TIDMABL
RNS Number : 3070A
Ablon Group Limited
29 March 2012
FOR RELEASE AT 29 March 2012
ABLON GROUP LIMITED
FINAL RESULTS
FOR THE YEAR ENDED 31 DECEMBER 2011
ABLON Group Limited ("ABLON" or "the Company" and, together with
its subsidiaries, the "Group"), a leading real estate owner and
developer in Central Europe, today announces its final results for
the year ended 31 December 2011 which were prepared in accordance
with International Financial Reporting Standards as adopted by the
EU (EU IFRSs) and in compliance with the Companies (Guernsey) Law,
2008.
FINANCIAL HIGHLIGHTS
-- Revenue at EUR30.4 million (2010: EUR30.7 million). Revenue
in all segments grew compared to 2010, except for residential sales
of the Viva Residences apartments (20 units handed over in 2011
compared to 44 handovers in 2010)
-- Loss after tax for the year of EUR25.1 million (2010: EUR26.4
million profit after tax) due to deferred tax expense following
corporate tax rule changes and decrease in property values
-- Total equity at EUR207.5 million (2010: EUR235.2 million)
-- Property portfolio value, on comparable terms, EUR484 million (2010: EUR515 million
-- Loan to equity ratio of 110.1% (31 December 2010: 101.8%)*
-- Positive operative cash flow of EUR5.6 million (2010: EUR0.1 million)
*Loan to equity ratio 110.1% calculated for 2011 as total loan
of EUR228.5 million divided by total equity of EUR207.5 million
(2010: 101.8% as total loan of EUR239.4 million divided by total
equity of EUR235.2 million
Alex Borrelli, Chairman of ABLON, commented:
"I am pleased to present results for 2011 which, once again,
demonstrate ABLON's resilience when faced with difficult market
conditions. We continue to monitor development opportunities within
our land bank and we have the flexibility to continue to generate
value."
For further information, please contact:
ABLON Group Limited
Kristof Skwarek Tel. +36 1 225 6600
Religare Capital Markets
Philip Davies (Financial Adviser)
Tim Davis (Joint Corporate Broker) Tel. +44 (0)20 7444 0500
ING Wholesale Banking (Joint Corporate Broker)
Nathalie Bachich de Recina Tel. +44 (0)20 7767 8362
Newgate Threadneedle (Financial PR)
Graham Herring Tel. +44 (0) 20 7653 9858
Terry Garrett Tel. +44 (0) 20 7653 9845
NOTES TO EDITORS
About ABLON Group Limited
Founded in 1993 in Budapest (Hungary), ABLON and its
subsidiaries (together the "ABLON Group") has properties at 34
locations, of which there are 15 completed projects, one project in
the construction phase and 23 development projects in Budapest,
Prague, Bucharest, Warsaw and Gdansk. Its portfolio comprises a
diversified mix of office, residential, retail, logistics and hotel
developments valued of EUR484 million by external independent
appraiser (GVA), as at 31 December 2011. The ABLON Group had, as at
31 December 2011, 202,000 square metres of existing and income
generating office, residential, hotel, retail and logistics assets
(at 15 locations) in Budapest and Prague, with a significant
development land bank comprising a further 1,236,300 square metres
(at 24 locations) in Budapest, Prague, Bucharest, Warsaw and
Gdansk. ABLON's shares are traded on the Main Market of the London
Stock Exchange under the ticker 'ABL'.
chairman's statement
Results and key achievements
The prevailing market environment inevitably impacted the
Group's performance last year. As general investment gloom returned
to the European markets in the second half of the year, property
valuations were affected in Central Europe and there was a lack of
general investment interest.
However, at the operational level, ABLON's diversified portfolio
coped well with the challenging economic background. The
significant drop in residential sales was almost fully compensated
for by revenue growth from the other segments of our operations.
Administrative costs decreased further and, as interest rate levels
remained low, operative cash flow improved further.
ABLON has made several important steps during the year to place
the Group in more favourable position to deliver increasing value
for our shareholders over the medium term:
-- ABLON completed a fully subscribed rights issue in May 2011,
the net proceeds from which have strengthened the Group's balance
sheet and provided additional working capital headroom.
-- The Group opened its third retail project in Budapest, the
Europeum Shopping Centre on 14 April 2011. The handover of this
project also marked the completion of the Group's first mixed use
site development as the Marriott Courtyard Hotel opened in the
upper floors of this building in 2010.
