Aristo Cyrpus








Magioko

 11

50%

 2

 -




Paphos Center Plot

 10

50%

 7

 -




Panorama Residences

 11

50%

 2

 -




Other Aristo Cyprus

 360

50%

 74

 -




Total Aristo other

 392


 86

 -

 60

0%


Grand Total

 6,289


 525

 140

 873

16%

 

 

 

 


Project

Land size (hectares)

Investment Cost *

Debt

Real Estate Value

% Loan to real estate asset value

Net Asset Value

(€ million)

(€ million)

(€ million)

1

Greece

 1,652

 221

 53

 357

15%

40%

2

Cyprus

 2,172

 197

 21

 304

7%

42%

3

Croatia & Turkey

 75

 53

 17

 60

29%

8%

4

Americas

 2,390

 54

 49

 152

32%

10%


Grand Total

 6,289

 525

 140

 873

16%

100%

*Including amounts paid in shares.

** The full Seafront Villas are included in the table until the collection of the deferred consideration from their sale.

 

Exits as at 26 September 2012


Land site (hectares)

Dolphin stake sold

Dolphin original investment (€m)

Dolphin exit proceeds (€m)

Dolphin return on investment (times)

Tsilivi - Aristo

11

100%

2

7

3.50x

Amanmila

210

100%

2.8

5.4

1.90x

Kea

65

33%

4

4.1

1.00x

Seafront Villas

3.6

100%

 9

 14

1.52x

Kings' Avenue Mall

4

100%

11

15

1.36x

Aristo Developers Ltd

1,351

50%

208

375.5

1.80x

The Nikki Beach Resort & Spa at Porto Heli

1

75%

 4

 6.9

1.83x

Pearl Island Founders phase

106

100%

 6

10.6

1.73x







TOTAL

 1,751


 247

 438.7

1.78x

 



I. Finance Director's Report

 

Net Asset Value ('NAV')

 

The reported NAV as at 30 June 2012 is presented below:

 




Variation since

31 December 2011


£

£

Total NAV before DITL (millions)

683

550

(5.8%)

(9.4%)

Total NAV after DITL (millions)

613

494

(5.7%)

(9.4%)

NAV per share before DITL

1.56

1.26

(5.8%)

(9.4%)

NAV per share after DITL

1.40

1.13

(5.7%)

(9.4%)

 

Notes:

·     Euro/GBP rate 0.80531 as at 30 June 2012.

·     NAV per share has been calculated on the basis of 438,004,270 issued shares as at 30 June 2012 (excluding 227,044,080 treasury shares acquired in June 2012 in the context of the Aristo Exchange)

·     NAV before DITL amounts include the 49.75% DITL of Aristo as at 30 June 2012

·     Total NAV variation percentages have been calculated using the pro-forma consolidated balance sheet as at 31 December 2011

 

The Aristo Exchange was completed on 22 June 2012 and took place on a NAV for NAV basis. The respective DCI NAV per share remained unchanged after the completion of the transaction.

 

The 30 June 2012 reported NAV is primarily based on new valuations conducted by Colliers International on the Porto Heli Collection, Sitia Bay Golf Resort, and the Aristo portfolio, which were updated to reflect current market conditions.

 

Underlying NAV predominantly decreased due to the reductions in property valuations in Greece and Cyprus, and regular Company operational, corporate and management expenses. These decreases were, however, partially offset by the appreciation of the Americas properties in euro terms due to the devaluation of the euro against the US dollar during the period.

 

Sterling NAV per share before DITL decreased in the six month period ended 30 June 2012 by 9.4% driven in addition to the reasons mentioned above, by 3.9% devaluation of euro versus the sterling, during the period.

 

Aristo NAV on a stand-alone basis for the six month period ended 30 June 2012 recorded a drop of approximately €27 million mainly due to reduced valuations of investment property driven primarily by the deteriorating outlook of the Cypriot economy.

 

The next full portfolio valuation will be as at 31 December 2012.

 

Financial position

Pro Forma Condensed Interim consolidated statement of financial position







30 June 2012

31 December 2011






€' 000

€' 000

Assets




Real estate assets (investment and trading properties)


607,308

598,733

Equity accounted investees


291,795*

306,750*

Other assets


25,576

13,075

Cash and cash equivalents


10,872

25,058

Total Assets


935,551

943,616

Equity




Equity attributable to Dolphin shareholders before DITL


682,623*

724,485*

Non-controlling interest


35,842

35,955

Total equity


718,465

760,440

Liabilities




Interest-bearing loans and finance lease obligations


148,936

133,544

Other liabilities


68,150

49,632

Total liabilities


217,086

183,176

Total equity and liabilities


935,551

943,616

*amounts include the 49.8% DITL of Aristo

 

The Company's NAV before DITL, after deducting from total consolidated assets, non-controlling interests of €36 million, other liabilities of €68 million and total debt of €149 million is set at €683million as at 30 June 2012 (including the 49.8% DITL of Aristo).

 

Accounting loss of the Company for the six-month period ended 30 June 2012 amounted to €11 million, implying a loss per share of €0.01.

 

The Company's pro-forma consolidated assets total €936 million and include €607 million of real estate assets, €292 million of investments in equity accounted investees, €37 million of other assets and cash. The €607 million figure represents Colliers' fair market valuation of Dolphin's real estate portfolio (both freehold and leasehold interests) as at 30 June 2012, assuming 100% ownership. The €292 million figure represents the 49.8% investment in Aristo. The €26 million of other assets comprise mainly €13 million of VAT receivable and €3 million of deferred income tax assets.

The Company's pro forma consolidated liabilities total €217 million and comprise €68 million of other liabilities, as well as €149 million of interest-bearing loans and finance lease obligations all of which are held by Group subsidiaries and are non-recourse to Dolphin (except for the Playa Grande convertible Bond and the servicing of Banco Leon loan interest at Playa Grande which are guaranteed by the Company). The €68 million of other payables comprise mainly a €15 million obligation relating to Playa Grande Holdings and €23 million of option contracts to acquire land, €22.4 million of which are exercisable at the end of 2013.

 

The consolidated financial statements have been reviewed by KPMG.

 

Notable changes in Debt position

•      Following the Aristo Exchange the consolidated debt of the Company was reduced by circa €337 million or c. 75% and consequently the Company's debt to asset ratio dropped from 27% to 15%. In the context of this transaction circa €16 million of Aristo's loans were taken over by Dolphin (through its wholly-owned subsidiary owning Apollo Heights in Cyprus) as an offset against an equal net receivable by Aristo from DCI. The Company has not provided any bank or other guarantees in favor of Aristo.

•      Dolphin's guarantee on the €33 million Amanzoe construction loan and €8 million VAT facility was lifted on 14 September 2012 and replaced with a corporate guarantee by Dolphin Capital Holdings One Ltd., the holding company of the Group's 49.8% in Aristo.

