Dci Advisors Regulatory News (DCI)

18 Mar 2008 07:02

Dolphin Capital Investors Limited18 March 2008 18 March 2008 Dolphin Capital Investors Limited (DCI.L) Preliminary results for the year to 31 December 2007 DOLPHIN RECORDS 107% RISE IN 2007 NAV AND EXCELLENT PROGRESS ACROSS ITS OPERATIONS Dolphin Capital Investors Limited ("Dolphin" or the "Company"), the leadinginvestor in the residential resort sector in south-east Europe and the largestreal estate investment company currently listed on AIM, announces its resultsfor the year to 31 December 2007. Highlights of the year include: • Total Net Asset Value ("NAV") of the Company of €1,691 million before deferred income tax liabilities ("DITL") (31 December 2006: €552 million; 30 June 2007: €1,295 million); total NAV of €1,524 million after DITL (31 December 2006: €509 million; 30 June 2007: €1,161 million) • NAV per share of 227p and 205p before and after DITL, up 107% and 103% respectively (31 December 2006: 110p and 101p; 30 June 2007: 167p and 150p). Cash adjusted NAV per share before DITL of 239p, up 74% (31 December 2006: 137p) • Profit before tax of €574 million (31 December 2006: €110 million; 30 June 2007: €212 million), resulting in fully diluted earnings per share of €1.24 • NAV uplift driven primarily by the inclusion of all assets of Cyprus' largest holiday home developer, Aristo Developers Plc ("Aristo"), following the successful acquisition via a public offer in April 2007, and a strong uplift in the valuations of existing projects due to operational and zoning advances • Healthy growth in Aristo's financial performance during 2007, with a 3% increase in home sales at €167 million (€162 million in 2006) corresponding to a 6% increase in holiday home units at 646 (610 in 2006) and a 7% increase in profit after tax of €26 million (€24 million in 2006) • Successful completion of third fundraising of €450 million in June 2007 • Robust balance sheet of €2.4 billion of total assets with only €297 million of financial debt and a pro-forma cash balance of €318 million • Active investment programme, consolidating the Company's track record of rapid capital deployment, establishing the Company as what is believed to be the largest seafront development landowner in Greece and Cyprus and bringing the total land portfolio to circa 48 million m2 (2006: 16 million m2) and the number of large-scale resorts within the portfolio to 14 (2006: 8), with more than 60 smaller projects within Aristo: o Two acquisitions in Greece o Completion of first investments in Croatia and Turkey o First investment outside core investment region through the acquisition of Playa Grande Golf Resort in the Dominican Republic o Purchase of minority stakes in Venus Rock, Kilada Hills, Lavender Bay, Seascape Hills and Scorpio Bay o Additional adjacent plots acquired in Kilada Hills, Seascape Hills, Sitia Bay, Lavender Bay and Eagle Pine • Significant progress with the design, branding and permitting of most of the Company's major projects during the year Commenting, Andreas N Papageorghiou, Chairman of Dolphin Capital Investors,said: "I am pleased to report significant achievements in Dolphin's second full yearof operations. The key acquisitions executed in 2007, along with record Aristosales and profit numbers, the continued progress in the design, planning andpermitting of the core residential resort projects and the attractive investmentpipeline pave the way for an exciting and successful 2008. I am confident thatthe team at Dolphin Capital Partners will continue to meet the market challengesand create significant NAV growth in the coming year." Miltos Kambourides, founder and Managing Partner of Dolphin Capital Partners,commented: "Over the past year Dolphin has maintained its rapid pace of growth andgenerated substantial shareholder value. Since admission to trading on AIM onlytwo years ago, the Company has recorded a 3.5x increase in NAV per share beforeDITL, buoyed in large part by strategic investments and permitting advancesacross the entire portfolio. Dolphin continues to sustain a significant competitive advantage in its targetregion. In late 2008, we expect to commence construction of the Company's firstlarge-scale, master-planned residential resort developments in Greece andCyprus. We look forward to the future with considerable excitement andconfidence." For further information, please contact: Dolphin Capital PartnersMiltos E. Kambourides miltos@dolphincp.comPierre A. Charalambides