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Ascencio — Interim / Quarterly Report 2017
Aug 3, 2017
3907_10-q_2017-08-03_f5b80258-e203-4591-8581-3b2359900a8d.pdf
Interim / Quarterly Report
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PRESS RELEASE
Regulated information
3 August 2017 Under embargo until 5.40 p.m.
I N T E R I M S T A T E M E N T O F T H E S T A T U T O R Y MA N A G E R T H I R D Q U A R T E R O F F I N A N C I A L Y E A R 2016 – 2017
SOLID, GROWING OPERATIONAL RESULTS
- Rental income: €30.53 million, up by 5.7%
- Value of the portfolio up slightly (1.6%) on a like-for-like basis.
EARNINGS PER SHARE
- Net result of key activities1: €3.07 per share, up by 4.0% for the nine months to 30 June 2016, despite the 5% increase in the number of shares
- Net result: €5.43 per share
INVESTMENTS MADE DURING THE FIRST NINE MONTHS OF THE FINANCIAL YEAR
- Acquisition of stores located in the Papeteries de Genval complex, 22 December 2016
- As a result of this investment, the portfolio has passed the €600 million mark
DEBT RATIO OF 42.8% AS AT 30 JUNE 2017
Remaining investment capacity of €90 million before debt ratio reaches 50%.
DIVIDEND FORECAST FOR THE 2016/2017 FINANCIAL YEAR
Barring any unforeseen events that may arise, the positive results of the first nine months should allow to continue the growth of the dividend.
1 Corresponds to the former heading "Net income per share before non-recurring items." See page 7 of this press release.
Real estate portfolio as at 30 June 2017
The fair value of the real estate portfolio stood at €612.0 million as at 30 June 2017, compared with €572.1 million as at 30 September 2016.
| (€000S) | 30/06/2017 | 30/09/2016 |
|---|---|---|
| BALANCE AT THE BEGINNING OF THE FINANCIAL YEAR | 572.132 | 520.974 |
| Acquisitions | 30.483 | 57.413 |
| Disposals | 0 | -21.261 |
| Transfer from assets held for sale | 0 | 0 |
| Change in fair value | 9.439 | 15.005 |
| BALANCE AT THE END OF THE FINANCIAL YEAR | 612.054 | 572.132 |
The increase posted since the beginning of the financial year is due mainly to the acquisition, on 22 December 2016, of a 99-year emphyteotic lease on the commercial premises in the Papeteries de Genval complex. This retail complex, with an area of 10,007 m², was opened in August 2015. It houses more than 30 brand names, including Carrefour Market, Espace Mode, Picard, Club, Planet Parfum and Boulangerie Louise.
The Genval complex generates total annual rental income of €1.5 million (net of the annual emphyteotic rent). It has contributed to the results since 1 January 2017. This investment was financed by borrowing.
Ascencio also acquired a Carrefour Market supermarket located in Anderlecht, in the Nautilus project which is currently under construction. It will be operated by the Mestdagh Group and is expected to open in July 2018. It will generate rental income of €0.26 million per year.
As at 30 June 2017, the occupancy rate of the portfolio stood at 98.2%, slightly down from its 30 September 2016 level due to the current rental vacancy on the Papeteries de Genval complex, where the occupancy rate presently stands at 90%.
As at 30 June 2017, the breakdown of the portfolio among the three countries in which Ascencio operates was as follows:
| COUNTRY | Investment value (€000S) |
Fair value (€000S) |
(%) | Contractual rents (€000S) |
Occupancy rate (%) |
Gross yield (%) |
|---|---|---|---|---|---|---|
| Belgium | 390.540 | 380.351 | 62,1% | 26.047 | 97,5% | 6,7% |
| France | 215.140 | 202.780 | 33,1% | 14.011 | 99,1% | 6,5% |
| Spain | 29.646 | 28.923 | 4,7% | 1.823 | 100,0% | 6,1% |
| TOTAL | 635.327 | 612.054 | 100% | 41.881 | 98,20% | 6,6% |
Consolidated results for the first nine months and the third quarter of financial year 2016/2017
| CONSOLIDATED RESULTS (000 EUR) | 30/06/2017 (9 months) |
30/06/2016 (9 months) |
30/06/2017 (3 months) |
30/06/2016 (3 months) |
|---|---|---|---|---|
| RENTAL INCOME | 30.534 | 28.876 | 10.299 | 9.986 |
| Charges linked to letting | -172 | -38 | -53 | -1 |
| Taxes and charges not recovered | -227 | -223 | -26 | -110 |
| PROPERTY RESULT | 30.135 | 28.615 | 10.220 | 9.875 |
| Property charges | -1.661 | -1.644 | -616 | -641 |
| Corporate overheads-Other operating costs |
-2.416 | -2.323 | -782 | -756 |
| OPERATING RESULT BEFORE RESULT ON PORTFOLIO |
26.058 | 24.648 | 8.822 | 8.478 |
| Operating margin (*) | 85,3% | 85,4% | 85,7% | 84,9% |
| Financial income | 3 | 0 | 0 | 0 |
