2013-03-20 17:43:56 -
2012 annual results & new strategy
Net recurring income up 11% and
a strategic refocus on Paris office properties
The 2012 year-end accounts were adopted by the Board of Directors at its
meeting of 20 March 2013 under the chairmanship of Mark Inch.
Consolidated figures
+------------------------------------------------------------------------------+
| M€ 2012 2011 Like-for-like change|
+------------------------------------------------------------------------------+
|Rental income* 69.5 69.4 + 4.5% |
| |
|EPRA earnings 34.0 30.6 |
| |
|Net result (Group share) -6.1 29.4 |
| |
| Of which value adjustments and disposal -39.4 -0.4 |
| results |
| |
|Recurring cash flow 35.7 33.0 +13.7% |
| |
|Portfolio value (net of transfer costs) 915.4 999.2 -2.8% |
| |
|EPRA NNNAV 378.1 392.8 |
+------------------------------------------------------------------------------+
|
+------------------------------------------------------------------------------+
|EPRA financial occupancy rate 91.6% 91.3% |
| |
|Net LTV 55.9% 57.6% |
| |
|Average maturity of bank debt 5.3 2.2 |
+------------------------------------------------------------------------------+
|
+------------------------------------------------------------------------------+
| € / share ** |
+------------------------------------------------------------------------------+
|EPRA earnings 5.6 5.3 |
| |
|Recurring cash flow 5.8 5.8 |
| |
|EPRA NNNAV *** 62.2 69.2 |
| |
|Dividend 4.2**** 4.2 |
+------------------------------------------------------------------------------+
* Disposals close to €110 million in 2011/2012
** Number of shares: 6,110,611 at 31 December 2012 and 5,736,272 at 31
December 2011
*** Number of shares diluted: 6,079,909 as at 31/12/2012 and 5 678 114 as at
31/12/2011
**** €2.10 interim dividend paid in October 2012 and €2.10 final dividend to be
proposed to the AGM on 30 May 2013
Significant increase in recurring income
EPRA earnings (€34.0 million) and cash flow (€35.7 million) improved
significantly in 2012 (respectively 11% and 8%) despite some €110 million of
disposals completed in 2011 and 2012, which incidently also enhanced the overall
portfolio quality.
Net income (Group share) was -€6.1 million in 2012 against €29.4 million, mainly
due to negative valuation adjustments on the portfolio(-€30 million) and hedging
instruments (-€8.3 million).
Strong operating performance
Dynamic asset management enabled Société de la Tour Eiffel to again take full
advantage of the qualities of its property portfolio completing nearly 60,000
sq. m of lease renewals and new lettings (€5.8 million in annual rent); on a
like-for-like basis, rents rose by 4.5% in 2012.
This strong operating performance resulted in the EPRA financial occupancy rate
remaining at a high level of 91.6% at year-end 2012, against 91.3% at 31
December 2011.
Constant portfolio rejuvenation with a gradual refocus on Paris offices
The Group's portfolio comprises more than 20% of green buildings with recognised
environmental certificates and 41% of new or sub-ten-year old properties. Its
value net of transfer costs totalled €915 million against €999 million at year-
end 2011; the decrease was primarily due to sales (€70 million in 2012, achieved
at an average of 1.5% below last appraisal value), conducted as part of the
active management of the portfolio, but also to a reduction in value of 2.8% on
a like-for-like basis (compared with 31 December 2011) mainly concerning sorting
centres and regional business parks. The asset values of offices in Ile-de-
France, the company's core business and the focus for its new strategy, remained
stable.
Pursuing its asset rotation policy, the company is accelerating refocusing on
the Paris office market: more than €40 million of property was under contract
for sale at 31 December 2012 and nearly €65 million to date this year; € 30
million have been sold since the 1(st) January 2013. The EPRA NNNAV amounts to
€62.2 / share against €69.2 at year-end 2011 under the combined effect of the
reductions in property values partly attributable to increased transfer costs (-
€4.9 / share) and hedging instruments (-€1.4), the 2012 distribution in cash (-
€1.9) and in shares (-€4.4), offset by EPRA earnings (€5.7 / share). Ignoring
the dilution caused by the creation of 6.5% of new shares as the partial
distribution of the 2012 dividend by scrip issue, EPRA NNNAV amounted to €66.6
per share, i.e. a decline of only 3.8%.
A secure financial structure and cost of debt under control
One of the highlights for 2012 was that the Group continued its deleveraging and
completed the restructuring of its financing, thus achieving the objective to
defer, segment and extend the average life of its debt through anticipated
refinancings of €490 million.
Consequently, this process enabled the Group to:
- Improve net LTV from 60.4% to 55.9% over the past two years, thanks to
i) nearly 20% in net debt redemption (€115 million) resulting from the disposals
carried out in 2011 and 2012, and ii) to the accelerated amortization of
existing loans;
- Reduce the average borrowing rate to 3.2% in 2012 (against 3.5% in
2011), the Group having subscribed €430 million in new hedging instruments under
extremely attractive conditions given the historically low interest rates;
- Significantly extend its average debt maturity to 5.3 years at year-end
2012.