 

 

 

Panos Katsavos

Finance Director

Dolphin Capital Partners

27 September 2012



 

Condensed consolidated interim statement of comprehensive income

For the six-month period ended 30 June 2012



 

From 1 January 2012

to 30 June 2012

 

From 1 January 2011

to 30 June 2011


 

Note

 

€'000

 

€'000

Continuing operations




Valuation loss on investment property

9

(2,812)

(20,057)

Share of (loss)/profit on equity accounted investees

12

(56)

3,882

Gain on disposal of investment in subsidiaries

23

44,668

1,958

Other operating profits


3,938

1,350

Total operating profits/(losses)


45,738

(12,867)

Investment Manager fees

22.2

(8,970)

(8,945)

Professional fees


(3,131)

(2,770)

Other expenses


(12,274)

(10,757)

Total operating and other expenses


(24,375)

(22,472)

Results from operating activities


21,363

(35,339)

Finance income


2,167

1,593

Finance costs


(15,235)

(16,819)

Net finance costs


(13,068)

(15,226)

Impairment loss on trading properties

11

(2,570)

(11,082)

Impairment loss on property, plant and equipment

10

(18,302)

(39)

Reversal of impairment loss on property, plant and equipment


-

1,048

Total net non-operating losses


(20,872)

(10,073)

Loss before taxation


(12,577)

(60,638)

Taxation

7

1,743

4,306

Loss for the period


(10,834)

(56,332)

Other comprehensive income




Foreign currency translation differences


2,513

(8,072)

Revaluation of property, plant and equipment


(263)

34

Other comprehensive income for the period, net of tax


2,250

(8,038)

Total comprehensive income for the period


(8,584)

(64,370)

Loss attributable to:




Owners of the Company


(9,074)

(55,636)

Non-controlling interests


(1,760)

(696)

Loss for the period


(10,834)

(56,332)

Total comprehensive income attributable to:




Owners of the Company


(7,519)

(61,831)

Non-controlling interests


(1,065)

(2,539)

Total comprehensive income for the period


(8,584)

(64,370)

Loss per share




Basic and diluted loss per share (€)

8

(0.01)

(0.09)

 



Condensed consolidated interim statement of financial position

As at 30 June 2012



30 June 2012

31 December 2011


Note

€'000

€'000

Assets




Investment property

9

457,056

1,201,933

Property, plant and equipment

10

106,209

103,213

Equity accounted investees

12

265,601

7,868

Deferred tax assets

18

2,501

3,659

Other non-current assets


5,544

4,717

Total non-current assets


836,911

1,321,390

Trading properties

11

44,043

298,964

Receivables and other assets

13

17,531

43,311

Cash and cash equivalents

14

10,872

31,068

Total current assets


72,446

373,343

Total assets


909,357

1,694,733

Equity




Share capital

15

6,650

6,650

Share premium

15

825,671

825,671

Reserves


(371,881)

1,960

Retained earnings


152,433

161,414

Total equity attributable to owners of the Company


612,873

995,695

Non-controlling interests


35,843

35,955

Total equity


648,716

1,031,650

Liabilities




Loans and borrowings

16

109,153

274,548

Finance lease obligations

17

8,477

8,682

Deferred tax liabilities

18

43,556

104,335

Other non-current liabilities

19

44,162

41,362

Total non-current liabilities


205,348

428,927

Loans and borrowings

16

 

30,900

178,967

Finance lease obligations

17

405

415

Trade and other payables

20

23,955

54,731

Current tax liabilities


33

43

Total current liabilities


55,293

234,156

Total liabilities


260,641

663,083

Total equity and liabilities


909,357

1,694,733

Net asset value per share (€)

21

1.40

1.50

 


Condensed consolidated interim statement of changes in equity

For the six-month period ended 30 June 2012


Attributable to owners of the Company





Share

Share

Translation

Revaluation

Reserve for

Retained


Non-controlling

Total


capital

premium

reserve

reserve

own shares

earnings

Total

interests

equity


€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

Balance at 1 January 2011

6,277

812,520

2,426

378

(144)

322,067

1,143,524

40,853

1,184,377

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD










Loss for the period

-

-

-

-

-

(55,636)

(55,636)

(696)

(56,332)

Other comprehensive income










Foreign currency translation differences

-

-

(6,229)

-

-

-

(6,229)

(1,843)

(8,072)

Revaluation of property, plant and equipment, net of tax

-

-

-

34

-

-

34

-

34

Total other comprehensive income

-

-

(6,229)

34

-

-

(6,195)

(1,843)

(8,038)

Total comprehensive income for the period

-

-

(6,229)

34

-

(55,636)

(61,831)

(2,539)

(64,370)

TRANSACTIONS WITH OWNERS OF THE COMPANY, RECOGNISED DIRECTLY IN EQUITY










Contributions by and distributions to owners of the Company










Issue of ordinary shares related to business combinations

111

4,918

-

-

-

-

5,029

-

5,029

Own shares exchanged in relation to business combinations

-

(5)

-

-

144

-

139

-

139

Non-controlling interests on capital increases of subsidiaries

-

-

-

-

-

-

-

725

725

Total contributions by and distributions to owners of the Company

111

4,913

-

-

144

-

5,168

725

5,893

Changes in ownership interests in subsidiaries










Acquisition of non-controlling interests without a change in control

 

-

 

-

 

-

 

-

 

-

 

86

 

86

(86)

-

Disposal of interests without a change in control

-

-

-

-

-

2,554

2,554

(21)

2,533

Total changes in ownership interests in subsidiaries

-

-

-

-

-

2,640

2,640

(107)

2,533

Total transactions with owners of the Company

111

4,913

-

-

144

2,640

7,808

618

8,426

Balance at 30 June 2011

6,388

817,433

(3,803)

412

-

269,071

1,089,501

38,932

1,128,433











Balance at 1 January 2012

6,650

825,671

1,486

474

-

161,414

995,695

35,955

1,031,650

TOTAL COMPREHENSIVE INCOME FOR THE PERIOD










Loss for the period

-

-

-

-

-

(9,074)

(9,074)

(1,760)

(10,834)

Other comprehensive income










Foreign currency translation differences

-

-

1,818

-

-

-

1,818

695

2,513

Revaluation of property, plant and equipment, net of tax

-

-

-

(263)

-

-

(263)

-

(263)

Transfer of net revaluation gain on property due to disposal

-

-

-

(93)

-

93

-

-

-

Total other comprehensive income

-

-

1,818

(356)

-

93

1,555

695

2,250

Total comprehensive income for the period

-

-

1,818

(356)

-

(8,981)

(7,519)

(1,065)

(8,584)

