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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Direct Wonen | LSE:DIWO | London | Ordinary Share | NL0000817377 | ORD EUR0.02 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 25.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:0359S
Direct Wonen N.V.
10 April 2008
For Immediate Release 10 April 2008
DIRECT WONEN N.V.
('Direct Wonen' the 'Company' or the 'Group')
Preliminary results for the year ended 31 December 2007
Direct Wonen (AIM, DIWO), the property and financial services provider based in
The Netherlands, announces today its preliminary results for the year ended 31
December 2007.
HIGHLIGHTS
* Revenue increased 48% to Euro43.6 million (2006: Euro 29.4 million); including
contribution from acquisitions;
* EBITA increased 26% to Euro 14.1 million (2006: Euro 11,2 million), EBITDA
increased by 28% from Euro11.6 million to Euro 14.9 million, including
contribution from acquisitions;
* Property lettings revenue increased 15% to Euro11.6 million (2006: Euro10.1
million) with a continuing steady upward trend in H2;
* New property sales increased 40% to Euro 18.7 million (2006: Euro 13.4
million) against a backdrop of slower sales growth of new properties
particularly in H2;
* Financial Services revenue increased 125% to Euro13.3 million (2006: Euro5.9
million) mainly as a result of businesses acquired. Market conditions
remained challenging in the second half of 2007;
* Number of registered users on www.directwonen.nl increased by
approximately 46% to 1,025,000 offering a strong platform for cross-selling.
The acquisition of Kamernet.nl is expected to add over 1 million active
users in 2008.
* Strong growth in traffic to 5.0 million on-line visits from 3.1 million
unique visitors, up 19% and 29% respectively;
* Cash balance at 31 December 2007: Euro 56.2 million;
* Proposed final dividend of 0.96p per Ordinary Share, resulting in a
total dividend of 1.37p for the year 2007.
* Commenting on 2007 , Yvonne Swaans, CEO, said:
"2007 was a year of transition in which we became a public company, adapted our
internal organisation and made several strategic acquisitions. The Company
showed strong growth although we faced a deteriorating external environment.
With our focus on strategy and operations we have created a solid base for 2008
and beyond.
For more information please contact:
Direct Wonen Tel +31(0)70 711 5691
Irma de Jong i.dejong@directwonen.nl
www.directwonencorporate.com
Buchanan Communications Tel +44(0)20 7466 5000
Richard Darby, Nicola Cronk richardd@buchanan.uk.com
www.buchanan.uk.com
About Direct Wonen
Direct Wonen is a residential property and financial services provider based in
The Netherlands.
The Direct Wonen group of companies operates two complementary business lines:
- private residential property lettings and new property sales
- financial services intermediary promoting mortgages, consumer loans,
insurance and savings products
Both business lines utilise Direct Wonen's database of individuals looking for
housing, landlords and property developers. In 2007 www.directwonen.nl had a
total of approximately 1,025,000 registered users and approximately 3.1 million
unique visitors. The Direct Wonen group of companies has a network of 28
regional offices.
Direct Wonen was formed in 1990 and has been listed on the Alternative
Investment Market (AIM) of the London Stock Exchange since 1 May 2007.
CHAIRMAN'S STATEMENT
INTRODUCTION
This is my first report on the full year's trading of Direct Wonen since its
listing on the AIM market of the London Stock Exchange in May 2007. We have
achieved significant milestones and laid the foundations for further
optimisation of our business in a year of challenging market conditions. Despite
these challenges, improved brand awareness has increased traffic on our internet
portal www.directwonen.nl during the year by 19% and our database of registered
users has grown 46% to 1,025,000 providing a strong platform for cross-selling
between our property services and financial services businesses. The Group has a
strong and growing presence in its chosen markets, established through a
national network of 28 branches.
Our public listing has also raised our profile and provided opportunities for
expansion through strategic acquisitions.
At the year end, we employed 239 FTE throughout our businesses, which ensures
the Company has the appropriate level of resource to continue to absorb future
growth.
RESULTS
In FY 2007, revenue increased 48% to Euro43.6 million (2006: Euro 29.4 million) and
earnings before interest and tax increased 25% to Euro14.0 million (2006: Euro11.2
million). These results were impacted by deteriorating market conditions
experienced within our Financial Services division together with a reduced
availability of projects within New Property Sales.
Group costs increased due to a combination of higher marketing investment in
more competitive markets, staff costs and increased operational costs to
establish the necessary infrastructure.
Therefore, profit before tax and before finance income and expenses recorded
Euro14.0 million (2006: Euro 11.2 million) and profit after tax finance income and
expenses, Euro12.5 million (2006: Euro7.2 million). Basic earnings per share for the
year were Euro0.12 (recalculated 2006 Euro 0.07). (Euro0.12 amounts to 8.8 pence per
share at exchange rate at close on 31 December 2007)
Based on the Group's previously announced dividend policy for 2007 the Board
proposes a final dividend of 0.96p per Ordinary share which together with the
interim dividend of 0.41p per Ordinary Share gives a total of 1.37p per Ordinary
Share,
The Placing on 1 May 2007, at a price of 137p per share raised approximately
Euro59.1 (£40.3) million (net of expenses) for the Company through the issue of
32,275,684 new Ordinary Shares. In addition, the Placing comprised the sale of
12,413,725 shares at the Placing price, by Weswa B.V. which remains the majority
shareholder of the Company
The Group's cash generation ensured we ended the year with cash reserves of
Euro56.2 million.
BUSINESS DEVELOPMENT
During the year, Geldshop.nl and Financium were acquired to expand the Financial
Services division and complement our Property Services division. Both companies
are active in the mortgage and consumer credit markets and specifically the
acquisition of Geldshop.nl reinforces our on-line strategy.