-- The Company's shares were admitted to the Official List on 1
July 2011 and trading on the AIM Market of the London Stock
Exchange was cancelled on the same date. We believe that the move
to the Official List will raise the profile and public awareness of
the Company. We also believe that this move will provide access to
a wider audience of investors, as well as give the Company greater
flexibility with regard to a dual listing on other EU exchanges
and, therefore, potential access to additional pools of capital in
the future.
-- The Group started the construction of the Karolkowa Business
Park in August 2011, this A-class office complex of 18.700 m2 of
office and retail space is the Group's first project to enter the
construction phase for three years and its first in Poland. The
Group is currently seeking alternative loan financing for the
project after withdrawing from the financing contract with
Investkredit Bank AG as a result of its breach of its contractual
obligations.
Working capital
Whilst we believe that the Group has sufficient cash (including
cash equivalents) for its present requirements, if the Group is
unable to renew, refinance or extend expired or expiring loans,
then it may be required to repay such loans; and, if the Group is
unable to raise sufficient sales proceeds from the disposal of the
Group's interest in the properties secured against such loans, then
it would default on those loans.
However, we believe, based on past experience during the recent
turmoil in the financial markets, that the Group will be able to
renegotiate covenants, extend or refinance all loans that breach or
will breach covenants or have or will fall due for repayment in the
next 12 months and that we will be able to renegotiate, extend,
refinance or renew all relevant loans on commercially acceptable
terms. I would also like to bring to your attention, note 2 (c) of
the financial statements which explains further the assumptions the
Board has made in confirming that the Group is a going concern, and
that the auditors have not qualified their audit opinion in this
regard although they too draw your attention to this statement.
Board changes
Gerald Williams, former Non-Executive Director, stepped down
from the Board in early 2012. We are grateful to for his
contribution to the Company since its flotation in 2007.
Prospects
The countries and segments in which the Group operates are
experiencing continuing difficult market conditions. We continue to
monitor potential development opportunities within our land bank
and we have the flexibility within our portfolio to commence
developments according to market needs as well as to realise value
on appropriate terms. This flexible approach will enable ABLON to
realise and generate value for our shareholders.
Alex Borrelli,
Chairman
-ends-
RESULTS IN BRIEF
For the year ended
31 Dec
in thousands of Euros 2011 31 Dec 2010
Gross rental income 16,610 16,536
Service charge income 7,175 5,875
Residential sales income 2,751 6,543
Hotel income 3,885 1,746
Revenue 30,421 30,700
---------- ------------
Cost of rental and service
charge (7,361) (5,781)
Cost of residential sales (2,090) (4,681)
Hotel expense (4,395) (2,929)
Cost of sales (13,846) (13,391)
---------- ------------
Gross profit 16,575 17,309
---------- ------------
Net valuation gain/ (loss) 17,909 12,756
Inventory provision (3,243) 1,177
Impairment of property plant
and equipment 0 4,070
Sales and administrative expense (5,221) (6,320)
Other income/(expense) (345) 60
Net operating profit / (loss) 25,675 29,053
---------- ------------
Net financing income/(expenses) (35,163) (12,994)
Profit / (loss) before income
tax (9,488) 16,059
---------- ------------
Tax (15,594) 10,351
Profit/ (loss) for the period (25,082) 26,410
---------- ------------
Basic earnings/(losses) per
share (euro) (0.02) 0.03
Diluted earnings/(losses)
per share (euro) (0.02) 0.03
---------- ------------
Summary Consolidated Statement of Financial Position
in thousands of Euros 31 Dec 2011 31 Dec 2010
Non-current assets 461,394 483,552
Current assets 20,421 24,332
Total assets 481,815 507,884
------------ ------------
EQUITY
Total equity 207,523 235,191
------------ ------------
Non-current liabilities 155,410 187,521
Current liabilities 118,882 85,171
Total liabilities 274,292 272,692
------------ ------------
Total equity and liabilities 481,815 507,884
------------ ------------
Summary CONSOLIDATED Statement OF CASH FLOWS
In thousands of Euros 31-Dec-11 31-Dec-10
Net cash generated/ (used in) from
operating activities 5,635 131
Net cash (used in) investing activities (5,298) (6,091)
Net cash from / (used in) financing
activities (1,900) (4,771)
Net increase / (decrease) in cash and
cash equivalents (1,563) (10,731)
Cash and cash equivalents at 1 January 11,481 22,046
Effect of exchange rate fluctuations
on cash held (188) 166
Cash and cash equivalents at 31 December 9,730 11,481
DIRECTORS' REPORT
The Directors' Report is prepared under the Companies (Guernsey)
Law, 2008 as amended.
