FREY (EPA:FREY) - HY 2019: deployment, European expansion and growth
Transparency directive : regulatory news
25/09/2019 18:00
Click here to download pdf version
PRESS RELEASEBezannes, 25 September 2019 - 6.00 pm
2019 half-year results
Deployment of Shopping Promenade in France
Two mixed-use projects won by Citizers
Accelerating European expansion on the Iberian Peninsula
Strong operating performance of the economic portfolio(1)
Valuation: EUR739.1 million (+1.3%) - Annualised rental income: EUR42.0 million
Footfall(2): +3.4% - Tenants' sales(2): +4.9%
Occupancy rate(1): 97.0% (+30 bp)
Profit from recurring operations: EUR10.1 million (+48%)
EPRA NNNAV(3): EUR31.70/share (-0.9%)
excluding the impact of the dividend distributed in respect of 2018,
liquidation NAV increased by 2.8%
Change in relation to 31.12.2018
Key figures -
In EUR million - 6 months 30.06.2019(4) 30.06.2018 Change
Consolidated revenues 24.8 17.6 +41%
Property investment activity
(gross rental income) 17.2 15.4 +12%
Profit from recurring operations 10.1 6.8 +48%
Fair value adjustment of
investment property 6.1 21,1 n/a
Net income group share 15.2 25.2 -40%
Balance sheet indicators -
In EUR million 30.06.2019(4) 31.12.2018 Change
Going concern NAV
(including transfer duties) 627.0 646.6 -3.0%
i.e. per share 34.00 EUR 34.40 EUR -0.9%
EPRA NNNAV (EPRA triple net
asset value)(3) 583.4 601.8 -3.0%
i.e. per share 31.70 EUR 32.00 EUR -0.9%
Net LTV (5) 31.6% 26.1% +550 bps
At its meeting on 25 September 2019, Frey's Board of Directors approved the
consolidated financial statements for the 1rst half of 2019. The audit has been
prepared by the Statutory Auditors.
(1) The economic portfolio in operation comprises assets wholly-owned by FREY
or jointly held with associates, in proportion to FREY's percentage interest in
those associates.
(2) On a like-for-like basis. Assets owned more than 50% in France.
(3) Triple net NAV calculated according to the standards developed and
published by the EPRA (European Public Real Estate Association).
(4) The Group has applied IFRS 16 (Leases) since 1 January 2019 using the
simplified retrospective method (the financial statements for 2018 have not
been restated). The impacts on the financial statements at 30 June 2019 are
presented in the Appendix to this press release and detailed in the half-yearly
financial report available on Frey's website under the heading
Finance/Regulated Information.
(5) Including transfer duties, excluding Opirnane.
HIGHLIGHTS SINCE THE BEGINNING OF 2019
* 7 projects under construction in France
Frey develops its portfolio in France at a good pace. Thus, as at 30 June 2019,
7 projects are under construction for deliveries planned between 2019 and 2020,
including mainly the 3 Shopping Promenade located in Claye-Souilly (77),
Strasbourg-Vendenheim (67) and Arles (13). The Group is also continuing the
restructuring of the 42,000 m2 Woodshop (formerly Maisonément) in Cesson (77).
These assets represent over 140,000 m2, of which approximately 118,000 m2 for
the patrimonial part.
* Two successes for Citizers in Rennes and Paris(1)
Launched in 2018, Citizers, Frey's subsidiary dedicated to the identification
and design of mixed-use urban projects, achieved its first success in February
by winning (in association with Engie) the competition for the transformation
of the Palais du Commerce de Rennes (35), an iconic building in the city
centre. Designed as a place for living, sharing and communicating, with over
18,000 m2, the project will gather an unprecedented offer in the Rennes
metropolitan area.
In March 2019, Frey and Citizers achieved their second success in Paris by
wining the Nouvel R project, alongside the consortium of developers comprising
AG Real Estate, Icade, Les Nouveaux Constructeurs and Nexity. This future
district (nearly 100,000 m2) aims to create a real link between Paris and
Ivry-sur-Seine (94). Citizers will develop and animate the retail part of the
project, including shops, restaurants, leisure and cultural areas).
* Accelerated deployment on the Iberian Peninsula in July(2)
Frey carried out two new international operations with the development of a
56,000 m2 outdoor shopping centre in Lleida (Catalonia, Spain) in partnership
with Eurofund Group and the acquisition of a 60,000 m2 outdoor shopping complex
in Albufeira (Algarve, Portugal). These two projects allow the Group to
continue its international expansion at a good pace.
