Press
Release
First half 2016 results
. Gross rental income up
1.4% like-for-like[1]
. Net operating cash flow[2] strongly up by 19.8%
. Solid progress in retail value-enhancement
programs
Paris, 29 July
2016: MRM (Euronext code ISIN FR0000060196), a real estate
company specialising in retail and office property, today announced
its results for the first half of 2016. This publication followed
the review and approval of the audited[3] financial
statements by MRM's Board of Directors at its meeting of 28 July
2016.
Asset portfolio
of €224.4m at end-June 2016
The value[4] of MRM's
asset portfolio was €224.4m at 30 June 2016, from €226.0m at
31 December 2015. This change reflects in particular a further
disposal of an office building, the Cytéo building in
Rueil-Malmaison.
The value of MRM's asset portfolio at 31 December 2015 restated for
the Cytéo disposal was €220.0m. During the first half, investments
totalled €3.8m and the fair value of the asset portfolio increased
by €0.6m. Overall, the value of the asset portfolio rose by 2.0% on
a like-for-like basis[5].
Value of MRM's portfolio
|
30.06.2016
€m % of
total |
31.12.2015
€m |
Like-for-like5
change
|
Retail |
149.0 |
66% |
144.0 |
+3.5% |
Offices |
75.4 |
34% |
82.0 |
-0.8% |
Total MRM |
224.4 |
100% |
226.0 |
+2.0% |
Retail properties
The value of the retail property
portfolio rose by 3.5% relative to end-December 2015, reflecting
the good progress made on value-enhancement programs, particularly
those at Les Halles (Amiens), Sud Canal (Saint-Quentin-en-Yvelines)
and Passage de la Réunion (Mulhouse).
During the first half, letting activity was strong. Nine new leases
or lease renewals were signed in the period, representing an annual
rent of €0.9m. Six of these concerned pre-letting of space as part
of ongoing value-enhancement programs (Les Halles, Sud-Canal and
Carré Vélizy at Vélizy-Villacoublay) and had not taken effect by
the end of the first half.
Investment over the first half was €2.4m and was dedicated to
value-enhancement programs at Les Halles, Sud Canal and Passage de
la Réunion.
At 1 July 2016, the occupancy rate of the retail portfolio was
broadly stable, at 81% from 82% six months earlier. The vacancy
rate reflects ongoing works during the first half at Les Halles and
Sud Canal, as well as strategic vacancies at Passage de la Réunion
and Galerie du Palais .
Annualised net rents was €7.6m at 1 July 2016, 3.0% lower than at 1
January 2016, reflecting the departure of tenants and temporary
rent reductions granted within the framework of the
value-enhancement programs.
Offices
During the first half, MRM sold
the Cytéo building in Rueil-Malmaison for €6.3m net of transfer
taxes.
On a like-for-like basis5, the value of the office portfolio saw a
small fall of 0.8% relative to end-December 2015.The Solis building
(Les Ulis), the sale of which was completed in July 2016, has been
booked in accounts at 30 June 2016 at its contract value net of
transaction costs.
At 1 July 2016, annualised net rents from office properties in
operation was €4.7m, a significant increase of 23.4% relative to 1
January 2016, linked to new leases that came into effect at
Cap Cergy (Cergy-Pontoise). These took to 95% the occupancy rate of
this building, allowing the launch of the sale process.
Growth in rental
income and current operating income
Consolidated revenues |
H1 2016 |
H1 2015 |
Change |
Like-for-like1
change |
€m |
% of total |
€m |
Retail |
4.4 |
64% |
4.8 |
-7.8% |
-7.8% |
Offices |
2.4 |
36% |
2.3 |
+7.1% |
+23.6% |
Gross rental income |
6.8 |
100% |
7.0 |
-3.0% |
+1.4% |
The 7.8% fall in gross rental
income from retail properties was due in particular to the
strategic vacancy and rental conditions granted during the
the implementation of value-enhancement plans. It should be noted
that new leases signed since the fourth quarter of 2015 as part of
these value-enhancement plans, which represent a total amount of
€1m in additional rent, or a potential reduction of 8.5 points in
the vacancy rate, have not yet come into effect in the first
half.
In offices, gross rental income
was 23.6% higher on a like-for-like basis1. This strong
increase was due to new leases coming into effect, which more than
offset the impact of disposals, as rental income rose by 7.1% on a
reported basis.
Total consolidated revenues were
3.0% lower, at €6.8m, but rose by 1.4% on a like-for-like
basis1.
