2019 full-year results
Press release
2019 full-year results
- Portfolio refocused on retail properties
- Portfolio value: €168.1m, up 5.5%
like-for-like
- Net rental income up 10.2%
- Net operating cash flow up sharply to
€3.0m
- Proposed payout of €0.11 per share
Paris, 28 February 2020: MRM
(Euronext code ISIN FR0000060196), a real estate investment company
specialising in retail property, today announced its results for
the financial year ended 31 December 2019. This publication
follows the review and approval of the financial statements1 by
MRM’s Board of Directors at its meeting on 27 February
2020.
Asset management and rental activity during the
period
Sale of the Urban building
On 30 January 2019, MRM announced the sale
of Urban, a vacant 8,000 sqm office building forming part of
the La Croix de Chavaux property complex located in Montreuil, for
€6.3 million (excluding transfer taxes). This sale marks the
completion of the process of refocusing MRM’s portfolio on retail
property initiated in June 2013.
Nova, MRM's last occupied office building, was
sold in May 2018.
Dynamic management of retail
assets
Letting activity was particularly robust in
2019: 41 contracts (new leases or renewals) were signed,
representing a total of annual rents of €2.1 million.
They included:
- 10 leases (1,300 sqm) concerning the Valentin
shopping centre, which is currently being redeveloped and
extended;
- 9 leases (2,100 sqm) signed for office space at the Carré
Vélizy mixed-use property. The office space (6,100 sqm) is
currently 75% let compared with 51% a year ago, while the retail
space (5,500 sqm) is fully occupied;
- 9 leases concerning the GammVert garden centres with a
firm period of six or nine years depending on sites;
- 1 lease (1,200 sqm) signed for Aria Parc in
Allonnes;
- 1 lease (450 sqm) signed for Les Halles du Beffroi in
Amiens.
Leases that came into effect during the year
more than made up for the lease termination on a 1,000 sqm
unit affected by redevelopment works at the Valentin shopping
centre.
This strong letting activity is reflected by an
increase in the physical occupancy rate to 88% as
at 31 December 2019 compared with 84% as at
31 December 2018. The financial occupancy rate rose from 83%
as at 31 December 2018 to 87% as at 31 December 2019.
This improved occupancy rate coupled with the related reduction in
non-recovered property expenses resulted in annualised net rents of
€8.5 million as at 1 January 2020, a year-on-year
increase of 4%.
Out of the leases signed, 11 have not yet taken
effect. These represent additional annualised net rents of €0.5
million.
Portfolio value up 5.5% like-for-like
€m |
31.12.2019 |
31.12.2018 |
Change (reported) |
Change like-for-like2 |
Retail |
168.1 |
159.3 |
+5.5% |
+5.5% |
Offices |
- |
5.4 |
-100.0% |
- |
Portfolio value (excl. TT) |
168.1 |
164.7 |
+2.0% |
+5.5% |
As at 31 December 2019, the portfolio
comprised only retail assets, the scope of which did not change
during the year. Its value was €168.1 million as at
31 December 2019, up 5.5% compared with 31 December 2018.
This growth resulted in part from investments made during the year
and in part from a moderately favourable capitalisation rate effect
on some assets due to improvement in their rental situation and/or
progress in investments made during the period.
Investments made in 2019 amounted to
€8.0 million, relating to:
- Continued redevelopment/extension works on the Valentin
shopping centre, due for completion in the second quarter of
2020;
- Refurbishment and repositioning of Galerie du Palais in Tours,
now renamed Passage du Palais. The shopping experience has been
upgraded and customer services improved to create a true
city-centre living place that meets the needs of the town's
residents.
On a reported basis, i.e. including Urban, MRM's
last remaining office building which was sold in January 2019, the
portfolio value increased by 2.0% compared with 31 December
2018.
Net rental income up 10.2%
€m |
2019 |
2018 |
Change (reported) |
Change like-for-like3 |
Retail |
9.1 |
8.7 |
+4.3% |
+4.3% |
Offices |
- |
0.8 |
-100.0% |
- |
Gross rental income |
9.1 |
9.5 |
-4.3% |
+4.3% |
Non-recovered property expenses, of which:
|
(1.8)(1.8)(0.0) |
(2.9) (2.1) (0.8) |
-38.0% -16.8% -97.8% |
|
Net rental income |
7.3 |
6.7 |
+10.2% |
|
2019 revenues correspond entirely to
gross rental income from retail assets, which
increased by 4.3% to €9.1 million. This growth was driven
mainly by the entry into force of new leases, including the full
year impact of the lease started in 2018 for the medium-sized unit
in the retail district of Reims and a number of leases coming into
effect at Sud Canal in 2019. Rent indexation also had a positive
albeit moderate impact.