| Net interest charges | -5.384 | -5.464 | -1.782 | -1.884 |
| Other financial charges | -266 | -145 | -100 | -42 |
| Taxes on result of key activities | -452 | -236 | -234 | -161 |
| NET RESULT OF KEY ACTIVITIES (*) |
19.959 | 18.804 | 6.706 | 6.391 |
| Net gains and losses on sales of investment property |
0 | 354 | 0 | 125 |
| Changes in the fair value of investement property |
9.440 | 15.816 | 522 | -661 |
| Other portfolio result | 0 | 0 | 0 | 0 |
| Portfolio result | 9.440 | 16.171 | 522 | -535 |
| Changes in fair value of financial assets and liabilities |
6.016 | -404 | 1.454 | -232 |
| Exit Tax | 0 | 50 | 0 | 0 |
| Deferred tax | -166 | -261 | -4 | 0 |
| NET RESULT | 35.249 | 34.360 | 8.678 | 5.624 |
| Net result of key activities per share (euros) (*) |
3,07 | 2,95 | 1,03 | 1,00 |
| Earnings per share (EPS) (euros) (*) | 5,43 | 5,40 | 1,34 | 0,88 |
| Number of shares | 6.497.594 | 6.364.686 | 6.497.594 | 6.364.686 |
(*)Alternative Performance Measure (APM). See pages 7 and 8.
Rental income was up by 5.7% at €30.53 million compared with €28.88 million for the first nine months of the previous financial year.
The following table shows rental income by country:
| RENTAL INCOME (€000S) | 30/06/2017 | 30/06/2016 | ||
|---|---|---|---|---|
| Belgium | 18.703 | 61% | 18.606 | 64% |
| France | 10.486 | 34% | 9.680 | 34% |
| Spain | 1.345 | 4% | 590 | 2% |
| TOTAL | 30.534 | 100% | 28.876 | 100% |
This improvement was due to the investments made
- over the course of the previous financial year: acquisition of three Grand Frais stores in France on 22 December 2015, three commercial properties in Spain on 1 March 2016 and a BUT store near Nancy, France on 16 September 2016;
- in the current financial year: acquisition of stores located in the Papeteries de Genval complex in December 2016.
On a like-for-like basis, rental income was up by 1.2% YoY.
Property result amounted to €30.13 million (up by 5.3% on the nine months to 30 June 2016).
After deduction of property costs and corporate overheads, the operating result before result on portfolio was €26.06 million (€24.65 million as at 30 June 2016), i.e. an increase of 5.7%. The operating margin2 came to 85.3%.
Net interest charges, including the cash flows generated by interest rate hedging instruments amounted to €5.38 million.
The average cost of borrowing2 (2.95% including margins and the cost of hedging instruments) was down compared with 30 June 2016 (3.09%).
After deducting taxes on result from properties acquired in Spain in March 2016 and the French tax charge on the results from French assets, net result of key activities(*) amounted to €19.96 million as at 30 June 2017, i.e. an increase of 6.1% on 30 June 2016.
Net result of key activities expressed as EPS2 amounted to €3.07 (€2.95 as at 30 June 2016), a rise of 4.0% in spite of the increased number of shares.
Non-monetary items in the income statement amounted to:
- +€9.4 million representing the change in fair value of investment properties (IAS 40) as a result of higher appraisal values associated with the adoption of lower capitalisation rates;
- +€6.0 million increase in the fair value of interest rate hedging instruments (IAS 39);
- -€0.2 million of deferred taxes relating to the deferred taxation (5% withheld at source) of unrealised capital gains on French assets.
2 Alternative Performance Measure (APM). See pages 7 and 8.
Net result reached €35.25 million, compared with €34.36 million as at 30 June 2016.
Expressed in per share terms, net result of key activities3 was €3.07 per share, compared with €2.95 as at 30 June 2016.
Consolidated balance sheet as at 30 June 2017
| CONSOLIDATED BALANCE SHEET (€000S) |
30/06/2017 | 30/09/2016 |
|---|---|---|
| ASSETS | 624.778 | 583.004 |
| Investment properties | 612.054 | 572.132 |
| Other non-current financial assets | 2.946 | 1.698 |
| Assets helf for sale | 0 | 0 |
| Trade receivables | 1.225 | 4.603 |
| Cash and cahd equivalents | 2.483 | 3.341 |
| Other current financial assets | 6.070 | 1.229 |
| EQUITY AND LIABILITIES | 624.778 | 583.004 |
| Equity | 340.391 | 318.032 |
| Non-current financial debts | 185.566 | 186.723 |
| Other non-current financial liabilities | 11.133 | 16.810 |
| Deferred taxes | 3.214 | 352 |
| Current financial debts | 74.906 | 48.772 |
| Other current liabilities | 9.568 | 12.315 |
The net asset value per share(*) stood at €52.39 as at 30 June 2017, compared with €49.97 as at 30 September 2016.
