Société de la Tour Eiffel : 2014 half year results and start of the acquisition phase

2014 Half-year results

Start of the acquisition phase

The Board of Directors' meeting held on July 23, 2014 under the chairmanship of March Inch approved the half-yearly accounts for 2014.

Consolidated figures (audited)

 In €mH1 2014H1 2013  Rents 26.132.8LFL Growth-0.5%5.2%EPRA recurring operating result20.025.5% rents76.7%77.6%EPRA earnings12.514.7% rents47.9%44.7% IFRS net result (Group share) -8.2 -0.7 Of which fair value adjustments and proceeds from disposals-19.2-14.9  Cash flow 13.714.0In € / share (**)2.22.2   30/06/201431/12/2013Portfolio valuation 682701Net LTV44.0%46.2%EPRA financial occupancy rate93.2%93.7% EPRA NNNAV (In € / share)56.658.1

Note: the LTV now includes the cash collateral accounts as a deduction from the net financial debt (LTV stands at 46.7% as at 31/12/2013 and 44.6% as at 30/06/2014 excluding this adjustment).

1 - Continuation of the implementation of the strategic plan

Start of the acquisition phase

After eighteen months of active refocusing of the portfolio, via more than € 260m of disposals of non-core assets in 2012 and 2013, the Group has kicked off the acquisition phase of its strategic plan.  A purchase agreement was contracted in May 2014 for the € 23.3m acquisition of an 8,300 m² building, located in the inner Southern rim of Paris.  This building benefits from a 12-year lease (of which 10.5 fixed years) with a top-quality tenant, member of the CAC 40, guaranteeing an annual income of circa € 2m .

Sustained focus on the renewals of leases

In a difficult rental environment, over € 5.3m of extensions or new leases were signed during the first half of 2014. This reinforces (i) the strong financial occupancy EPRA rate at 93.2 % at June 30, 2014, as compared to 91.8% one year beforehand and (ii) the resilience of the growth of rents on a like-for-like basis, which are virtually stable over the half year (-0.5%) in spite of the absence of an indexing effect over the period. 

As regards significant transactions, it should be noted that the team has already handled two major leaves received during the half year:  partial renewal over 9 years in Plessis and long-term lease signed with a new tenant (France Télévisions) in Saint Cloud.

Further improvement of debt ratios

The marginal disposals of the first half (€ 8.2m) and the generation of operating cash flow lead to a further improvement of the consolidated LTV ratio at 44.0% as compared to 46.2% at December 31, 2013. Taking into account all the assets under contract (sales/purchases), the ratio is limited to 42.7%.

Significant reduction in operating costs

Over a year ago, the Company set up a programme to control and reduce its operating costs with new reporting tools. This programme has started to bear fruit, as the recurring operating costs dropped from € 7.8m to € 6.1m between the first half of 2012 and the first half of 2014 (-22%), i.e. a decrease equivalent to the decline in rents between these two periods.

Over the first half of 2014, the Group also recorded € 1.4m of non-recurring costs, linked in particular to the current shareholding situation and to the end of the governance transition period.

2 - Impact on the half-yearly accounts: improvement of the net margin

Profit and loss account

In EPRA basis, the decrease in operational costs combined with the very sharp contraction of financial costs allows an improvement of the net margin at 47.9% as compared to 44.7% over the first half of 2013, for a net result of € 12.5m as compared to € 14.7m for the first half of 2013.

In IFRS basis, the non-recurring costs (€ 1.4m ), but more significantly the depreciation of assets (€ 14.0m) and the decline in the valuation of hedging instruments (€ 5.2m out of the € 5.4m of non-recurring financial costs) have led to an € 8.2m loss being recorded for the half year. 

Balance sheet

The positive side effect of the disposals carried out is a new improvement in debt ratios with, in particular, the LTV ratio which fell below 45% as at June 30, 2014 (44.0%). Taking into account the contracted disposals and acquisition, the ratio falls to 42.7% on a pro forma basis. The Group is therefore clearly ahead of its target on this dimension. 

The fixed assets have also decreased as a direct consequence of the disposals and adjustments of values related to the valuations carried out each semester on the entire portfolio. This reduction is off-set by a significant increase in the Group's cash position, which allows a stability of the balance sheet total over the half year.

3 - Dividends

Taking the shareholding context into account, the Commercial Court granted the Company the possibility to postpone its General Shareholder's Meeting, initially planned for May 28, 2014, until December 31, 2014.  The main purpose of this Meeting will be to approve the 2013 annual accounts and to determine the 2013 dividend balance.

4 - Take-over Bid

The Take-over bid initiated by SMABTP on the shares of Société de la Tour Eiffel at € 58/share will close on August 6, 2014, according to AMF notice n° 214C270 published on July 2, 2014.  Following the withdrawal of Eurobail's bid at € 55/share on July 9, 2014, this bid is the only one in the running.

Important dates:

August 6, 2014: closure of the take-over bid in progressNovember 14, 2014 post market close: turnover and activity for the 3rd quarter of 2014
 
 

       

About Societe 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 offices mainly in Paris and its region capable of attracting a wide range of tenants The company's portfolio stood at 682 million Euros of assets as at 30 June 2014. Societe 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 contact Jean-Philippe MOCCI Capmot www.societetoureiffel.com Tel : +33 (0)1 81 70 96 33 /+33 (0)6 71 91 18 83                                           jpmocci@capmot.com   Société de la Tour Eiffel : 2014 half year results


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Source: Société de la Tour Eiffel via Globenewswire
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