Peach Property Group AG — Earnings Release 2011

Apr 2, 2012

News Details

Ad-hoc | 2 April 2012 06:58

Peach Property Group reports operational progress and result for 2011 in line with expectations

Peach Property Group AG / Key word(s): Final Results/Dividend

02.04.2012 06:58

Release of an ad hoc announcement pursuant to Art. 53 KR

Press release

Peach Property Group reports operational progress and result for 2011 in
line with expectations

• Market value of portfolio increased to CHF 292.4 million

• Consolidated income of CHF 19.7 million lower than previous year since,
  as planned, no major projects were concluded

• Annual profit of CHF -11.1 million or CHF -2.31 per share in line with
  expectations

• Significant expansion of investment property portfolio to CHF 58
  million at present; increase in rental income to currently CHF 4.6
  million p.a. to stabilise earnings

• Solid progress made in construction and sale of development projects

• Integration and automation of business processes to enhance efficiency

• Dividend of CHF 0.30 per share proposed; yield-based dividend policy
  continued

Zurich, 2 April 2012 - Peach Property Group AG, a leading developer of
high-value residential property in German-speaking Europe, reports
consolidated operating income of CHF 19.7 million for the financial year
2011, against CHF 84.4 million in the previous year. The reason for the
decrease is that, as planned on the timeline, no major real estate projects
were completed in the year under review. Accordingly, income from property
development of CHF 12.1 million was lower than in the previous year.
Furthermore, in 2010, substantial other operating income was accrued from
the re-evaluation of acquisitions as well as from the sale of shares in
Beach House AG. Other operating income amounts to CHF 3.6 million in 2011.
Income from re-evaluation of investment property of CHF 3.3 million is
attributable to the acquisition of an investment property portfolio in
Munster (Germany) in December 2011. In the year under review, Peach
Property Group generated income from the lease of investment properties in
the amount of CHF 0.7 million.

The lower operating income leads to an operating loss (EBIT) of CHF 12.0
million for the financial year 2011. At the net result level, Peach
Property Group reports a loss of CHF 11.1 million for the financial year
2011. This corresponds to a result of CHF -2.31 per share.

Continuation of dividend policy
The Board of Directors proposes to the annual general meeting of Peach
Property Group AG that a dividend of CHF 0.30 per share be distributed for
the financial year 2011. This represents a dividend yield of 2.7 percent as
at the year-end and is in line with Peach Property Group's dividend policy,
which aims to pay shareholders a regular dividend that is above long-term
money market rates. The dividend will be distributed in the form of a
tax-privileged capital repayment.

Portfolio value close to the 300 million mark
Based on the valuation by the independent real estate valuer Wüest &
Partner, the market value of the total real estate portfolio held by Peach
Property Group as at 31 December 2011 amounts to CHF 292.4 million, CHF
270.8 million, or 93 percent, of which is attributable to development
properties (including joint ventures) and CHF 21.6 million, or 7 percent,
to investment properties.

According to this independent market valuation of the portfolio, the net
asset value (NAV) of Peach Property Group AG at year-end 2011 amounts to
CHF 130.0 million. In line with IFRS guidelines, which require an
assessment of development properties at their acquisition or production
costs, the NAV amounts to CHF 95.2 million. The difference compared to the
previous year's NAV figures is attributable to the loss reported for the
financial year 2011, including additional costs incurred on the 'yoo
berlin'/Am Zirkus 1 project, and the dividend distribution. These negative
effects on NAV could not be offset by the increase in value of the
portfolio.

Solid equity base
On the basis of acquisition or production costs, the development properties
of Peach Property Group as at 31 December 2011 are accounted for at CHF
153.4 million. The year-on-year increase in value is due to the
construction work carried out on existing projects, factoring out the
Living 106 project in Berlin, which was derecognised after ownership of the
last apartments had been transferred to their buyers. The acquisition of
the portfolio in Munster (Germany) increases the value of investment
properties to CHF 21.6 million. Peach Property Group's equity amounted to
CHF 95.2 million at year-end. This corresponds to a solid equity ratio of
42 percent; on the basis of the NAV market value, the equity ratio amounts
to 48 percent.

Development projects progressing according to plan
Peach Property Group pressed on according to plan with all projects under
construction in the financial year 2011. Milestones include:
- completion of the Living 106 project in Berlin;

• start of structural engineering work on 'yoo berlin'/Am Zirkus 1;

• topping-out ceremony for the first construction stage of Harvestehuder
  Weg 36 in Hamburg (Alsterkamp 43);

• off-plan sales reached for the start of the second construction phase
  at Harvestehuder Weg 36;

• topping-out ceremony for the Schooren des Alpes project in Kappl (near
  Ischgl).

Significant progress was also achieved in projects in the development
phase, including the exclusive cooperation agreement signed with renowned
landscape architect Enzo Enea to design the entire park and garden area for
the Peninsula site in Wädenswil. The rear noise barrier was installed,
marking the first phase of the construction process.