Reported gross rental income fell by 4.3%
compared with 2018, which included €0.8 million of rent from
the Nova office building until 15 May 2018, when it was
sold.
Non-recovered property expenses decreased
further in 2019, benefiting from:
- The favourable impact of the sale of Urban, which was vacant,
and Nova, which was 80% occupied;
- Retail lettings and work on reducing property expenses on some
retail assets.
All in all, the decrease in non-recovered
property expenses more than offset the decline in reported gross
rental income. Consequently, net rental income
rose by 10.2% to €7.3 million versus €6.7 million the
previous year.
Net operating cash flow4 up
23.3%
€m |
2019 |
2018 |
Change |
Net rental income |
7.3 |
6.7 |
+10.2% |
Operating expenses |
(2.5) |
(2.5) |
-0.1% |
Other operating income and expenses |
(0.7) |
(0.3) |
|
EBITDA |
4.2 |
3.9 |
+7.6% |
Net cost of debt |
(1.2) |
(1.5) |
-17.4% |
Net operating cash flow |
3.0 |
2.4 |
+23.3% |
EBITDA increased to €4.2 million compared
with €3.9 million in 2018, despite the increase in other
operating expenses relating to various non-recurring items.
Net cost of debt decreased to €1.2 million
compared with €1.5 million in 2018 as a result of notably the
repayment of a loan following the sale of the Nova building in May
2018.
Consequently, net operating cash flow rose by
23.3% to €3.0 million compared with €2.4 million in
2018.
Positive operating income and net income
Operating expenses remained more or less stable
in 2019. Recognition of lease default penalties, which contributed
to a €0.8 million positive net balance of other operating
income and expenses, was offset in full by the write-down of the
corresponding receivable.
All in all, operating income before
asset sales and change in fair value increased by 5.7% to
€3.9 million.
After deducting capital expenditures during the
period, the rise in appraisal values resulted in a positive change
in the portfolio fair value of €0.8 million compared with a
negative change in 2018.
Net financial expense amounted to
€1.4 million compared with €1.9 million in 2018.
Consequently, consolidated net
income for 2019 came to a €3.2 million profit
compared with a loss of €10.4 million the previous year.
The simplified income statement is attached in
appendix.
Solid financial position
Gross debt stood at €77.1 million at
31 December 2019 compared with €74.1 million a year
earlier. This increase reflects drawdowns of €5.4 million on
the investment credit facility, partly offset by partial loan
repayments made during the period. No significant loan repayments
fall due before the end of 2021.
At 31 December 2019, 79.5% of debt was
fixed rate, with an average cost of debt down 10 bps
(158 bps in 2019 compared with 168 bps in 2018).
Cash and cash equivalents at end-December 2019
amounted to €12.3 million compared with €13.5 million at
31 December 2018. Net debt increased from €60.6 million
to €64.8 million in 2019. The net LTV ratio was 38.6% at
end-December 2019 compared with 36.8% a year earlier.
Taking into account the premiums paid out in
2019 in respect of the 2018 financial year (€4.8 million), net
operating cash flow generated during the year (€3.0 million)
and the positive change in fair value of the portfolio
(€0.8 million), EPRA NNNAV came to €100.3 million
compared with €102.1 million at end-December 2018.
Net Asset Value |
31.12.2019 |
31.12.20185 |
Total€m |
Per share€ |
Total€m |
Per share€ |
EPRA NNNAV |
100.3 |
2.30 |
102.1 |
2.34 |
Replacement NAV |
111.4 |
2.55 |
112.8 |
2.59 |
Number of shares (adjusted for treasury stock) |
43,631,618 |
|
43,597,305 |
Proposed payout
MRM’s Board of Directors has decided to propose
the payment of premiums of €0.11 per share in respect of the 2019
financial year, identical to the amount paid out in respect of the
previous year. This will be subject to approval at the general
shareholders’ meeting of 26 May 2020. The intended coupon date
will be 2 June 2020 and payment will be made on 4 June
2020.