TRANSACTIONS WITH OWNERS OF THE COMPANY, RECOGNISED DIRECTLY IN EQUITY










Contributions by and distributions to owners of the Company










Own shares acquired

-

-

-

-

(375,303)

-

(375,303)

-

(375,303)

Non-controlling interests on capital increases of subsidiaries

-

-

-

-

-

-

-

953

953

Total contributions by and distributions to owners of the Company

-

-

-

-

(375,303)

-

(375,303)

953

(374,350)

Total transactions with owners of the Company

-

-

-

-

(375,303)

-

(375,303)

953

(374,350)

Balance at 30 June 2012

6,650

825,671

3,304

118

(375,303)

152,433

612,873

35,843

648,716


Condensed consolidated interim statement of cash flows

For the six-month period ended 30 June 2012

 



From 1 January 2012

to 30 June 2012

From 1 January 2011

to 30 June 2011



€'000

€'000

Cash flows from operating activities




Loss for the period


(10,834)

(56,332)

Adjustments


(10,630)

37,043



(21,464)

(19,289)

Change in receivables


2,385

(18,129)

Change in payables


(1,352)

6,125



(20,431)

(31,293)

Tax paid


(92)

(439)

Net cash used in operating activities


(20,523)

(31,732)

Cash flows from investing activities




Net proceeds from disposal of subsidiaries


32,101

17,533

Net acquisitions of investment property


(1,636)

(240)

Net acquisitions of property, plant and equipment


(14,199)

(8,010)

Net change in equity accounted investees


(289)

170

Net change in trading properties


7,348

8,742

Interest received


625

795

Net cash from investing activities


23,950

18,990

Cash flows from financing activities




Funds received from non-controlling interests


953

725

Change in loans and borrowings


22,950

33,251

Change in finance lease obligations


(215)

(12)

Interest paid


(14,849)

(12,259)

Net cash from financing activities


8,839

21,705

Net increase in cash and cash equivalents


12,266

8,963

Cash and cash equivalents at the beginning of the period


(3,607)

(1,078)

Effect of exchange rate fluctuations on cash held


(6)

116


8,653

8,001

For the purpose of the condensed consolidated interim statement of cash flows, cash and cash equivalents consist of the following:




Cash in hand and at bank (see note 14)


10,872

39,243

Bank overdrafts (see note 16)


(2,219)

(31,242)


8,653

8,001

 


Notes to the condensed consolidated interim financial statements

 

1. REPORTING ENTITY

Dolphin Capital Investors Limited (the 'Company') was incorporated and registered in the British Virgin Islands on 7 June 2005. The Company is a real estate investment company focused on the early-stage, large-scale leisure-integrated residential resorts in south-east Europe, and managed by Dolphin Capital Partners Limited (the 'Investment Manager'), an independent private equity management firm that specialises in real estate investments, primarily in south-east Europe. The shares of the Company were admitted to trading on the AIM market of the London Stock Exchange ('AIM') on 8 December 2005.

The condensed consolidated interim financial statements of the Company as at and for the six-month period ended 30 June 2012 comprise the financial statements of the Company and its subsidiaries (together referred to as the 'Group') and the Group's interests in associates and jointly controlled entities.

The consolidated financial statements of the Group as at and for the year ended 31 December 2011 are available at www.dolphinci.com.

2. STATEMENT OF COMPLIANCE

These condensed consolidated interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting'. They do not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the Group as at and for the year ended 31 December 2011. They are presented in euro (€), rounded to the nearest thousand.

These condensed consolidated interim financial statements were approved by the Board of Directors on 26 September 2012.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied by the Group in these condensed consolidated interim financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2011.

4. ESTIMATES

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation and uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2011.



5. Significant SUBSIDIARIES

As at 30 June 2012, the Group's most significant company holdings were the following:


Country of

Shareholding

Name

incorporation

interest

Scorpio Bay Holdings Limited

Cyprus

100%

Scorpio Bay Resorts S.A.

Greece

100%

Latirus Enterprises Limited

Cyprus

80%

Iktinos Techniki Touristiki S.A. ('Iktinos')

Greece

78%

Xscape Limited

Cyprus

100%

Golfing Developments S.A.

Greece

100%

MindCompass Overseas Limited

Cyprus

100%

MindCompass Overseas S.A.

Greece

100%

MindCompass Overseas Two S.A.

Greece

100%

MindCompass Parks S.A.

Greece

100%

Ergotex Services Co. Limited

Cyprus

100%

D.C. Apollo Heights Polo and Country Resort Limited

Cyprus

100%

Symboula Estates Limited

Cyprus

100%

DolphinCI Fourteen Limited

Cyprus

86%

Eidikou Skopou Dekatessera S.A.

Greece

86%

Eidikou Skopou Dekaokto S.A.

Greece

86%

Portoheli Hotel and Marina S.A.

Greece

100%

Azurna Uvala D.o.o.

Croatia

100%

DCI Holdings Two Limited ('DCI H2')

BVIs

50%*

Dolphin Capital Atlantis Limited

Cyprus

50%*

Aristo Developers Limited ('Aristo')

Cyprus

50%*

Single Purpose Vehicle Twelve Limited

Cyprus

50%*

Eastern Crete Development Company S.A.

Greece

60%

DolphinLux 1 S.a.r.l.

Luxembourg

100%

DolphinLux 2 S.a.r.l.

Luxembourg

100%

Pasakoy Yapi ve Turizm A.S.

Turkey

100%

Kalkan Yapi ve Turizm A.S.

Turkey

100%

DCI Holdings Five Limited

BVIs

100%

DCI Holdings Four Limited ('DCI H4')

BVIs

99%

DCI Holdings Seven Limited ('DCI H7')

BVIs

99%

Playa Grande Holdings Inc. ('PGH')

Dominican Republic

99%

Single Purpose Vehicle Eight Limited

Cyprus

100%

Eidikou Skopou Dekapente S.A.

Greece

100%

Single Purpose Vehicle Ten Limited ('SPV 10')

Cyprus

67%

Eidikou Skopou Eikosi Tessera S.A.

Greece

67%

Pearl Island Limited S.A.

Panama Republic

60%

Zoniro (Panama) S.A.

Panama Republic

60%

*On 22 June 2012, the Company exchanged 50% of its holding in these companies for the acquisition of 227 million own shares, under the Aristo exchange agreement (see note 22.4).

The above shareholding interest percentages are rounded to the nearest integer.

6. Segment reporting

The Group has one business and geographical segment focusing on achieving capital growth through investing in residential resort developments primarily in south-east Europe.

7. Taxation


From 1 January 2012

From 1 January 2011


to 30 June 2012

to 30 June 2011


€'000

€'000

Corporate income tax

24

99

Defence tax

2

35

Deferred tax

(1,769)

(4,440)

Total

(1,743)

(4,306)



8. LOSS per share

Basic loss per share

Basic loss per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of common shares outstanding during the period.


