- Earnings after taxes vastly improved to CHF 10.4 million after CHF 1.2 million in the previous year
- Rental income up by over 7% to CHF 9.2 million thanks to portfolio expansion and reduction of vacancies, residential property accounts for 85%
- Equity ratio at market values leaps from 33% to 45%
- NAV at market values after deferred taxes increases by 21% to CHF 23.50 per share
- Expansion to continue in 2017
Zurich, 21 March 2017 – Peach Property Group’s profits have soared according to final figures for fiscal year 2016. Earnings after taxes totalled CHF 10.4 million in 2016, a huge increase compared to the previous year (CHF 1.2 million). Earnings before taxes were also significantly higher than in the previous year (CHF 3.3 million) at CHF 15.5 million.
During the period under review Peach Property Group acquired a total of four residential portfolios in Germany and more than doubled its residential units to a total of 3,129 units, up by a good 1,600 units. As a result of this expansion to the portfolio as well as a reduction in vacancy rates, rental income in 2016 increased by more than 7% to CHF 9.2 million. At the same time the market value of the investment properties rose from CHF 218 million in the previous year to CHF 226 million during the course of the year. This increase was achieved despite the sale of the Gretag site in Switzerland and the commercial property “Erkrath Retail” in Germany for more than CHF 120 million in total. As a result of these changes to the portfolio, residential properties accounted for almost 85% of the target rental income at the end of 2016.
Development properties were further reduced in line with the strategy: The last apartments in the “Living 108” project in Berlin were sold and handed over in 2016. All sold apartments of the projects “yoo berlin” and “H36” in Hamburg have also been handed over; there were only four respectively one apartments in these projects still left for sale at the end of the year. In the “Wollerau Park” project nearby Zurich, apartments with a value of CHF 58 million were sold or reserved and construction was started in 2016. These transactions account for almost 65% of the anticipated sales volume of around CHF 89 million.
On the costs side, the direct costs of the investment properties were further optimized, as were the Group’s operating costs. For example, the direct costs for investment properties fell by around 5% despite the higher rental income. Operating costs were reduced by around 8%. Optimising the staff structure as part of the focus on investment property management allowed personnel expenses to be reduced by almost 10% to CHF 4.8 million.
The strong increase in profits and the increase in the issued volume of the hybrid bond by almost CHF 25 million in 2016 resulted in a significant increase in equity on the balance sheet date – up to around CHF 147.8 million after CHF 114.0 million one year before. The repayment of the EUR bond in 2016, which had a final outstanding volume of EUR 46.7 million, substantially reduced the Peach Property Group’s borrowings. The Group’s total liabilities were reduced by CHF 47.9 million to CHF 202.3 million during the course of the financial year 2016. This resulted in a decrease of interest expenses by a total of around 25%. In line with the Group’s focus on investment properties and the continued attractive interest rates, the maturity structure of the Group’s financing was adjusted: at the end of 2016, 72% of the borrowings were long-termed (after 18% one year before).. The equity ratio (IFRS) soared to 42% on 31 December 2016 compared to 31% at the end of 2015. In terms of market value, the increase was to 45% from the previous 33%. The NAV per share by market values is CHF 23.50 – up 21% year-on-year.
Peach Property Group has confirmed the positive outlook for 2017 and is expecting its profitable growth to continue in the current financial year. The simple fact that the portfolio in Kaiserslautern will be consolidated for the full year, and also the integration of the recently announced acquisition in Oberhausen will substantially increase rental income. The portfolio of investment properties is to be further expanded, focusing on residential properties in Germany’s B cities, vacancy rates are to be reduced and rental income increased. Operating costs are to remain constant.
Dr. Thomas Wolfensberger, Peach Property Group’s CEO, commented: “The remarkable profit growth in 2016 shows that we are on the right track with our strategy focussing on high yield investment properties with appreciation potential. We were recently able to acquire a further 1,114 apartments in North Rhine-Westphalia, increasing our annualized target rental income to around CHF 22 million. As a result, we are significantly closer to reaching our short to medium-term target of having 5,000 apartments in our portfolio of investment properties. We will reduce the share of development projects in our portfolio substantially once again with the conclusion of the Wollerau Park project in Switzerland at the beginning of 2018”.
The 2016 annual report is available on the Peach Property Group’s Web site using the following link: www.peachproperty.com/GB2016
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Contacts:
Media, investors and analysts
Dr. Thomas Wolfensberger, Chief Executive Officer and Dr. Marcel Kucher, Chief Financial Officer
+41 44 485 50 00 | investors@peachproperty.com
Media Germany
edicto GmbH, Axel Mühlhaus, Peggy Kropmanns
+49 (0) 69 90 55 05 52 | amuehlhaus@edicto.de
About Peach Property Group AG
Peach Property Group is a property investor and developer focused on investments in Germany and Switzerland. The Group stands for long time experience, competence and quality. Innovative solutions for modern housing needs, strong partnerships and a wide value chain complete the profile of the Group. The portfolio consists of an increasing number of high yield investment properties, typically in B-cities in close reach to metropolitan areas. In addition, the Group develops properties for its own portfolio or for the sale as condominium. Developments for sale focus on A-locations and encompass attractive architecture and high level furnishing for an international clientele. The business activities of the Group cover the entire value chain, from property acquisition and site selection to active asset management and finally to the sale or lease of properties.
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). Its Board of Directors consists of Reto Garzetti (President), Peter Bodmer and Christian De Prati.
For more information, see www.peachproperty.com