Operational Review
Budapest
Total occupancy and annualised gross rent improved, the main
driver being the retail segment. Retail income growth was from the
newly opened Europeum Shopping Centre (opened in April 2011), with
an annualised gross rent of EUR1.4 million (EUR0.9 million
pre-leased as at 31 December 2010).
Office occupancy and annualised gross rent slightly decreased
without major changes in occupancies on project levels.
The Airport City storage project has grown in occupancy and
annualised rental income. Due to this segment's proportionately
smaller contribution to GLA, the effect on the totals was less
significant.
Prague
At the end of December 2011, the total Prague occupancy was 90%
(96% as at 31 December 2010), while annualised gross rent slightly
decreased to EUR2.6 million (EUR2.7 million as at 31 December
2010). In the residential development, 20 units were delivered to
buyers during the twelve months ended 31 December 2011, compared to
46 in 2010. As at 31 December 2011, 74 units had been sold out of a
total of 162.
Bucharest
The Group's developments in Bucharest remain on hold until
market conditions improve.
Poland
In August 2011, the Company commenced the construction of the
Karolkowa Business Park in Warsaw. The A-class office complex will
include 15,600 m2 of office space, 3,100 m2 of retail space on the
ground floor and 260 underground car parking spaces. Karolkowa
Business Park is located within a business park adjoining Warsaw's
Central Business District and is easily accessible by public and
private transportation links, including a new metro station.
Completion is expected in 2013, subject to agreeing terms for the
continuation of loan financing.
The Group's other developments in Poland remain on hold until
market conditions improve.
Income Statement review
In thousand Euros 2011 2010
Cost of Cost of
Revenue sales Revenue sales
Rental of investment
properties 16,610 (1,277) 16,536 (1,099)
Residential sales 2,751 (2,090) 6,543 (4,681)
Service and management
activity 7,175 (6,084) 5,875 (4,682)
Hotel operation 3,885 (4,395) 1,746 (2,929)
Total 30,421 (13,846) 30,700 (13,391)
Rental activities
Gross rental income was EUR16.6 million for the year ended 31
December 2011, on a level with the EUR16.5 million generated during
the year ended 31 December 2010. The retail segment's expansion
(the Europeum Shopping Centre opened in mid-April 2011) balanced
the slight decrease in office revenues.
Residential activities
Residential income was EUR2.8 million for the year ended 31
December 2011, compared to EUR6.5 million for the year ended 31
December 2010. The income is attributed to 20 units delivered to
buyers at the Viva Residence project in Prague (2010: 46 units
delivered).
Hotel activities
Marriott Courtyard operations generated hotel sales income of
EUR3.9 million in 2011, while, the figure was EUR1.7 million for
the eight months of operation following the hotel's handover on 26
April 2010.
Service and management activities
Service and management activities income was EUR7.2 million
representing a growth of EUR1.3 million, or 22% from the EUR5.9
million generated during the year ended 31 December 2010. The
growth was from invoiced fit-out activity connected to the new
retail leases in Europeum Shopping Centre and Buy Way
Dunakeszi.
Net losses on fair value adjustment of investment property
Net gains on the fair value adjustment of investment property
for the year ended 31 December 2011 were EUR17.9 million, compared
to net gains of EUR12.8 million for the year ended 31 December
2010. The reasons for the gains are solely exchange differences
caused by a 11.6% depreciation of the Hungarian Forint and 11.5%
depreciation of the Polish Zloty in the year ended 31 December
2011.
Valuations of investment properties are denominated in Euros
but, as the functional currencies of the Group's subsidiaries are
the respective local currencies, they are translated into the local
currency. The change in the local currency values of investment
properties is recognised in the income statement on net gains or
losses on fair value adjustment. This accounting treatment means
that, even if there is no change in the underlying Euro value of
the investment properties, exchange rate changes will still result
in changes in fair value adjustment. As the majority of assets are
investment properties, these changes can substantially influence
the reported profit of the Group.