From 1 January 2012

From 1 January 2011


to 30 June 2012

to 30 June 2011


'000

'000

Loss attributable to owners of the Company (€)

(9,074)

(55,636)

Number of weighted average common shares outstanding

655,068

633,152

Basic loss per share (€)

(0.01)

(0.09)

Weighted average number of common shares outstanding


From 1 January 2012 to 30 June 2012

From 1 January 2011 to 30 June 2011


'000

'000

Outstanding common shares at the beginning of the period

665,048

627,403

Effect of own shares acquired

(9,980)

-

Effect of shares issued during the period

-

5,595

Effect of re-issuance of own shares during the period

-

154

Weighted average number of common shares outstanding

655,068

633,152

Diluted loss per share

Diluted loss per share is calculated by adjusting the number of common shares outstanding to assume conversion of all dilutive potential shares. As at 30 June 2012 and 30 June 2011, the diluted loss per share is the same as the basic loss per share, due to the fact that no dilutive potential ordinary shares were outstanding during these periods.

9. Investment property


30 June 2012

31 December 2011


 

€'000

 

€'000

At beginning of period/year

1,201,933

1,277,760

Direct acquisitions

1,636

6,254

Transfers to property, plant and equipment

(150,975)

-

Transfers to trading properties

(1,698)

(2,661)

Transfers to equity accounted investees (see note 12)

(691)

-

Disposals through disposal of subsidiary companies (see note 23)

(594,098)

-

Direct disposals

-

(1,043)

Exchange difference

3,761

1,912


459,868

1,282,222

Fair value adjustment

(2,812)

(80,289)

At end of period/year

457,056

1,201,933

10. Property, plant and equipment


30 June 2012

31 December 2011


€'000

€'000

Cost or deemed cost



At beginning of period/year

122,164

97,426

Direct acquisitions

14,352

24,380

Direct disposals

(304)

(155)

Disposals through disposal of subsidiary companies (see note 23)

(153,951)

-

Transfers from investment property

150,975

-

Revaluation adjustment

(284)

37

Exchange difference

693

476

At end of period/year

133,645

122,164

Depreciation and impairment losses



At beginning of period/year

18,951

17,372

Direct disposals

(151)

(122)

Disposals through disposal of subsidiary companies (see note 23)

(10,589)

-

Revaluation adjustment

(33)

(69)

Depreciation charge for the period/year

895

1,841

Impairment loss

18,302

490

Reversal of impairment loss

-

(604)

Exchange difference

61

43

At end of period/year

27,436

18,951

Carrying amounts

106,209

103,213

11. Trading properties


30 June 2012

31 December 2011


€'000

€'000

At beginning of period/year

298,964

339,461

Net direct disposals

(7,348)

(14,490)

Net transfers from investment property

1,698

2,661

Disposals through disposal of subsidiary companies (see note 23)

(247,749)

-

Impairment loss

(2,570)

(26,022)

Exchange difference

1,048

(2,646)

At end of period/year

44,043

298,964

 


12. equity accounted investees






Joint

Joint


Joint








venture

venture


venture

Joint







between

between

Joint

between

venture







Aristo

Aristo

venture

Aristo

between




Athiari

Athiari


and Alea

and

between

and

Aristo




Commercial

Residential

Aristo

Limassol

St. Chara

Aristo

Tsada/Randi

and




(Paphos)

(Paphos)

Accounting

Star

Developers

and

Cyprus Golf

Lanitis



DCI H2

Limited

Limited

S.A.

Limited

Limited

Poseidon

Resorts

Limited

Total


€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

Balance at 1 January 2012

 

-

-

-

29

7,703

-

83

53

 

-

7,868

Initial cost of investment (see note 23)

 

265,566

-

-

-

-

-

-

-

-

265,566

Share of (losses)/profits

-

-

-

6

(62)

-

-

-

-

(56)

Transfers from investment property (see note 9)

-

-

-

-

-

-

-

-

691

691

Profits received

-

-

-

-

-

-

-

(36)

-

(36)

Contribution from shareholders

-

-

-

-

317

-

-

-

8

325

Disposals (see note 23)

-

-

-

-

(7,958)

-

(83)

(17)

(699)

(8,757)

Balance at 30 June 2012

265,566

-

-

35

-

-

-

-

-

265,601

Balance  at 1 January 2011

-

9,659

3,849

29

7,016

-

63

117

-

20,733

Share of (losses)/profits

-

(753)

(248)

-

1,209

(1)

-

1

-

208

Long-term loans

-

322

104

-

-

-

-

-

-

426

Disposals (see note 23)

-

(9,228)

(3,705)

-

-

-

-

-

-

(12,933)

Profits received

-

-

-

-

(522)

-

-

(65)

-

(587)

Contribution from shareholders

-

-

-

-

-

1

20

-

-

21

Balance at 31 December 2011

-

-

-

29

7,703

-

83

53

-

7,868

As of 31 December 2011, the Group has a payable of 10,597 thousand to Aristo joint ventures with Alea Limassol Star Limited and St. Chara Developers Limited (see note 20).

 


The details of the above investments are as follows:


Country of


Shareholding interest

Name

incorporation

Principal activities

30 June 2012

31 December 2011

DCI H2

BVIs

Acquisition and holding of investments

50%

-

Aristo Accounting S.A.

Greece

Provision of professional services

49%

49%

Joint venture between Aristo and Alea Limassol Star Limited

Cyprus

Ownership and development of land


50%*

Joint venture between Aristo and St. Chara Developers Limited

Cyprus

Ownership and development of land


50%

Joint venture between Aristo and Poseidon

Cyprus

Construction of marina


25%

Joint venture between Aristo and Tsada/Randi Cyprus Golf Resorts

Cyprus

Management and operation of golf resort


50%

* Profit sharing fluctuates and is based on the actual contributions of the venturers.

The above shareholding interest percentages are rounded to the nearest integer.

On 22 June 2012, the Company reduced its participation in DCI H2 from 100% to 50% as part of the Aristo exchange agreement (see note 22.4).

As of 30 June 2012, Aristo, DCI H2's most significant subsidiary, had a total of €7,130 thousand contractual capital commitments on property, plant and equipment and a total of €47 million contingent liabilities in respect to bank guarantees arising in the ordinary course of business. Aristo's management does not anticipate any material liability to arise from these contingent liabilities.

Summary of financial information for equity accounted investees as at 30 June 2012 and 31 December 2011, not adjusted for the percentage of ownership held by the Group:


 

 

 

DCI H2

 

 

 

Aristo Accounting S.A.