Geldshop.nl is a notable independent execution-only financial services brokerage
portal providing online consumer credit, mortgages and insurance products and
services. Its state of the art website, processing software and management tools
provide leverage for the Group's existing operations.
Financium is a mortgage service provider acting as a local intermediary between
large mortgage lenders and independent financial agents. It provides high
standards of service to mortgage lenders that include the preparation and
processing of mortgage offers through to the acceptance and administration of
mortgages.
We acquired GIS Apartments, in October 2007. GIS Apartments is a full service
broker in Amsterdam, specialising in the expatriate sector of the market and
offering additional accommodation services. This acquisition offers us an
excellent entrance in the top-end of the lettings market.
During December, the Board terminated discussions with a target company
operating in the UK property market, which would have represented a major
acquisition. Following the deteriorating market conditions the Board considered
it prudent to abort these discussions in order to re-focus on strengthening
existing business.
RECENT DEVELOPMENTS
The Company continues to expand through entry into new market segments,
broadening our customer base and through the launch of new products.
Post the year end, the Company acquired Kamernet.nl, a market leader in
consumer-to-consumer classified accommodation for the student and low value end
letting market in the Netherlands. This acquisition, in the 'self service'
letting market reinforces the Group's on-line strategy and complements the
Group's strong market position in property lettings. Kamernet.nl occupies a
dominant position in the 'starter' segment and is expected to increase the
Group's database with over 1 million house seekers. With a self service business
model and outsourced content screening, Kamernet.nl has no employees. Its
integration into the Group is progressing on schedule.
The Company very recently entered into an agreement with a settlement and
relocation company. With this agreement the Company will improve its position in
the high end segment of the lettings market. It is expected that this agreement
will also immediately contribute to the expansion of the number of transactions
in the lettings division.
In February 2007 the Company started a "Joint Venture" with VCS. The Joint
Venture Company was set up to perform activities as an intermediary in consumer
credit and related products and services. After the year end, we acquired,
earlier than planned, the remaining 60% stake in VCS to create a platform for
synergy, cost efficiency and integration
OUTLOOK
The current year has started as expected. In the first two months of 2008
Property lettings have continued their upward trend in subscribers and there has
been an increase in the supply of residential properties increasing from both
residential and institutional investors. Within New Property Sales, we continue
to have difficulty in acquiring projects, nevertheless opportunities occur. I am
pleased that the management of our Financial Services Division is strengthening
and based on our reputation, our strong clientbase, an active and intensive
web-marketing programme and the integration of our acquisitions made, we are
able to realise growth. General market conditions remain tough, however with the
full potential of our existing business to be realised, we are confident of a
satisfactory outcome in 2008.
Terry Hart
Chairman
BUSINESS OVERVIEW
INTRODUCTION
During 2007, the Group maintained its strong position in the private residential
property letting market in the Netherlands. This was achieved against an
increasingly challenging business environment. Our lettings business has grown
over the period, complemented by our property sales and financial services
offering which leverages our customer base through our portal www.directwonen.nl.
Operational issues, mainly within financial services were addressed by improving
our internal processes and recruiting new personnel even in a tight labour
market. Resolving these issues, however, took considerable management resource.
We have invested further in our brand in the Netherlands and our listing has
assisted in providing acquisition opportunities.
PROPERTY SERVICES: LETTINGS
Business Development
Direct Wonen has a strong reputation and position in private residential
property lettings throughout our national network of 24 rental branches. As an
established business we continue to expand our business model. The brands
Kamernet.nl and Direct Wonen Verhuur are dominating the self-service and
mid-tier letting markets respectively. With the acquisition of Kamernet.nl after
the year end, we are aiming to cover the main market-segments. The acquisition
of GIS Apartments followed by an agreement with a settlement and relocation
company after year end, offers us a stronger position at the top-end of the
lettings market. Our on-line database is central to our lettings operation,
providing an efficient mechanism for letting transactions as well as a valuable
source of information for cross-selling opportunities.
During 2007, the number of registered subscribers on the relaunched web-portal
www.directwonen.nl increased from 700.000 to 1,025,000, an increase of 46%.
There was strong growth in traffic to 5.0 million on-line visits from 3.1
million unique visitors, compared with 4.2 million on-line visits from 2.4
million unique visitors in 2006. Average market rent increased in 2007,
resulting in an increase in average monthly letting charges of 6%.
Revenue increased 15% to Euro11.6 million (2006: Euro10.1 million) showing an upward
trend throughout the year. During the second half of 2007 revenue increased by
18% on the second half of 2006. This reflects the increase in subscribers
requiring accommodation, which corresponds to a similar pattern in the supply of
properties onto the market with a general improvement in the quality of units
being offered.
Our attention has been focused towards prolonging customer life-time value. The
service to our subscribers, who pay subscription fees of Euro35 per annum to gain
on-line access for search and filter facilities has been extended in 2007 to
include a loyalty programme.
To achieve an increase in our market share at the top end of the market, we
launched www.directliving.nl in June 2007, to target expatriate clients. The
website offers extensive information, not only on the accommodation but also on
the local area, town or city. Similarly, we acquired GIS Apartments, in October
2007. GIS Apartments is a full service broker in Amsterdam, specialising in the
expatriate sector of the market and offering additional accommodation services.
Shortly after the year end, we acquired Kamernet.nl, the market leader in
consumer-to-consumer classified accommodation for student and low value end
lettings in the Netherlands. Kamernet.nl occupies a dominant position in the
starter segment with its website that facilitated nearly 2.2 million unique
visitors in 2007. It has the largest database of rooms in the Netherlands with
73,000 rooms submitted for rent and between 1,800 and 3,000 active rooms
available for rent at any given time. Fees are paid by 'room seekers' to obtain
contact details of landlords.Users have a life-time membership onto the website,
thereby extending the customer base and offering the potential to cross-sell
other Group services.