pierre@dolphincp.com Financial Dynamics(Financial PR)Stephanie Highett/Nicole MarinoTel: +44 (0) 20 7831 3113 Grant Thornton Corporate Finance(Nominated Adviser)Philip SecrettTel: +44 (0) 20 7383 5100 Panmure Gordon(Broker)Richard Gray/Dominic Morley/Andrew PottsTel: +44 (0) 20 7459 3600 Notes to editors Overview Dolphin Capital Investors is the leading investor in the residential resortsector in the eastern Mediterranean and the largest real estate investmentcompany listed on AIM by market capitalisation. Dolphin's investment model is focused on generating strong capital growththrough investing in early-stage, large-scale, leisure-integrated residentialresorts primarily in south-east Europe, targeting holiday and retirement homebuyers from northern Europe, Russia and the Middle East. The Company partnerswith some of the world's most recognised architects, golf course designers andhotel operators for the creation of sophisticated projects and, since April2007, benefits from the development expertise of Dolphin's largest investment,Aristo, one of south-east Europe's most experienced holiday home developers. Since inception in 2005, Dolphin has raised €859 million of equity funds, hasestablished a track record of rapid capital deployment and significant NAVcreation, while adhering to stringent risk management and acquisition criteria,and has grown to become one of the largest private seafront landowners in Greeceand Cyprus. The Company's portfolio currently comprises 14 large-scale, leisure-integratedresidential resorts under development in Greece, Cyprus, Croatia, Turkey and theDominican Republic and more than 60 smaller holiday home projects through Aristoin Greece and Cyprus. Dolphin is managed by Dolphin Capital Partners ("DCP" or the "Investment Manager"), an independent private equity management firm that specialises in real estate investments in south-east Europe. Key highlights in Dolphin's evolution Q3 2005 - Dolphin founded with €5 million of seed capital Q4 2005 - Dolphin admitted to trading on AIM, raising €104 million Q1 2006 - Dolphin executes first investment in Greece (Kilada Hills Golf Resort) Q2 2006 - Dolphin follows on with first investment in Cyprus (Apollo HeightsPolo Resort) and an additional acquisition in Greece (Scorpio Bay Resort) Q3 2006 - Continued investment activity in Greece (Amanmila Resort, Lavender BayGolf Resort) Q4 2006 - Secondary AIM fundraise of an additional €300 million - Dolphin completes first acquisition in Crete (Sitia Bay Golf Resort) and partners for a second time in Greece with Aman Resorts in its newly executed Seascape Hills Resort Q1 2007 - Dolphin makes first investment in Croatia (Livka Bay Resort) Q2 2007 - Dolphin purchases 85% stake in Aristo - Third AIM fundraise of an additional €450 million Q3 2007 - Dolphin purchases a 60% stake in Plaka Bay Resort Q4 2007 - Dolphin acquires site on the island of Tzia - Dolphin makes first investment in Turkey (LaVanta and Port Kundu Resorts) - Dolphin makes first investment outside south-east Mediterranean, with acquisition of Playa Grande Golf Resort in the Dominican Republic - Minority buy-out and significant zoning improvements for Venus Rock Golf Resort Typical project characteristics • Coastal land sites typically more than 100 hectares (1 million m2) in size with visible development potential • Surrounded by unspoilt natural environment and in close proximity to areas of historical and cultural significance • Easily accessible for both local and international travelers alike • Master-planned as sophisticated residential resorts integrated with leisure components such as golf, hotel, spa, marina and other leisure activities • Branded and managed by world-renowned, luxury operators • Targeting affluent holiday/retirement home buyers from northern Europe, Russia and the Middle East Investment proposition Create strong NAV growth by acquiring undervalued seafront sites andtransforming them into fully permitted, high-end, premium-branded developmentprojects • Acquisitions: o Identify and acquire undervalued large developable sites with strong value appreciation potential o Use tax efficient holding structures to minimise capital gains tax • Design and branding: o Employ internationally acclaimed master-planners, architects, and designers to create world-class products o Partner with luxury operators and marketers to create highest quality branding • Development capability: o Leverage on the expertise of Aristo and other