EQS Group-Ad-hoc: Peach Property Group AG / Key word(s): Half Year
Peach Property Group reports profitable growth for the first half of
13.08.2015 / 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.
Peach Property Group reports profitable growth for the first half of 2015
- Investment properties account for 61% of portfolio
- Equity ratio (market value) rises to 27.3%
- Rental income increased by 9% to CHF 4.2 million
- Portfolio market value up 11% to CHF 204 million
- Implementation of cost-cutting programme in the amount of CHF 2,5
- CHF 3.4 million in profit after tax despite negative currency effects;
profit before tax at CHF 4.7 million
Zurich, 13 August 2015 - Peach Property Group AG, a leading investor in
residential and commercial real estate, successfully implemented its
strategy with an increased focus on investment properties that allow for
value appreciation in the first half of 2015. Simultaneously, the rental
income increased significantly during this period and the proportion of
development projects in the overall portfolio decreased noticeably with the
completion of the "Living 108" project in Berlin and the handover of
additional apartments at the "H36" and "yoo berlin" properties. This
substantially reduced the risk profile of the Group's business activities.
In addition, the implementation of the cost-cutting programme announced in
March 2015 was completed. Overall, this resulted in a net-profit of CHF 3.4
million for the first half of 2015.
Due to further acquisitions to the investment portfolio and an active asset
management of the existing portfolio, the market value of the entire
investment portfolio was increased to CHF 204 million by the end of June
2015, representing an increase of just over 11% as against the end of 2014
and around 31% as compared to 30 June 2014. Investment properties now make
up 61% of Peach Property Group's total portfolio after amounting to 38% at
the end of December 2014. All told, the Group reported income from the
revaluation of investment properties of CHF 15.1 million in the first six
months of 2015.
This positive development was reflected in the operating result, which grew
75% to CHF 14.9 million in the first half of 2015. However, negative
currency effects of CHF 2.6 million, higher financing costs attributable to
the new portfolios as well as the write-down of a loan towards the
associated company Beach House AG led to a net profit for the period of CHF
3.4 million, which was below the prior-year figure of CHF 4.4 million.
By acquiring several properties north of Düsseldorf, the Group expanded its
investment portfolio by 72% to over 1,500 apartments, or more than 160,000
square metres of lettable space. The newly acquired properties hold
substantial value appreciation potential. Through strategic investments the
Group plans to modernise the apartments to raise rental income that is
partly below market rates for the region, and to drastically cut vacancy
Important progress was made in the planning process for the Gretag property
in Regensdorf near Zurich and the monument object in Dortmund. The Gretag
property is a key component of the "Zukunft Bahnhof-Nord" development zone
north of the train station in Regensdorf that is currently the largest
development area in the Canton of Zurich. The comments and recommendations
on the published draft plans for the revised construction and zoning
regulations for this area are being incorporated currently, and the winning
project from the architectural competition for the development projects
"Gretag Wohnen I and II" is being optimised further. This resulted in an
approximately 7% increase in usable space with the project volume remaining
unchanged. Written building permit was granted by both the building and
historical preservation commissions for the monument "Rheinische Str. 173"
in Dortmund. Peach Property Group will now invite for tender for
repurposing the property for commercial and residential use and push ahead
with the negotiations for a lease agreement with a tenant.
The rental income generated by the Peach Property Group rose by 9% to CHF
4.2 million during the reporting period. Adjusting for the negative
currency effects resulting from the Swiss National Bank's elimination of
the minimum Swiss franc-euro exchange rate would have resulted in an
increase of 19%. Despite these currency effects, the annual target rent for
the investment properties grew to CHF 11.4 million in mid-2015, up some 30%
as against the end of 2014.
The work on the "Living 108" development project in Berlin also proceeded
satisfactorily. The property was completed according to plan and 95% of the
128 apartments have been handed over to its buyers. Additional condominiums
in the "H36" and "yoo berlin" projects were also handed over, resulting in
revenue from development properties of CHF 66 million.
Furthermore, the implementation of the announced cost-cutting programme was
completed: costs were already cut by around 20% from January to June 2015.
Contributing factors here were lower staff costs and the reduction of other
operating expenses. The full effect of this cost-saving programme will
however only become apparent in the second half of 2015.
Due to the positive result for the first half of 2015, equity was up by
approximately 8% as against the end of 2014 to CHF 91.2 million as at 30
June 2015. The equity ratio according to IFRS stood at 25.5%, well over the
19.8% reported at the end of December 2014. The equity ratio at market
value was at 27.3% at the end of the first six months. In addition to the
profit generated in the first half-year, a decrease in total assets,
resulting from the completion and handover of apartments in development
projects, contributed to this result.
Peach Property Group is optimistic about continuing to grow in 2015. The
Group will focus on the standardised value appreciation and further
expansion of its portfolio of investment property while further reducing
cost. The Group will use market opportunities and shift its focus on
further acquisitions toward properties in attractive locations in B-cities
in Germany featuring both recurring cash flows as well as appreciation
potential. Negotiations are currently underway to purchase additional
Dr Thomas Wolfensberger, CEO of Peach Property Group, commented: "We
achieved key operational and financial progress in the first half of 2015
and remain optimistic about business development for remainder of the year.
As planned, our investment properties make up the core of our real estate
portfolio, and we have made good progress in generating sustained earnings
based on higher recurring rental income. Our higher equity ratio will
enable us to engage in further measured steps in growing our Group.
Managing our investment portfolio with a view to profitability and value
appreciation along with additional cost-cutting measures are the top
priorities for us."
The 2015 Half-yearly Report is available on the Peach Property Group's
website by clicking the following link: www.peachproperty.com/HJB2015
Media, investors and analysts
Dr. Thomas Wolfensberger, Chief Executive Officer and Dr. Marcel Kucher,
Chief Financial Officer
+41 44 485 50 00 | firstname.lastname@example.org
edicto GmbH, Axel Mühlhaus, Peggy Kropmanns
+49 (0) 69 90 55 05 52 | email@example.com
About Peach Property Group AG
Peach Property Group AG is a property investor and developer focused on
investments in Switzerland and Germany. The portfolio includes an
increasing number of investment properties that are designed to generate
sustained income as well as attractive residential development properties.
The Group's activities cover the entire value chain, from site evaluation
to project planning, implementation and marketing. In the investment
segment, the Group is focused on properties with a potential for achieving
attractive yields based on active asset management - typically secondary
locations in the catchment area of urban agglomerations. In the development
segment, the Group concentrates on exceptional locations and properties
with high-end specifications and amenities that meet the requirements of a
Peach Property Group AG is headquartered in Zurich and has its German Group
headquarters in Cologne. Peach Property Group AG is listed on the SIX Swiss
Exchange (PEAN, ISIN CH0118530366).
For more information, see www.peachproperty.com
End of ad hoc announcement
Document title: Press release
13.08.2015 News transmitted by EQS Schweiz AG. www.eqs.com - news
The issuer is responsible for the contents of the release.
Company: Peach Property Group AG
Phone: +41 44 485 50 00
Fax: +41 44 485 50 11
Listed: Regulated Unofficial Market in Berlin, Stuttgart; Open
Market in Frankfurt ; SIX
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