par PATRIMOINE ET COMMERCE (EPA:PAT)
PATRIMOINE ET COMMERCE: 2023 HALF-YEAR RESULTS
PATRIMOINE ET COMMERCE
PRESS RELEASE 2023 HALF-YEAR RESULTS
Paris, July 26, 2023
At its meeting on July 25, 2023, the Patrimoine & Commerce Supervisory Board reviewed the Company’s operations and approved the 2023 half-year financial statements, prepared by Management.
Key figures:
Eric Duval, Managing Director and Founder of Patrimoine & Commerce declared: « Patrimoine & Commerce achieved strong results over the first six months of 2023, with the company benefiting from limited exposure to interest rates increase while taking advantage of the positive effects of rent indexation. Our robust financial structure allows us to have confidence in the ability of Patrimoine & Commerce to consolidate its position as the leader of low-cost retail park market players in France and to ensure sustainable growth for our shareholders. »
Operational performance In an uncertain context, marked by inflation and rising interest rates, Patrimoine & Commerce continues to demonstrate the attractiveness of the retail park model, through moderate rents, and low-cost stores sought after by consumers to fight against the decline in purchasing power. Over the first half of 2023, Patrimoine & Commerce had a sustained leasing activity and signed 16 leases (of which 10 renewals). The financial occupancy rate is stable at 94.3% (5). The collection rate on rents, service charges and taxes stands at 98% on the first quarter of 2023 and 95% on the second quarter. Financial performance Over the first half of 2023, Patrimoine & Commerce continued to deliver a solid financial performance. As of June 30, 2023, Patrimoine & Commerce reported gross rents of € 24.7m, against € 23.0m as of June 30, 2022:
The increase of gross rental income is driven by acquisitions (+€ 0.9m) and disposals (-€ 1.0m), as well as by the delivery of restructuring works of La Martinique and Ville-du-Bois (+€ 0.7m). The like-for-like increase of gross rental income (+€ 1.1m, +5.2%) derives from contractual indexation, and the decrease in the amortization of Covid-19 rent free periods.
Net rental income is increasing by +6.9% between 2022 and 2023, with the gross to net ratio in line between the two fiscal years (91% of gross rental income in 2023 vs. 92% in 2022), mainly composed of unrecovered rental expenses and provisions for credit losses (which represent approximately 1.3% of half-year invoicing):
Operating expenses and other revenues remained under control at € 2.7m. Current operational result reached € 19.8m as of June 30, 2023.
Net cost of debt amounted to € 5.4m as of June 30, 2023, increasing by +21.4% compared to June 30, 2022. The Company has a low exposure to interest rate risk with 78% of fixed or variable rate debt hedged, which limited the increase in the average interest rate over the period (2.63% for the first half of 2023 vs. 1.97% for the first half of 2022), in a context of a sharp rise in the 3-month Euribor rate.
Recurring net result (FFO) amounted to € 14.8m as of June 30, 2023, against € 14.1m as of June 30, 2022, increasing by +5.4%:
The external appraisal valuation campaign resulted in a fair value adjustment of -€ 0.8m in the 2023 half-year accounts, reflecting an appreciation of the capitalization rate of commercial galleries, partly offset by the high level of rent indexation.
Including the share of the result of companies accounted for using the equity method (-€ 1.4m), the fair value adjustment on financial instruments (-€ 0.3m) and other non-recurring revenues and charges (-€ 0.2m), the net profit amounted to € 12.1m as of June 30, 2023 and € 12.8m in group share.
Decrease of the LTV ratio, decrease of the NAV per share at € 28.0 (-1.6%) The Group consolidated net debt of € 358.0m as of June 30, 2023, implies a Loan-to-Value ratio of 42.9%, leaving a significant investment capacity compared to the target of 50% set by Patrimoine & Commerce.
Net asset value per share amounted to € 28.0 (€ 423.1m) as of June 30, 2023, a decrease of -1.6% versus 2022. Restated from the distribution of the dividend relative to 2022 fiscal year, the net asset value would stand at € 443.4m (29.4 €/share), an increase of +3.1% compared to December 31, 2022.
Development and optimization of the portfolio As of June 30, 2023, the portfolio valuation (excluding transfer taxes and including properties accounted for using the equity method), reached € 854.9m, increasing by +1.6% compared to December 31, 2022. The capitalization rate of the properties in operation stands at 7.1% (vs. 7.0% as of December 31, 2022).
Over the first six months of 2023, Patrimoine & Commerce continued its development through the acquisition of a retail property in Saint-Parres-aux-Tertres (Grand Est), for a global amount of € 9.7m. Other investments were made on the existing portfolio, for a global amount of € 8.2m, mainly composed of the restructuring works in La Ville-du-Bois, the construction of a new building in Wittenheim, and the delivery of two retail units in Lexy.
Patrimoine & Commerce also completed the disposal of a retail asset in Vandoeuvre (Grand Est), a commercial unit in Salon-de-Provence (Provence-Alpes-Côte d'Azur) and a land in Lempdes (Auvergne-Rhône-Alpes) for a total consideration of € 2.6m, in line with external appraisers’ valuations.
ESG Commitment Regardful ESG issues, with the willingness to go beyond the regulatory constraints of the Décret Tertiaire, Patrimoine & Commerce has committed to the implementation of its 2021-2025 roadmap on the themes of environment, governance and social issues. This approach materialized over this semester with a partnership signed with the Atlante group in April 2023, with a project to deploy 100 fast charging stations at 18 Patrimoine & Commerce sites, which will be installed by mid-2024. A study is underway to extend these charging stations to other sites. Approval of the € 1.30 dividend per share The Annual General Meeting held on June 8, 2023 approved the distribution of a dividend of € 1.30 per share, for a global amount of € 20.2m. This dividend implies a yield on NAV (before dividend distribution) of 4.4%, and a yield on share price of 7.0% (as of July 21st, 2023).
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