Peach Property Group AG — Earnings Release 2011

Aug 26, 2011

News Details

Ad-hoc | 26 August 2011 07:05

Peach Property Group closes first half of 2011 in line with expectations

Peach Property Group AG / Key word(s): Half Year Results

26.08.2011 07:05

Release of an ad hoc announcement pursuant to Art. 72 KR

Media release

Peach Property Group closes first half of 2011 in line with expectations

* Market value of portfolio managed by the Group increased by 3% to CHF
272.2 million
* No bargain purchases or project closeouts in first half of the year, as
expected: commensurate decrease in operating income
* Result is a loss of CHF 6.3 million, including net foreign exchange
losses of CHF 1.9 million
* Development projects progressing as planned
* Strategy extended to ensure operating income continuity
* Purchase of Munster portfolio marks first step in strategy execution
* Euro bond issue to finance further expansion

Zurich, 26 August 2011 - The market value of the property portfolio managed
by Peach Property Group Ltd, a leading developer of high-quality
residential property in German-speaking Europe, has increased in the first
half of 2011. A 3% rise since 31 December 2010 takes the portfolio's total
market value to CHF 272.2 million. The strong rise in the Swiss franc acted
as a constraint on value growth. Had exchange rates remained steady, a 5%
increase would have resulted, taking the total to CHF 278.5 million.

As expected, there were no major project closeouts or bargain purchases in
the first half of 2011. The company's operating income of CHF 6.2 million
is therefore below the one for the comparable prior-year period (first half
of 2010: CHF 34.5 million). Deriving from the lower level of operating
income, a loss of CHF 5.3 million (2010: CHF 24.6 million) was recorded
under the heading of operating profit (EBIT). The result for the period,
affected by net foreign exchange losses of CHF -1.9 million, amounts to CHF
-6.3 million (2010: CHF 16.6 million). This corresponds to diluted earnings
of CHF -1.30 per share (2010: CHF 6.18).

As of 30 June 2011, consolidated shareholders' equity stands at CHF 99.4
million. This equates to a sound equity ratio of 51% (31 December 2010:
53%).

Important project milestones passed
In the first half of 2011, Peach Property Group forged ahead with its
development projects in Switzerland, Germany and Austria according to
schedule. Works preparatory to construction began on the 'Peninsula' site
in Wädenswil, near Zurich. In an exclusive cooperation agreement, the
well-known landscape designer, Enzo Enea, was commissioned to design the
park and gardens. Peach Property Group has also held talks with all
appellants against its 'Aquatica' project. The appeal process is not yet
concluded. On time at the end of June, an application was finally filed for
building permission for the 'Mews & Gardens' project. Peach Property Group
brought 'Living 106', its first project in Berlin, to a successful
conclusion. Civil engineering works for 'yoo berlin' were completed in
July. 1 August 2011 then marked the start of the building construction. A
20-year lease with Fattal Group, which operates 24 hotels in Germany, has
been concluded for the hotel which will be built in the adjacent wing of
'yoo berlin' as part of the 'Am Zirkus 1' project. In Hamburg, the
foundation stone was laid in May for the first of the two stages of the
'Harvestehuder Weg 36' building project. Finally, building construction
work on the 'Schooren des Alpes' project in Kappl, near Ischgl, Austria,
progressed according to schedule.

Strategy extension
Peach Property Group developed its strategy further in the first half of
the year. Maintaining its existing focus on project developments in the
luxury and top-quality residential property segment, the Group will also
invest in future in portfolio properties yielding good returns, using
ongoing rental income to even out the income peaks from the project
business.

The first step in the implementation of the strategy was already taken in
mid-July, with the acquisition of a first set of portfolio properties in
Germany. The portfolio comprises 376 residential units, with total floor
space of 26,000 square metres. The properties are located in Munster,
within commuting distance from the two major cities of Hamburg and Hanover.
The purchase price of EUR 9 million, including purchase-related costs, will
lead to annual rental income of around EUR 1.2 million. This represents a
gross return in excess of 13%. After deduction of maintenance costs, the
result is a net return of 9.75%.