local developers o Obtain construction permits through a well-planned process o Appoint the most credible construction firms on a turn-key basis through tender offers Competitive advantages • First-mover advantage in the region allows for optimal selection of sites, often off-market, under limited competitive pricing pressure • Portfolio synergies through economies of scale and expertise transfer in design, management, operations, marketing and financing • Solid business fundamentals, gross assets over €2.4 billion, with financial debt only representing 12% of gross assets • Multiple options for exit at various stages of each project; key driver is to create and crystallise shareholder value • Dedicated investment manager with extensive local knowledge, international network and ability to overcome the high barriers to entry in the targeted markets Chairman's Statement 2007 was a year of extraordinary growth for the Company. After successfullyraising an additional €450 million of equity funds in June 2007, Dolphin becamethe largest real estate investment company listed on AIM. A strong run ofinvestment activity also saw continued expansion in the Company's landportfolio, which grew from 16 million m2 in December 2006 to 48 million m2 as at31 December 2007. Most importantly, the Company's total NAV over the samereporting period grew from €552 million to €1,691 million before DITL and from€509 million to €1,524 million after DITL.* Accordingly, the NAV per share figures at 31 December 2007 stand at 227p (€3.08)and 205p (€2.78) before and after DITL respectively**, implying a 107% and 103%annual increase over the 31 December 2006 reported figures. When adjusting forthe uninvested cash, the NAV per share before DITL is 239p (€3.25) correspondingto an uplift of 74% over 2006. Dolphin made a strong start to the year with the Company's first investment inCroatia. The most significant investment of the year was the acquisition inApril 2007 of an 85% stake in Aristo. This transaction allowed Dolphin toacquire one of the region's largest private landowners and leading residentialdevelopers, markedly strengthening the Company's portfolio and developmentcapabilities. Shortly thereafter, Dolphin made its first foray in the growing Turkish holidayhome market, with investments in two holiday home projects near Antalya. InGreece, two major sites were acquired in Crete and on the island of Tzia,alongside the ongoing expansion of the majority of the Company's coreresidential resort projects. Finally, the year closed with Dolphin's first venture outside south-east Europe:a landmark transaction in the Dominican Republic which is expected to become theisland's first Aman-branded resort. The key acquisitions executed in 2007, along with record Aristo sales and profitnumbers, the continued progress in the design, planning and permitting of thecore residential resort projects and an attractive investment pipeline pave theway for an exciting and successful 2008. I am confident that the team at DolphinCapital Partners will continue to meet the market challenges and createsignificant NAV growth in the coming year. Andreas N PapageorghiouChairman18 March 2008 * The NAV figures include the €439 million net placing proceeds of the June 2007 fundraise. ** Number of shares (inclusive of shares issued from exercise of warrants) - 549,036,141. Investment Manager's Report Another year of strong growth We are very pleased to report that in its second full year of operations Dolphinhas continued to maintain its rapid pace of growth and generate shareholdervalue. Since admission to trading on AIM only two years ago, the Company hasrecorded an increase of 3.5x in its NAV per share before DITL, buoyed in largepart by strategic investments and permitting advances across the entireportfolio. Over the past six months alone, NAV before DITL increased by €396million (or 31%) from €1,295 million as at 30 June 2007 to €1,691 million as at31 December 2007, driven primarily by: • The rezoning of 123 hectares of Venus Rock Golf Resort ("Venus Rock ") that added 111,000 m2 of buildable potential; • The receipt of water permits for the two golf course developments within Venus Rock and for one in Eagle Pine Golf Resort ("Eagle Pine"), in total representing close to 300,000 m2 of residential real estate; • The Company's acquisition of the remaining minority stakes in Venus Rock, Kilada Hills Golf Resort ("Kilada Hills"), Lavender Bay Golf Resort ("Lavender Bay") and