Joint venture between Aristo and  Alea Limassol Star Limited

Joint Venture

between

 Aristo and

 St.Chara

Developers

Limited

 

Joint

venture

between

Aristo and

Poseidon

Joint venture between Aristo and Tsada/ Randi Cyprus Golf Resorts

 

Joint venture between Aristo and Lanitis Limited

Total


€'000

€'000

€'000

€'000

€'000

€'000

€'000

€'000

30 June 2012









Current assets

205,666

101

1,185

314

333

124

12

207,735

Non-current assets

746,726

3

-

-

-

13

973

747,715

Total assets

952,392

104

1,185

314

333

137

985

955,450










Current liabilities

177,911

45

598

5

-

56

-

178,615

Non-current liabilities

240,679

-

-

-

-

-

-

240,679

Total liabilities

418,590

45

598

5

-

56

-

419,294










Revenues

5,380

189

25

-

-

1,029

-

6,623

Expenses

(32,799)

(170)

(91)

-

-

(1,029)

-

(34,089)

Profit/(loss)

(27,419)

19

(66)

-

-

-

-

(27,466)

 

31 December 2011









Current assets

-

112

1,718

314

333

196

-

2,673

Non-current assets

-

5

-

-

-

13

-

18

Total assets

-

117

1,718

314

333

209

-

2,691










Current liabilities

-

70

642

5

-

56

-

773

Non-current liabilities

-

-

-

-

-

-

-

-

Total liabilities

-

70

642

5

-

56

-

773










Revenues

-

376

5,493

-

-

1,031

-

6,900

Expenses

-

(375)

(4,010)

(2)

-

(1,029)

-

(5,416)

Profit/(loss)

-

1

1,483

(2)

-

2

-

1,484

13. RECEIVABLES AND OTHER ASSETS


30 June 2012

31 December 2011


€'000

€'000

Trade receivables

561

18,607

Accrued interest receivable

5

11

Investments at fair value through profit or loss

-

129

Amount receivable from Archimedia Holding Corp. ('Archimedia') (see note 22.4)

1,577

8,747

Other receivables and prepayments

15,388

15,817

Total

17,531

43,311

14. Cash and cash equivalents


30 June 2012

31 December 2011


€'000

€'000

Bank balances

8,208

22,714

One-week deposits

241

46

One-month fixed deposits

2,422

1,756

Two-month fixed deposits

-

4,842

Three-month fixed deposits

1

1,710

Total

10,872

31,068

The average interest rate on the above fixed deposit balances for the six-month period ended 30 June 2012 was 1.239% (31 December 2011: 2.279%).

15. CAPITAL AND RESERVES

Capital

Authorised share capital


30 June 2012


31 December 2011


'000 of shares

€'000


'000 of shares

€'000

Common shares of €0.01 each

2,000,000

20,000


2,000,000

20,000

Movement in share capital and premium


Shares in

Share capital

Share premium


'000

€'000

€'000

Capital at 1 January 2011

627,709

6,277

812,520

Shares issued in relation to business combination on 31 March 2011 (see note 22.4)

 

11,129

 

111

 

4,918

Re-issuance of own shares in relation to business combination on 31 March 2011 (see note 22.4)

 

-

 

-

 

(5)

Shares issued on 30 December 2011

26,210

262

8,238

Capital at 31 December 2011

665,048

6,650

825,671

Capital at 1 January 2012 and 30 June 2012

665,048

6,650

825,671

Warrants

In December 2011, the Company raised €8,500,000 through the issue of new shares at GBP 0.27 per share (with warrants attached to subscribe for additional Company shares equal to 25% of the aggregate value of the new shares at a price of GBP 0.35 per share).  The Company issued 26,210,536 new shares and 5,054,889 warrants.  The warrantholders can exercise their subscription rights within five years from the admission date.

Following this placement of shares, the total number of shares in issue of the Company as at 30 June 2012 and 31 December 2011 is 665,048,350.



Reserves

Reserve for own shares

The reserve for the Company's own shares comprises the cost of the Company's shares held by the Group.

On 31 March 2011, the Company re-issued all of its 307 thousand common shares to Grupo Eleta as part of the deferred consideration for the Group's Pearl Island transaction (see note 22.4).

On 22 June 2012, the Company exchanged Mr. Theodoros Aristodemou ('TA') 's 34.14% shareholding in the Company for a direct 50.25% participation of TA in DCI H2 (see note 22.4).

Following the above exchange, the amount of own shares held by the Company as at 30 June 2012 is 227,044,080 (31 December 2011: Nil). 

Translation reserve

Translation reserve comprises all foreign currency differences arising from the translation of the interim financial statements of foreign operations. 

Revaluation reserve

Revaluation reserve relates to the revaluation of property, plant and equipment net of any deferred tax.

16. LOANS AND BORROWINGS


Total


Within one year


Within two to five years


More than five years


31 December


30 June

31 December


30 June

31 December


30 June

31 December


2012

2011


2012

2011


2012

2011


2012

2011


€'000

€'000


€'000

€'000


€'000

€'000


€'000

€'000

Loans in euro

88,248

370,052


21,713

139,504


29,219

191,686


37,316

38,862

Loans in United States dollars

17,815

17,900


6,968

4,788


8,782

13,112


2,065

-

Bank overdrafts in euro

2,219

34,675


2,219

34,675


-

-


-

-

Convertible bonds payable

31,771

30,888


-

-


31,771

30,888


-

-

Total

140,053

453,515


30,900

178,967


69,772

235,686


39,381

38,862

Convertible bonds payable

On 29 March 2011, DCI H7 issued 4,000 bonds at US$10 thousand each, bearing an interest of 7% per annum, payable semi-annually, and maturing on 29 March 2016.  The bonds are trading on the Open Market of the Frankfurt Stock Exchange (the freiverkehr market) under the symbol 12DD.

Bonds may be converted prior to maturity (unless earlier redeemed or repurchased) at the option of the holder into Company's common shares of €0.01 each for an initial conversion price of  US$0.7998 (equivalent of GBP 0.50 on issuance date), subject to anti-dilution adjustments pursuant to the bond's terms and conditions. The number of shares to be issued on exercise of a conversion right shall be determined by dividing the principal amount of the bonds to be converted by the conversion price in effect on the relevant conversion date.

At the option of bondholders:

(i)   some or all of the principal amount of the bonds held by a bondholder maybe repurchased by the Issuer; and

(ii)  the consideration for such repurchase shall be the transfer by the Company to the bondholder of land plot(s) at the issuer's Playa Grande Aman development in the Dominican Republic.

