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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
European Conv. | LSE:ECPC | London | Ordinary Share | GB00B0B7ZC68 | ORD EUR1.00 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.00105 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:1317R European Convergence Property CoPLC 31 March 2008 31 March 2008 European Convergence Property Company plc Interim Results for the period ended 31 December 2007 European Convergence Property Company PLC ("ECPC", the "Company" or the "Group"), a property company focused on investing in commercial, retail and industrial property in South-East Europe with a view to taking advantage of high yields and the potential for capital appreciation, announces its interim results for the six month period ended 31 December 2007. Highlights Towards the end of 2007 the Company completed the sale of its Romanian investment properties to DEGI Deutsche Gesellschaft fur Immobilienfonds m.b.H. The three investment properties sold were Millennium Business Centre (purchase price, Euro52.6m), PGV Tower (Euro27.4m), and Construdava (Euro26.5m). These are all prime office locations based in Bucharest and their yields at point of sale were approximately 6.40%, 6.55%, and 7.20% respectively. The net consideration for the disposals was approximately Euro110.5m (after transaction costs and adjustments of Euro5.5m for the net current assets of the trading companies being sold). The properties were acquired for a combined cost of Euro89.1m, and were re-valued earlier this year at Euro97.5m. As at 31 December 2007 this increased the unaudited NAV per share to Euro1.21. After repaying the external financing of the projects the Company was left with net proceeds of approximately Euro49.9m (prior to any adjustments for items such as deferred tax and management fees), which included a gain of approximately Euro15.9m on the initial equity investment. As previously reported we have seen considerable yield compression in the market and the Company decided not to pursue further acquisitions and instead to return the proceeds of the sale along with any un-invested cash to Shareholders. With Shareholder approval and to facilitate an efficient mechanism for returning these monies to Shareholders, along with any un-invested cash, the Company was re-registered as a company governed by the Isle of Man Companies Act 2006 on 21 December 2007. Following the re-registration, an initial return of capital of Euro58.9 million (Euro0.94 per share) was made to Shareholders on 31 January 2008. In relation to the Company's remaining asset Mall Veliko Turnovo, Bulgaria; a number of offers have been considered and rejected. The Company is hopeful that a sale can be concluded in the near future. The property is currently carried at fair value measured as at its last revaluation date of January 2007. Erwin Brunner 28 March 2008 Chairman Enquiries: European Convergence Property Company plc +44 (0)1624 640200 Anderson Whamond Charlemagne Capital +44 (0)20 7518 2100 Christopher Fitzwilliam Lay/Varda Lotan Panmure Gordon +44 (0)20 7459 3600 Hugh Morgan/Jonathan Lack/Stuart Gledhill Smithfield Consultants +44 (0)20 7360 4900 George Hudson www.europeanconvergence.com Consolidated Income Statement Note (Unaudited) (Unaudited) (Audited) 1 July 2007 to 1 July 2006 to Year ended 31 December 2007 31 December 2006 30 June 2007 Euro'000 Euro'000 Euro'000 ------------------ ------ ------------ ------------ ---------- Realised gain on sale of investment property 6,871 - - Net gain from fair value adjustment on investment property 6 - - 13,124 Net rent and related income 9,429 1,278 5,766 Manager's fees (2,354) (563) (2,343) Audit and professional fees (1,433) (127) (258) Other expenses (7,615) (578) (1,771) ------------------ ------ ------------ ------------ ---------- Administrative expenses (11,402) (1,268) (4,372) ------------------ ------ ------------ ------------ ---------- ------------------ ------ ------------ ------------ ---------- Net operating profit before net 4,898 10 14,518 financing income ------------------ ------ ------------ ------------ ---------- Financial income 648 423 743 Financial expenses (3,074) (370) (2,923) ------------------ ------ ------------ ------------ ---------- Net financing income/(expense) (2,426) 53 (2,180) ------------------ ------ ------------ ------------ ---------- Profit before tax 2,472 63 12,338 Income tax expense 10 4,715 (290) (5,890) ------------------ ------ ------------ ------------ ---------- Retained profit/(loss) for the year 7,187 (227) 6,448 ------------------ ------ ------------ ------------ ---------- ------------------ ------ ------------ ------------ ---------- Basic and diluted profit/(loss) 7 0.1146 (0.0036) 0.1028 per