International Real Estate Plc
28 June 2007
The following amends the final results announcement released today under RNS
number 1783Z at 7am. The third bullet point in the overview re the 2005 final
dividend figure should be 7 pence and not 8 pence as previously stated. All
other details remain unchanged and the full amended announcement appears below.
International Real Estate Plc / Epic: IRE / Index: AIM / Sector: Property
28th June 2007
International Real Estate Plc ('IRE' or 'the Group')
Final Results
International Real Estate Plc, the AIM traded European property investment and
development company, announces its results for the year ended 31 December 2006.
Overview
• Pre-tax profit increased to €16.8 million (2005: €4.8 million)
• Total group net assets increased to €34.5 million (2005: €24.3 million)
• Final dividend proposed of 5 pence per share making a total of 9 pence for
the year (2005: 7 pence)
• Geographical focus on Germany, which offers significant opportunity for
development and the ability to construct a portfolio that has high capital
growth potential
• Rapidly developing portfolio - increased property holding in Germany to
circa 282,000 sq m by June 2007
• Ongoing refurbishment programmes aimed at improving lettings and technical
standards of properties to add value
• Strong financial position following a €32 million two-tranche bond issue,
finalised in May 2007
IRE CEO, Daniel Akselson, said, 'During the year we have made considerable
progress in advancing our portfolio of properties and establishing IRE as a
credible European development and investment company. As the German economic
climate continues to strengthen, we have increased our operational presence in
Germany and strive to develop and refurbish existing properties, to add value
and in turn enhance shareholder value. IRE has the ability, the technical
know-how and industry connections to structure and finance deals quickly and
cost effectively, and as a company we are well positioned to progress our
property portfolio rapidly in line with our growth strategy.'
For further information please visit www.IREplc.com or contact:
Rolf L Nordstrom International Real Estate Plc Tel: +44 (0) 20 7495 1480
Daniel Akselson International Real Estate Plc Tel: +31 (0) 653 304 590
David Anderson KBC Peel Hunt Ltd Tel: +44 (0) 20 7418 8900
Hugo de Salis St Brides Media & Finance Ltd Tel: +44 (0) 20 7242 4477
Chairman's Statement
It gives me great pleasure to report on the progress the Group has made towards
fulfilling its objective of establishing a European property development group
focused primarily on the German market. During and following the period under
review, the Group has maintained its geographical focus, successfully completed
a number of substantial property transactions, strengthened its financial
position via a two-tranche bond issue and evaluated a pipeline of potential
projects in line with its growth strategy.
IRE is a property development and investment Group. Its main targets are
properties that have strong development potential and the ability for the Group
to gain capital value uplift through the implementation of redevelopment/
refurbishment programmes. The Group has a track record in achieving this, with
all developments to date reporting positive returns. Once the investment
programmes have been completed, the Group is able to implement stable tenant
structures and subsequently increase the yields on a property. With a
structured and proven investment/development process in place, an established
office in Berlin and an increasing staff count, the Group believes it is well
positioned to continue to perform and build its portfolio, particularly in
Germany.
Property Portfolio - Germany
The Board see Germany as central to its strategy, primarily focussing on the
development and investment in residential projects. In property investment terms
the country offers significant opportunity for development and the ability for
the Group to construct a portfolio that has high capital growth potential. IRE
believes that the current low rental environment will transfer into higher rents
in the future, which with the correct development initiatives, the Group will
benefit from.
In recent years, IRE has built up a presence in Germany, which has been expanded
over the reporting period following the conclusion of a number of exciting
transactions. The Group now holds circa 282,000 sq m of property in Germany
primarily in central Berlin, Magdeburg, Halle and the North Rhine-Westphalia
area. It continues to select opportunistic property acquisitions in addition to
substantially upgrading existing property assets to further enhance and add
value to its portfolio. Once the Group has finished its enhancement programmes
and raised the value of the property, selective disposals maybe made if the
Board believes such a transaction would benefit shareholders.
IRE has increased its portfolio significantly during the period, with the
purchase of both residential and commercial properties. Below are a number of
examples of the type of transactions the Group has recently been involved with.
In May 2006, the Group acquired Friedrichstrasse 56, a 2,140 sq m development
situated in Berlin Mitte, between the former 'Checkpoint Charlie' and '
Gendarmenmarkt'. The property, which consists of 24 apartments, two retail
spaces with additional office space, is scheduled to undergo a refurbishment
programme.