Outlook
The €35.5 million investment plan initiated
in 2016 and devoted to seven of MRM’s nine retail property lines is
close to being completed. Five projects have already been completed
(Halles du Beffroi in Amiens, Sud Canal in
Saint-Quentin-en-Yvelines, Carré Vélizy in Vélizy-Villacoublay,
Aria Parc in Allonnes and Passage du Palais in Tours). All in all,
out of the 6,900 sqm of additional space in the investment
plan, 4,300 sqm have already been built or acquired, bringing
MRM's total retail portfolio6 to 85,000 sqm at end-December
2019.
At 31 December 2019, investments still to
be paid out totalled €6.8 million, corresponding to the
Valentin shopping centre extension project and, to a lesser extent,
a budget related to the letting of ground floor units at Passage de
la Réunion in Mulhouse.
As regards the 1,000 sqm redevelopment and
2,600 sqm extension of the Valentin shopping centre, MRM's
biggest investment project, the shell units hand over is scheduled
in the second quarter of 2020 and public opening in the third
quarter of 2020.
Going forward, MRM will pursue its letting,
re-letting and tenant rotation activities and confirms its target
of total annualised net rents in excess of €10 million,
assuming a physical occupancy rate of 95%. This target is based on
the current portfolio excluding acquisitions and disposals.
Calendar
First quarter 2020 revenues will be published on
7 May 2020 before market opening. The general shareholders’
meeting to approve the financial statements for 2019 will be held
on 26 May 2020.
About MRM
MRM is a listed real estate investment company
that owns and manages a portfolio of retail properties across
several regions of France. Its majority shareholder is SCOR SE,
which owns 59.9% of share capital. MRM is listed in Compartment C
of Euronext Paris (ISIN: FR0000060196 - Bloomberg code: MRM:FP –
Reuters code: MRM.PA). MRM opted for SIIC status on 1 January
2008.
For more information:
MRM5, avenue Kléber75795 Paris Cedex 16FranceT +33
(0)1 58 44 70 00relation_finances@mrminvest.com |
Isabelle Laurent, OPRG FinancialT +33 (0)1 53 32
61 51M +33 (0)6 42 37 54
17isabelle.laurent@oprgfinancial.fr |
Website: www.mrminvest.com
Appendix 1: Income statement
Simplified IFRS income
statement€m |
2019 |
2018 |
Net rental income |
7.3 |
6.7 |
Operating expenses |
(2.5) |
(2.5) |
Provisions net of reversals |
(1.8) |
(0.2) |
Other operating income and expenses |
0.8 |
(0.3) |
Operating income before disposals and change in fair
value |
3.9 |
3.7 |
Net
gains/(losses) on disposal of assets |
(0.0) |
(0.1) |
Change in fair value of properties |
0.8 |
(12.1) |
Operating income |
4.6 |
(8.5) |
Net
cost of debt |
(1.2) |
(1.5) |
Other financial income and expense |
(0.2) |
(0.4) |
Net income before tax |
3.2 |
(10.4) |
Tax |
- |
- |
Consolidated net income |
3.2 |
(10.4) |
Appendix 2: Quarterly rental income
€m |
Q4 2019 |
Q4 2018 |
Change |
Change like-for-like4 |
Retail |
2.30 |
2.29 |
+0.7% |
+0.7% |
Offices |
- |
- |
- |
- |
Total gross rental income |
2.30 |
2.29 |
+0.7% |
+0.7% |
Appendix 3: Balance sheet
Simplified IFRS balance
sheet€m |
31.12.2019 |
31.12.2018 |
Investment properties |
167.9 |
159.1 |
Assets held for sale |
0.2 |
5.7 |
Current receivables/assets |
7.6 |
6.3 |
Cash and cash equivalents |
12.3 |
13.5 |
Total assets |
188.0 |
184.6 |
Equity |
101.1 |
102.7 |
Bank debt |
77.1 |
74.1 |
Other debt and liabilities |
9.8 |
7.8 |
Total equity and liabilities |
188.0 |
184.6 |
1 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.2
Adjusted for the asset sale carried out in 2019.3 The change in
revenues is 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.4 Net operating cash flow = consolidated net income
before tax adjusted for non-cash items.5 For the calculation of the
NAV, the restatement of the fair value of fixed-rate debt at
31 Decembre 2018 has been adjusted.6 To which will also be
added 1,000 sqm temporarily closed at the Valentin shopping centre
pending completion of the Redevelopment stage of this project.
- MRM - CP Résultats 2019 - ENG
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