EVOLUTION OF PROPERTY PORTFOLIO
As at 30 June 2019, FREY's(3) economic portfolio:
- is valued at EUR739.1 million excluding transfer duties, up 1.3% compared
with 31 December 2018,
- develops a surface area of 369,000 m2 (compared to 365,000 m2 at 31 December
2018) following the extensions carried out on several operating assets and
the acquisition of co-ownerships on the Parc Vallès asset in Barcelona,
- generates EUR20.9 million in gross rents for the first-half of 2019 (up 14%
compared to the first half of 2018),
- and has an occupancy rate (EPRA)(4) of 97.0%, compared with 96.7% at the end
of 2018.
At 30 June 2019, the value (excluding duties) of projects under construction
amounted to EUR191.0 million, bringing the total value of assets (economic
portfolio + projects in progress) to EUR930.1 million (excluding duties).
(1) See press releases issued on 07 February 2019 for the "Palais du Commerce
in Rennes" and on 13 March 2019 concerning the "Nouvel R project", available on
Frey's website.
(2) See press releases issued on 29 July 2019 for the Spanish project and on 1
August 2019 for the Portuguese project, available on Frey's website.
(3) The economic portfolio comprises assets in operation that are wholly-owned
by FREY or jointly held with associates, in proportion to FREY's percentage
interest in those associates.
(4) Delivered over a year ago and excluding strategic restructuring.
* Revenue and rental income
As at 30 June 2019, the growth of the property company brought gross rental
income from the 100%-owned property (306,500 m2) to EUR17.2 million, up +11.7%
year-on-year. This increase is due to a very significant scope effect with the
delivery of Z'aisne to Saint-Quentin in March 2018, the acquisitions made in
2018 (mainly Parc Vallès in Spain) and the ongoing restructuring of Woodshop
(formerly Maisonnément) in Cesson (77).
The performance on a like-for-like basis remains strong (+2.8%) driven by the
commercial activity and the improvement in the occupancy rate of the assets in
the portfolio.
Promotional activity remains marginal and represented EUR2.4 million in revenue
at 30 June 2019 compared with EUR1.1 million at 30 June 2018.
Overall, Frey's revenues amounted to EUR24.8 million at 30 June 2019, compared
with EUR17.6 million at 30 June 2018, up +41%, reflecting the growth momentum
of property under development.
* Profit from recurring operations of EUR10.1 million (up 48%)
Profit from recurring operations, up sharply by 48%, stood at EUR0.1 million at
30 June 2019, compared with EUR6.8 million at 30 June 2018. The Group
continues to control efficiently its structural costs in a context of active
development.
Operating profit amounted to EUR15.8 million (compared with EUR27.4 million at
30 June 2018, or -42%). In the first half of 2018, this result benefited from
the recognition of very strong value creation (+EUR21.1 million) related to the
launch of works for the two major Shopping Promenade in Strasbourg and Claye
Souilly.
Net profit Group share amounted to EUR15.2 million at 30 June 2019, after
taking into account a stable net cost of debt of EUR(4.9) million and an
impairment loss on financial instruments linked to changes in interest rate
expectations of EUR(2.2) million.
* EPRA NNNAV per share of EUR31.70 (-0.9%) after payment of the 2018 dividend
of EUR1.20 per share
The Group's shareholders' equity was down 3% compared to 31 December 2018 at
EUR582.7 million, mainly due to the distribution of the 2018 dividend on 28 May
2019.
As a result, the EPRA NNNAV (including transfer duties) amounted to EUR583.4m
at 30 June 2019, down 3% compared to 31 December 2018 (EUR601.8m). Adjusted per
share, triple net NAV was EUR31.70 at 30 June 2019 (-0.9%). Excluding the
impact of the 2018 dividend, EPRA NNNAV per share increased by 2.8% to
EUR32.90.
* Financial position and bank debt
The net consolidated LTV ratio including transfer duties, excluding Opirnane,
was 31.6% compared with 26.1% at the end of 2018. As a reminder, the
particularly low LTV level was due to the strengthening of equity and the
increase in value of investment properties over the year.
The average interest rate on bank debt after taking into account interest rate
hedges and with 3-month Euribor at 30 June 2019 of (0.346%) was 1.52% (compared
with 1.95% at 31 December 2018).
The duration was 5.4 years (compared with 5.9 years at 31 December 2018) and
the debt coverage rate at 79.0% (compared with 98.2% at 31 December 2018).
At 30 June 2019, the Group had EUR255 million of available liquidity. At the
end of July 2019, the Group also set up a new EUR100 million 6-year syndicated
credit facility with two optional one-year extension.