A number of properties have been acquired in Magdeburg including Sudstadthofe, a
12,232 sq m development consisting of 154 apartments located in the southern
part of the city. Two thirds of this property has been refurnished to a high
standard and one third is under refurbishment. The Group has continued to buy
properties in the Hegelstrasse, Magdeburg's most desirable area. Following
the purchase of 3,049 sq m office block, the Group now has 18 properties on or
adjacent to Hegelstrasse making IRE one of the largest property owners in
this area.
A renovation and refurbishment programme is underway at the Group's flagship
6,071 sq m freehold multi-use property in Uhlandstrasse, at the corner of
Kurfurstendamm. Rental levels at the apartments have generally improved since
refurbishment. A refurbishment programme is also nearing completion at the
Group's 90% owned 27,928 sq m portfolio of seven residential and retail
properties around Bersarinplatz in Freidrichshain, Berlin.
Property Portfolio - Belgium
Following the receipt of the building permit at the end of last year, the
development of a 5,166 sq m project consisting of 29 apartments and parking on
Rue du Gouvernement Provisoire, close to the Royal Palace in the centre of
Brussels, has progressed well. The construction phase is on-going with a full
team now on site. The target completion date is mid 2008 with the resulting
apartments targeted for sale or tenancy occupancy.
The successful letting of the newly refurbished 22,778 sq m IT Tower property in
Brussels, which was transferred in August 2004 for €71.2 million, is nearing
completion as is the renovation programme, in accordance with the transfer
agreement. This may result in IRE receiving an additional upward adjustment to
the transfer price at the end of the agreed three-year period in August 2007.
We look forward to further updating shareholders on our progress.
Financials
Results for the year ended 31 December 2006 show revenue of €5.4 million (2005:
€16.2 million), pre-tax profit of €16.8 million (2005: €4.8 million) and profit
after taxation of €11.0 million (2005: €5.1 million). The Group's cash position
at 31 December 2006 was €12.2 million (2005: €17.1 million). Total net
borrowings after taking into account cash balances amounted to €60.0 million
(2005: €17.0 million) Total net assets amounted to €34.5 (2005: €24.3 million).
Whilst the Group accounts show a tax charge of €5.8 million, €5.7 million of
this charge was in relation to deferred tax following the revaluation of certain
properties in Germany.
Post year-end, the Group raised €32 million through a bond issue in a private
placement with two European banks via its Dutch subsidiary I.R.E. German
Property Holding B.V, in order to further expand its portfolio of mid-size
properties with particular focus on Germany. The bonds are dual listed on the
OMX Stockholmsborsen AB and on the OMX Copenhagen Stock Exchange to provide
increased liquidity.
Dividend
The Board is proposing a final dividend of 5 pence per share (€0.07) payable on
10 August 2007 to shareholders on the register on 13 July 2007. An Interim
dividend of 4 pence (€0.06) was paid on 27 October 2006, making the total for
the year of 9 pence (€0.13), up 28.5% on the previous year.
Outlook
The Board is confident that the Group can continue to maximise growth and
generate value by utilising its skills in both the identification and
development of European property. While competition is naturally increasing,
IRE believe that by exploiting its regional knowledge and strong local
relationships, it can target and acquire property with strong potential and add
value through development and refurbishment programmes as previously
demonstrated. The Board remain confident about the future of International Real
Estate plc.