A further reduction in
non-recovered property expenses (down by 6.6% relative to the first
half of 2015) helped limit the fall in net rental income to 1.1%,
taking it to €4.5m.
Current operating income was €2.5
million, 5.9% higher than in the first half of 2015.
MRM thus recorded consolidated net
income of €1.6m, from €3.0m in the first half of 2015. This fall
was due mainly to the lower growth in fair value in the first half
of 2016 (€0.3m[6]) compared
to that recorded in the first half of 2015 (€2.2m).
Strong growth in
net operating cash flow
Net operating cash flow2
€m |
H1 2016 |
H1
2015 |
Change |
Net rental
income |
4.5 |
4.6 |
-1.1% |
Operating
costs |
(1.8) |
(1.8) |
-0.9% |
Other
operating income and expense |
0.2 |
(0.0) |
|
EBITDA |
2.9 |
2.7 |
+5.2% |
Net cost
of debt |
(1.1) |
(1.2) |
-13.1% |
Net operating cash flow |
1.8 |
1.5 |
+19.8% |
Despite the scope effect due to
disposals, the favourable impact of the reduction in non-recovered
property expenses on net rental income and the fall in net
operating costs resulted in EBITDA of €2.9m, an increase of 5.2%
compared to the first half of 2015.
The net cost of debt continued to fall, reaching €1.1m
(-13.1%). MRM thus generated net operating cash flow of €1.8m,
a 19.8% increase on the first half of 2015.
Solid balance
sheet
During the first half, MRM repaid
a fallen due €27.2m bank debt by means of a new €22.0m loan
maturing in January 2017, with the remaining amount repaid using
the Group's cash. Considering repayment relating to the sale of
Cytéo and contractual repayments during the first half, net
financial debt fell by €10.0m from its level at 31 December
2015.
At end-June 2016, MRM had cash and cash equivalents of €6.3m, from
€13.4m at 31 December 2015. Net debt was thus €94.7m at
30 June 2016, from €97.6m at 31 December 2015, a
reduction of 3%.
The net LTV ratio continued to fall and stood at 42.2% at 30 June
2016, from 43.2% at 31 December 2015.
EPRA NNNAV was €123.8m, slightly lower than the €126.5m recorded at
31 December 2015. Restated for a dividend[7] of €4.4m
paid against 2015 results, EPRA NNNAV rose by 1.4%, thanks to
consolidated net income of €1.6m in the first half.
Net Asset Value |
30.06.2016 |
31.12.2015 |
30.06.2015 |
total
€m |
per share
€ |
total
€m |
per share
€ |
total
€m |
per share
€ |
EPRA NNNAV |
123.8 |
2.84 |
126.5 |
2.90 |
122.2 |
2.80 |
Replacement NAV |
137.5 |
3.15 |
140.0 |
3.21 |
135.0 |
3.09 |
Number of shares
(adjusted for treasury stock) |
43,623,633 |
43,612,702 |
43,633,061 |
Outlook
Since June 2013, MRM has launched a strategy of gradually
refocusing on its retail property. Two new sales of office
buildings since the beginning of 2016 take the total number of
disposals to six out of the nine properties owned by MRM in June
2013. The total value of these disposals to date is €66.9m (net of
transfer taxes). MRM will pursue its disposal plan for the
remaining office properties in its portfolio (Cap Cergy, Nova in La
Garenne-Colombes and Urban in Montreuil) over the coming quarters,
and aims for a full withdrawal from the office segment by late 2016
or early 2017.
With its solid balance sheet, MRM
has set out an ambitious investment plan that will seek to exploit
the value-enhancement potential of its retail assets. The two
programs of work launched during the first half at Les Halles and
Sud Canal will be completed in 2016. Two other programs have
been committed, with delivery planned in 2017: Carré-Vélizy and
Passage de la Réunion. Of the €32.0m total projected investment for
the retail portfolio (21% of its value at 30 June 2016), the
investment budget committed in 2016 is likely to be €12m.
Following the signature of an agreement with Carrefour Property in
the first half, launch of extension and renovation works for the
Ecole-Valentin shopping centre in Besançon is now planned for 2017.
MRM also plans to start projects at Galerie du Palais and the
Allonnes retail park (Le Mans) during next year. Thus, barring
unforeseen circumstances, all the value-enhancement programs
identified for retail assets will have been launched by the end of
2017.
Calendar
Revenues for the third quarter of 2016 are due on 10 November 2015
before market opening.
