Société de la Tour Eiffel :2013 annual results

2013 Financial Statements

A sound portfolio and a strengthened financial structure    

Several objectives of the strategic plan achieved ahead of schedule

The Board Meeting chaired by Mark Inch on 19 March 2014 approved the 2013 financial statements.

Consolidated figures

20132012Portfolio valuation excl. Transfer costs€ 701m€ 915mNet financial debt€ 327m€ 512mNet LTV46.7%55.9%EPRA NNNAV (in €/share*)58.162.2Rental income € 61.5m€ 69.5mLFL growth3.3%4.5%EPRA financial occupancy rate93.7%91.6%Current EPRA operating result€ 47.3m € 53.7m% rents77.0%77.3%EPRA earnings€ 28.0m€ 34.0mIFRS net result (Group share)-€ 1.9m-€ 6.1mRecurring cash flow€ 29.5m€ 35.7min €/share*4.75.8

(*) number of shares: 6,253k as at 31 December 2013 and 6,111k as at 31 December 2012, i.e. a dilution of 2.3%

Successful refocus on the Paris office property segment and a sharp reduction in debt level

2013 was the pivotal year for the 2013-2015 strategic plan, with a number of achievements enabling the Company to be one year ahead of schedule.

First of all, the Company successfully completed the sale of some € 190 million of non-core assets in one year, compared with a target of € 200 million of disposals over two years, scheduled for 2013 and 2014. The disposals mainly involved business parks and logistics warehouses in the provinces.  The policy has made the Group portfolio considerably more homogeneous, with 69% of office buildings in Paris at year-end 2013, against only 49% one year earlier.  In addition, the disposals were made at levels very close to their appraisal value, reflecting the transactional agility of the Company's teams.

In addition to refocusing on a more coherent portfolio, the disposals have resulted in a major reduction in the Group's debt level, with a Loan-to-Value ratio (LTV) of 46.7% at year-end 2013 compared with 55.9% one year earlier.  Here again, the Company is close to reaching in one year a target initially scheduled for completion after two years (i.e. an LTV ratio of 45% at year-end 2014).

This proactive policy has led ispo facto to a temporary contraction in most of the Company's financial aggregates with two factors causing change:

Volume: the reduction in rents and the underlying cash flows 

Non-recurring expenses: asset disposals resulted in a high level of non-recurring operating expenses of around € 1.8 million. 

Sound operating performance in a complex rental market

On a complex rental market, Société de la Tour Eiffel fared well in terms of asset management.

On a like-for-like basis, rents increased 3.3%, reflecting both the positive effect of indexing as well as a net gain in terms of the arrivals of new tenants.

The latter item bolstered the improvement in the financial occupancy rate of the portfolio, which gained 2.1% to reach a record level of 93.7% at year-end 2013 against 91.6% at year-end 2012. The ratio was also improved by the disposal of assets in the provinces with higher vacancy rates.

The cost reduction policy in support of the deliberate downsizing in business announced in July 2013 is beginning to bear fruit.  Recurring operating expenses (EPRA) were down approximately 10% in 2013 and on track to achieve the goal of 20% as of the second half of 2014.

Dividend as announced

As stated in March 2013, subject to approval by the General Meeting of shareholders, the 2013 dividend will be 3.20 euros / share, paid entirely in cash. This includes the interim dividend paid in the second half of 2013 (1.20 euros / share) and the balance to be paid in June 2014 (2.0 euros / share).  The level of the dividend, adjusted last year to support the deliberate downsizing in business, represents a total shareholder return of 16.6% in 2013.

The Board reiterates its total confidence in the management and their team

The Board has acknowledged the appeal filed by the MI 29 company opposing the approbation by the French stock market regulator of the tender offer initiated by SMABTP.

Whilst expressing regrets at this new disruption for the Company, its clients and employees, the Board reiterated its total confidence in the management and their team to preserve the Company's and shareholders' interests.

The Company is determined to continue the implementation of its strategic plan.

Next steps

As a result, the Company is entering the growth phase of its strategic plan one year ahead of schedule, and has started to identify acquisition targets involving offices buildings in Paris. The change in the ownership structure will necessarily affect the implementation of this third stage.

About Société de la Tour Eiffel
A listed real estate investment company (SIIC) on NYSE Euronext Paris, the company pursues a strategy focused on investing in areas with high potential and the provision of new buildings leased to quality covenants.  At 31 December 2013 its portfolio stood at € 701 million of assets located primarily in the Paris region.
The shares of Société de la Tour Eiffel  are listed on NYSE Euronext Paris (Eurolist B):  ISIN Code: FR 0000036816 - Reuters : TEIF.PA - Bloomberg : EIFF.FP - Indexes : IEIF Foncières, IEIF Immobilier France

Press ContactJean-Philippe MocciCapmotwww.societetoureiffel.comTel : +33 (0)1 71 16 19 13/+33 (0)6 71 91 18 83                 jpmocci@capmot.comSociété de la Tour Eiffel : 2013 annual results


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Source: Société de la Tour Eiffel via Globenewswire
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