Rolf L Nordstrom, Chairman
28 June 2007
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2006
Note 2006 2005
€'000 €'000
Revenue 5,365 16,166
Cost of Sales (4,793) (10,073)
Gross Profit 572 6,093
Other operating income 20,695 2,188
Administration expenses (3,052) (2,309)
Other operating expenses (1,932) (148)
Operating Profit 16,283 5,824
Finance income 292 618
Profit on sale of subsidiaries 2,656 -
Finance costs (2,445) (1,610)
Profit Before Tax 16,786 4,832
Tax (charge)/credit (a) (5,785) 277
Profit for the Year 11,001 5,109
Attributable to:
Equity holders of the Parent 10,500 5,109
Minority Interest 501 -
11,001 5,109
Basic and diluted earnings per share (b) €1.59 €0.74
CONSOLIDATED BALANCE SHEET
As at 31 December 2006
Note 2006 2005
€'000 €'000
Non-Current Assets
Investment properties 112,036 51,734
Available for sale investments 2 2
112,038 51,736
Current Assets
Inventories 1,962 1,962
Trade and other receivables 2,884 2,997
Cash and cash equivalents 12,168 17,115
17,014 22,074
Total Assets 129,052 73,810
Current Liabilities
Other payables (6,692) (4,218)
Current tax liabilities (37) -
Bank loans (d) (8,474) (21)
Provisions (9,011) (4,146)
Finance leases (37) (37)
(24,251) (8,485)
Non-Current Liabilities
Bank loans (d) (63,688) (34,136)
Deferred tax liabilities (6,056) (326)
Long term provisions
- (6,000)
Finance leases
(561) (563)
(41,025)
(70,305)
Total Liabilities (94,556) (49,510)
Net Assets 34,496 24,300
Equity
Share capital 4,408 4,408
Share premium account 7,957 7,957
Capital redemption reserve 566 566
Retained earnings 21,064 11,369
Equity Attributable to Equity Holders of the Parent 33,995 24,300
Minority interest 501 -
Total Equity 34,496 24,300
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 December 2006
2006 2006 2005 2005
€'000 €'000 €'000 €'000
Net Cash Inflow from Operating Activities (3,075) 6,984
Investing Activities
Interest received 273 372
Acquisition of investment properties (39,627) (48,946)
Disposal of investment properties 4,687 -
Purchase of subsidiary undertaking (2,031) -
Net Cash Used in Investing Activities (36,698) (48,574)
Financing Activities
Dividends paid (805) (609)
Interest paid (2,374) (2,109)
Repayment of borrowings (21) (7,066)
New bank loans raised 38,026 34,157
Net Cash Generated by Financing Activities 34,826 24,373
Net Decrease in Cash and Cash Equivalents (4,947) (17,217)
Cash and Cash Equivalents at Beginning of Year 17,115 34,332
Cash and Cash Equivalents at End of Year 12,168 17,115
NOTES TO THE ACCOUNTS
for the year ended 31 December 2005
(a) Tax on profit on ordinary activities
2006 2005
€'000 €'000
The tax (charge)/credit on the profit on ordinary activities for the year was as
follows:
Current tax charge (56) (9)
Deferred taxation (5,729) 286
(5,785) 277
(b) Earnings per share
2006 2005
Earnings for the purpose of basic and diluted earnings per share being net profit
attributable to equity holders of the parent €11,000,746 €5,109,314
Weighted average number of Ordinary Shares for the purpose of basic and diluted
earnings per share 6,927,446 6,927,446
Basic and diluted earnings per share €1.59 €0.74
(c) Equity dividends
2006 2005
€'000 €'000
Amounts recognised as distributions to equity holders in the period
Final dividend for the year ended 31 December 2005 of €0.06 (4.0p) (2004 - €0.04
(3.0p)) per share 403 306
Interim dividend for the year ended 31 December 2006 of €0.06 (4.0p) (2005 - €0.04
(3.0p)) per share 402 303
805 609
Proposed final dividend for the year ended 31 December 2006 of €0.07 (5.0p) per share
(2005 - €0.06 (4.0p)) 485 415
The proposed final dividend is subject to approval by shareholders at the Annual
General Meeting and has not been included as a liability in these financial
statements.
(d) Bank Overdrafts and Loans - Group
31 December 31 December
2006 2005
€'000 €'000
Bank loans 72,162 34,157
The borrowings are repayable as follows:
On demand or within one year 8,474 21
In the second year 3,453 492
In the third to fifth years inclusive 5,376 1,477
After five years 54,859 32,167
72,162 34,157
Less: Amount due for settlement within 12 months 8,474 21
Amount due for settlement after 12 months 63,688 34,136
All borrowings, in both financial periods, are denominated in Euros
(e) Accounting Policies
The financial information set out in this announcement has been prepared in
accordance with the International Financial Reporting Standards (IFRS's),
adopted for use in the European Union and therefore comply with Article 4 of the
EU IAS Regulation.
(f) Financial information
The financial information set out in this announcement does not constitute the
company's statutory accounts for the years ended 31 December 2006 or 2005, but
is derived from those accounts. Statutory accounts for the year ended 31
December 2005, prepared under IFRS's, have been delivered to the Registrar of
Companies and those for the year ended 31 December 2006 will be delivered
following the company's annual general meeting. The auditors reported on these
accounts; their reports were unqualified and did not contain a statement under
s237(2) or (3) of the Companies Act 1985.
(g) AGM
The Company will hold its AGM at 12.00pm on 27 July 2007 at the Stafford Hotel,
16-18 St. James's Place, London SW1A 1NJ.
This information is provided by RNS
The company news service from the London Stock Exchange
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