As there are significant opportunities to strengthen our position in the
lettings market by cooperating with institutional investors and corporations, we
have expanded our operations with some substantial contracts. Also we have
developed a platform for residential real estate sales and introduced
www.directwonen.nl/kopen.
Personnel development has improved through further investment into training;
recruitment of senior personnel has also been made to further grow the business.
Although competition in on-line lettings is increasing, the market remains
strong in the Netherlands. Our successful on-line strategy, together with our
continued investment in IT and our ability to execute transactions gives us a
competitive advantage. We believe we are a long way ahead of the competition
with many possibilities for further growth in the future.
Prospects
Our focus is on lettings growth and therefore we need to continue strengthening
our core on-line offering and increasing the size of our database to maximise
cross-selling opportunities. With the acquisition of Kamernet.nl, we are able to
capture young professionals at the start of their careers.
Our core offering now provides for all three segments of the letting market
(self-service, mid-tier service and luxury) and from this position we plan to
extend our market coverage. Kamernet.nl dominates the self-service 'starter'
segment and we will strive for greater market share, sales growth and profit
maximisation from this position of strength. Growth in the mid-tier segment is
expected to continue as we target professional institutional investors in real
estate to improve supply of rental accommodation to attract more customers to
Direct Wonen Verhuur. Growth in the luxury segment is expected, following the
recent acquisition of GIS Apartments. The Group has not previously been present
in this segment of the market and good progress is being made with the
integration of this company.
The Company very recently entered into an agreement with a settlement and
relocation company. With this agreement the Company will improve its position in
the high end segment of the lettings market. It is expected that this agreement
will also immediately contribute to the expansion of the number of transactions
in the lettings division.
We anticipate continued growth in the supply of property, on-line visitors and a
growing number of new subscribers. The structure for subscriptions has been
modified so that there are no free trials. We continue to look for acquisition
opportunities to further strengthen the existing business and we anticipate an
ongoing steady upward trend in volume and value.
PROPERTY SERVICES: SALES
Business Development
Direct Wonen mainly acts as a sales agent for property developers on new build
residential developments. The sales division contracts with developers to sell
property 'off plan' and to buy any unsold property at an agreed price, thereby
providing a guarantee for a sale ('guarantee model'). Our focus is on high
quality, projects.
Marketing of new properties is carried out by using information from our
database and by using our on-line capability. Potential purchasers are targeted
who have been filtered from our database and from website users who have
registered an interest in buying property.
Revenue increased 40% to Euro18.7 million (2006: Euro13.4 million). Although already
announced in our trading statement in December, this performance is
disappointing and stems from a significant slowing of sales growth in new
properties in the second half of 2007. In May 2007, we announced a contract in
which we were committed to the sale of the units from a high quality project in
Tilburg. Two high quality projects, Statendam and Funenpark, are progressing
according to plan with all units of Funenpark being sold out (except for the
recently redeveloped phase 7 consisting of 10 properties of which building will
start in the second quarter of 2008). The largest part of the Statendam
properties has been sold as per year end with 9 units remaining.
Due to a delay in the start date of the building , we sold a project to a third
party, thereby securing revenues but at lower margins. New property sales are,
predictably, dependent upon a pipeline of new build projects. Negotiations with
developers have become even more protracted during the second half of 2007,
making it more difficult to close high margin, high quality transactions. As the
demand for newly-built houses is still strong in the Netherlands, real estate
developers have increasingly been taking the risk of disposal themselves rather
than sharing margin with Direct Wonen. As a result, demand for our guarantee
model has been declining. As personnel costs are sales related, costs have been
well contained.
Prospects
The current market situation is operationally difficult, since developers have
become more willing to take on the direct sales of the units themselves. However
as market conditions in the Netherlands soften, developers may again look to
Direct Wonen to guarantee the successful sale of their new build units. There
are early indications that market conditions are improving in favour of Direct
Wonen. We remain confident of the future success of our model but in addition we
will be looking to apply a more flexible model, to adapt the pricing and level
of margin achievable on new build sales according to market conditions.
By resuming sales, the cross referral of business to our financial services
division will provide a stimulus to the Group's overall revenue and
profitability.
FINANCIAL SERVICES
Business Development
During 2007, our Financial Services division significantly increased its
business activity as a broker in mortgages, insurance and consumer credit
products and services. The division's products are sold via three separate
channels: online, as an intermediary through the Group's four specialised
financial services branches and via third party intermediaries. All channels
have access to the Group's data through www.directwonen.nl.
Revenue in FY2007 increased by 125% to Euro13.3 million (2006: Euro 5.9 million)
including the effect of acquisitions. Performance was adversely affected by
higher than anticipated costs and operational issues regarding hiring qualified
staff, integration and consolidation, which have largely been resolved.
The Dutch mortgage market has, like those in other countries, suffered from
increasing interest rates, up from 4.62% to 5.10% in 2007 and uncertainties
arising from tighter bank lending. As a result, mortgage advances in 2007 were
down 15% by volume and down 9% by value. The re-mortgage market also declined,
falling 29% by volume and 24% by value. Average mortgage balances outstanding
during 2007 increased 5.2% to Euro 284,671, while the average buying price of a
house increased by 5.3% to Euro 248,325.
Acadium Bastion, with its top-end brand "Hypotheekcentrum voor Academici"
(Mortgagecenter for Academics) represents a major part of our Financial Services
business and its performance was in line with our revised budgets, reduced
during 2007 to reflect the decline in the mortgage market. The general slowdown
in mortgage transactions has been influenced by factors such as high market
prices (and therefore affordability) of real estate, increasing interest rates,
the effects of the ongoing mortgage crisis and subsequently decline of certain
mortgage products (second mortgages and re-mortgages).Together with an
increasing demand for interest only mortgages, our market is also highly
competitive, which has led to increased pressure on commission rates.