Impairment of inventory
Impairment losses on inventory for the year ended 31 December
2011 were EUR3.2 million against an impairment gain of EUR1.2
million for the year ended 31 December 2010. The losses incurred
are due to decreasing comparable values on Bucharest residential
properties.
Impairment of property, plant and equipment
There were no impairment gains or losses on property, plant and
equipment for the year ended 31 December 2011 (EUR4.1 million
impairment gain in the year ended 31 December 2010).
Sales and marketing expenses
Sales and marketing expenses were EUR0.6 million for the year
ended 31 December 2011, a decrease of EUR0.2 million from EUR0.8
million for the year ended 31 December 2010.
Administrative expenses
Administrative expenses were EUR4.7 million for the year ended
31 December 2011, a decrease of EUR0.8 million compared to the
EUR5.5 million for the year ended 31 December 2010. The improvement
is mostly due to one-off entries: In 2010 there was a non-recurring
legal expense of EUR0.3 million and the Marriott hotel pre-opening
period boosted wages by EUR0.2 million. In 2011 regular advisory
fees were partially capitalised on the Karolkowa project in the
amount of EUR0.2 million.
Net financing expense
Net financing expense was EUR35.2 million for the year ended 31
December 2011, an increase of EUR22.2 million, compared to the net
financing expenses of EUR13.0 million for the corresponding period
in 2010. The increase in financial expense is primarily due to
retranslation of certain Group loans as a result of the marked
depreciation of 11.6% in the Hungarian Forint in 2011, while 2010
saw a 2.9% depreciation. As explained in the 'net loss on fair
value of investment property' section this relates to a
consolidation of retranslation at the subsidiary level, not the
underlying value of the loans in Euros.
Year ended 31 December 2011 2010
Net interest expenses (9.2) (8.4)
Net FX movement (25.8) (4.4)
Other (0.2) (0.2)
------------------------------------- ------- -------
Total net finance income/(expenses) (35.2) (13.0)
Current income tax
Current income tax was EUR0.3 million for the year ended 31
December 2011 unchanged from the corresponding period in 2010.
Deferred income tax
Deferred tax expense was EUR15.3 million for the year ended 31
December 2011, while in the year ended 31 December 2010 it was an
income of EUR10.7 million. The change from income to expense was
due to a reversal of a one-off change in the Hungarian corporate
tax law. The measure to reduce the corporate tax from 19 per cent
to 10 per cent starting from 2013 stepped into effect as at
31.12.2010 and created the deferred tax income. The measure was
abolished in 2011.
Deferred tax expense was influenced as well by the depreciation
of the local currencies. This depreciation raised the difference
between the historical cost of the Group's property portfolio
values and revaluated carrying amounts and deferred tax liability
increased on the valuation difference.
Statement of financial position review
Investment property
The value of investment property was EUR379.6 million as at 31
December 2011, a decrease of EUR13.3 million or 3.4% from the
EUR392.9 million as at 31 December 2010. Discounting new investment
valuations decreased in all four countries of operations
involved.
Property, plant and equipment
Property, plant and equipment decreased by EUR5.2 million, from
EUR34.1 million as at 31 December 2010 to EUR28.9 million as at 31
December 2011. The decrease is mainly due to the depreciation of
the Hungarian currency.
Long-term inventory
Long-term inventory decreased by EUR4.5 million, from EUR55
million as at 31 December 2010 to EUR50.5 million as at 31 December
2011. The decrease is mainly due to further inventory provision on
the Romanian residential purpose land portfolio.
Current assets
Current assets include inventories (in particular, residential
property intended for sale), current receivables (rent receivables,
receivables from property sales and receivables from shareholders)
and other assets, bank balances and cash. Total current assets
decreased by EUR3.9 million, from EUR24.3 million as at 31 December
2010 to EUR20.4 million as at 31 December 2011. The decrease was
due to a EUR2.1 million decrease in inventory (sale of apartments
in the Viva project) and a EUR1.8 million decrease in cash and cash
equivalents.
Non--current liabilities
Non--current liabilities include long--term borrowings from
commercial banks and shareholders, as well as deferred tax
liabilities for future tax obligations. Total non--current
liabilities decreased by EUR32.1 million, from EUR187.5 million as
at 31 December 2010 to EUR155.4 million as at 31 December 2011.