As a result of these refinancings and its proactive deleveraging, Société de la
Tour Eiffel has no significant debt maturity until 2017 and has secured an
average annual finance cost of less than 4% over the next five years.
Dividend maintained in 2012 and change announced for 2013
Following the 2012 interim dividend of €2.10 per share paid last October, the
Board of Directors has decided to propose to the AGM on 30th May next
the payment of a final dividend of €2.10 per share, i.e. an overall
distribution of €4.20 per share for 2012, representing 72% of the net recurring
cash flow paid in cash or in shares at the election of each shareholder.
For 2013, the company intends to continue its emphasis on deleveraging by
announcing a temporary change in its distribution policy and lowering its
dividend objective to 3.20 euros per share paid in cash.
Governance and new management
An executive succession plan was drawn up with effect from 1 September 2012,
under which the functions of Chairman and Managing Director were separated. In
accordance with the plan, Mr Mark Inch, while retaining his position as Chairman
of the Board of Directors, resigned as Chief Executive Officer and was replaced
by Mr. Renaud Haberkorn. Mr. Robert Waterland resigned as Deputy Chief Executive
Officer, remains a Board member and has been appointed Chairman of the
Investment Committee. Mr. Frédéric Maman was appointed Deputy Managing Director
from 1 September 2012, in charge of investment and asset management.
Finally, Mr. Jérôme Descamps announced his resignation from his position as
Deputy Managing Director and board member and will leave the company at the end
of March; the new Chief Financial Officer will take over his duties early in
April.
A new strategy focusing on Paris offices
The Company has defined a new strategy enabling it to resume its growth in the
coming years. This new strategy involves (i) refocusing its activity on offices
in the Paris region, (ii) scaling-up its value creation operations and (iii) an
improved risk profile.
The Company will continue to privilege assets that meet occupier requirements,
providing well located space at an affordable overall cost and offering state-
of-the-art facilities. A 5 to 15% portion of the future portfolio will also be
devoted to value creation, whether through speculative forward purchases,
properties with short leases, or potential for refurbishments. Société de la
Tour Eiffel has substantial expertise and a proven track record established over
the past fifteen years in these areas. Furthermore, half of the company's
property portfolio already meets the defined criteria. Another aspect of the
strategy is an improved risk profile, with a portfolio in which 85 to 95% of
assets are income producing and the LTV is reduced to 45%.
Work in progress
Detailed during the presentation of the company's annual results, this strategy
was initiated in 2012 by pro-active risk management in particular with the
renegotiation of the company's debt on attractive terms, extending the average
maturity to 5.3 years. This dynamic was furthered by the sale of €70 million of
non-core assets and the establishment of a new management team responsible for
revitalizing the company.
In 2013-2014, Société de la Tour Eiffel will continue its refocusing phase with
further disposals of mature, non-strategic assets, negotiation of lease
extensions, LTV reduction to 45% and consequently mechanically aligning its
dividend objective down to 3.20 euros per share, paid in cash. In addition, the
Company may make opportunistic investments in partnerships.
As of year-end 2014, the company will display a new profile: it will be able to
reinvest the revenue from disposals in strategic assets and distribute 70-80% of
its recurring income in cash.
CALENDAR:
- 14 May 2013 (after market close): turnover and activity for Q1 2013
- 30 May 2013 (11 am) : Annual General Meeting, Automobile Club de France, Place
de la Concorde, 75008 Paris
- 24 July 2013 (after market close): Half Year Results 2013
Audit procedures on 2012 accounts have been performed. The statutory report is
pending.
About Société de la Tour Eiffel
A listed real estate investment company (SIIC) on NYSE Euronext Paris, the
company pursues a strategy focused on the ownership and the development of
quality office and business space capable of attracting a wide range of tenants
in both established and emerging locations. The company's portfolio stands at
915 million Euros of assets spread evenly between the Paris area and the
regions.
Société de la Tour Eiffel is listed on NYSE Euronext Paris (compartment B) -
ISIN code: 0000036816 - Reuters: TEIF.PA - Bloomberg EIFF.F. Indexes: GIEIF
Foncières, IEIF Immobilier France.
Press www.societetoureiffel.com Communications
contact
Jean- Renaud Haberkorn
Philippe
Mocci
Capmot Chief Executive Officer
Tel:+33 (0)1 71 16 19 13/+33 (0)6 Tel: +33 (0)1 53 43 07 06
71 91 18 83
jpmocci@capmot.com renaud.haberkorn@stoureiffel.com
Société de la Tour Eiffel: 2012 annual results & new strategy:
hugin.info/143560/R/1686758/553088.pdf
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Source: Société de la Tour Eiffel via Thomson Reuters ONE
[HUG#1686758]
