Summit Germany Limited Annual Financial Report - 2017 Full Year Report (1562M)

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RNS Number : 1562M

Summit Germany Limited

26 April 2018

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.

Summit Germany Limited

(the "Company")

2017 Full Year Results

We are pleased to present the audited results for the year ended 31 December 2017 ("the Reporting Period") of Summit Germany Limited and its subsidiaries ("the Group").

Profits

   --    Net profit more than doubled to EUR113.0 million (FY 2016: EUR55.6 million) 
   --    Earnings Per Share (EPS) of 21.6 cents (FY 2016: 10.5 cents) 
   --    Profit Before Tax (PBT) of EUR128.7 million (FY 2016: EUR63.9 million) 

-- EBITDA up 93.9% to EUR146.0 million (FY 2016: EUR75.3 million) of which Revaluation Profit is EUR88.0 million (FY 2016: EUR28.2 million)

NAV

   --     EPRA NAV of EUR572.9 million increased by 22.9% compared with EUR466.3 million in 2016 
   --     EPRA NAV per share of EUR1.23 (FY 2016: EUR1.00) 
   --     Group's NAV increased 21.8% to EUR533.3 million (FY 2016: EUR437.9 million) 
   --     NAV per share of EUR1.15 (FY 2016: EUR0.94) 
   --     Total Assets of EUR1,057.1 million (FY 2016: EUR882.3 million) 

Rent

   --    Rental income increased by 5.8% to EUR60.5 million (FY 2016: EUR57.2 million) 
   --    EUR64.7 million annualised net rent, equivalent to 6.9% rental yield 
   --    Funds From Operations (FFO) up 4.6% to EUR36.5 million (FY 2016: EUR34.9 million) 
   --    Average rent per sqm per month of EUR6.6 across the portfolio is lower than ERV 

Portfolio

-- Portfolio of 84 properties with a Net Market Value (NMV) of EUR939 million (FY 2016: 100 properties at EUR798 million NMV)

-- In addition, EUR51.4 million is due following the sale of an office building at 2.3% yield, 24% above last valuation.

   --     Substantial further value in the portfolio due to: 

o Rent lower than ERV

o 93,000 sqm of vacancy

o Additional building rights and surplus of land in many properties

   --     92% occupancy over the portfolio's majority (90% including properties for re-development) 

Main Developments

-- EUR100 million acquisition of a new portfolio; 80,000 sqm of fully let properties with net rent of approximately EUR7.9 million p.a.

   --     EUR17.6 million disposals of 19 non-strategic assets enhance average portfolio quality. 

-- New leases and renewals for approximately 162,000 sqm; representing total rental income of ca. EUR9.6 million p.a.

   --     Further activities to capitalise upon on-going demand for German residential: 

o Two residential development projects for 132 apartments are under process on surplus land in two Group's properties in Frankfurt

o Two JV projects for 95 residential units in Berlin

o Acquisition of 865,000 sqm of land for future development

Financing

-- EUR300 million bond placement post Reporting Period mainly refinanced medium term existing secured debt facilities; Senior fixed rate notes bear 2.00% p.a. for seven year term.

-- Deployment of bond proceeds post Reporting Period to refinance existing secured debt facilities:

o Repayment of ca. EUR220 million of debt facilities bearing average 3.62% interest p.a.; Interest saving of approximately EUR3.4 million p.a

o Acquisition of EUR12.2 million of existing debt bearing 3.7% interest p.a.; Interest savings of approximately EUR0.3 million p.a.

-- Following refinancing activities, average interest rate on Group facilities decreased to 2.17% with an average duration of seven years.

Dividend

-- Total dividend distributions of EUR14.1 million were paid in 2017, reflecting 3.02 cents per share.

   --    Additional EUR4.65 million was paid post Reporting Period, reflecting 1.00 cents per share. 

Harry Hyman, Chairman commented: "In 2017 we succeeded to increase and improve our portfolio. In the beginning of 2018 we also restructured our financing. The impact of these actions was partly reflected in FY 2017 earnings and net asset value. The group is well positioned for 2018, as the full benefit of those transactions and intensive asset management will flow this year. With funds available for portfolio growth and debt refinance, we will pursue opportunities to further improve the stability and visibility of net rent and underlying earnings."

Zohar Levy, Managing Director commented: "The German real estate market remains very attractive, underpinned by strong tenant demand and a limited pipeline of new development. This plays well to our portfolio and skills. Our portfolio is under rented and almost every lease renewal is signed at substantially higher rent, increasing our cash flow and potential valuation. In addition, we are actively engaged in several developments using surplus building rights in our properties which we believe will have a significant upside. We expect that the combination of the under rented portfolio with the upside potential in our properties would have a massive contribution to our NAV in the near future."

For the full report please download the PDF.

http://www.rns-pdf.londonstockexchange.com/rns/1562M_-2018-4-25.pdf

For further information please contact:

 
Summit Germany Limited                      Tel: [phone] 
Zohar Levy - Managing Director 
Itay Barlev (Braun) - Finance Director 
 
Non-Executive Chairman                      Tel: [phone] 
Harry Hyman 
 
Carey Group, Company Secretary              Tel: [phone] 
Sara Bourne 
 
Liberum Capital Limited, Nominated Adviser  Tel: [phone] 
 and Joint Broker 
Chris Clarke / Jill Li 
 
Cenkos Securities, Joint Broker             Tel: [phone] 
Mark Connelly 
Russell Kerr / Selwyn Jones (Broking) 
 
 
 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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April 26, 2018 02:00 ET (06:00 GMT)