17. Finance lease obligationS


30 June 2012


31 December 2011


Future minimum lease payments

Interest

 

Present value of minimum lease payments


Future minimum lease payments

Interest

 Present value of minimum lease payments


€'000

€'000

€'000


€'000

€'000

€'000

Less than one year

563

158

405


573

158

415

Between two and five years

1,933

588

1,345


1,933

588

1,345

More than five years

28,908

21,776

7,132


29,191

21,854

7,337

Total

31,404

22,522

8,882


31,697

22,600

9,097

The major finance lease obligations comprise leases in Greece with 99-year lease terms.



18. Deferred tax assets and liabilities


30 June 2012


31 December 2011


Deferred

Deferred


Deferred

Deferred


tax assets

tax liabilities


tax assets

tax liabilities


€'000

€'000


€'000

€'000

Balance at beginning of period/year

3,659

(104,335)


3,066

(120,193)

From disposal of subsidiary (see note 23)

(509)

58,222


-

-

Debit/(credit) in the consolidated statement of comprehensive income

(808)

2,577


871

15,796

Exchange difference and other

159

(20)


(278)

62

Balance at end of period/year

2,501

(43,556)


3,659

(104,335)

Deferred tax assets and liabilities are attributable to the following:


30 June 2012


31 December 2011


Deferred

Deferred


Deferred

Deferred


tax assets

tax liabilities


tax assets

tax liabilities


€'000

€'000


€'000

€'000

Revaluation of investment property

-

(38,162)


-

(90,398)

Revaluation of trading properties (on acquisition of subsidiaries)

-

(1,574)


-

(10,728)

Revaluation of property, plant and equipment

-

(3,446)


-

(5,355)

Other temporary differences

-

(374)


-

2,146

Tax losses

2,501

-


3,659

-

Total

2,501

(43,556)


3,659

(104,335)

19. OTHER NON-CURRENT LIABILITIES


30 June 2012

31 December 2011


€'000

€'000

Land creditors

22,480

22,078

Payable to the former controlling shareholder of PGH project (see note 22.4)

4,765

4,633

Other non-current liabilities

16,917

14,651

Total

44,162

41,362

20. Trade and other payables


30 June 2012

31 December 2011


€'000

€'000

Trade payables

1,057

5,047

Amount due to customers for contract work

-

13,823

Land creditors

313

705

Investment Manager fees payable

933

930

Payable to the former controlling shareholder of PGH project (see note 22.4)

10,326

10,425

Payables to Aristo joint ventures (see note 12)

-

10,597

Other payables and accrued expenses

11,326

13,204

Total

23,955

54,731

21. NET ÁSSET VALUE per share


30 June 2012

31 December 2011


'000

'000

Total equity attributable to owners of the Company (€)

612,873

995,695

Number of common shares outstanding at end of period/year

438,004

665,048

Net asset value per share (€)

1.40

1.50

22. Related party transactions

22.1  Directors of the Company

Miltos Kambourides is the founder and managing partner of the Investment Manager.

The interests of the Directors, all of which are beneficial, in the issued share capital of the Company as at 30 June 2012 were as follows:


Shares


'000

Miltos Kambourides (indirect holding)

49,749

Roger Lane-Smith

60

Andreas Papageorghiou

5

Save as disclosed, none of the Directors had any interest during the period in any material contract for the provision of services which was significant to the business of the Group.

22.2 Investment Manager fees

Annual fees

The Investment Manager is entitled to an annual management fee of 2% of the equity funds defined as follows:

•    €890 million; plus

•    The gross proceeds of further equity issues; plus

•    Realised net profits less any amounts distributed to shareholders.

In addition, the Company shall reimburse the Investment Manager for any professional fees or other costs incurred on behalf of the Company at its request for services or advice. 

The Company and the Investment Manager have entered into a side letter pursuant to which the Investment Manager has agreed not to receive any management fee from the Company in respect of the proceeds of the equity issue of 30 December 2011.

Management fees for the six-month periods ended 30 June 2012 and 30 June 2011, amounted to €8,970 thousand and €8,945 thousand, respectively.

Performance fees

The Investment Manager is entitled to a performance fee based on the net profits made by the Company, subject to the Company receiving the 'Relevant Investment Amount' which is defined as an amount equal to:

i    The total cost of the investment reduced on a prorated basis by an amount of €167 million; plus

ii    A hurdle amount equal to an annualised percentage return equal to the average 1-month Euribor applicable in the period commencing from the month when the relevant cost is incurred (up to 31 December 2011 annualised percentage return of 8%) compounded for each year or fraction of a year during which such investment is held (the 'Hurdle'); plus

iii   A sum equal to the amount of any realised losses and/or write-downs in respect of any other investment which has not already been taken into account in determining the Investment Manager's entitlement to a performance fee.

In the event that the Company has received distributions from an investment equal to the Relevant Investment Amount, any subsequent net profits arising shall be distributed in the following order or priority:

i    60% to the Investment Manager and 40% to the Company until the Investment Manager shall have received an amount equal to 20% of such profits; and

ii    80% to the Company and 20% to the Investment Manager, such that the Investment Manager shall receive a total performance fee equivalent to 20% of the net profits.

The performance fee payment is subject to the following escrow and clawback provisions:

Escrow

The following table displays the current escrow arrangements:

Escrow

Terms

Up to €109 million returned

50% of overall performance fee held in escrow

Up to €109 million plus the cumulative hurdle returned

25% of any performance fee held in escrow

After the return of €409 million post-hurdle, plus the return of 50% of €450 million post-hurdle

All performance fees released from escrow

Clawback

If on the earlier of (i) disposal of the Company's interest in a relevant investment or (ii) 1 August 2020, the proceeds realised from that investment are less than the Relevant Investment Amount, the Investment Manager shall pay to the Company an amount equivalent to the difference between the proceeds realised and the Relevant Investment Amount. The payment of the clawback is subject to the maximum amount payable by the Investment Manager not exceeding the aggregate performance fees (net of tax) previously received by the Investment Manager in relation to other investments.

No performance fees were charged to the Company for the six-month periods ended 30 June 2012 and 30 June 2011.  As at 30 June 2012 and 31 December 2011, funds held in escrow, including accrued interest, amounted to €933 thousand and €930 thousand, respectively.

 22.3 Directors' remuneration

The Directors' remuneration for the six-month periods ended 30 June 2012 and 30 June 2011 were as follows:

 


From 1 January 2012

From 1 January 2011


to 30 June 2012

to 30 June 2011


€'000

€'000

Andreas Papageorghiou

7.5

7.5

Cem Duna

7.5

7.5

Nicholas Moy*

-

7.5

Roger Lane-Smith

22.5

22.5

Antonios Achilleoudis

7.5

7.5

Christopher Pissarides*

25.0

3.4

Total

70.0

55.9

*On 6 June 2011, Mr. Nicholas Moy resigned from the Board and Mr. Christopher Pissarides was appointed as non-executive Director.

Mr. Miltos Kambourides has waived his fees.