Long term borrowings decreased by EUR44.8 million, from EUR163.1
million as at 31 December 2010 to EUR118.3 million as at 31
December 2011. The decrease is mainly due to a loan, maturing in
2012 with a EUR38 million balance and continuous repayment of all
other long term loans. Deferred tax liability increased by EUR12.8
million, from EUR23.5 million as at 31 December 2010 to EUR36.3
million as at 31 December 2011. The increase in deferred tax
liabilities is due to change in the Hungarian corporate tax rules
and depreciation of the local currencies.
Current liabilities
Current liabilities increased by EUR33.7 million, from EUR85.2
million as at 31 December 2010 to EUR118.9 million as at 31
December 2011. The growth was due to an increase of EUR33.9 million
in short-term loans due to maturing of long term loans.
Cash flow, loans and liquidity
Cash flow
The Group's internal sources of liquidity and cash flow are
generated from rental revenues and the sale of residential
apartments. The Group had a positive operational cash flow of
EUR5.6 million for the year ended 31 December 2011, an improvement
of EUR5.5 million compared to the operational cash flow of EUR0.1
million for the year ended 31 December 2010.
Investing activities produced a EUR5.3 million negative cash
flow (2010 EUR6.1 million negative cash flow). The start of the
Karolkowa construction and the Europeum Shopping Centre handover
were the major beneficiaries of the investment cash flow.
Financing activities produced a EUR1.9 million negative cash
flow (2010 EUR4.8 million negative cash flow). The 2011 figure
includes a EUR10.9 million loan repayment and a EUR9.0 million cash
inflow from a rights issue. The 2010 figure included EUR6.1 million
loan repayment and EUR1.3 million loan take-up on the Europeum
project.
The loan repayment increased by EUR4.8 million in 2011 (2011:
EUR10.9 million loan repaid, 2010: EUR6.1 million loan repaid). The
major factors contributing to the growth of loan repayments were
the following:
-- EUR1.5 million - the Europeum loan service started in 2011, following grace period in 2010.
-- EUR1.9 million one-time repayments connected to loan negotiations.
-- EUR0.5 million higher loan repayment on the Viva project
Indebtedness ratios
The Group's loan to equity ratio deteriorated by 8.3 percentage
points to stand at 110.1% as at 31 December 2011, while it was
101.8% as at 31 December 2010. The loan to equity ratio is
calculated as total loan/total equity as shown in the Group's
statement of financial position.
The Group's debt ratio (as measured by debt to total assets) was
unchanged at 47% as at 31 December 2011, the same as the 31
December 2010 figure.
Loan covenants and collaterals
The Group has six loans with covenants:
One loan (with an outstanding amount of approximately EUR38
million as at 31 December 2011 and an expiry date of 25 October
2012) has a 130% interest service cover ("ISC") covenant with
certain cash trap provisions in force when the ISC ratio is between
100 and 130%. Although the Group companies which are subject to the
loan agreement are not in technical breach of this covenant, the
current ISC ratio of such loan is between 100 and 130% and,
therefore those Group companies are subject to the cash trap
provisions. Pursuant to those provisions, all excess net operating
income (if any) of such Group companies is collected on reserve
accounts and may only be used for the payment of certain re-letting
expenditures in respect of certain premises if there is not
sufficient current income.
Another loan (with an outstanding amount of approximately
EUR12.2 million as at 31 December 2011 and an expiry date of 31
March 2019) has a 115% DSCR covenant. The relevant Group company is
technically in breach of this covenant, although the lender has not
issued a default notice.
A third loan with an outstanding balance of EUR36.9 million as
at 31 December 2011 and an expiry date of 31 December 2022) has a
71% LTV covenant. The relevant Group company is technically in
breach of this covenant, although the lender has not issued a
default notice.
The three remaining loans with covenants are within those
covenants' requirements.
Loans granted by the financing banks to the projects are
non-recourse loans regarding ABLON Group Limited except for the
loan provided to the Europeum project, where ABLON Group Limited
provided EUR3.6 million guarantee (2010: EUR7.5 million)
Cross collateral in a form of payment guarantees affect a number
of projects, which are marked accordingly in the portfolio summary
table below.