Seascape Hills Resort ("Seascape Hills"); • The increase in the freehold development potential for Lavender Bay through the award of a government certification relating to a 38-hectare area of the site; • New site acquisitions such as Kea Resort ("Kea") on the island of Tzia, Playa Grande Golf Resort ("Playa Grande"), Plaka Bay Resort ("Plaka Bay") and various others in Cyprus as well as land expansion for Kilada Hills, Seascape Hills, Lavender Bay and Sitia Bay Golf Resort ("Sitia Bay"); • Strong sales and operating profit by Aristo; and • Land value appreciation in several locations across Greece and Cyprus. As the NAV per share is quoted in Pounds Sterling, it should also be noted thatc. 10% of the absolute increase in the quoted NAV per share figures isattributable to the depreciation of the Pound Sterling against the Euro over thesecond half of 2007. Central to the Company's success are the solid business fundamentals thatinclude: • total assets of approximately €2.4 billion as at 31 December 2007; • low gearing, with debt of approximately €297 million; • a strong pro-forma cash balance of €318 million as at 31 December 2007*; and • a strong home sales performance by Aristo throughout 2007, which generated €26 million of operating profit after tax, excluding revaluation gains and DITL. As an example of our confidence in the future growth potential of Dolphin, wepurchased 33.7 million shares in the Company through Silver Capital Holdings, aninvestment vehicle 50% owned by ourselves. When added to the 3.2 million sharesalready owned and the 31.5 million shares to be awarded from the 2007 warrantscheme (for further details, please refer to the Finance Director's Report), theInvestment Manager will control a total of 68 million shares (12%), of which 52million shares (9%) are indirectly owned, representing one of the largestshareholders in the Company and firmly aligning our interests to those of theCompany's remaining shareholders. Key personnel additions have also been undertaken to ensure that the DCP team isbest placed to continue to deliver on its strategic objectives and therebyenhance shareholder value. The number of professionals at DCP has grown to morethan 25, including the notable recent appointment of Michael Tsirikos,previously Tax Managing Partner at Deloitte Greece, to become DCP's ChiefOperating Officer. Team expansion has occurred across the acquisitions, assetmanagement and accounting departments, all functions that support Dolphin'sinvestment and development strategy through the next phase of its growth andevolution. *Adjusted for the payable Aristo management incentive fee of €73 million for2007. A growing market Underpinned by solid business fundamentals and a strengthened team of industryprofessionals, Dolphin is strongly positioned to capitalise on a continuallygrowing global tourism industry. In 2007, world tourism statistics exceeded allexpectations, with a record 898 million arrivals, a 6% increase over 2006according to the latest UNWTO World Tourism Barometer. Of the additional 52million international tourist arrivals, Europe claims by far the strongestmarket, totalling 480 million tourists in 2007, with destinations such as Turkeyand Greece recording double digit growth rates of 18% and 12% respectively,proof of the increasing popularity of the region. Along with the dramatic increase in global tourism, the luxury goods andservices industry (Source: Barclays Wealth, December 2007) is expected tocontinue to evolve with increasing numbers of aspirational and wealthyconsumers. In spite of the recent credit market difficulties, the global luxurymarket is forecasted to grow by 5.8% during 2008 (Source: Sanford Bernstein)with future expansion expected to come from a growing network of high net worthindividuals ("HNWIs"), in particular from emerging markets. According toresearch, HNWIs in the top income brackets grew almost 11% over the last fiveyears, whilst the wealth of emerging markets' billionaires has increased from11% of global billionaires' wealth to 28% over the past six years. Global travelvolumes remain on an upward track, with the highest 3% tourist spend accountingfor 20% of all tourism expenditure, according to a survey by ILTM, and expectedto rise by up to 9% per annum until 2009 in the UK alone. Through the Company's ownership of what the Investment Manager believes to besome of the most pristine coastal land sites in south-east Europe and beyond, aswell as its partnerships with