Press release
2016 full-year results
. Gross rental income up
3.2% like-for-like[1]
. Net operating cash
flow[2] up
12.9%
. Increase
in portfolio value of 5.7% like-for-like[3]
. Proposed
dividend[4] of €0.11
per share, up 10%
Paris, 24
February 2017: MRM (Euronext code ISIN FR0000060196), a real
estate company specialising in retail and office property, today
announced its results for the financial year ended 31 December
2016. This publication follows the review and approval of the
audited financial statements[5] by MRM's
Board of Directors at its meeting of 23 February 2017.
Portfolio of
€197.8 million at 31 December 2016
The value[6] of MRM's
portfolio was €197.8 million at 31 December 2016, compared with
€226.0 million at 31 December 2015. This change reflects
notably the acceleration of disposals of office properties over the
course of the year. Three office properties were sold for a total
of €38.0 million (excluding transfer taxes). On a like for like
basis, the value of the portfolio increased by 5.7%.
During 2016, investment in retail
value-enhancement programs totalled €5.8 million (primarily Sud
Canal in Saint-Quentin-en-Yvelines and Les Halles in Amiens). MRM
also made an investment of €1.5 million on office properties that
were sold later on.
The fair value of the portfolio
increased by €5.0 million relative to 31 December 2015.
Portfolio value6
|
31.12.2016
€m % of total |
31.12.2015
€m |
Like-for-like change3 |
Retail |
152.8 |
77% |
144.0 |
+6.1% |
Offices |
45.0 |
23% |
82.0 |
+4.5% |
Total |
197.8 |
100% |
226.0 |
+5.7% |
Retail
The value6 of the retail
portfolio as at 31 December 2016 increased by 6.1% relative to
31 December 2015, reflecting the solid progress made in
value-enhancement programs.
Over the course of the year, 26
new leases or lease renewals were signed, representing total annual
rental income of €2.2 million. In particular, MRM signed leases
within the framework of value-enhancement plans at Sud-Canal in
Saint-Quentin-en-Yvelines (5 leases of which Action, Fitness Park
and Joué Club), Les Halles in Amiens (Bistro Régent), Carré
Vélizy in Vélizy-Villacoublay (Indiana Café) and Le Passage de
la Réunion in Mulhouse (Freeness, a fitness centre). In addition,
11 leases were renewed for the GammVert garden centres
portfolio.
The occupancy rate for the retail
portfolio was 84% as at 1 January 2017. Taking account leases
signed that have not yet taken effect at that time, the occupancy
rate is 86%.
Net annualised rental income for
retail properties was €7.9 million as at 1 January 2017, up 0.7%
relative to 1 January 2016. This was partly due on the one hand to
the first retailers arriving at redeveloped premises and, on the
other hand, to the departure of tenants, rent reductions granted
within the framework of value-enhancement programs and lease
renewals. Concerning Carré Vélizy, a mixed-use office/retail
complex included in the retail portfolio, departure of tenants
concerned office space.
Offices
2016 was a busy year in terms of
management of the office portfolio, with three additional sales
(Cytéo in Rueil-Malmaison, Solis in Les Ulis and Cap Cergy in
Cergy-Pontoise).
Adjusted for asset sales carried
out during the year, the value of the office portfolio at
31 December 2016 was up 4.5% compared with 31 December 2015 at
€45.2 million. This portfolio now comprises just two properties
(Nova in La Garenne-Colombes and Urban in Montreuil) for which the
selling process has already been initiated.
At 31 December 2016, the office
portfolio accounted for just 23% of the total value of
the portfolio compared with 43% at 30 June 2013, reflecting
the progress made in MRM's strategy of refocusing on retail
properties.
Like-for-like increase in rental
income
Consolidated revenues
|
2016 |
2015 |
Change (reported) |
Like-for-like change1 |
€m |
% of total |
€m |
Retail |
8.9 |
68% |
9.3 |
-4.8% |
-4.8% |
Offices |
4.1 |
32% |
4.3 |
-4.8% |
+26.1% |
Total gross rental income |
13.0 |
100% |
13.6 |
-4.8% |
+3.2% |
Gross rental income totalled €13.0
million in 2016, down 4.8% compared with 2015. This includes the
effect of disposals of office properties since 1 January 2015. On a
like-for-like basis1, gross rental
income increased by 3.2%.