Portfolio summary
Major financial data of the Group's projects:
Project Project Completed Annualized Occupancy Valuation Bank Loan Cross
Type Area Gross rate loan expiry Collater-alised
Rent
----------------- ------------- ---------------------- ---------------------- ---------- ----- ------------- ----------------
(EUR million (%) as (EUR million) as at
p.a.) at as at
as at
----------------- ------------- ---------------------- ---------------------- ----------------- ------------- ----------------
(sq. 31-Dec-10 31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-11
m)
Budapest
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
BC. 99 -
yielding Office 17,300 2.4 2.4 90% 89% 28.5 11.8 30-Sep-15 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
BC. 99 -
development Office - - - - 10.7
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Forgach Office - - - - 3.1
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ----------
Erzsebet Office - - - - 4.0
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Hightech Park
- yielding Office 2,600 0.1 0.1 45% 43% 2.6 0.6 30-Sep-15 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Hightech Park
- development Office 15.6 4.7 31-Mar-12 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Fogarasi Office 2,700 0.4 0.4 100% 100% 2.8 1.5 30-Sep-15 No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
M3 Office 18,000 0.5 0.5 19% 18% 21.0 12.2 31-Mar-19 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
BC. 91 Office 6,600 0.8 0.7 74% 67% 9.8 10.2 25-Oct-12 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
BC. 30(2) Office 12,900 1.7 1.6 69% 71% 24.6 21.9 25-Oct-12 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Buy-Way
Dunakeszi Retail 21,600 1.0 1.1 45% 64% 17.7 12.9 30-Sep-17 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Buy-Way Soroksar Retail 11,500 0.5 0.4 42% 64% 9.8 7.5 30-Sep-17 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Zoldvaros Residential - - - - 5.7 - - No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Gateway Office 35,900 5.5 5.6 95% 92% 75.2 32.4 30-Sep-18 No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Europeum Retail 6,500 0.9 1.4 70% 94% 25.5 36.9 31-Dec-22 No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Hotel 12,600 - - N/A N/A 28.8
------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Airport City
- yielding Storage 19,600 0.9 1.0 57% 69% 14.7 9.0 30-Apr-13 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Airport City
- development Storage - - - - 7.1
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Hold Hotel - - - - 6.9 3.7 30-Sep-12(1) Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Katona Hotel - - - - 6.2 2.4 31-Dec-11 No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Nap Hotel - - - - 3.6 2.2 31-Dec-11 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Rosslyn Hotel - - - - 7.8 - - No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Newage Office - - - - 4.6 - - No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Rakoczi Retail 800 - - - - 0.9 - - No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Total Budapest 168,600 14.7 15.2 65% 70% 337 170
-------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Prague
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Palmovka Office 4,500 0.7 0.7 93% 95% 7.4 5.9 25-Oct-12 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Meteor -
yielding(2) Office 14,000 2.0 1.9 97% 89% 24.2 12.7 30-Jun-17 Yes
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Meteor -
development Office - - - - 3
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
VIVA
Residence(3) Residential 14,900 - - - - 8.6 4.9 31-May-12 No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
May House Office - - - - 2.3 0.9 31-Dec-12 No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Kolben Mixed - - - - 21.4 5.8 30-Sep-12 No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Ritka Residential - - - - 6.8 5.2 31-Mar-12 No
----------------
Total Prague 33,400 2.7 2.6 96% 90% 74 35
-------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Bucharest
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Mogosaia Residential - - - - 6.9 4.5 31-Dec-11 No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Timisoara Av. Residential - - - - 14.6 16.6 31-Dec-11 No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Pipera 3H Mixed - - - - 3.4 - - No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Pipera 4H Mixed - - - - 10.4 - - No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Airport City Mixed - - - - 8.6 - - No
Otopeni
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Vlad Tepes Office - - - - 2.6 - - No
----------------
Total Bucharest - - - - 47 21 -
-------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Poland
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
K.B.P. - Warsaw Mixed - - - - 19.0 No
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Wislinka - Residential - - - - 7.2 No
Gdansk
----------------- ------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Salomea - Warsaw Office - - - - 5.7 No
----------------
Total Poland - - - - 32 0
-------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Total Group 202,000 17.4 17.8 68% 73% 490 226
-------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Non-controlling
interest (6.0)
-------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
Total Group
without non-controlling
interest 484
-------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ----- ------------- ----------------
(1) Offices and storages in own use are included in the
annualised rental income of BC 30, Meteor and Airport City,
contributing to a total annualised gross rent of EUR0.3 million
p.a. as at 31.12.2011 (31.12.2010: EUR0.2 million).
