(WPR) West Pioneer Props

West Pioneer Properties Limited

("West Pioneer" or the "Company")

Interim Results

West Pioneer Properties Limited (AIM:WPR), a leading developer and operator of shopping malls and mixed use developments in west and south India, announces its interim results for the 6 months ended 30 September 2011.

Highlights

Commenting on the results, Amit Jatia, Chairman of West Pioneer, said: "This has been a challenging period not only for the Company but for all Indian real estate developers coping with a tightening of the country's monetary policies to counter inflation and  slow  project approvals by  government bodies.  However, I am confident that our persistent and focused efforts to position the Kalyan mall as a leading value shopping and lifestyle destination will produce significant results in the near future.  The mall continues to cement its position as the most appealing shopping and entertainment destination for the local population in its catchment area.  

"We are committed to the delivery of quality development of Residential and Commercial projects with ever strengthening support from our customers.  The recent agreement to develop and sell the Company's Aurangabad asset will boost our ability to accelerate progress at the more value generating projects at Kalyan and Nashik.  The Board remains optimistic in its ability to seek out further opportunities in the retail, hospitality, residential and commercial sectors which will bring best value to our shareholders going forward."

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Chairman's Statement

In the period ended 30 September 2011, West Pioneer achieved revenue and other income of $2.4 million (2010: $2.2 million), including property rentals and other operating income of $2.3 million (2010: $2.0 million).  Loss before tax of $0.6 million (2010: loss of $0.4 million) and basic loss per share was $0.003 (2010: loss of $0.007).  Net assets were $61.0 million (2010: $63.0 million), including cash and cash equivalents of $1.12 million (2010: $1.68 million).  Interest bearing loans and borrowings decreased from $7.8 million to $7.4 million during the period, inclusive of debt repayments.

Indian Economy

Whilst the macro-economic fundamentals of the Indian economy remain attractive, persistently high inflation rates and ensuing tightening of monetary policy by the Central Bank are contributing to lower than expected rates of growth.  With Q1 and Q2 GDP growth at 7.7% and 6.9% respectively, the Central Bank has revised the growth estimate downward from 8% to 7.6% for the year 2011/12.  West Pioneer's low gearing has ensured that its cash flows have not been badly affected by the resulting higher interest rates.  The Board will however, as a result of the increased risk free rate in the country, be keeping under review the appropriateness of the discount rates it is using in valuing the Company's investment properties and this could lead to an impairment in the carrying value of these properties being recognized in the 31 March 2012 results.

Impact of depreciation of Rupee   

During recent months the Indian Rupee has fallen in value by more than 10% against the US Dollar, falling from 45.7 rupees dollar as at 31 March 2011 to 49.7 rupees to the dollar as at 30 September 2011.  This has negatively impacted the Company's reported Net Asset Value by US$ 5.76 million during the 6 months ended 30 September 2011.  The value has fallen even further to 51.5 rupees as of today and if this is not reversed by the end of the Company's financial year in 31 March 2012 then there would be a further fall in the Company's reported Net Asset Value as at the year end.

On a more positive note, India's central government has reiterated its commitment to reforming Foreign Direct Investment ("FDI") policy by proposing FDI in multi-brand retail and also increasing the FDI limit in single-brand retail to 100%.  The plan by the government to open up the Indian retail market to global retail chains is a positive undertaking for all participants in the sector.  However, the proposals have met with strong resistance and are currently on hold.

Operating Review

Nashik

The Company continues with its planned development of a 300,000 sq. ft. shopping mall and has been in advanced negotiations with a number of anchor tenants with a view to pre-leasing space in the mall.  Further potential has been identified for a hotel on the site with a management agreement with InterContinental Hotels Group in place for the development of a Holiday Inn hotel.

However, in the past few months there has been slow progress in processing project approvals by government bodies.  Unfortunately for West Pioneer, due to the need for on going regulatory and government approvals, property developers have been among the worst hit by the slow movement in decision making and progress at the Company's Nashik project has slowed significantly as a result of this.  However, the Board is hopeful of a resolution in the near future.