Gross rental income from retail
properties fell by 4.8% over the full year in 2016. However, the
arrival of new tenants at recently redeveloped premises was
staggered as of July 2016. This only partly made up for strategic
vacancies, the adjustment of rental terms granted and the departure
of tenants. New leases allowed for a return to positive growth in
rental income for the retail portfolio as from the third quarter of
2016.
Gross rental income from office
properties fell by 4.8% on a reported basis due to asset sales but
increased by 26.1% on a like-for-like basis1. This
reflects the improved occupancy rate for buildings during the
quarters before they were sold.
Increase in net
operating cash flow
Net operating cash flow2
€m |
2016 |
2015 |
Change |
Net rental income |
9.5 |
9.8 |
-2.9% |
Operating
expenses |
(3.2) |
(3.1) |
+2.1% |
Other
operating income and expense |
0.6 |
0.0 |
n/a |
EBITDA |
6.9 |
6.7 |
+2.9% |
Net cost
of debt |
(1.9) |
(2.3) |
-16.2% |
Net operating cash flow |
4.9 |
4.4 |
+12.9% |
The reduction in net rental income
relating to asset sales was more than offset by an increase in
other non-recurring net operating income, allowing for an EBITDA of
€6.9 million in 2016, up 2.9%.
Further reduction in debt coupled
with historically low interest rates allowed for a further 16.2%
reduction in net cost of debt to €1.9 million in 2016.
MRM therefore generated net
operating cash flow of €4.9 million, up 12.9% compared with
2015.
Solid balance
sheet and significant rescheduling of debt
MRM had cash and cash equivalents
of €25.0 million at 31 December 2016 compared with €13.4 million at
31 December 2015. Taking account of asset sales and contractual
repayments, bank debt decreased by €15.0 million. In total, net
debt was reduced by 27% compared with 31 December 2015, to €71.0
million. The net LTV ratio once again decreased over the course of
the year to 35.9% at 31 December 2016 compared with 43.2%
at 31 December 2015.
In December 2016, MRM signed a
bank loan with SaarLB maturing at the end of 2021, comprising two
credit facilities. The first €48.6 million credit facility, secured
against part of the retail portfolio, replaces the credit facility
of the same amount that was due to mature at the end of 2017. The
second €15.2 million credit facility is intended for financing
retail value-enhancement programs. In addition, MRM announced in
December 2016 the one-year extension, under the same terms, of a
€22.0 million loan that was due to mature in January 2017. MRM's
bank debt has therefore been significantly rescheduled, with the
percentage of loans maturing in less than two years reduced from
92% of the total as at 31 December 2015 to 41% as at 31
December 2016.
Considering the
dividend[7] paid in
respect of the 2015 financial year (-€4.4 million), net operating
cash flow generated during the year (+€4.9 million), the change in
the fair value of properties (+€4.3 million) and impact from asset
sales in 2016 (-€2.8 million), EPRA NNNAV rose to €127.3 million
compared with €126.5 million at 31 December 2015.
Net asset value
|
31.12.2016 |
31.12.2015 |
total
€m |
per share
€ |
total
€m |
per share
€ |
EPRA NNNAV |
127.3 |
2.92 |
126.5 |
2.90 |
Replacement NAV |
139.1 |
3.19 |
140.0 |
3.21 |
Number of shares
(adjusted for treasury stock) |
43,644,452 |
|
43,612,702 |
|
Dividend
MRM's Board of Directors has
decided to propose the payment of a dividend4 of
€0.11 per share for 2016, representing an increase of 10% compared
with the amount paid out for each of the last three financial
years. The ex-dividend date will be set on 7 June 2017 and the
dividend will be paid on 9 June 2017 This pay-out will be subject
to approval at the annual general meeting to be held on 1 June
2017.
Outlook
MRM's strategy of refocusing its
activities on retail properties was stepped up in 2016. Following
the three asset sales carried out in 2016, the office portfolio -
which comprised nine office properties in June 2013 - now comprises
only two properties, for which the selling process is under way.
MRM is aiming to complete the process of withdrawing from the
office property sector in 2017.
With its solid balance sheet, MRM
has also launched a large investment plan with the aim of
increasing the value of its retail properties. This represents a
total projected investment of €32 million, of which €9 million
was launched in 2016.
In 2016, the Group completed the
redevelopment and reletting process of a 5,000 sqm area within Sud
Canal in Saint-Quentin-en-Yvelines, giving the entire site a new
commercial momentum. Work on the redevelopment and repositioning of
the Les Halles shopping centre in Amiens was completed.