As a newly established brand Direct Hypotheken has especially suffered from the
challenging market conditions and action has been taken to improve performance
In October 2007, we acquired Financium which is a mortgage service provider
acting as a local intermediary between large mortgage lenders and independent
financial agents. The company prepares and processes mortgage offers through to
acceptance and administration of mortgages as well as developing branded
mortgage products. Financium adds 1,200 agents to the Group's network, providing
a platform for product innovation and our insurance products.
The personal insurance market has similarly suffered a slowdown, as a
consequence of lower volumes in mortgage transactions which directly impact
sales of insurance and endowment products. Since the employment market is
buoyant, the number of people leaving employment decreased strongly. This,
combined with an interest rate that is almost equal to the interest on savings
accounts led to a decline in the market for annuity insurances (Golden
Handshakes). Nevertheless, increased marketing and sales effort and product
innovation together resulted in a higher turnover in H2 2007 compared to H2
2006.
Flexgarant which was part of our acquisition of Acadium Bastion Groep holds a
proxy for a life insurance product of a large reputable Dutch insurance company.
The activities of Flexgarant ensure a continuing flow of stable income in future
years as for every change in the policies administered a certain amount is
earned. To ensure future profitability the Company plans to expand its product
range and is in the process of finalising negotiations with another insurance
company to add an additional proxy for a life insurance portfolio to its product
offering.
In 2007, we entered the consumer credit market with a minority share in a joint
venture company VCS Financiele Diensten BV. (VCS), an intermediary in consumer
loans. Despite some downward market pressure, VCS has performed in line with
expectations.
Our activities in the consumer loan market have been reinforced by the
acquisition of Geldshop.nl. in September 2007, an independent execution only
financial services brokerage portal providing on-line consumer credit, mortgages
and insurance products and services. Geldshop.nl has a database of 107,000
clients, many of whom are homeowners. Advanced software connects with front and
back office systems of banks and insurance companies. With a state of the art
website, processing software and management tools, this acquisition enhances our
online strategy. The Geldshop.nl website achieved 2nd place in the Usability
Awards and was awarded a nomination in 2007 for the best comparison site by
ThuisWinkelAwards.
Prospects
Despite current market difficulties and uncertainties within the mortgage and
insurance market the Financial Services division is well placed for future
growth and we remain confident of long term prospects. We have a strong client
base of high-end consumers within Acadium Bastion and strong supporting
businesses with innovative business models. In addition we expect to see the
benefits of improvements made by web-based customer acquisition processes. We
also see further opportunities to achieve more efficiencies and synergy effects
by combining certain activities. By combining the back office activities with
Financium resulting in staff reduction, substantial cost savings will be
realised. Integration of recent acquisitions remains on schedule and will
receive our increased focus. The Financial Services division is well
complemented by our property services lettings and sales activities, which is
able to cross-sell its financial products through our internet portal by
accessing our extensive database.
After the year end, we acquired, earlier than planned, the remaining 60% stake
in VCS to create a platform for synergy, cost efficiency and integration. At the
same time we introduced a new brand Geldlenen ("lend money"), which provides an
excellent additional platform for web-based marketing.
We are focused on expanding our services between our operations (from
self-service to full service offerings), as well as improving internal processes
and cost efficiency. We are also strengthening our core on-line offering by
continuing our acquisition strategy. With our existing structure, our operations
are highly scaleable and can be geographically diversified.
BUSINESS OUTLOOK 2008
Although market conditions will remain challenging, the Group has started 2008
as expected and we intend taking full advantage of the growth potential within
our existing business.
We are focused on continuing to strengthen our core on-line offering in Property
Lettings and Financial Services and to increase the size and the use of our
database to maximise cross-selling opportunities, while at the same time keeping
a tight control on costs.
With the strategic acquisitions achieved during 2007 and our operational focus
on each of our businesses, we have a solid platform in place from which to
further grow during 2008 and beyond.
There remains a healthy pipeline of acquisition opportunities in our property
and financial services offering. The Board continues to review these
opportunities with a focus on new property sales projects and smaller
acquisitions within the framework of the existing business model and in line
with our growth strategy.
While market conditions are expected to remain difficult, we are optimistic of a
satisfactory performance in 2008.
FINANCIAL REVIEW
Group Revenue increased by 48% from Euro 29.4 million in 2006 to Euro 43.6 million,
primarily due to a full year effect of revenues from acquisitions within
Financial Services together with a higher 2007 result from New Build Property
Sales.
EBITDA increased by 28% from Euro11.6 million to Euro 14.9 million, and net profit
after tax increased from Euro 7.2 million in 2006 to Euro12.5 million in 2007. The net
profit performance reflects the positive revenue increase, but partially offset
by higher than anticipated costs mainly within the Financial Services Division.
FY 2007 FY 2006 % Change
(Eurom's) (Eurom's)
Revenue 43.6 29.4 48
EBITDA 14.9 11.6 28
EBITA 14.1 11.2 26
Net profit 12.5 7.2 74
Property Lettings Division
FY 2007 FY 2006 % Change
(Eurom's) (Eurom's)
Revenue 11.6 Euro 10.1 15
Revenues of the Lettings Division were 15% ahead of 2006. The total number of
subscriptions in 2007 is 51% ahead of previous year. Excluding renewals the
increase of subscriptions compared to previous year is 3%.
Average revenue per lettings transaction increased by 6%, largely caused by an
increase in average rental payments.