The Group will pursue its growth strategy aimed at leveraging its unique
know-how in retail real estate. FREY intends to take advantage of new
development and value creation opportunities offered by current changes in
retail universe:
- win restructuring projects of retail areas on the outskirts of towns, such as
in Strasbourg or Montpellier;
- acquire assets sold by their owners, in order to convert them into the brand
new concepts, such as WoodShop (formerly Maisonnément in Cesson), Parc Vallès
in Barcelona, or the recently acquired commercial complex in Albufeira in
Portugal;
- promote the urban retail anchor by developing dense mixed projects via
Citizers;
- continue the Group's international expansion to uplift the share of its
international portfolio to 30% in the medium term, with a focus on the
Iberian Peninsula, as with the acquisition of the development project in
Lleida (Catalonia) in partnership with Eurofund Group.
Frey's HY 2019 financial report is available on frey.fr, under Finance/
Regulated Information
About FREY
A planner, developer, investor and manager, FREY is a real estate company
specialising in major urban renewal operations as well as the development and
operation of open-air shopping centres. Its Shopping Promenade(r), an open-air
shopping centre, offers a complete range of shopping and leisure activities to
create an "enhanced experience" for the whole family. Thanks to its unique
expertise, Frey has become a recognised French leader in this resilient asset
class, with a deep market (creation, extension, renovation) and in perfect
harmony with the expectations of consumers, brands and local authorities.
Another structuring pillar of FREY's know-how is the large mixed urban
projects, which it develops with the support of its dedicated subsidiary
CITIZERS.
Frey is listed on compartment B of Euronext Paris. ISIN: FR0010588079 - Mnemo:
FREY.
CONTACTS:
Antoine Frey - Chairman and CEO
Emmanuel La Fonta - Director-Finance & Human Resources.
Mathieu Mollière - Director of Communications, Marketing and Innovation -
Tel.: + 33 (0)3 51 00 50 50
Agnès Villeret - Investor relations and financial press
KOMODO - agnes.villeret@agence-komodo.com - Tel.: + 33 (0)6 83 28 04 15
APPENDICES - Financial statements at 30 JUNE 2019
Impacts of the application of IFRS 16 (Leases)
Frey has applied IFRS 16 since 1 January 2019, using the simplified
retrospective method. The main impacts on the financial statements at 30 June
2019 are:
- on the assets side of the balance sheet, the distinction between a right of
use under operating leases of EUR3.6 million and on the liabilities side of the
balance sheet, an impact on shareholders' equity of (EUR0.4) million, an
increase in current financial liabilities of EUR3.1 million and an increase in
non-current financial liabilities of EUR0.9 million.
- in the income statement, the rents previously recognised in operating income
are replaced by a EUR0.4 million depreciation charge for the right-of-use and a
EUR0.02 million financial charge.
Figures relating to the portfolio
In EUR million
Portfolio value (excl. transfer duties)
Investment property - IFRS statement of
financial position 809.8
Projects under development (191.0)
Wholly-owned assets in operation 618.8
Jointly-owned assets in operation in proportion to the 120.3
percentage interest held
Economic portfolio 739.1
Assets in operation, jointly-owned (share non-FREY) 412.4
Total wholly-owned asset portfolio 1,151.5
IFRS consolidated simplified income statement
In EUR million 30.06.2019 30.06.2018 Change
Gross rental income 17.2 15.4 +12%
Income from third-party
development 2.4 1.1
Income from other real
estate management activities 1.0 1.1
Re-invoiced charges - IFRS 16 4.1 -
Revenue 24.8 17.6 +41%
Purchases consumed (9.4) (6.1)
Payroll expenses (4.4) (3.7)
Other income and expenses 0.4 0.0
Taxes and similar payments (0.6) (0.6)
Amortisation and depreciation (0.7) (0.4)
Profit from recurring operations 10.1 6.8 +49%
Other operating profit and
expenses (0.5) (0.5)
Adjustment of values of
investment property 6.1 21.1
Operating profit 15.8 27.4 -42%
Share of net profit (loss)
of associates 7.0 3.7
Operating profit after share of
net profit (loss) of associates 22.8 31.1 -27%
Cost of net debt (4.9) (4.9)
Adjustment of values of
derivatives instruments (2.2) 0.0