MRM is planning to complete two
other development projects in 2017 (Carré Vélizy in
Vélizy-Villacoublay and the first phase of the value-enhancement
program at Le Passage de la Réunion in Mulhouse). MRM is also
planning the commitment of three new programs for 2017-2018
(Ecole-Valentin shopping mall, Allonnes retail park and Galerie du
Palais in Tours). In total, €8 million should be committed in
2017.
All of the retail
value-enhancement programs identified should - barring any
unforeseen events - be launched in 2017-2018.
With MRM well on its way to
withdrawing from the office property sector, the Group will now be
able to focus all of its resources on its retail property
portfolio. This will be achieved primarily by carrying out the
value-enhancement programs identified, as well as the possibility
of opportunistic acquisitions or disposals to initiate a dynamic
portfolio management.
Calendar
Revenues for the first quarter of
2017 are due on 11 May 2017 before market opening. MRM's annual
general meeting will take place on 1 June 2017.
About MRM
MRM is a listed real estate
company with a portfolio worth €197.8 million (excluding transfer
taxes) as at 31 December 2016, comprising retail properties (77%)
and offices (23%). Since 29 May 2013, SCOR SE has been MRM's main
shareholder, holding a 59.9% stake. MRM is listed in compartment C
of NYSE Euronext Paris (ISIN: FR0000060196 - Bloomberg code:
MRM:FP - Reuters code: MRM.PA). MRM opted for 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) |
2016 |
2015 |
Change |
Net rental income |
9.5 |
9.8 |
-2.9% |
Operating
expenses |
(3.2) |
(3.1) |
|
Provisions
net of reversals |
(0.8) |
(0.5) |
|
Other
operating income and expense |
0.6 |
0.0 |
|
Operating income before disposals and change in fair value
of properties |
6.1 |
6.1 |
-0.9% |
Net
gains/(losses) on disposal of assets |
(2.8) |
(0.1) |
|
Change in
fair value of properties |
4.3 |
4.1 |
|
Operating income |
7.5 |
10.1 |
-25.6% |
Net cost
of debt |
(1.9) |
(2.3) |
-16.2% |
Other
financial income and expense |
(0.5) |
(0.5) |
|
Net income before tax |
5.1 |
7.3 |
-30.3% |
Income
tax |
0.0 |
(0.0) |
|
Consolidated net income |
5.1 |
7.3 |
-30.2% |
Appendix 2:
Quarterly rental income
Consolidated
revenues (€m) |
Q1
2016 |
Q2
2016 |
Q3
2016 |
Q4
2016 |
Q4
2015 |
Q4 2016 vs. Q4 2015 |
Q4 change like-for-like |
Retail |
2.21 |
2.18 |
2.19 |
2.31 |
2.27 |
+1.6% |
+1.6% |
Offices |
1.21 |
1.22 |
0.94 |
0.74 |
0.64 |
-29.6% |
+16.0% |
Total gross
rental income |
3.42 |
3.40 |
3.13 |
3.05 |
2.91 |
-8.3% |
+4.7% |
Appendix 3:
Simplified balance sheet
Simplified IFRS balance
sheet
(€m) |
31.12.2016 |
31.12.2015 |
|
Investment
properties |
152.8 |
216.3 |
|
Assets
held for sale |
45.0 |
9.7 |
|
Current
receivables/assets |
8.9 |
8.4 |
|
Cash and
cash equivalents |
25.0 |
13.4 |
|
Total assets |
231.8 |
247.8 |
|
Equity |
127.4 |
126.6 |
|
Financial
debt |
96.0 |
111.0 |
|
Other
debt and liabilities |
8.3 |
10.2 |
|
Total equity and liabilities |
231.8 |
247.8 |
|
[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 = consolidated net income before tax adjusted
for non-cash items.
[3] Adjusted
for asset sales carried out in 2016.
[4] Proposed
pay-out of dividends and premiums in respect of the 2016 financial
year, subject to approval by shareholders at the annual general
meeting to be held on 1 June 2017.
[5] Audit
procedures have been performed and audit reports for MRM SA's
financial statements and the Group's consolidated financial
statements are currently being issued.
[6] Value
excluding transfer taxes based on valuations issued on 31 December
2016 by Jones Lang LaSalle, including assets held for sale, which
are recognised in accordance with IFRS 5.
[7] Pay-out of
dividend and premiums.
MRM Press release PDF
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information contained therein.
Source: MRM via Globenewswire
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