Euro bond issue
In line with its long-term goals and adjusted strategy, the German
subsidiary Peach Property Group (Deutschland) GmbH is issuing a euro bond.
Proceeds from this will be used primarily to finance existing and new
projects and add to its portfolio properties in Germany. Publicly offered
for up to EUR 50 million, the bond has a coupon of 6.6% and a term of five
years. It is listed on the Open Market of the German Stock Exchange (ISIN
code: DE000A1KQ8K4, WKN: A1KQ8K). The bond is placed largely with
institutional investors in Germany and Switzerland. The issue opened on 4
July 2011 and continues until the end of the year.

Prospects
Peach Property Group will continue to examine the acquisition of suitable,
high-return portfolio properties in the second half of 2011. At project
level, its sights are again set on a number of milestones. On the
'Peninsula' site in Wädenswil, building permission should be received this
winter for the 'Mews & Gardens' project, while the 'Peninsula Beach House'
project continues parallel to this. During the second half of the year, the
Building Appeal Tribunal should rule on the 'Aquatica' appeal. If no
agreement is reached, the Administrative Court, as the court of next
instance, would have to make a judgement - probably by the end of 2012.

The topping-out ceremony at 'Harvestehuder Weg 36' should take place at the
end of September, celebrating completion of the first stage of
construction. The second stage is set to commence before the end of this
year. In Berlin, building construction continues on the twin projects 'yoo
berlin' and 'Am Zirkus 1'. Another topping-out is due this autumn: on the
'Schooren des Alpes' project.

Dr. Thomas Wolfensberger, CEO of Peach Property Group Ltd, comments: 'Peach
Property Group Ltd has made good progress in the first half of 2011. Our
development projects have reached the planned milestones and thereby
increased the market value of our property portfolio. Parallel to this, we
have developed our strategy further and acquired an initial portfolio of
properties leased for income. This lays the foundation for regular income
flows in future.'

Consolidated key figures for Peach Property Group Ltd

                                          30.6.2011     30.6.2010

Operating income CHF 000 6 242 34 543
Operating profit (EBIT) CHF 000 -5 291 24 569
Net profit CHF 000 -6 262 16 626
Diluted earnings per shar CHF -1.30 6.18

                                           30.6.2011    31.12.2010

Market value of development portfolio1 CHF 000 272 154 264 335
NAV as per IFRS CHF 000 99 436 112 477
NAV at market value1 CHF 000 137 703 146 529
Equity CHF 000 99 436 112 477
Equity capital ratio % 51% 53%
Equity capital ratio (NAV at market value1) % 57% 57%

Headcount 34 34

1 NAV market value calculated on the basis of the Wüest & Partner
evaluation account having been taken of deferred taxes.

Contact
For investors and analysts:
Dr. Thomas Wolfensberger, Chief Executive Officer
Bruno Birrer, Chief Operating Officer
+41 44 485 50 00
investors@peachestates.com

For the media:
Siro Barino, Barino Consulting
+41 79 335 24 24
info@barino.ch

Information on Peach Property Group Ltd
Peach Property Group Ltd is one of the leading developers in the area of
top-quality residential property in the German-speaking part of Europe.
Activities cover the entire value chain of property development, from site
surveying to project planning, implementation and marketing. Properties
developed by Peach Property Group Ltd are located on exceptional sites in
or near city centres and holiday resorts. Premier amenities meet the
requirements of a demanding clientele.

Peach Property Group Ltd currently employs 34 real-estate and finance
specialists at its Zurich head office and at its Cologne branch. The Group
plans and is currently implementing 14 projects with total target marketing
volume of approximately CHF 800 million. Peach Property Group Ltd has been
listed on the SIX Swiss Exchange since 12 November 2010 (PEAN, ISIN
CH0118530366).

For further information, please visit www.peachestates.com

26.08.2011 News transmitted by EquityStory AG.
The issuer is responsible for the contents of the release.

EquityStory publishes regulatory releases, media releases on the capital
market and press releases.
The EquityStory Group distributes authentic and real-time financial news
for over 1'300 listed companies.
The Swiss news archive can be found at www.equitystory.ch/news

---

Language: English
Company: Peach Property Group AG
Seestrasse 346
8038 Zürich
Switzerland
Phone: +41 44 485 50 00
Fax: +41 44 485 50 11
E-mail: investors@peachestates.com
Internet: www.peachestates.com
ISIN: CH0118530366
Swiss Security Number: A1C8PJ
Listed: Freiverkehr in Berlin, Stuttgart; Open Market in
Frankfurt; SIX

End of Announcement EquityStory News-Service

---