some of the world's most recognised luxuryoperating brands in the sector, we believe Dolphin is well positioned to capturethe increasing demand for luxury holiday home products which appearsparticularly popular amongst traditional and new emerging markets such asRussian and Middle-Eastern customers who are not currently affected by therecent credit crisis. Since the year end, Dolphin has made continued strides inexpanding its network of operating partners. In addition to having concludedthree agreements with Aman Resorts and three agreements with GHM Hotels, termsheets have recently been signed with Oberoi Hotels and Resorts and KempinskiHotels, whilst negotiations are advancing with numerous other luxury brands forDolphin's remaining major residential resort projects. New investments Dolphin's investment activity has been brisk, continuing a track-record of rapidcapital deployment and successful geographical expansion. Invested and committedfunds as at 31 December 2007 amounted to €539 million and €693 millionrespectively. A notable €437 million and €492 million was invested and committedin new project acquisitions during 2007 respectively, which enabled the Companyto: • Consolidate its presence in Greece through: o the acquisitions of Plaka Bay and Kea; o land expansion in its largest developments such as Kilada Hills, Seascape Hills, Lavender Bay and Sitia Bay; and o the execution of minority buy-outs with respect to Scorpio Bay, Kilada Hills, Seascape Hills and Lavender Bay where the Company is now the sole owner. • Become the largest private landowner and holiday home developer in Cyprus, through the acquisition of an 85% stake in Aristo, the leading Cypriot developer. This was a transformational event for the Company, serving to double its land holdings and integrating leading development expertise, local market knowledge and significant operational synergies into Dolphin as the Company continues to build upon its in-house sales and development platform for its Greek and Cypriot projects alike. Aristo's securing of an €85 million debt facility in August 2007 has further boosted the Company's acquisition activities in Cyprus, with the purchase of prime land in strategic locations in the districts of Paphos and Limassol, most notably an 87-hectare site adjacent to the existing Eagle Pine development, and the purchase of the 13% minority stake in Venus Rock, Aristo's flagship asset and currently Dolphin's largest and most valuable project. • Complete the first acquisitions in Croatia and Turkey through the investments in Livka Bay Resort ("Livka Bay"), on the island of Solta, Croatia and Port Kundu Resort ("Port Kundu") and LaVanta Resort ("LaVanta"), in Antalya, Turkey. • Execute the first landmark transaction outside south-east Europe through the acquisition of what is set to become the Dominican Republic's first Aman Resort. Playa Grande is the first acquisition within the 5% investment allocation for projects outside of Dolphin's core investment region, following the amendment in the Company's investment policy at the latest fundraise in June 2007. In the first two months of 2008, the Company has continued its positive run ofinvestment activity with: • The divestment of one of Aristo's non-core assets through the sale of Aristo's 60% stake in A&A Super Aphrodite Waterpark (the "Waterpark') at an 11x profit multiple. • The buy-out of Dolphin's 10% minority partners in Livka Bay. Development progress Dolphin made significant strides through 2007 in the design, planning andpermitting of its existing projects, all of which contributed to considerablevalue uplifts in Dolphin's year end numbers. Particular highlights included: • Kilada Hills and Seascape Hills received the approval of the preliminary environmental impact study for their latest designs and their respective tourist suitability permits from the Greek National Tourist Organisation for the GHM and Aman hotel components respectively. • Lavender Bay expanded its potential for the project's freehold residential buildable m2, based on a government certificate relating to a 38-hectare portion of the site. The awards of the 2013 Mediterranean Games to the nearby cities of Volos and Larissa, whose golfing events are expected to be hosted at Lavender Bay, are also expected to fast-track the project's permitting process, with award of the final environmental permit in relation to the project's hotel, desalination and wastewater treatment plants expected