08 Mar 2017

2016 ANNUAL RESULTS – INCREASED GROSS RENTAL INCOME BY +18.8%

2016 ANNUAL RESULTS – Increased gross rental income by +18.8%

Growth in FFO (Funds From Operations) of +16.2%

Dividend up by +8%

Asset valuation of €666M, up by +5.5%

 

Boulogne-Billancourt, 8th March 2017

At its 7 March 2017 meeting, the Patrimoine & Commerce Supervisory Board reviewed the Company’s operations and approved the 2016 financial statements, prepared by Management.

 

Key figures – IFRS In euros million 2016 2015 Variation %
Gross rental income 40.9 34.4 +6.4 +18.8%
Recurring net income (EPRA Earnings)1 24.1 20.7 +3.4 +16.2%
Asset appraisal value (excluding transfer taxes)² 666.4 631.8 +34.6 +5.5%
Capitalisation rate 7.3% 7.4% N/A N/A
LTV ratio 43.6% 43.2% N/A N/A
EPRA NNNAV 316.5 294.4 +22.1 +7.5%
EPRA NNNAV (in €/share) 24.7 23.9 +0.9 +3.6%

 

Gross rental income growth: +18.8%

For the fiscal year ended 31 December 2016, Patrimoine & Commerce reported consolidated gross rental revenues of €40.9M compared with €34.4M for the fiscal year ended 31 December 2015, up by +18.8%, primarily driven by the impact of assets leased in the course of the year and by the full-year impact of acquisitions and projects delivered in 2015.

During the period, the portfolio underwent minor changes in tenancy (tenant turnover rate of around 1.7%) despite a challenging economic environment. The occupancy rate remains high at 96%3 for the portfolio as a whole, and the rental payment default rate of 2.1% attests to the quality and resilience of the Company’s portfolio.

Increase in recurring net income: +16.2%

Recurring net income (EPRA Earnings) amounted to €24.1M (€1.88 per share), an increase of +16.2% compared with 2015. Group net income amounted to €25.9M, a slight decrease compared with the prior fiscal year (€26.6M).

Asset valuation: +€35M

As of 31 December 2016, independent appraisal of assets (excluding transfer taxes and including assets held for sale) amounted to €630M (€666M if the assets of equity method investees are included), an increase of +4.0% compared with 31 December 2015. Indeed, Patrimoine & Commerce managed an active acquisitions and development assets policy throughout 2016, investing a total of €48.3M.

The change in the fair value of investment properties had a positive impact of +€1.8M on net income (which is about 0.3% of the portfolio’s global value). The capitalization rate of assets in use was at 7.3%.

Net Asset Value per share growth at €24.7

The group’s consolidated net debt, €284.7M as of 31 December 2016, enables the Company to present a Loan-To-Value ratio of 43.6%, which remains well below the average target of 50% that Patrimoine & Commerce has set for itself.

In addition, the Company was able to take advantage of the low interest rate environment to renegotiate or hedge its debt. Accordingly, 83% of the debt is now hedged with financial instruments and the average rate for fiscal year 2016 is 3.1%.

EPRA NNNAV amounted to €316.5M (€24.7 per share), an increase of +7.5% versus 31 December 2015. This increase in NAV is primarily attributable to Patrimoine & Commerce’s 2016 satisfactory results.

Dividend growth: +8.0%

At the annual meeting of Patrimoine & Commerce shareholders on the 27th of June 2017, shareholders will be asked to approve a dividend distribution based on €1.08 per share, with shareholders opting between payment in cash or in newly issued shares of the Company. This dividend payout is +8.0% higher than the 2015 dividend.

Asset portfolio growth and optimization

In 2016, Patrimoine & Commerce continued its expansion with the acquisitions of 8 assets located in Champniers (16), Lempdes (63), Loches (37), Poitiers (86), Provins (77), Mantes-la-Jolie (78) and Limoges Le Vigen (87). Those acquisitions sum €48.3M in investment for a net return of 7.65%.

Patrimoine & Commerce pursue its portfolio turnover policy of non-strategical assets with the sale of Chasseneuil-du-Poitou (86), Melesse (35), Quetigny (21) and La Rochelle (17) for total amount of €12M, in line with independent appraisal.

Outlook

« In six years, we successfully disseminated our innovative concept of low-cost retail parks. This new concept is recognized by financial market and is widely approved by major retailers. Our operational performances confirm the strength of Patrimoine & Commerce’s business model. Our 2016 results reinforce the financial position of our low-cost retail park Company.» said Eric Duval, Managing Director and Founder of Patrimoine & Commerce.

 

Notes:                               1 Groupe Sepric income and expenses have been reposted to net income.

                ² Excluding transfer taxes (incl. Cherbourg and Studio Prod for the percentages held)

3 Calculated on the basis of rents (excluding strategic vacancies).