13 Mar 2018

2017 Annual Results

2017 ANNUAL RESULTS

 

Growth in FFO of +23.3%

Asset valuation of €736M, up by +10.5%

Dividend up by +6.5%

 

At its 12 March 2018 meeting, the Patrimoine & Commerce Supervisory Board reviewed the Company’s operations and approved the 2017 financial statements, prepared by Management.

 

Key figures 31/12/2017 31/12/2016 Variation %
12 months 12 months
Gross rental income €41.1M €40.9M +0.5%
Funds From Operation 1 €29.7M €24.1M +23.3%
Group Share Net Income €29.5M €25.9M +13.8%
Alternative Performance Measures 2 31/12/2017 31/12/2016 Variation %
Asset appraisal value (excluding transfer taxes) 3 €736.3M €666.4M +10.4%
Capitalization rate 7.2% 7.3% n.a
LTV ratio 4 47.2% 43.6% n.a
NAV (excluding transfer taxes – €/share) €25.8 €24.7 +4.2%
NAV (excluding transfer taxes) €343.4M €316.5M +8.5%

 

 

Gross rental income growth: +0.5%

For the fiscal year ended 31 December 2017, Patrimoine & Commerce reported consolidated gross rental revenues of €41.1M compared with €40.9M for the fiscal year ended 31 December 2016, up by +0.5%, primarily driven by the impact of acquisitions and projects delivered.

 

During the period, the portfolio underwent minor changes in tenancy (tenant turnover rate of around 2.6%) despite a challenging economic environment. The occupancy rate remains high at 95%5 for the portfolio as a whole and the rental payment default rate of 2% attests to the quality and resilience of the Company’s portfolio.

 

Increase in recurring net income: +23.3%

Operating expenses and other incomes amounted to an income of €1.5M, compared to an expense of €4.3M in 2016. In 2017, other operating incomes included a capital gain of €5.9M after the sale of the Cergy project.

 

Net cost of debt totaled €8.9M in 2017, down by -7.2% compared to fiscal year 2016. The Company was able to take advantage of the low interest rate environment, specifically with the financing at attractive rates of Wittenheim (67), Plérin (22), Leader Price property portfolio, Argentan (61), Lexy (54), Champniers (16), Cognac (16), and Bourg-en-Bresse (01). The average interest rate on debt is 2.83% for the 12 months ending 31 December 2017 (versus 3.10% in 2016).

 

Recurring net income (FFO) amounted to €29.7M (€2.22 per share), an increase of +23.3% compared with 2016.

 

Including changes in fair value of properties (+€1.3M) and financial instruments (+€1.9M), equity method revenues (-€1.8M), and other expense and income (-€0.6M), net income totaled €30.4M as of 31 December 2017 (compared to €25.7M in 2016), up by +18.2%.

 

After accounting for minority interests, Group share net income amounted to €29.5M, an increase of +13.8% compared with 2016.

 

Asset valuation: +€70M

As of 31 December 2017, independent appraisal of assets (excluding transfer taxes and including group share of equity method entities and assets held for sale) amounted to €736.3M, an increase of +10.5% compared with 31 December 2016. The capitalization rate of assets in use is at 7.2%.

 

Patrimoine & Commerce developed and managed it property portofolio with the acquisitions and deliveries of 9 Leader Price assets and 6 retail parks in Lexy (54), Argentan (61), Plérin (22), Bourg-en-Bresse (01), Wittenheim (67), and Cognac (16). Those investments summed €64.7M for a net yield of 7,1%.

 

Patrimoine & Commerce pursue its portfolio turnover policy of non-strategical assets. The Group disposed of an office property in Blagnac (31) and three commercial properties in Quetigny (21), Epagny (74), and Chaintré (71) representing a total amount of €11.5M, in line with independent appraisal.

 

Net Asset Value per share growth at €25.8 (+4.2%)

The group’s consolidated net debt, €340.1M as of 31 December 2017, enables the Company to present a Loan-To-Value ratio of 47.2%, which remains well below the average target of 50% that Patrimoine & Commerce has set for itself.

Net asset value amounted to €343.4M (€25.8 per share), an increase of +4.2% versus 31 December 2016.

Dividend growth: +6.5%

At the annual meeting of Patrimoine & Commerce shareholders on the 27th of June 2018, shareholders will be asked to approve a dividend distribution based on €1.15 per share, with shareholders opting between payment in cash or in newly issued shares of the Company. This dividend payout is +6.5% higher than the 2016 dividend.

 

 

Outlook

« All indicators increased sharply in 2017 confirming the strength of Patrimoine & Commerce’s business model despite a difficult economic environment. Our robust financial position supports our active investment strategy and assures us of Patrimoine & Commerce’s growth prospect. » said Eric Duval, Managing Director and Founder of Patrimoine & Commerce.

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