Successful strategy: LEG records significant growth in operating earnings (FFO) in the 2012 fiscal year
- Group transformation successfully completed: Significant increase of 22.2% in FFO I to EUR136.5 million
- Healthy letting business: Vacancy rate drops to 3.1%; occupancy rate is 96.9%
- Strong balance sheet: Low gearing (LTV) of 47.9% forms the basis for further growth
- Growth strategy confirmed: Negotiations on the acquisition of an attractive portfolio enter the final stage
Dusseldorf, 30th April 2013 - In 2012, LEG Immobilien AG successfully completed the comprehensive transformation set out in its corporate strategy and again improved its operational and financial key figures. Rental income for the LEG Group as a whole increased by 1.8% to EUR344.2 million (previous year: EUR338.2 million). This was driven in part by a further reduction in the vacancy rate, which declined significantly from 3.6% to 3.1% at year-end 2012. For 2013, LEG is forecasting accelerated rental growth as a result of catch-up effects and the non-recurring effects recorded in the previous year. These effects should be seen in conjunction with the new rent indexes that have been announced and the extraordinary reduction in the cost of rent as a result of the early refinancing of subsidized loans. Describing the letting strategy, COO Holger Hentschel commented: 'A clearly defined market, local presence, extensive market expertise and a high-quality portfolio are what ensures our continuously strong letting performance.'
Investments in modernization and maintenance amounted to EUR76.9 million in 2012 (previous year: EUR81.9 million), corresponding to an investment volume of EUR12.90 per square meter of residential space. 'Investments remained at a high level and form the basis for the further value enhancement of the portfolio,' commented Holger Hentschel (COO).
Positive consolidated net profit underlines effective business model
IFRS consolidated net profit also confirms the positive earnings trend. Despite non-recurring expenses in connection with the reorganization, consolidated net profit was positive at EUR112.1 million (previous year: EUR-15.1 million). The positive operating development (lower vacancy rates, higher rental income and the acquisition of 1,244 residential units in Bocholt in October 2012) were also reflected in the positive portfolio valuation results of EUR120.3 million.
On the day this report was published, net asset value in accordance with the EPRA standard (EPRA NAV) amounted to EUR2,368.3 billion (EUR44.72 per share) and remained largely unchanged to the previous year (2011: EUR2,384.4 billion). In early 2013, a shareholder loan was converted to equity; this had a positive effect of around EUR40 million on NAV. The equity ratio amounted to 39.8% in 2012, while gearing (loan-to-value - LTV) was a low 47.9%. This secures the Company's defensive risk profile and forms the basis for future growth.
CEO Thomas Hegel: 'In the past year, the Company has overcome significant internal challenges, such as the introduction of new SAP ERP software, the transition to IFRS and, in particular, preparations for the IPO. In light of these factors, we are particularly satisfied with our clearly positive earnings performance. The LEG team has demonstrated the effectiveness of our business model.'
On the basis of this positive earnings development, the Management Board will propose the payment of an initial dividend of EUR0.41 per share to the Annual General Meeting. This corresponds to 16% of FFO I in the 2012 financial year. A distribution ratio of 65% of FFO I is planned from 2013 onwards.
Focus on growth strategy: Acquisition in a core region is in a very late stage
Negotiations with the seller on the acquisition of an additional residential portfolio in North Rhine-Westphalia have entered the final phase. The portfolio consists of more than 2,000 residential units and offers considerable synergies with LEG's existing portfolio. This transaction will also meet LEG's ambitious financial target criteria for acquisitions with further potential for value enhancement. CEO Thomas Hegel: 'Our extensive local market expertise and financial strength means that we enjoy significant competitive advantages when it comes to external growth. Our financial flexibility helps us to become the exclusive negotiation partner for sellers at an early stage.' LEG's acquisition pipeline also contains a number of different portfolios that have been selected on the basis of clearly defined target criteria, including a further small portfolio that is under exclusive examination. This means that LEG is continuing on the growth path that began with the acquisition of 1,244 residential units in Bocholt in October 2012. These units were rapidly integrated into LEG and their operational performance is already exceeding expectations.
The Annual Report, containing the audited annual financial statements of LEG Immobilien AG, is as of today available for download at www.leg-nrw.de.
Investor Relations/Press Contact:
Burkhard Sawazki/Manfred Neuhöfer
Tel. +49 211 45 68-204/-325
End of Media Release
Issuer: LEG Immobilien AG
Key word(s): Real estate
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|Company:||LEG Immobilien AG|
|Phone:||+49 (0) 211 / 4568 - 0|
|Fax:||+49 (0) 211 / 4568 - 261|
|Listed:||Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Stuttgart|
|End of News||DGAP-Media|