22.4 Shareholder and development agreements

Shareholder agreements

DCI Holdings Twenty One Limited ('DCI H21'), a subsidiary of the Group, has signed a shareholder agreement with the non-controlling shareholder of Pedro Gonzalez Holdings I Limited, Grupo Eleta, the company's local 40% partner. DCI H21 has acquired 60% of the shares of Pearl Island project by paying Grupo Eleta a sum upon closing and a conditional payment to be paid in the event Grupo Eleta was successful in obtaining full masterplan and environmental permits. Following receipt of the Environmental Impact Study approval, the renegotiated amount due of US$25.7 million was payable as follows: US$10 million in cash; US$6 million payable in the form of 9,061,266 Company own shares (issued at GBP0.40); and US$9.7 million (plus Libor-based interest plus 400 basis points) payable one calendar year from the execution of the revised agreements. The cash payment of US$10 million to Grupo Eleta, was made on 30 September 2009, and the transfer of 9,061,266 own shares worth US$6 million was made on 5 October 2009, pursuant to the renegotiated terms of the transaction. On 28 September 2010 the parties signed a second amended and restated agreement, under which DCI H21 made a payment of US$2.5 million, with the remaining amount of US$7.6m to be transferred six months later including interest accruing from the date of the renegotiation, either in the form of cash or Company shares according to the sole discretion of DCI H21. On 30 March 2011, the Company paid US$389 thousand in cash, and on 31 March 2011 issued 11,128,586 new common shares (issued at GBP 0.40) and transferred 306,681 own shares (issued at GBP 0.40) to Grupo Eleta as afull settlement of the deferred consideration.

DolphinCI Twenty Two Limited, a subsidiary of the Group, has signed a shareholder agreement with the non-controlling shareholder of Eastern Crete Development Company S.A. DolphinCI Twenty Two Limited has acquired 60% of the shares of Plaka Bay project by paying the former majority shareholder a sum upon closing and a conditional amount in the event the non-controlling shareholder is successful in, among others, acquiring additional specific plots and obtaining construction permits.

DolphinCI Thirteen Limited, a subsidiary of the Group, has signed a shareholder agreement with the non-controlling shareholder of Iktinos. Under its current terms, DolphinCI Thirteen Limited has acquired approximately 80% of the shares of Latirus Enterprises Limited (Sitia Bay project) by paying the non-controlling shareholder an initial sum upon closing and a conditional amount in the event the non-controlling shareholder will be successful in, among others, acquiring additional specific plots and obtaining construction permits.

On 24 December 2009, the Group signed an agreement with Exactarea International Limited for the sale of a 33.33% stake in SPV10 (Kea Resort project) for a consideration of €4.1 million.  The transfer of the shares was completed in February of 2011, following the full payment of the agreed price and in accordance with the shares sale agreement.

On 20 September 2010, the Group signed an agreement with Archimedia controlled by John Hunt, for the sale of a 14.29% stake in the Aman at Porto Heli for a consideration of €11 million. The agreement was also granting Archimedia the right to partially or wholly convert this shareholding stake into up to three predefined Aman Villas (the 'Conversion Villas') for a predetermined value and percentage per Villa. The first €1 million of the consideration was received at signing, while the completion of the transaction and the payment of the €10 million balance was subject to customary due diligence on the project and the issuance of the construction permits for the Conversion Villas prior to a longstop date set at 1 April 2011. On 28 March 2011, the Company reached an agreement with Archimedia to vary the original terms of the sale agreement, which was followed by the Company and Archimedia entering into an amended sale agreement on 13 March 2012. The Company has already received US$12,422 thousand and €1,300 thousand, while US$978 thousand and €800 thousand, plus any additional consideration that may be due depending on the exact size and features of the Conversion Villas, will be received upon completion of the Conversion Villas.  The total receivable amount of €1,577 thousand (31 December 2011: €8,747 thousand) is included in receivables and other assets (see note 13).

On 22 June 2012, the Company and TA agreed to the exchange of TA's 34.14% shareholding in Dolphin for a direct 50.25% participation in DCI H2. The Aristo exchange took place on a Net Asset Value ('NAV') for NAV basis before deferred income tax liabilities and, as such, was valued at approximately €375 million.  Under the same shareholder agreement, neither party may sell or transfer the beneficial ownership of any shares of Aristo to third parties without first making an offer in writing to sell the same to the other party while each party retains tag along rights in the event of a sale of the shares by the other party.

Development agreements

Eastern Crete Development Company S.A., a subsidiary of the Group, has signed a development management agreement with a company related to the non-controlling shareholder of Plaka Bay under the terms of which this company undertakes to assist Eastern Crete Development Company S.A. to obtain all permits required to enable the development of the project as well as to select advisers, consultants, etc., during the pre-construction phases. The development manager receives an annual fee.

Subject to obtaining the necessary permits, DCI H7 is obliged to construct the infrastructure on the land retained by DR Beachfront Real Estate LLC ('DRB'), the former majority shareholder of PGH. The total provision for the above as at 30 June 2012 is US$19 million (€15,091 thousand) (31 December 2011: €15,058 thousand) with the long-term portion included in other non-current liabilities (see note 19) and the short-term included in trade and other payables (see note 20).

Pedro Gonzalez Holdings II Limited, a subsidiary of the Group, has signed a Development Management agreement with DCI Holdings Twelve Limited ('DCI H12') in which the Group has a stake of 60%. Under its terms, DCI H12 undertakes, among others, the management of permitting, construction, sale and marketing of the Pearl Island project.

22.5 Other related parties

During the period, the Group incurred the following related party transactions with the following parties:

Related party name

€'000

Nature of transaction

Aristo Accounting S.A.

189

Accounting fees

John Heah, non-controlling shareholder of SPV10

24

Design fees in relation to Kea Resort project and Playa Grande project

Iktinos Hellas S.A.

 

25

Project management services in relation to Sitia project and rent payment

J&P Development S.A.

30

Project management services in relation to Cape Plaka project

23. Business combinations

During the six-month period ended 30 June 2012, the Group, under the Aristo exchange agreement (see note 22.4), reduced its participation in DCI H2 from 100% to 49.8%, as follows:




€'000

Investment property (see note 9)



(594,098)

Property, plant and equipment (see note 10)



(143,362)

Equity accounted investees (see note 12)



(8,757)

Deferred tax assets (see note 18)



(509)

Trading properties (see note 11)



(247,749)

Receivables and other assets



(22,573)

Cash and cash equivalents



(1,141)

Loans and borrowings



303,956

Deferred tax liabilities (see note 18)



58,222

Bank overdrafts



33,242

Trade and other payables



26,568

Net assets on which control was lost



(596,201)

Equity accounted investees (see note 12)



265,566

Net assets disposed of



(330,635)

Own shares exchanged



375,303

Net gain on exchange



44,668

Cash effect on exchange:




Proceeds on exchange



-

Cash and cash equivalents



(1,141)

Bank overdrafts



33,242

Net cash inflow on exchange



32,101

During the six-month period ended 30 June 2011, the Group increased its ownership interest without any change in control in the following entity:


PGH


€'000

Non-controlling interests acquired

86

Consideration transferred

-

Gain on acquisition recognised in equity

86

The Group has increased its shareholding interest in PGH by 0.21% as a result of a dilution in non-controlling interests.