Profit before tax 15.6 26.1 -40%
Income tax (0.4) (0.9)
Net income attributable to
owners of the company 15.2 25.2 -40%
IFRS simplified consolidated statement of financial position
In EUR million 30.06.2019 31.12.2018
ASSETS
Non-current assets 890.7 818.8
of which Investment property 809.8 746.2
Of which Shares of associates 59.0 54.2
Current assets 165.3 168.2
of which Cash and cash equivalents 81.9 78.0
EQUITY AND LIABILITIES
Equity 582.7 600.5
Non-current liabilities 374.1 299.1
of which long-term financial debt
(including bond issues) 354.8 280.0
Current liabilities 99.1 87.4
of which short-term financial debt
(including bond issues) 48.4 44.6
Total statement of financial position 1,056.0 987.0
Loan to value
30.06.2019 31.12.2018
Non-current financial liabilities 354.8 280.0
Current financial liabilities 48.4 44.5
Adjustment of OPIRNANE bonds (26.4) (25.4)
Adjustment of debts not related to
investment property (*) (10.0) (3.8)
Cash (81.9) (77.7)
Total debt (A) 284.9 217.6
Investment property 809.8 746.2
Registered office (recognised in
property, plant and equipment) 7.0 7.2
Adjustment of non-recoverable costs
on projects (29.2) (24.8)
Transfer duties 31.3 29.7
Total property holdings including
transfer duties (B) 818.9 758.3
Investment property including
transfer duties 129.6 124.2
Debt (50.9) (52.4)
Cash 4.7 2.8
Total free assets of associates (C) 83.4 74.6
Net LTV including transfer duties
(A / (B + C)) 31.6% 26.1%
(*) including deposits and guarantees received and IFRS treatment of debt
issuance costs and IFRS 16
IFRS consolidated cash flow statement
In EUR million 30.06.2019 31.12.2018
Cash flow from operations 10.7 19.5
Dividends received from associates 1.7 3.3
Tax paid (0.1) (0.7)
Change in working capital requirement 3.6 (31.6)
Net cash generated by operating
activities (1) 16.0 (9.4)
Fixed asset acquisitions (48.4) (60.5)
Fixed asset disposals - -
Impact of change in consolidation
scope and miscellaneous (0.0) (25.3)
Change in other financial assets - -
Net cash related to investment (2) (47.9) (83.4)
Dividends paid to shareholders of
the parent company (22.1) (12.1)
Capital increase - 201.1
Loan issue 115.0 148.0
Loan repayment (including
finance leases) (43.4) (225.0)
Remboursement des dettes de location (0.4)
Cost of debt (including on rental
obligations) (2.6) (10.8)
Change in other financing (10.7) (0.2)
Net cash related to financing (3) 35.8 100.9
Change in cash (1+2+3) 3.9 8.1
Net asset value
In EUR million 30.06.2019 31.12.2018 Change
Consolidated equity - attributable
to owners of the company 582.7 600.5 -3.0%
Adjustment of financial instruments 5.8 4.7
Deferred tax on the statement of
financial position on non-REIT assets 7.3 7.4
Adjustment of associates 0.3 0.1
EPRA NAV 596.2 612.7 -2,7%
Market value of financial instruments (5.8) (4.7)
Effective tax on unrealised capital
gains of non-REIT assets (7.3) (7.4)
Optimisation of transfer duties
and expenses 0.7 1.3
Adjustment of associates (0.3) (0.1)
EPRA triple net NAV (EPRA NNNAV) 583.4 601.8 -3.0%
EPRA NNNAV per share 31.7 32.0 -0.9%
Reintegration of transfer duties
and actual disposal costs 31.3 29.7
Reintegration of tax on unrealised
capital gains 7.3 7.4
Adjustment of associates 5.0 7.7
Diluted going concern NAV 627.0 646.6 -3.0%
Diluted going concern NAV per share 34.0 34.4 -0.9%
Diluted number of shares 18,841,665 18,841,665
Number of shares and treasury shares
held in the liquidity contract 427,091 30,337
Corrected number of shares 18,414,574 18,811,328
FREY's latest news
28/02/2024 17:00
15/12/2023 08:00
28/11/2023 08:00
18/10/2023 17:00
12/10/2023 18:00
01/08/2023 17:00
27/07/2023 17:00
23/02/2023 17:00
17/10/2022 17:00
21/09/2022 09:00
Other stories
13/05/2024 12:52
13/05/2024 12:00
13/05/2024 10:15
13/05/2024 04:12
13/05/2024 13:46
13/05/2024 08:35
13/05/2024 10:46
13/05/2024 09:34
12/05/2024 23:00
13/05/2024 12:07
13/05/2024 09:27
13/05/2024 12:43
13/05/2024 12:17
13/05/2024 12:50
13/05/2024 09:10
13/05/2024 01:01
13/05/2024 10:22
13/05/2024 06:58
13/05/2024 05:55
13/05/2024 08:12
12/05/2024 20:00
11/05/2024 18:43
13/05/2024 11:25
13/05/2024 11:38
12/05/2024 19:14
13/05/2024 11:10
13/05/2024 09:36
13/05/2024 12:58
13/05/2024 10:27
13/05/2024 11:23
12/05/2024 08:00
12/05/2024 14:33
11/05/2024 16:00
12/05/2024 23:36
13/05/2024 07:42
13/05/2024 00:47
12/05/2024 23:25
13/05/2024 08:32