imminently. • Approvals of the water applications for Venus Rock and Eagle Pine, typically the penultimate planning milestone before construction permits are granted. • Favourable amendments to the zoning status of Venus Rock, allowing for the conversion of 56 hectares of land from agricultural to residential for holiday home use with a 25% building coefficient and the conversion of 43 hectares from forest to agricultural land. The project also benefits from the change in use and increase in building coefficient on 7 and 17 hectares that allow for the development of commercial facilities and hotel/residential units with a 25% building coefficient respectively. • Significant permitting milestones for Port Kundu, with final zoning permits for Phase I achieved in October and final construction permits expected in the near term. Meanwhile, Dolphin's second Turkish project, LaVanta Resort, is already in the construction phase, having already completed the first phase shell works and half of the first phase pre-sales. So far in 2008, the Company has also seen further development progress that isto be noted and which is expected to favourably impact future NAV: • The approval of the Urban Plan for Livka Bay's first phase hotel, residential and marina components by the Ministry of Environmental Protection, Planning and Construction. • Approval of the final Environmental Impact Study for the GHM Hotel of Kilada Hills. Aristo 2007 marked a successful and evolutionary year for Aristo. Since the acquisitionin April 2007 and under Dolphin's direction, Aristo has focused on restructuringand product-upgrading initiatives, set to maximise efficiency and profitability.The company has also been working hard on integrating the cross-functional salesand development teams in Aristo's Cyprus and Greece operations. As highlighted in previous announcements, a considerable emphasis continues tobe placed on re-branding and re-positioning efforts aimed at facilitating theupgrade of some of Aristo's larger and more valuable development projects. Theservices of experienced branding consultancy firms have been sought over therecent months, with an immediate focus on the corporate Aristo profile and theVenus Rock development. Residential sales in the latter were put on hold whileEDSA was appointed to make significant improvements to the project'smaster-plan, which has now been finalised and submitted for permitting approval.Architectural concepts for Venus Rock are currently being formulated by leadingdesign firm Robert A.M. Stern Architects who have also been commissioned todesign the beachfront commercial area of the development as well as the new clubhouse. Furthermore, the profile of the project's golf component has beensubstantially elevated with the appointment of British golf legend Tony Jacklinto lead the design of the two new 18-hole golf courses. Cutting-edge design development efforts also continue for some of Aristo'ssmaller scale developments. Porphyrios Associates and Scott Brownrigg are only afew of the award-wining firms that are currently engaged in such projects,namely Pissouri Panorama and St. George's development at the company's Paphoscentral plot respectively. The effort to strengthen the Athens-based Aristo team is ongoing with therecruitment of a number of key professionals and the upgrading of its systemsand facilities. The strategic aim is to replicate the success in Cyprus andcreate the leading holiday home development company in Greece. In addition tomanaging the development of a range of Dolphin's major residential resortprojects, Aristo is making progress on a number of medium-scale, holiday homeprojects such as a 27-hectare site in Douneika, Western Peloponnesus, for whichthe permitting process has commenced, and the Remvi project in Syros, adevelopment of 44 seafront villas. The approval of final construction permitsfor 20 of the residential units in this project has already been obtained andsales will be launched shortly. In addition to a wide selection of 60+ holiday home projects currently on sale,Aristo has in its pipeline of new releases a number of attractive projects whichwill allow the company to maintain its leading position in the market. Apartfrom the very exciting and large-scale golf developments at Venus Rock and EaglePine, the following table presents a selection of holiday home projectscurrently under planning by Aristo in Greece and Cyprus: Residential Land site buildable (hectares) (m2) Aristo Hellas Tsilivi* 