Significant events and transactions arising after 30 June 2017
There have been no significant events since 30 June 2017.
Outlook
With a debt ratio of 42.8% as at 30 June 2017, Ascencio still has €90 million of investment capacity before the debt ratio passes the 50% threshold.
Ascencio continues to pursue its investment strategy focused on quality sites, generally located on the outskirts of major conurbations.
Barring any unforeseen events that may arise, the positive results of the first nine months should allow to continue the growth of the dividend.
3 Alternative Performance Measure (APM). See pages 7 and 8.
Financial calendar
Annual press release as at 30 September 2017: 27 November 2017
Ordinary general meeting of shareholders 2018: 31 January 2018 at 2.30 p.m.
For any additional information:
Marc Brisack4 Chief Executive Officer Tel. 071.91.95.00 [email protected] Michèle Delvaux Chief Financial Officer Tel. 071.91.95.04 [email protected] Stéphanie Vanden Broecke Legal Director Tel. 071.91.95.18 [email protected]
4 Manager of SPRL Somabri
Reconciliation of Alternative Performance Measures (APMs)
Following the coming into force of the ESMA (European Securities and Markets Authority) Guidelines on Alternative Performance Measures (APMs) the APMs used in this press release are identified by an asterisk (*).
The definition of the APMs and the use made of them can be found at the end of the 2015/2016 Annual Report, which is available on Ascencio's website (www.ascencio.be).
Operating margin
| 30/06/2017 | 30/06/2016 | ||
|---|---|---|---|
| Operating result before result on portfolio (€000S) | = A | 26.058 | 24.648 |
| Rental income (€000S) | = B | 30.534 | 28.876 |
| OPERATING MARGIN | = A / B | 85,3% | 85,4% |
Net result of key activities:
| 30/06/2017 | 30/06/2016 | |
|---|---|---|
| Operating result before result on portfolio (€000S) | 26.058 | 24.648 |
| Financial income (€000S) | 3 | 0 |
| Net interest charges (€000S) | -5.384 | -5.464 |
| Other financial charges (€000S) | -266 | -145 |
| Corporate tax (€000S) | -618 | -497 |
| Deferred tax (€000S) | 166 | 261 |
| NET CURRENT RESULT (€000S) | 19.959 | 18.804 |
| Number of shares in circulation entitled to the dividend | 6.497.594 | 6.364.686 |
| NET CURRENT RESULT PER SHARE (EUR) | 3,07 | 2,95 |
Net Asset Value (NAV) excluding value of IRS
| 30/06/2017 | 30/09/2016 | |
|---|---|---|
| Net asset value (NAV) (€000S) | 340.391 | 318.032 |
| Number of shares | 6.497.594 | 6.364.686 |
| NAV per share (euros) | 52,39 | 49,97 |
| Restatements: | ||
| Fair value of financial instruments (IRS & CAP) (€000S) | 8.100 | 14.231 |
| NAV excluding the fair value of IRS & CAP (€000S) | 348.491 | 332.263 |
| Number of shares | 6.497.594 | 6.364.686 |
| NAV per share excluding the fair value of IRS & CAP (€000S) | 53,63 | 52,20 |
Average cost of borrowing
| 30/06/2017 | 30/06/2016 | ||
|---|---|---|---|
| Net interest charges (heading XXI) (€000S) | 5.384 | 5.464 | |
| Commissions on undrawn balances under credit facilities | 208 | 96 | |
| Opening commission and charges for credit facilities | 25 | 25 | |
| TOTAL COST OF FINANCIAL DEBTS | = A | 5.617 | 5.585 |
| WEIGHTED AVERAGE DEBT FOR THE PERIOD | = B | 254.116 | 240.465 |
| AVERAGE COST OF BORROWING | = (Ax4/3)/B | 2,95% | 3,09% |
Hedging ratio
| (€000S) | 30/06/2017 | 30/09/2016 | |
|---|---|---|---|
| Fixed-rate financial debts | 57.207 | 58.489 | |
| Variable-rate financial debts converted into fixed-rate debts by means of IRS |
120.000 | 120.000 | |
| Variable-rate financial debts converted into fixed-rate debts by means of caps. |
20.000 | 20.000 | |
| TOTAL FIXED RATE OR CAPPED FINANCIAL DEBTS | = A | 197.207 | 198.489 |
| TOTAL VARIABLE RATE FINANCIAL DEBTS | 63.265 | 37.006 | |
| TOTAL FINANCIAL DEBTS | = B | 260.472 | 235.495 |
| HEDGING RATIO | = A / B | 75,7% | 84,3% |