Aurangabad

Since the period end and as announced on 7 November 2011, the Company entered into a non-binding Memorandum of Understanding ("MoU") to develop and sell, subject to contract, its asset in Aurangabad, India ("Aurangabad") to Golden Crown Realtors Limited Liability Partnership ("GCR") for a total cash consideration of approximately $15.2 million.  The Company has started developing the project in three phases which, when completed, will include built up retail space of approximately 148,000 square feet and built up warehousing space of approximately 398,000 square feet as per GCR's requirement on the site prior to completing the transaction.  West Pioneer will fund the construction costs up to a maximum amount of approximately $2.8 million, with all further costs being borne by the purchaser.

The proposal to develop and sell the Aurangabad asset follows the Board's decision to focus efforts and resources on the projects on which it has the greatest visibility and those which it considers will generate the most value for shareholders, namely its mixed use development in Kalyan and its development project in Nashik.  Accordingly, the sale proceeds will be used to accelerate and expand the existing projects at Nashik and Kalyan.

Kalyan 

Phase I - Retail

West Pioneer's efforts to reposition the Kalyan mall as leading value and lifestyle destination are showing positive results with a number of leading national Indian lifestyle brands expressing strong interest in occupying the remaining space in the mall.  The mall is currently 74% leased.  Other key performance indicators such as trading density and footfall numbers have remained positive over the period.

Phase II - Kalyan residential

The Company is disappointed to report that the three-tower residential project of 560,000 sq. ft., construction of residential towers (A and B) has not progressed at the desired pace in the last few months on account of delays in approvals from local authorities and a temporary shortage of manpower. These problems have now been resolved and the Company has regained momentum in the construction of both towers.

Customer response to the project has been very encouraging with 85% of the apartments sold and with current sale rates commanding approximately a 50% premium to the launch rate.

Phase III - Commercial Plaza

The Company is pleased to report that the development of the three story commercial plaza of 68,000 sq. ft. has begun with ground break in November 2011.  The plaza will consist of three floors, ground, first and second.  The ground floor will be leased and the first and second floor offices will be sold.  The development has achieved pre-sales of 30% of the space available for sale.  The current sale rate commands a premium of around 50% over prevailing residential sale rates.

Directorate changes

The Company was pleased to announce on 23 September 2011 that Chris Hough, aged 52, joined the Board as a Non-Executive Director.  Chris qualified as a Chartered Surveyor and has worked on a wide range of construction projects both in the UK and overseas for last 34 years. He is one of the founding members of the Association of Project Management, a registered charity in the United Kingdom which aims to develop and promote the professional disciplines of project management and currently has over 19,000 individual members and 500 corporate members.

In recent years, Chris has acted as Project Manager on a $2 billion leisure development in Zanzibar, the $20 million Central Bank in Mauritius and provided programming advice for the new $25 million Hilton Hotel, also in Mauritius.  In 2007 he was the lead Project Director on a €120 million retail mall development in Romania.  In the UK, Chris has a range of experience on new build and refurbishment projects in both public and private sectors, including the Broadgate Development and the Imperial War Museum.  Most recently Chris has been providing development and project management advice to a development and finance company working in London.  We are confident that his knowledge and expertise will be invaluable to the West Pioneer as we continue to make progress on the Company's developments.

The Company also announced that Mihir Thacker, Non-Executive Director of the Company stepped down from the Board at the same time in order to pursue other business interests.  The Board would also like to thank Mihir Thacker for his contribution to the Company over the years and wish him well in the future.

Amit Jatia

Chairman

8 December 2011

Interim consolidated income statement

for the six month period ended 30^th September 2011

Interim consolidated statement of comprehensive income   

for the six month period ended 30^th September 2011

Interim consolidated statement of financial position

 As at 30^th September 2011