11 56,000 Douneika 27 42,000 Syros 1 4,798 Aristo Cyprus Pissouri Panorama 11 21,000 Magioko - Paphos 11 21,000 St. George - Paphos 15 85,000 Paphorama - Paphos 2 9,000 GTR - Paphos 14 30,000 Beachfront - Polis 6 10,600 Agnades - Polis 3 5,200 Residential - Polis 2 19,300 Riviera Beach Villas - Polis 2 3,462 Melanda Plot - Pissouri 6 12,400 Total 111 319,760 * 50% owned. Aristo's financial performance in 2007 was also very positive. Total holidayhome sales were reported at €167 million, up by 3% over 2006 with 646corresponding units sold versus 610 over the course of 2006. The company'soperating cash position also remains strong, with higher reported operatingprofit after tax up by 7% (over 2006) at €26 million. In the first two months of2008, the company also recorded a 14% increase in total unit sales over thecorresponding period in 2007, driven by higher selling prices of the order of26% albeit with lower unit sales volume. Aristo is further expected to driveorganic growth through attractive bank financing. It should be noted that thecost of bank debt for Aristo was decreased by 10bps in 2007 to 5.9%. These results are particularly encouraging when one considers (i) the withdrawalfrom pre-sales of Aristo's major projects, namely Venus Rock as well as thesmaller Aristo projects such as Pissouri Panorama and St. George, in order toredesign them and maximise future selling prices and (ii) the relative slowdownof holiday home sales to the UK market. The decrease in sales to UK purchaserswas largely offset by winning new clients from the rapidly expanding Russianmarket. In particular, Aristo's sales to Russian home purchasers increased from15% of total turnover in 2006 to 27% in 2007, while those to the Britishdecreased from 70% to 49%. In an effort to diversify its potential client-baseand secure sales against potential future market difficulties, Aristo is in theprocess of strengthening its presence in these new target markets with plans toopen additional regional offices in Russia as well as new offices in the Ukraineover the coming months, while its network of associates in central and northernEurope is continuously being expanded. In early 2008, Dolphin divested one of Aristo's non-core assets, through thesale of its 60% stake in the Waterpark, for a net cash consideration of €5million. The transaction was executed on the basis of an enterprise value forthe Waterpark of €14 million. This compares favourably with the last reportedenterprise value based on Colliers' valuation of €2.8 million and the allocatedacquisition value of €1.3 million, in turn representing profit multiples of 5xand 11x respectively. This transaction is consistent with Dolphin'srestructuring initiatives set out for Aristo following the acquisition. Finally, Aristo's delisting process is expected to be finalised during thecourse of Q2 2008, following the activation of Dolphin Capital Atlantis' ("DCA")right to squeeze out the remaining shareholders. DCA, an 85%-owned Dolphinsubsidiary and the holding company of Aristo, currently holds a 99.1% stake inAristo and upon completion of the squeeze-out process will become the sole ownerof Aristo. Dolphin Capital Foundation The Company envisions further progress in charitable activities over the comingyear through the Dolphin Capital Foundation ("DCF"), a non-profit charitableentity dedicated to assisting the surrounding regional communities andenvironments where Dolphin invests. Part of the progressive donation of up to €2million for DCF charitable projects, approved by the Board of Directors in 2007,was put to good use over the past 12 months. Amongst DCF's key contributionswas the donation of environmental maintenance equipment to the areas of KiladaHills and Sitia Bay, with delivery of the equipment to occur by early summer2008. Planned contributions are further set to materialise in Dolphin's LavenderBay over the coming months. It must also be noted that Aristo made verysignificant donations to the aid effort for the regions of Greece which weredevastated by forest fires in the summer of 2007. Investment Portfolio Land site Dolphin Dolphin Dolphin (hectares) (% stake) Investment Commitment 29 Feb 2008 (•m) 29 Feb 2008 (•m)Greece 1,812 176 275Kilada 250 100 78 85Seascape Hills 89 100 33 50Lavender Bay 306 100 15 46Scorpio Bay 172 100 11 16Amanmila 200 25 - 50 2 5Sitia Bay 250 77 13 24Branded Hotels 1 80 3 5Plaka Bay 440 60 7 26Tsilivi - Aristo 11 85 2 2Douneika - Aristo 27 85 1 1Other - Aristo 2 85