About
MRM
MRM is a listed real estate company with a portfolio worth €224.4
million (excluding transfer taxes) as at 30 June 2016, comprising
retail properties (66%) and offices (34%). Since 29 May 2013, SCOR
SE has been MRM's main shareholder, holding a 59.9% stake. MRM is
listed in compartment C of Euronext Paris (ISIN: FR0000060196 -
Bloomberg code: MRM: FP - Reuters code: MRM.PA) and opted for the
SIIC status on 1 January 2008.
For more
information:
MRM
5, avenue Kléber
75795 Paris Cedex 16
France
T +33 (0)1 58 44 70 00
relation_finances@mrminvest.com |
Isabelle
Laurent, DDB Financial
54, rue de Clichy
75009 Paris
France
T +33 (0)1 53 32 61 51
isabelle.laurent@ddbfinancial.fr
|
Website: www.mrminvest.com
Appendix 1:
Simplified IFRS income statement
Simplified IFRS income statement
€m |
H1 2016 |
H1
2015 |
Change |
Gross rental income |
6.8 |
7.0 |
-3.0% |
Non-recovered property expenses |
(2.3) |
(2.5) |
-6.6% |
Net rental income |
4.5 |
4.6 |
-1.1% |
Operating
costs |
(1.8) |
(1.8) |
-0.9% |
Provisions net of reversals |
(0.2) |
(0.4) |
|
Current operating income |
2.5 |
2.4 |
+5.9% |
Net
gains/(losses) on disposal of assets |
0.0 |
(0.1) |
|
Change in
fair value of properties |
0.3 |
2.2 |
|
Other
operating income and expense |
0.2 |
(0.0) |
|
Operating income |
3.0 |
4.4 |
-31.7% |
Net cost
of debt |
(1.1) |
(1.2) |
-13.1% |
Other
financial income and expense |
(0.3) |
(0.2) |
|
Net income before tax |
1.6 |
3.0 |
|
Income
tax |
0.0 |
(0.0) |
|
Consolidated net income |
1.6 |
3.0 |
|
Appendix 2:
Quarterly rental income
Consolidated revenues
€m |
Q2 2016 |
Q2
2015 |
Like-for-like change |
Retail |
2.2 |
2.4 |
-10.5% |
Offices |
1.2 |
1.0 |
+30.9% |
Gross rental income |
3.4 |
3.5 |
+1.0% |
Appendix 3:
Balance sheet at 30 June 2016
Simplified IFRS balance sheet
€m |
30.06.
2016 |
31.12.
2015 |
Investment
properties |
189.1 |
216.3 |
Assets
held for sale |
35.4 |
9.7 |
Current
receivables/assets |
11.8 |
8.4 |
Cash and
cash equivalents |
6.3 |
13.4 |
Total assets |
242.5 |
247.8 |
Shareholders' equity |
123.9 |
126.6 |
Financial
debt |
101.0 |
111.0 |
Other
debt/liabilities |
17.5 |
10.2 |
Total equity and liabilities |
242.5 |
247.8 |
Appendix 4:
Disposals made since 1 January 2013
Assets sold |
Date of sale |
Price excl. transfer taxes
€m |
Office
building,
Rue de la Bourse, Paris (2nd
arrondissement) |
December
2013 |
10.4 |
Office
building,
Rue Cadet, Paris (9th
arrondissement) |
April
2014 |
12.0 |
Delta
office building complex,
Rungis (94) |
September 2014 |
10.5 |
Plaza
office building,
Rue de la Brêche-aux-Loups, Paris (12th
arrondissement) |
April
2015 |
16.8 |
Cytéo
office building,
Rueil-Malmaison (92) |
April
2016 |
6.3 |
Solis
office building,
Les Ulis (91) |
July
2016 |
11.0 |
[1] Revenues
are calculated on a like-for-like basis by deducting the rental
income generated by acquired assets from the revenues reported for
the current year and deducting the rental income generated from
assets sold from the revenues reported for the previous year.
[2] Net
operating cash flow = net income before tax adjusted for non-cash
items.
[3] The
financial statements have been subject to a limited review by the
statutory auditors. The auditors' report on financial information
for the first half of 2016 has been issued without observation or
reservation.
[4] Value
excluding transfer taxes based on valuations at 30 June 2016 issued
by Jones Lang LaSalle, including assets held for sale, which are
recorded in financial statements in accordance with IFRS 5.
[5] Adjusted
for disposals carried out in the first half of 2016.
[6] Amount net
of reclassification of rent-free periods to be staggered relating
to buildings held for sale in the amount of €0.3 million.
[7]
Distribution of dividend and premiums.
MRM Press release in PDF
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: MRM via Globenewswire
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