share (Euro) ------------------ ------ ------------ ------------ ---------- Consolidated Balance Sheet Note (Unaudited) (Unaudited) (Audited) At 31 December At 31 December At 30 June 2007 2006 2007 Euro'000 Euro'000 Euro'000 ------------------- ------ ------------ ------------ ---------- Investment property 6 32,550 80,217 131,971 Property, plant and equipment 44 - 62 ------------------- ------ ------------ ------------ ---------- Total non-current assets 32,594 80,217 132,033 ------------------- ------ ------------ ------------ ---------- Trade and other receivables 6,494 5,208 3,977 Cash and cash equivalents 60,643 25,132 23,107 ------------------- ------ ------------ ------------ ---------- Total current assets 67,137 30,340 27,084 ------------------- ------ ------------ ------------ ---------- Total assets 99,731 110,557 159,117 ------------------- ------ ------------ ------------ ---------- Issued share capital 62,696 62,696 62,696 Retained earnings/(loss es) 10,422 (3,440) 3,235 Foreign currency translation reserve 3,314 168 1,758 ------------------- ------ ------------ ------------ ---------- Total equity 76,432 59,424 67,689 ------------------- ------ ------------ ------------ ---------- Interest-beari ng loans and borrowings 8 19,175 50,008 80,108 Rental guarantees 125 - - Deferred tax liability 280 - 5,045 ------------------- ------ ------------ ------------ ---------- Total non-current liabilities 19,580 50,008 85,153 ------------------- ------ ------------ ------------ ---------- Trade and other payables 3,719 1,125 6,275 ------------------- ------ ------------ ------------ ---------- Total current liabilities 3,719 1,125 6,275 ------------------- ------ ------------ ------------ ---------- Total liabilities 23,799 51,133 91,428 ------------------- ------ ------------ ------------ ---------- Total equity & liabilities 99,731 110,557 159,117 ------------------- ------ ------------ ------------ ---------- Consolidated Statement of Changes in Equity Share capital Retained Foreign currency Total earnings translation reserve Euro'000 Euro'000 Euro'000 Euro'000 ----------------- ---------- ---------- ---------- ---------- Balance at 1 July 2006 62,696 (3,213) (122) 59,361 Foreign exchange translation differences - - 290 290 Retained profit for the period - (227) - (227) ----------------- ---------- ---------- ---------- ---------- Balance at 31 December 2006 62,696 (3,440) 168 59,424 ----------------- ---------- ---------- ---------- ---------- Balance at 1 July 2006 62,696 (3,213) (122) 59,361 Foreign exchange translation - - 1,880 1,880 differences Retained profit for the year - 6,448 - 6,448 ----------------- ---------- ---------- ---------- ---------- Balance at 30 June 2007 62,696 3,235 1,758 67,689 ----------------- ---------- ---------- ---------- ---------- Balance at 1 July 2007 62,696 3,235 1,758 67,689 Foreign exchange translation - - 1,556 1,556 differences Retained profit for the period - 7,187 - 7,187 ----------------- ---------- ---------- ---------- ---------- Balance at 31 December 2007 62,696 10,422 3,314 76,432 ----------------- ---------- ---------- ---------- ---------- Consolidated Cash Flow Statement (Unaudited) (Unaudited) (Audited) For the period from For the period from Year ended 1 July 2007 to 1 July 2006 to 30 June 2007 31 December 2007 31 December 2006 Euro'000 Euro'000 Euro'000 ------------------------ ----------- ----------- ---------- Operating activities Group profit/(loss) for the period 7,187 (227) 6,448 Adjustments for: Net gain from sale of investment property (6,871) - - Net gain from fair value adjustment on investment property - - (13,124) Financial income (648) (423) (743) Financial expense 3,074 370 2,923 Foreign currency translated 1,556 Depreciation 18 290 1,880 Income tax expense (4,715) 290 5,890 ------------------------ ----------- ----------- ---------- Operating profit/(loss) before changes in (399) 300 3,284 working capital ------------------------ ----------- ----------- ---------- (Increase)/decrease in trade and other receivables (2,517) 683 (3,696) Increase/(decrease) in trade and other payables (2,431) 119 5,108 Cash generated (used in)/from operations (5,347) 1,102 4,696 Interest paid (3,074) (370) (2,923) Income and corporation tax paid (50) (158) (852) Interest received 648 423 743 ------------------------ ----------- ----------- ---------- Cash flows generated (used in)/from (7,823) 997 1,664 operating activities ------------------------ ----------- ----------- ---------- Investing activities Staged payments relating to property acquisitions - (55,695) (88,425) Sale of investment property 106,291 - - Purchase of property, plant and equipment - - (62) ------------------------ ----------- ----------- ---------- Cash flows used in investing