(2) The valuations are based on the appraisal reports conducted
by GVA Robertson. The values are based on the comparable approach
for the future development sites and discounted cash flow method
for the yielding properties.
Summary table for yielding rental properties:
Segment Completed Annualized Occupancy rate Valuation Valuation
Area Gross Rent
(EUR million (%) as at (EUR million)
p.a.) as at as at
(sq. 31-Dec-10 31-Dec-11 31-Dec-10 31-Dec-11 31-Dec-10 31-Dec-11
m)
------------------ ---------- ---------- ----------
Budapest office 94,800 11.4 11.3 73% 72% 166.1 164.5
------------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Budapest retail 40,350 2.4 2.9 47% 68% 60.0 53.0
------------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Budapest storage 19,600 0.9 1.0 57% 69% 14.3 14.7
------------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Prague office 18,900 2.7 2.6 96% 90% 43.3 36.9
Total yielding 173,650 17.4 17.8 68% 73% 283.7 269.1
------------------ ---------- ---------- ---------- ---------- ---------- ---------- ----------
Area summary of the Group's projects as at 31 December 2011:
Project Project Completed Under construction Planned Building Surface
Type permit area
--------------------------- ------------
Gross lettable/saleable (sq.m.)
area (sq. m)
--------------------------- ------------
Budapest
--------------------------- ------------ --------- ------------------ --------- -------- -------
BC. 99 - yielding Office 17,300 12,767
--------------------------- ------------ --------- ------------------ --------- -------- -------
BC. 99 - development Office 27,400 27,400
--------------------------- ------------ --------- ------------------ --------- -------- -------
Forgach Office 8,700 8,700 3,335
--------------------------- ------------ --------- ------------------ --------- -------- -------
Erzsebet Office 17,900 17,900 6,905
--------------------------- ------------ --------- ------------------ --------- -------- -------
Hightech Park -
yielding Office 2,600 78,380
--------------------------- ------------ --------- ------------------ --------- -------- -------
Hightech Park -
development Office 142,900 142,900
--------------------------- ------------ --------- ------------------ --------- -------- -------
Fogarasi Office 2,700 632
--------------------------- ------------ --------- ------------------ --------- -------- -------
M3 Office 18,000 9,511
--------------------------- ------------ --------- ------------------ --------- -------- -------
BC. 91 Office 6,600 2,431
--------------------------- ------------ --------- ------------------ --------- -------- -------
BC. 30(2) Office 12,900 2,677
--------------------------- ------------ --------- ------------------ --------- -------- -------
Buy-Way Dunakeszi Retail 21,600 3,700 64,768
--------------------------- ------------ --------- ------------------ --------- -------- -------
Buy-Way Soroksar Retail 11,500 39,240
--------------------------- ------------ --------- ------------------ --------- -------- -------
Zoldvaros Residential 29,100 29,100 18,399
--------------------------- ------------ --------- ------------------ --------- -------- -------
Gateway Office 35,900 11,255
--------------------------- ------------ --------- ------------------ --------- -------- -------
Europeum Retail 6,500 3,632
--------------------------- ------------ --------- ------------------ --------- -------- -------
Hotel 12,600
---------------------------------------- --------- ------------------ --------- -------- -------
Airport City - yielding Storage 19,600 117,150
--------------------------- ------------ --------- ------------------ --------- -------- -------
Airport City - development Storage 51,600 51,600
--------------------------- ------------ --------- ------------------ --------- -------- -------
Hold Hotel 6,800 6,800 1,507
--------------------------- ------------ --------- ------------------ --------- -------- -------
Katona Hotel 4,000 1,442
--------------------------- ------------ --------- ------------------ --------- -------- -------
Nap Hotel 5,100 5,100 1,581
--------------------------- ------------ --------- ------------------ --------- -------- -------
Rosslyn Hotel 5,500 5,500 1,037
--------------------------- ------------ --------- ------------------ --------- -------- -------
Newage Office 13,700 13,700 4,270
--------------------------- ------------ --------- ------------------ --------- -------- -------
Rakoczi Retail 800
--------------------------- ------------ --------- ------------------ --------- -------- -------
Total Budapest 168,600 316,400 308,700
----------------------------------------- --------- ------------------ --------- -------- -------
Prague
--------------------------- ------------ --------- ------------------ --------- -------- -------
Palmovka Office 4,500 1,015
--------------------------- ------------ --------- ------------------ --------- -------- -------
Meteor - yielding(2) Office 14,000 8,484
--------------------------- ------------ --------- ------------------ --------- -------- -------
Meteor - development Office 6,100