New Property Sales Division
FY 2007 FY 2006 % Change
(Eurom's) (Eurom's)
Revenue 18.7 13.4 40
New Property Sales revenue increased 40% to Euro18.7 million, with gross profit
reflecting the profit margin earned on all sold premises.Within the second half
of 2007 we realised profit on the sale of a major New Build project.
Financial Services Division
FY 2007 FY 2006 % Change
(Eurom's) (Eurom's)
Revenue 13.3 5.9 125
The revenue increase within the Financial Services Division is due largely to
the acquisitions carried out during 2007. Geldshop.nl and Financium started to
contribute positively to the business in October and November, respectively.
Personnel expenses
Personnel costs for 2007 amounted to Euro10.5 million, compared to Euro6.3 million in
2006, an increase of 67%. Due to a tight labour market for qualified staff,
costs for temporary staff increased from Euro593,000 in 2006 to Euro2.1 million in
2007.
The increase in personnel costs is caused by an increase in number of personnel
and an increase in average salaries by 17%. The average number of FTE's
increased in 2007 to 190 compared to 130 in 2006.
Costs for temporary employees increased substantially compared to the previous
year, due largely to the growth in the Company and the shortage of qualified
staff within HR, marketing, legal and finance.
Selling and marketing expenses
Selling and marketing expenses related to advertising, internet marketing and
other sales costs.
Selling and marketing costs increased from Euro2.2 million in 2006 to Euro5.4 million
in 2007, largely caused by increased costs within the Financial Services
Division.
Interest and other financial income
Interest income increased from Euro740,000 in 2006 to Euro1.9 million in 2007 and is
caused by higher average cash balances during the year following the funds
raised at the IPO.
Profit Margin
Operating profit margin decreased from 38% to 32% in 2007. The margin calculated
on the basis of profit before tax decreased from 35% in 2006 to 33% in 2007.
Earnings per share (EPS)
Basic earnings per share (EPS) were Euro 0.12 (2006 Euro 0.07). (Euro0.12 amounts to 8.8
pence per share at exchange rate at close on 31 December 2007)
Dividends
The Board is recommending a final dividend of 0.96p per share giving a total
dividend of 1.37p in respect of the financial year 2007.
Subject to shareholder approval at the Annual General Meeting ('AGM') the final
dividend will be paid on 25 July 2008 to shareholders on the register at the
close of business on 11 July 2008.
Cash flows and cash balances
Total cash flow from operations, investing and financing activities amounted to
Euro 40.9 million. The high cash balance as at year end 2007 of Euro 56.2 million is
mainly caused by the proceeds from the IPO.. The Company has deposited these
funds on a no risk bank deposit.
Balance Sheet
The increase in Intangible assets is mainly caused by the goodwill paid on
acquisitions in 2007.
Trade and other receivables amount to Euro22.9 million as at the year end 2007 and
mainly relates to income receivable in the New Build Property Sales division and
commission receivable in the Financial Services division. It is common practice
in the industry that cash is received later, as there is a time delay between
the signing of a contract by the client and closure of the real estate
transaction at the notary.
Trade and other payables include a payable to related parties and mainly relates
to pre IPO payment of reserves. Immediately before admission, the Company
declared a shareholder distribution of Euro22.2 million. This distribution to the
Company's sole shareholder, Weswa B.V. is mainly to be used by Weswa B.V. for
repayment of a loan of Euro16.5 million made to Weswa B.V. by ABN Amro in respect
of the acquisition of Acadium Bastion Groep. This amount has been settled in the
first quarter of 2008, after adequate debt financing has been arranged.
The high fluctuation of the balances of Related company payable and Merger
reserve relates to the pre IPO group restructuring. In November 2006 Direct
Wonen N.V. acquired as a result of a group restructuring, the Direct Wonen group
companies, from its parent Weswa B.V, which was settled by means of a capital
contribution and by means of a 5 year term loan. In March 2007 Weswa B.V. made a
capital contribution of abovementioned loan including accrued interest to a
wholly owned subsidiary. The shares of this subsidiary were contributed as
capital in Direct Wonen N.V.. As a result on a consolidated basis the receivable
and the payable are eliminated as they are within the Direct Wonen N.V. Group.
Consolidated income statement*
For the year ended 31 December unaudited
In thousands of euro Note 2007 2006
Revenue 1 43,603 29,427
Cost of sales 1 (6,395) (4,951)
------- -------
Gross profit 37,208 24,476
Other income 2 1,797 -
Administrative expenses (14,081) (7,405) *
Other expenses (10,954) (5,865) *
------- -------
Results from operating activities 13,970 11,206
------- -------
Share of profits/(losses) of associate (91) -
Finance income 1,912 740
Finance expenses (1,273) (1,761)
------- -------
548 (1,021)
------- -------
Profit before tax 14,518 10,185
Tax expense 3 (1,979) (2,993)
------- -------
Profit for the year 12,539 7,192
------- -------
Earnings per share after tax (Euro)
Basic earnings per share 4 0.12 0.07 *
------- -------
The accompanying notes are an integral part of these consolidated financial
statements.
* Restated for comparison purposes
Consolidated balance sheets*
As at 31 December unaudited
In thousands of euro Note 2007 2006
ASSETS
Property, plant and equipment 2,832 1,835
Intangible assets 28,894 13,885
Investments in equity accounted investees 33 -
Financial fixed assets 5,963 -
------- -------
Total non-current assets 37,722 15,720
------- -------
Inventories and work in progress 736 2,046
Current tax asset 194 -
Trade and other receivables 22,860 21,184
Cash and cash equivalents 5 56,203 15,275
------- -------
Total current assets 79,993 38,505
------- -------
Total assets 117,715 54,225
------- -------
EQUITY
Share capital 3,148 45
Share premium 53,355 (173,220)
Retained earnings 22,987 10,448
------- -------
Total equity 79,490 (162,727)
------- -------
LIABILITIES
Loans and borrowings - 2,183
Provisions 5,827 7,723
Deferred tax liability 661 1,058 *
------- -------
Total non-current liabilities 6,488 10,964
------- -------
Loans and borrowings 257 41
Trade and other payables 31,480 205,947 *
------- -------
Total current liabilities 31,737 205,988
------- -------
Total liabilities 38,225 216,952
------- -------
Total equity and liabilities 117,715 54,225
------- -------
The accompanying notes are an integral part of these consolidated financial
statements.