activities 106,291 (88,487) ------------------------ ----------- ----------- ---------- Financing activities Proceeds from long term loans - 36,258 67,108 Repayment of long term loans (60,933) - (750) Share issue expenses - - - Cash flows generated from financing activities (60,933) 36,258 66,358 ------------------------ ----------- ----------- ---------- Net (decrease)/increase in cash and cash equivalents 37,536 (18,440) (20,465) Cash and cash equivalents at beginning of period 23,107 43,572 43,572 ------------------------ ----------- ----------- ---------- Cash and cash equivalents at end of period 60,643 25,132 23,107 ------------------------ ----------- ----------- ---------- Notes to the Consolidated Financial Statements (Unaudited) 1 The Company European Convergence Property Company plc (the "Company") was incorporated and registered in the Isle of Man under the Isle of Man Companies Acts 1931 to 2004 on 1 June 2005 as a public company with registered number 113616C. Pursuant to a prospectus dated 15 June 2005 there was an original placing of up to 100,000,000 Ordinary Shares. Following the close of the placing on 24 June 2005 62,696,333 Shares were issued. The Shares of the Company were admitted to trading on the Alternative Investment Market of the London Stock Exchange ("AIM") on 28 June 2005 when dealings also commenced. The Company's agents and the Manager perform all significant functions. Accordingly, the Company itself has no employees. 2 The Subsidiaries For efficient portfolio management purposes, the Company has established the following subsidiary companies:- --------------------------------- ------------ --------- Country of Percentage of incorporation shares held --------------------------------- ------------ --------- European Convergence Property Company Bulgaria EOOD Bulgaria 100% European Property Acquisitions EOOD Bulgaria 100% European Convergence Property Company (Cayman) Limited Cayman Islands 100% ECPC (Cyprus) Limited Cyprus 100% European Convergence Property Company (Malta) Limited Malta 100% European Convergence Property Company SRL(1) Romania 100% Paris Development SRL(1) (sold August 2007) Romania 100% European Property Development Invest SRL (sold August 2007) Romania 100% European Property Millenium SRL (2) Romania 100% Millennium Estates SRL (2) (sold August 2007) Romania 100% European Property Imobiliar Invest SRL Romania 100% European Property Development Corporation SRL Romania 100% Convergence Property Invest SRL Romania 100% Orange Convergence Finance BV The Netherlands 100% European Convergence Property Company Real Estate Trading and Management Limited Turkey 100% --------------------------------- ------------ --------- (1) During the year European Convergence Property Company SRL was merged with Paris Developments SRL subsequent to which, European Convergence Property Company SRL was deregistered on 7 November 2006. (2) During the year European Property Millenium SRL was merged with Millennium Estate SRL and consequently, European Property Millenium SRL is currently in the process of being deregistered. 3 Significant Accounting Policies The interim consolidated financial statements of the Company for the six months ended 31 December 2007 comprises the Company and its subsidiaries (together referred to as the "Group"). The interim consolidated financial statements are unaudited. 3.1 Basis of presentation These interim financial statements have been prepared in accordance with International Accounting Standard 34: Interim Financial Reporting Accounting. Policies have been applied on a consistent basis as those adopted for the last full financial statements. 3.2 Investment property Investment properties are those which are held either to earn rental income or for capital appreciation or both. Investment properties are stated at fair value. Any gain or loss arising from a change in fair value is recognised in the income statement. 3.3 Basis of consolidation Subsidiaries Subsidiaries are those enterprises controlled by the Company. Control exists where the Company has the power, directly or indirectly, to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control effectively commences until the date that control effectively ceases. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised gains arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Financial statements of foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation, are translated to Euro at the foreign currency exchange rates ruling at the balance sheet date. Foreign exchange differences arising on translation are recognised directly in equity. 3.4 Dividends Dividends are recognised as a liability in the year in which they are declared and approved. There was no dividend declared as at 31 December 2007 (30 June 2007: Nil). 