Patrimoine et Commerce (PAT) H2 2014 earnings summary

Executive summary

• FY14 results were described as in line with expectations; the portfolio comprised 69 assets and 314,000 m², with a 96% occupancy rate and a 7.4% capitalization yield.

• Strategy centers on low-cost retail parks, national consolidation, selective development and asset disposals, while maintaining financial discipline.

Financial highlights

• Gross rents reached €31.6m, up 3.5% YoY; rental revenue was €32.4m versus €31.1m, and net rents were €31.6m versus €30.6m.

• Current operating income was €26.9m versus €26.4m; EBITDA was €27.8m versus €26.5m, while recurring FFO was €19.5m versus €19.0m.

• Consolidated net income fell to €10.1m from €19.5m; net income attributable to shareholders was €9.3m versus €18.4m.

• Net financial expense was €11.1m, including €8.1m net debt cost and €2.7m of negative derivative fair-value movements; property fair-value adjustments were negative €3.7m.

• Operating cash flow was €17.4m, investing cash flow was negative €25.2m, financing cash flow was €60.5m, and closing cash reached €70.6m.

Outlook and guidance

• FY15 economic prospects were considered mixed; continued monitoring of sites and tenants was planned, with expectations of maintaining historically high occupancy and no particular difficulty anticipated.

• Development priorities include national retail-property consolidation, a pipeline near €350m over four years, and maintaining LTV around 50%.

• Since year-end, agreements for western France retail parks covering nearly 28,000 m² and 27 tenants were reached; expected annual net rent attributable to the portfolio was €2.1m.

• A proposed absorption merger with Foncière Sepric was approved in principle on 18 March 2015, subject to regulatory and shareholder approvals.