* Restated for comparison purposes.
Consolidated statements of changes in equity* unaudited
In thousands of euro note Share Share Merger Retained Total
capital premium reserve earnings
Balance at 1
January 2006 45 48,000 (221,220) 3,256 (169,919)
Profit for the
period - - - 7,192 7,192
------ ------ ------- ------- -------
Balance at 31
December 2006 45 48,000 (221,220) 10,448 (162,727)
Share issues 3,103 61,789 - - 64,892
IPO cost - (7,772) - - (7,772)
IPO tax - 1,982 - - 1,982
Capital
contribution - - 193,676 - 193,676
Repayment of
share premium
to shareholders - (22,157) - - (22,157)
Write off of
merger reserve - (27,544) 27,544 - -
Dividend 6 - (943) - - (943)
Profit for the
period - - - 12,539 12,539
------ ------ ------- ------- -------
3,103 5,355 221,220 12,539 242,217
------ ------ ------- ------- -------
Balance at 31
December 2007 3,148 53,355 - 22,987 79,490
------ ------ ------- ------- -------
The accompanying notes are an integral part of these consolidated financial
statements.
* Restated for comparison purposes
Consolidated statement of cash flows*
For the year ended 31 December unaudited
In thousands of euro Note 2007 2006
Cash flows from operating activities
Profit for the period 14,518 10,185
Adjustments for:
Net foreign exchange (gain)/loss 1,022 -
Depreciation and amortisation 915 393
Proceeds from equity accounted investees (91) -
Finance income (1,912) (740)
Finance cost 251 1,761
-------- --------
14,703 11,599
Change in inventories 1,310 (485)
Change in trade and other receivables (6,667) (9,407)
Change in trade and other payables 8,388 18,467
Change in provisions (1,896) (478)
-------- --------
15,838 19,696
Taxation paid (2,376) (2,935)
-------- --------
Net cash from operating activities 13,462 16,761
-------- --------
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired 2 (14,645) (4,094)
Purchase of fixed assets (1,832) (504)
Development of websites (244) -
Sales of held-to-maturity investments in equity
accounted investees (33)
Loan to held-to-maturity investments accounted investees (150) -
Interest received 2,905 740
-------- --------
Net cash used in investing activities (13,999) (3,858)
-------- --------
Cash flows from financing activities
Proceeds from issue of share capital 59,102 -
Bank borrowing advances (2,183) 2,080
Bank borrowing repayments - (838)
Interest paid (2,266) (97)
Share premium paid (12,245) -
Dividends paid 6 (943) -
-------- --------
Net cash from (used in) financing activities 41,465 1,145
Net increase in cash and cash equivalents 40,928 14,048
Cash and cash equivalents at 1 January 5 15,275 1,227
-------- --------
Cash and cash equivalents at 31 December 5 56,203 15,275
-------- --------
The accompanying notes are an integral part of these consolidated financial
statements.
* Restated for comparison purposes
All amounts in thousands of euro unless otherwise stated.
Notes to the consolidated financial statements unaudited
1. Business segments
1.1 Segment revenue and segment result
Segment revenue Segment result
2007 2006 2007 2006
Continuing operations
Lettings 11.649 10.081 3.296 2.674
New build sales 18.681 13.371 6.733 6,383
Financial services 12.850 5.975 3.593 2,149
------- ------- ------- -------
43.180 29.427 13.622 11.206
------- -------
Unallocated 548 (1.021)
------- -------
Profit before tax 14.170 10.185
Income tax expense (1.890) (2.993)
------- -------
Profit for the year from continuing
operations 12.280 7.192
------- -------
Discontinued operations
Financial services 423 - 348 -
------- ------- ------- -------
423 - 348 -
------- ------- ------- -------
Profit before tax 348 -
Income tax expense (89) -
------- -------
Profit for the year from discontinued
operations 259 -
------- -------
Consolidated revenue (excluding
investment revenue) and profit for
the 43.603 29.427 12.539 7.192
year ------- ------- ------- -------
All amounts in thousands of euro unless otherwise stated.
1.2 Segment assets and liabilities
Assets Liabilities
2007 2006 2007 2006
Lettings 28.996 3.360 6.379 13.840
New build sales 45.665 12.769 16.954 49.687
Financial services 43.053 38.096 14.892 153.425
------- ------ ------ -------
Total of all segments 117.715 54.225 38.225 216.952
------- ------ ------ -------
All amounts in thousands of euro unless otherwise stated.
1.3 Other segment information
Depreciation Capital
and expenditure
amortisation
2007 2006 2007 2006
Lettings 347 175 - -
New build sales 81 9 - -
Financial services 487 209 - (1.393)
------- ------- ------ -------
915 393 - (1.393)
------- ------- ------ -------
All amounts in thousands of euro unless otherwise stated.
No geographical segmenting is applicable because all activities are realised in
The Netherlands. No intersegment pricing is applicable because no intersegment
transactions have taken place. Transactions with other segments are not
applicable because segment activities are unique and not exchangeable.
The cost of sales represent the costs of sold units related to Work in Progress.