4 Segment Reporting Segment information is presented in respect of the Group's business and geographical segments. The segments are managed on a worldwide basis, but operate in three principal geographical areas, Bulgaria, Romania and Turkey. The location of the customers is the same as the location of the assets. 6 months ended Bulgaria Romania Turkey Unallocated Total 31 December 2007 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 ---------------- -------- --------- --------- --------- --------- Net rent and associated income 1,303 8,216 - 8,126 9,429 Segment results (111) 3,041 (2) 4,259 7,187 Segment assets 31,371 - - 68,360 99,731 Segment liabilities (19,817) - (23) (3,459) (23,299) ---------------- -------- --------- --------- --------- --------- 6 months ended Bulgaria Romania Turkey Unallocated Total 31 December 2006 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 ---------------- -------- --------- --------- --------- --------- Net rent and associated income - 1,278 - - 1,278 Segment results (22) 196 - (401) (227) Segment assets 30,012 61,770 - 18,775 110,557 Segment liabilities (13,011) (37,688) - (434) (51,133) ---------------- -------- --------- --------- --------- --------- Year ended 30 June 2007 Bulgaria Romania Turkey Unallocated Total Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 ---------------- -------- --------- --------- --------- --------- Net rent and associated income 1,660 4,106 - - 5,766 Segment results 2,223 6,119 (6) (1,888) 6,448 Segment assets 33,846 107,380 - 17,891 159,117 Segment liabilities (19,973) (70,040) - (1,415) (91,428) ---------------- -------- --------- --------- --------- --------- 5 Net Asset Value per Share The net asset value per share as at 31 December 2007 is Euro1.21 based on net assets of Euro75.9 million and 62,696,333 ordinary shares in issue. 6 Investment Property 31 December 2007 31 December 2006 30 June 2006 Group Group Group Euro'000 Euro'000 Euro'000 ---------------------- ------------ ----------- ----------- At beginning of period 131,971 24,522 24,522 Additions through: direct acquisitions of property - 55,695 94,325 acquisition of subsidiary - - - companies Disposals 99,421 - - Net gain from fair value adjustments on investment property - - 13,124 ---------------------- ------------ ----------- ----------- Balance at end of period 32,550 80,217 131,971 ---------------------- ------------ ----------- ----------- Security At 31 December 2007, there was a first rank mortgage on the above properties securing the bank loans of Euro19 million. 7 Basic and Diluted Earnings/(Loss) per Share Basic and diluted earnings/(loss) per share is calculated by dividing the profit /(loss) attributable to equity holders of the Company by the number of ordinary shares in issue during the period: 31 December 2007 31 December 2006 30 June 2007 -------------------------- ----------- ----------- --------- Profit attributable to equity holders of the Company (Euro'000) 7,187 (227) 6,448 Number of ordinary shares in issue (thousands) 62,696 62,696 62,696 -------------------------- ----------- ----------- --------- Basic and diluted earnings per share (Euro per share) 0.1146 (0.0036) 0.1028 -------------------------- ----------- ----------- --------- 8 Interest-Bearing Loans and Borrowings This note provides information about the Group's interest-bearing loans and borrowings. Non-current liabilities Group Group Group 31 December 2007 31 December 2006 30 June 2007 Euro'000 Euro'000 Euro'000 ------------------------ ----------- ----------- ---------- Secured bank loans 19,175 50,008 80,108 ------------------------ ----------- ----------- ---------- 9 Exchange Rates The following exchange rates were used to translate assets and liabilities into the reporting currency at 31 December 2007: Bulgarian Lev 1.9558 Romanian Lei 3.6082 Turkish Lira 1.7042 10 Taxation Income tax expense Group Euro'000 --------------------------- ------------------------- Current tax 50 Deferred tax (4,765) --------------------------- ------------------------- (4,715) ------------------------- Deferred income tax is based on temporary differences between revalued amounts of investment property in the books of the subsidiaries and their respective tax bases. The deferred tax position is based on the capital gains tax rate of 16% in Romania and 10% in Bulgaria. 11 Commitments at the Balance Sheet Date There were no material commitments as at the balance sheet date. 12 Post Balance Sheet Events At the end of January 2008 the Company made a capital distribution to shareholders of Euro0.94 per share. This information is provided by RNS The company news service from the London Stock Exchange END IR SDLSUFSASEDD
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