--------------------------- ------------ --------- ------------------ --------- -------- -------
VIVA Residence Residential 14,900 14,637
--------------------------- ------------ --------- ------------------ --------- -------- -------
May House Office 8,200 2,043
--------------------------- ------------ --------- ------------------ --------- -------- -------
Kolben Mixed 73,000 55,601
--------------------------- ------------ --------- ------------------ --------- -------- -------
Ritka Residential 50,800 394,701
--------- -------
Total Prague 33,400 138,100 0
----------------------------------------- --------- ------------------ --------- -------- -------
Bucharest
--------------------------- ------------ --------- ------------------ --------- -------- -------
Mogosaia Residential 79,200 93,753
--------------------------- ------------ --------- ------------------ --------- -------- -------
Timisoara Av. Residential 152,800 61,100 40,994
--------------------------- ------------ --------- ------------------ --------- -------- -------
Pipera 3H Mixed 97,300 33,650
--------------------------- ------------ --------- ------------------ --------- -------- -------
Pipera 4H Mixed 115,800 40,000
--------------------------- ------------ --------- ------------------ --------- -------- -------
Airport City Otopeni Mixed 215,200 8,200 133,254
--------------------------- ------------ --------- ------------------ --------- -------- -------
Vlad Tepes Office 9,800 9,800 1,844
--------- -------- -------
Total Bucharest 670,100 79,100
----------------------------------------- --------- ------------------ --------- -------- -------
Poland
--------------------------- ------------ --------- ------------------ --------- -------- -------
K.B.P. - Warsaw Mixed 18,700 5,562
--------------------------- ------------ --------- ------------------ --------- -------- -------
Wislinka - Gdansk Residential 58,000 90,253
--------------------------- ------------ --------- ------------------ --------- -------- -------
Salomea - Warsaw Office 35,000 24,523
--------- --------
Total Poland 0 18,700 93,000 0
----------------------------------------- --------- ------------------ --------- -------- -------
Total Group 202,000 18,700 1,217,600 387,800
----------------------------------------- --------- ------------------ --------- -------- -------
Dividend Policy
The Company has adopted a dividend policy that will reflect
long-term earnings and cash flow potential while at the same time
maintaining both prudent dividend cover and adequate capital
resources within the business.
As a result of continued uncertainty in the economic outlook of
the Group's markets, the Board of Directors of the Company has
decided it would not be prudent to recommend the payment of a
dividend.
This approach supports the Company's initiatives to preserve
cash during the current challenging market environment. The Board
of Directors of the Company believes that shareholders' interests
will be better served by retaining the Group's cash to improve its
working capital position. The Company cannot at this stage indicate
when it will pay its next dividend.
Disclosure of information to auditors
So far as each of the Directors is aware, there is no relevant
audit information of which the Company's auditor is unaware, and
each of the Directors has taken all the steps required to have been
taken as a Director to make himself aware of any relevant audit
information and to establish that the Company's auditor is aware of
that information.
Directors during the period:
Uri Heller appointed 16/10/06 - Current Director
Gerald Williams appointed 02/01/07 - Director, (resigned
24/01/12)
Adrienn Lovro appointed 25/02/10 - Current Director
Alex Borrelli appointed 15/03/10 - Current Director
Mordechai Bignitz appointed 26/08/10 - Current Director
Statement of Directors' responsibilities
The Directors are responsible for preparing the Directors'
Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law they have
elected to prepare the financial statements in accordance with
International Financial Reporting Standards and applicable law.
The financial statements are required by law to give a true and
fair view of the state of affairs of the Group and of the profit or
loss of the Group for that period.
In preparing these financial statements, the Directors are
required to:
n select suitable accounting policies and then apply them
consistently;
n make judgments and estimates that are reasonable and
prudent;
n state whether applicable accounting standards have been
followed, subject to any material departures disclosed and
explained in the financial statements; and
n prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group will continue
in business.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Group and to enable them to ensure that
the financial statements comply with The Companies (Guernsey) Law,
2008. They have general responsibility for taking such steps as are
reasonably open to them to safeguard the assets of the Group and to
prevent and detect fraud and other irregularities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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