Discontinued operations are related to divestments in business segment Financial
services.
2. Acquisitions and divestments
2.1 Business combinations
Cost of acquisitions
The business combinations in 2007 relate to the acquisitions of Geldshop.nl,
Financium and GIS Apartments. Total consideration paid, excluding Geldshop.nl,
in cash amounts to Euro 7.677 million.
Pre-acquisition carrying amounts were determined based on applicable IFRSs
immediately before the acquisition. The values of assets, liabilities, and
contingent liabilities recognised on acquisition are their estimated fair
values.
Impact of acquisition on the results of the group
Included in the profit for the year is Euro 747 attributable to the additional
business generated by the acquirees.
Had these business combinations been effected at 1 January 2007, the revenue of
the Group from continuing operations would have been Euro 46.8 million, and the
profit for the year from continuing operations would have been Euro 14.8 million.
Geldshop.nl
On 27 September 2007 the Group acquired all of the shares in Geldshop Holding
B.V. Although the IFRSs requires to communicate the purchase price this is not
communicated due to contractual limitations.
Geldshop.nl is an independent execution only financial services brokerage portal
providing online consumer credit, mortgages and insurance. The company operates
a state of the art website, processing software and management tools that will
provide leverage for the Group's existing operations. In the 3 months to 31
December 2007 the subsidiary contributed profit of Euro 148.
The acquisition had the following effect of the Group's assets and liabilities
on acquisition date:
Pre-
acquisition Recognised
carrying Fair value values on
In thousands of euro amounts adjustments acquisition
Property, plant and equipment 24 - 24
Cash and cash equivalents - - -
Trade and other payables (21) - (21)
-------- -------- --------
Net identifiable assets and liabilities 3 - 3
-------- -------- --------
Goodwill/Intangible assets on
acquisition 8,257
The goodwill recognised on the acquisition based on the payment on acquisition
date is attributable to the business. Other intangible assets consist of the
acquired website and client portfolio.
The allocation of the purchase has not been finalised as the earn out and the
final purchase price have not been finalised.Therefore the final consolidation
may be subject to change.
Financium
On 15 October 2007 the Group acquired all of the shares in Financium Primae B.V.
for Euro 6,500 in cash. Other costs related to the acquisition mainly consist of
notaries and due diligence costs and amounted to
Euro 108, therefore a total of Euro 6,608 is considered to be paid in cash.
Financium is a mortgage service provider acting as a local intermediary between
large mortgage lenders and independent financial agents. Financium provides high
standards of service to mortgage lenders that include the preparation and
processing of mortgage offers through to the acceptance and administration of
mortgages. In the 2 months to 31 December 2007 the subsidiary contributed profit
of Euro 394.
The acquisition had the following effect of the Group's assets and liabilities
on acquisition date:
Pre-
acquisition Recognised
carrying Fair value values on
In thousands of euro amounts adjustments acquisition
Property, plant and equipment 320 - 320
Trade and other receivables 397 - 397
Cash and cash equivalents 1,248 - 1,248
Trade and other payables (710) - (710)
-------- -------- --------
Net identifiable assets and liabilities 1,255 - 1,255
-------- -------- --------
Goodwill on acquisition 5,354
Consideration paid, satisfied in cash 6,608
--------
Cash acquired 1,248
--------
Net cash outflow (5,360)
--------
The goodwill recognised on the acquisition is attributable to the business.
GIS Apartments
On 24 October 2007 the Group acquired all of the shares in GIS Apartments B.V.
for Euro 968 in cash. Other costs related to the acquisition mainly consist of
notaries and due diligence costs and amounted to Euro 101, therefore a total of Euro
1,069 is considered to be paid in cash.
GIS Apartments is a specialist in offering accommodation for expatriates in the
greater Amsterdam region. In addition to its broking activities, GIS Apartments
is also offering its clients complementary services such as baby-sitting, car
rental, laundry and dry cleaning services and more. In the 2 months to 31
December 2007 the subsidiary contributed profit of Euro 17.
The acquisition had the following effect of the Group's assets and liabilities
on acquisition date:
Pre-
acquisition Recognised
carrying Fair value values on
In thousands of euro amounts adjustments acquisition
Property, plant and equipment 134 - 134
Trade and other receivables 104 - 104
Cash and cash equivalents 152 - 152
Trade and other payables (508) - (508)
-------- -------- --------
Net identifiable assets and liabilities (118) - (118)
-------- -------- --------
Goodwill on acquisition 1,235
Consideration paid, satisfied in cash 1,069
--------
Cash acquired 152
--------
Net cash outflow (917)
--------
The goodwill recognised on the acquisition is attributable to the business.
Kamernet.nl
On 5 February 2008 the Group acquired Kamernet.nl for Euro 7,500 in cash.
Kamernet.nl is a market leader in consumer-to-consumer classified accommodation
for the student online letting market in the Netherlands.
The allocation of the purchase price to the net assets acquired had not yet been
finalized as of 29 February 2008, as further information related to intangible
asset valuations remained outstanding.
The goodwill recognised on the acquisition is attributable to the business.
Other intangible assets consist of the acquired website.
VCS Holding
On 6 March 2008 the Group acquired VCS Financiele Diensten B.V. ("VCS Holding").
As a result of this transaction VCS Financiele Partners B.V. ("VCS") became a
100% subsidiary of Direct Wonen NV Reference is made to note 2.2.