Appeals by the Heritage Society against individual projects on the
Peninsula site were assessed by the Construction Appeal Tribunal
(Baurekursgericht) of Canton Zurich in March 2012. Approval for Peach
Property Group's plans to divert the Reidbach watercourse and to remove
former lodging houses from the inventory has been upheld. This brings the
Group a major step closer to realising its Mews & Gardens project. The
Group is being required to incorporate two further existing buildings into
its Aquatica project, which reduces the entire construction volume. Peach
Property Group is nevertheless confident of being able to ensure the
profitability of the Aquatica project, but reserves the right to file an
appeal with the Administrative Tribunal (Verwaltungsgericht) as court of
the next higher instance.

Investment portfolio expanded in line with strategy
In addition to the existing Bakery commercial property in Wädenswil, Peach
Property Group in 2011 has acquired an investment property portfolio in
Munster (Germany) within the catchment area of the major cities of Hamburg
and Hanover. At the end of January 2012, Peach Property Group acquired
another high-yield portfolio of apartments and commercial units in
Erkrath-Hochdahl near Düsseldorf.

As at the end of January 2012, Peach Property Group therefore has an
overall investment property portfolio (market value: CHF 58 million) which
comprises 519 apartments and commercial space of almost 15 000 m2 and
generates annual rental income of approximately CHF 4.6 million. The Group
has thus implemented important steps towards stabilising income while
adhering to strategy.

Integration and automation of business processes
Peach Property Group focussed on the integration and automation of business
processes in the financial year 2011. IT systems for customer relationship
management and construction cost management were introduced at all
locations. The aim is to replicate the processes along the property
development value added chain in a cross-disciplinary information system.
On the basis of such an integrated platform Peach Property Group can
execute its projects more efficiently and transparently.

Positive assessment of financial year 2011
CEO Thomas Wolfensberger is positive on the financial year 2011: 'Peach
Property Group's financial result for 2011 is in line with expectations. It
is important that the company has made good operational progress at all
levels: We have reached the specified milestones for all projects under
construction and pressed on with projects in the development stage. We have
implemented the announced build-up of an investment property portfolio. And
not least, we have enhanced the efficiency of our processes. We have
thereby set the course for the profitable development of Peach Property
Group going forward.'

Outlook for 2012
Peach Property Group expects real estate markets in German-speaking Europe
to also perform well in the current year. With its projects for the most
discerning of client segments Peach Property Group is well positioned in
the market. The popular initiative limiting the construction of second
homes that was passed by the Swiss electorate in March does not impose any
constraints on Peach Property Group's business model.

Peach Property Group is again targeting various milestones at project level
in 2012: Under the twin project 'yoo berlin'/Am Zirkus 1 construction work
is progressing on the ten-storey freestanding building. In Hamburg, title
to the apartments in the first construction stage is to be transferred to
the owners from spring 2012 on. Structural engineering work for the second
phase is scheduled to commence in April. The twelve luxury holiday
apartments in the Schooren des Alpes property will be ready in time for the
next winter season. The foundation stone for the Beach House project is to
be laid in April 2012. In parallel with the realisation of development
projects, Peach Property Group will also examine the acquisition of
high-yield investment property portfolios in 2012.

Key figures Peach Property Group AG (consolidated)

                                                     2011        2010

Income in TCHF* 19 679 84 425
Income from property development in TCHF 12 101 44 926
Income from the lease of investment
properties in TCHF 690 0
Re-evaluation of investment property in TCHF 3 328 2 335
Other operating income in TCHF 3 560 37 164
Operating profit (EBIT) in TCHF -11 960 21 342
Profit/(loss) for the period in TCHF -11 137 17 971
Diluted earnings per share in CHF -2.31 6.03
31.12.2011 31.12.2010
Market value1 of the real estate
portfolio in TCHF* 292 408 264 335
NAV IFRS in TCHF 95 234 112 477
NAV market value2 in TCHF 130 016 146 529
Development properties in TCHF 153 423 147 563
Investment properties in TCHF 21 605 7 454
Building loans used in TCHF 71 651 59 472
Equity in TCHF 95 234 112 477
Equity ratio (reported) in % 42% 53%
Equity ratio (at NAV market value1) in % 48% 57%
Employees 35 34

1 Market value calculated on the basis of the independent Wüest & Partner
valuation.
2 NAV market value calculated on the basis of the independent Wüest &
Partner
valuation, taking account of deferred taxes.
* thousands of CHF

Peach Property Group AG is hosting a media conference on the 2011 annual
results today at 9.00 a.m. in the Convention Point of SIX Swiss Exchange,
Selnaustr. 30, Zurich.

The 2011 annual report is available on the company's website at:
http://investoren.peachestates.com/peachestates/downloads/Annual_report201
1.pdf

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

Media:
Siro Barino, Barino Consulting
+41 79 335 24 24
info@barino.ch

About Peach Property Group
Peach Property Group AG is a leading developer in the field of top-quality
residential property in the German-speaking region of Europe. Its
activities cover the entire prime property development value chain, from
site evaluation to project planning, implementation and marketing.
Properties developed by Peach Property Group AG are located on exceptional
sites in or near city centres and holiday resorts. Premier amenities meet
the requirements of a demanding clientele. The company's integrated
corporate strategy includes not only the development of high-quality
residential properties, but also the management of investment properties
for the purpose of generating consistent annual revenues.

Peach Property Group AG is headquartered in Zurich and also has a branch
office in Cologne. Peach Property Group AG is listed on SIX Swiss Exchange
(PEAN, ISIN CH0118530366).

Visit www.peachestates.com for more information.

02.04.2012 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

---