During the six-month period ended 30 June 2011, the Group disposed of its 100% stake in the following Cyprus subsidiaries:


Single Purpose

Single Purpose



Vehicle Eighteen

Vehicle Ninenteen



Limited

Limited

Total


€'000

€'000

€'000

Equity accounted investees (see note 12)

(9,228)

(3,705)

(12,933)

Other net (assets)/liabilities

(130)

21

(109)

Net assets disposed of

(9,358)

(3,684)

(13,042)

Proceeds on disposals

11,250

3,750

15,000

Gain on disposal recognised in profit or loss

1,892

66

1,958

Cash effect on disposal:




Proceeds on disposal

11,250

3,750

15,000

Cash and cash equivalents

-

-

-

Net cash inflow on disposal of subsidiaries

11,250

3,750

15,000

During the six-month period ended 30 June 2011, the Group reduced its ownership interest without losing control in the following Cyprus subsidiaries:


DolphinCI




Fourteen Limited

SPV 10

Total


€'000

€'000

€'000

Non-controlling interests disposed of

(958)

979

21

Proceeds on disposal

11,328

4,139

15,467

Less: receivables assignment to new shareholders

(8,020)

(4,914)

(12,934)

Net proceeds on disposal

3,308

(775)

2,533

Gain on disposal recognised in equity

2,350

204

2,554

Cash effect on disposal:




Net proceeds on disposal

3,308

(775)

2,533

Cash and cash equivalents

-

-

-

Net cash inflow on disposal of subsidiaries

3,308

(775)

2,533

24. FINANCIAL RISK MANAGEMENT

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as at and for the year ended 31 December 2011.

Risk from economic crisis

The recent escalation of the sovereign debt crisis in Greece (and on a smaller scale in Cyprus) has ignited discussions in the international media involving scenarios of default and/or Greece's exit from the Eurozone. Even though the impact of such eventualities on the domestic economy would be admittedly detrimental, it is not anticipated that they will necessarily impact Dolphin's business model in a negative way which, like other export-driven sectors, essentially relies on external (and not domestic) demand.  On the contrary, Greek and Cypriot tourism has witnessed impressive growth in 2011 and was stabilized during the first six months of 2012 whilst the debt crisis has reduced construction costs for the projects that the Group has under development and is expected to lower the operational expenses for our resorts in both countries. Also, it has been a catalyst in adopting a faster entitlement process for development projects in Greece.

The general economic environment prevailing in the south-east Europe area and internationally may affect the Group's operations to a significant extent.  Concepts such as inflation, unemployment and development of the gross domestic product are directly linked to the economic course of every country and any variation in these and the economic environment in general may create chain reactions in all areas thus affecting the Group.

25. Commitments

As of 30 June 2012, the Group had a total of €1,000 thousand contractual capital commitments on property, plant and equipment (31 December 2011: €7,876 thousand).

Non-cancellable operating lease rentals are payable as follows:


30 June 2012

31 December 2011


€'000

€'000

Less than one year

19

19

Between two and five years

80

81

More than five years

2

13

Total

101

113

26. Contingent liabilities

Companies of the Group are involved in pending litigations. Such litigations principally relate to day-to-day operations as a developer of second-home residences and largely derive from certain clients and suppliers. Based on the Group's legal advisers, the Investment Manager believes that there is sufficient defence against any claim and they do not expect that the Group will suffer any material loss. As a result, no provision has been recorded in relation to this matter in these condensed consolidated interim financial statements.

If investment properties, trading properties and property, plant and equipment were sold at their fair market value, this would have given rise to a payable performance fee to the Investment Manager of approximately €61 million (31 December 2011: €63 million).

In addition to the tax liabilities that have already been provided for in the condensed consolidated interim financial statements based on existing evidence, there is a possibility that additional tax liabilities may arise after the examination of the tax and other matters of the companies of the Group.

27. EVENTS AFTER THE REPORtING PERIOD

On 5 July 2012, the Company proceeded with the cancellation of 227,044,080 own shares that had been received through the Aristo exchange, bringing the total number of Company shares in issue to 438,004,270.

On 3 August 2012 Dolphin received a Conversion Notice from Archimedia to convert 6.43% of its shares in Amanzoe in exchange for an Aman Villa, and is in the process of finalizing the relevant documentation for the completion of the conversion. Following the conversion, Archimedia's shareholding in Amanzoe will be reduced from 14.29% to 7.86%.

On 6 August 2012, the Company signed an agreement for the sale of eight out of the nine remaining Seafront Villas, part of the Mindcompass Overseas Limited group of entities. The total base net consideration agreed for this sale is €12 million with the Company also entitled to a 35% profit participation on the sales generated by the purchaser from the further sale of four villas above a purchase price of €2 million. Moreover it is agreed that the Company will undertake the construction contract for the completion of the Villas. A €1 million deposit has been paid upon signing, €2 million is due by 6 November 2012, €3 million is due upon the release of the existing mortgages on the Villas, €4 million is due in parallel with the construction of the Villas and the €2 million balance is due together with the sale of the Villas or at maximum on the third anniversary from the transaction.

On 5 September 2012 the Company signed a sales agreement with regional investor group led by Mr. Alberto Vallarino for the sale of its 60% shareholding in Peninsula Resort Holdings Limited, the entity that indirectly  holds the land for Pearl Island's Founders' phase of the Pearl Island Project. The consideration for the sale was a cash payment of US$6 million (50% paid at closing on 14 September 2012 and 50% one year from closing) and a commitment to invest an additional c. US$35 million of development capital within a maximum period of 2 years in order to complete the aforementioned Phase of the project.

On 24 September 2012 the Company signed an agreement with an affiliate of the Swiss Development Group for the sale of a 75% stake in the Nikki Beach Resort & Spa at Porto Heli together with a contract for the management and construction of the project for a minimum expected net consideration of €5.9m, that may vary depending on the loan facility obtained, the returns realized and the final construction cost. A €225 thousand deposit has already been received. A further €1 million is due on 30 September 2012 and a €1.9 million payment is due on 31 October 2012. The balance of the consideration is payable in stages depending on the conclusion of the development loan and the pace of project construction.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
IR KMGZLFVRGZZZ
UK 100

Latest directors dealings