2.2 Acquisition of associate
In February 2007, the Company (through its wholly owned subsidiary Direct
Financieren B.V.) signed an agreement, with VCS Financiele Diensten B.V. ("VCS
Holding") and VCS Financiele Partners B.V. ("VCS"), to purchase 40 percent of
the shares in VCS from VCS Holding for a purchase price of Euro 36. The shares of
VCS were transferred to Direct Financieren B.V. at 31-03-2007. VCS performs
activities as an intermediary in consumer credit and related products and
services. The Company negotiated the right to acquire the remaining 60 percent
after four years or earlier in the event that VCS' brokered loan portfolio
reaches a level of Euro 225 million. The associate had limited assets and
liabilities before the acquisition. The Board of Directors estimated the fair
value of these assets liabilities which did not significantly differ from their
carrying values and therefore did not recognise goodwill in the associates
carrying value.
2.3 Divestments
In June 2007, the Company sold the brokered simple risk insurance portfolio and
the claim handling activities of its portfolios in the Acadium Bastion Group and
Direct Verzekeren B.V. to Weswa B.V. for different amounts totalling Euro 1.8
million, based on external valuation reports. Total profit amounted to Euro 1.8
million attributable to business segment Financial Services and presented in the
consolidated income statement as other income and did not result in a cash flow.
The tax effect using effective tax rate (25.5 per cent) amounted to Euro 456.
2007 2006
In thousands of euro
Revenue:
Direct Verzekeren B.V. 175 24
Acadium Bastion Group 248 257
Result:
Direct Verzekeren B.V. 175 24
Acadium Bastion Group 173 172
The effect on earnings per share amounts to 0.01 euro cent.
3. Income tax expense
2007 2006
In thousands of euro
Deferred tax (397) 963
Current tax expense 2,376 2,030
-------- --------
Income tax expense 1,979 2,993
-------- --------
The tax expense for the year can be reconciled to the profit in the income
statement as follows:
2007 2006
In thousands of euro
Profit for the period 14,518 10,185
Income tax expense 1,979 2,993
------- ------- ------ ------
Profit excluding income tax 12,539 7,192
Income tax using the Company's domestic
tax 25.50% 3,701 29.60% 3,015
rate
Effect on deferred tax balances due to the
change in income tax rate from 29.6% to
25.5% (39) (22)
Effect of different tax rates of
subsidiaries operating in other
jurisdictions (1,683)
------- ------- ------ ------
Income tax expense 1,979 2,993
------- ------- ------ ------
The tax rate used for the 2007 reconciliations above is the corporate tax rate
of 25.50 per cent (2006: 29.60 per cent) payable by corporate entities in The
Netherlands on taxable profits under tax law in that jurisdiction.
Income tax recognised directly in equity
2007 2006
In thousands of euro
Current tax:
Share-issue expenses 1,982 -
Deferred tax - -
-------- --------
Total tax recognised directly in equity 1,982 -
-------- --------
4. Earnings per share (EPS)
Basic earnings per share (EPS)
2007 2006
--------- ---------
Profit attributable to ordinary shareholders
(Euro'000) 12,539 7,192
--------- ---------
--------- ---------
Weighted average number of shares 108,281,189 108,281,189
--------- ---------
Issued ordinary shares at beginning period 2,250,000 -
(after share split 1:10)
Share issue in April 2007 122,880,344 -
Share issue in May 2007 32,275,684 -
--------- ---------
Total outstanding number of shares 157,406,028 -
--------- ---------
Basic earnings per share (EPS) after tax
Basic (Euro) 0.12 0.07
2006 figures are restated by using the same weighted average number of shares as
calculated over 2007.
The weighted average number of shares is calculated using nominal number of days
of outstanding shares multiplied by number of shares divided by the total days
in the reported period as stated below.
Nominal Average
Issued ordinary shares at beginning period 2,250,000 704,670
(after share split 1:10)
After Share issue April 125,130,344 2,062,588
Total outstanding number of shares 157,406,028 105,513,931
------------
Weighted average number of shares 108,281,189
------------
5. Cash and cash equivalents
2007 2006
In thousands of euro
Call deposits 18,372 -
Cash and bank balances 37,831 15,275
--------- ---------
56,203 15,275
--------- ---------
6. Dividends paid
In total dividends as proposed by the company is GBP 2.156 and consist of :
Direct Wonen N.V. has a dividend policy with a first year pay-out ratio of 1% of
the initial share price (137p). An interim dividend of 0.41p per share of Euro 0.02
nominal value (Euro 0.00587 per share at exchange rate at close on 27 September),
(being 30% of 1% of 137p), was paid on 2 November 2007 to shareholders on the
register on 12 October 2007. Total amounting to Euro 943 (GBP 647). This amount is
disclosed in the Consolidated Statements of changes in equity.
7. AGM
The Annual General Meeting will be held on 27 June at Direct Wonen's offices at
Nieuwe Duinweg 24, The Hague, Netherlands.
All the above mentioned figures and accompanying notes are unaudited.
10 April 2008
Board of Directors Direct Wonen N.V.
Disclaimer
This press release contains forward-looking statements with regard to the
financial position and results of Direct Wonen's activities. These
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed in the
forward-looking statements. Many of these risks and uncertainties relate to
factors that are beyond Direct Wonen's ability to control or estimate precisely,
such as future market and economic conditions, the behaviour of other market
participants, changes in consumer preferences, the ability to successfully
integrate acquired businesses and achieve anticipated synergies, interest-rate
fluctuations, changes in tax rates, changes in law, pension costs, the actions
of government regulators and weather conditions. These and other risk factors
are detailed in Direct Wonen's publicly available financial information as
included in the admission document to the AIM dated 25 April 2007. You are
cautioned not to place undue reliance on these forward-looking statements, which
are only relevant as of the date of this press release. Direct Wonen does not
undertake any obligation to publicly release any revisions to these
forward-looking statements to reflect events or circumstances after the date of
these statements. Market and market share estimates contained in this press
release are based on outside sources, such as specialised research institutes,
in combination with management estimates.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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