Intershop closes 2017 with outstanding result and increases dividend; Change in the Board of Directors
The Intershop Group reported a year-on-year increase in profits of 6.7% for the financial year 2017.
- Net income came to CHF 63.5 million, or CHF 31.76 per share, which represents a return on equity of 10.7%.
- Equity rose to CHF 619 million as of 31st December 2017 and now corresponds to CHF 310 per share. This represents an equity ratio of 43.8%.
- The net yield on investment properties remained high at 5.4%.
- The vacancy rate of the investment property portfolio fell slightly to 11.0%.
- At the Annual General Meeting, the Board of Directors will propose to increase the dividend by 10% to CHF 22.00 per share.
Rental income was up by 6% on the previous year, as a result of acquisitions. This and the gains on disposals of CHF 9.9 million helped Intershop to generate a return on equity of 10.7%.
On the reporting date, the portfolio comprised 56 properties, including development and promotional properties. Rental income in the reporting period was composed of the following types of use: 51% office and education, 29% light-industrial and logistics, 6% retail and food, 6% residential and 8% parking.
The market value of theproperty portfolio as of year-end was CHF 1,363 million. After deducting capital expenditure in the reporting year this represents an increase of CHF 4.2 million or 0.3%.
Primarily thanks to the World Trade Center in Lausanne, rental income rose to CHF 89.2 million, even though several properties were sold in the reporting year and the previous year. The gross yield on the investment properties was 6.3%.
In a still very demanding letting environment the vacancy rate for the investment properties was reduced slightly to 11.0%.
Property expense went up by 10.9% to CHF 9.9 million, partly due to higher expenses for maintenance and repairs, but still only accounted for 11.1% of rental income. The net yield on the investment properties came to 5.4%.
Thanks to the service revenue generated in the World Trade Center, other income improved by 46% to CHF 4.2 million. As expected, administrative expense rose accordingly by 37% to CHF 2.6 million and personnel expense by 9% to CHF 10.1 million. The costs of local staff as well as for the serviced offices and conference facilities provided are included for the full financial year for the first time.
The average interest rate on interest-bearing debt came to 2.02% as of the reporting date, with an average fixed-interest term of 6.2 years. Interest expenses were down by 6% to CHF 13.6 million due to lower debt and lower interest rates.
Equity rose by CHF 28 million to CHF 619 million despite the dividend payment of CHF 40 million. This was 4.8% higher than the previous year.
The Board of Directors will propose a dividend increase of CHF 2.00 to CHF 22.00 per registered share at the Annual General Meeting, which represents a total distribution of CHF 44 million. Based on the share price on the reporting date this corresponds to a dividend yield of 4.5%. The total share performance, made up of the share price increase and the dividend payment, came to 1.2% in the reporting year, which in contrast to prior years was less than the peer group index SXI Swiss Real Estate Shares TR, which increased by 9.9%.
Intershop is confident for the current financial year. Rental income is expected to be slightly lower to stable, not including any transactions. Although the letting business is expected to remain demanding, Intershop aims to compensate for the rental income lost due to property disposals and achieve further reductions in the vacancy rate. Over the year, Intershop anticipate that the vacancy rate for investment properties will fall by 0.5% to 1.0%.
The sale of the units in the promotion project «eden7» in Zurich is forecast to generate a high single-digit million pre-tax profit for Intershop in the first half-year 2018.
Sales opportunities and attractive acquisition opportunities will still be seized, provided they help to realise or create sustainable added value.
Change in the Board of Directors
Dr. Michael Dober will not stand for re-candidacy at the 55th Annual General Meeting. Intershop thanks Michael Dober for his great commitment during his three-year of service and his contribution to the success of the company.
Ernst Schaufelberger is proposed for the election. Mr. Schaufelberger completed a notary's degree and various further education courses in the areas of taxes, finance and real estate. He holds the certificate of eligibility as a notary. After various activities and functions as a notary, for a trust company and institutional real estate investors, he joined today's AXA Investment Managers Switzerland AG in 2005. He is responsible for Real Assets as a member of the Board of Directors and Deputy Managing Director.
Key Figures Intershop-Group
Intershop is a real estate company listed on the SIX Swiss Exchange and active in Switzerland, which invests principally in commercial properties. As per 31/12/2017 its portfolio comprised 57 properties with a lettable area of 585,000 m2 and a market value of some 1.4 billion Swiss francs. Intershop invests mainly in the Zurich area, around Lac Leman and along the main traffic arteries. Its portfolio combines high yields with security, thanks to diversification by geography and type of use, with considerable potential for value appreciation in the properties with development potential.
|28/03/2018||Annual General Meeting 2018|
|29/08/2018||Publication of half-year report 2018 with online presentation for media and financial analysts|