par PATRIMOINE ET COMMERCE (EPA:PAT)
PATRIMOINE ET COMMERCE: FIRST-HALF 2024 RESULTS
PATRIMOINE ET COMMERCE
PRESS RELEASE FIRST-HALF 2024 RESULTS
Paris -July 24, 2024
At its meeting on July 23, 2024, the Patrimoine & Commerce Supervisory Board reviewed the Company’s operations and approved the 2024 half-year financial statements, prepared by Management.
Key figures:
Eric Duval, Managing Director and Founder of Patrimoine & Commerce declared: “The first-half results for the 2024 financial year once again illustrate the solidity and resilience of our economic model. Despite an uncertain economic context, we have managed to maintain our position as the leader in low-cost retail parks in France. Our excellent performance is the result of proactive management, a high-quality asset portfolio, and long-term relationships with our partners. We are also pleased to welcome Crédit Agricole Centre France as a new shareholder, which strengthens our financial structure and our ability to generate sustainable growth. We remain confident in our ability to offer significant added value to our shareholders through our rigorous development strategy and solid financial structure.”
Operational performance Patrimoine & Commerce confirms the interest in the retail park concept and the advantages of out-of-town retailing in an uncertain situation marked by rising inflation and interest rates. The group offers reasonable rents to low-cost brands that meet the needs of consumers facing a decline in purchasing power. Over the first half of 2024, Patrimoine & Commerce had a dynamic leasing activity and signed 33 leases (including 19 renewals), improving the financial occupancy rate to 95.2% (5). The rent, charges, and taxes collection rate stands at 99.1% for the first half of 2024. Financial performance Over the first six months of 2024, Patrimoine & Commerce continued to deliver solid a financial performance. As of June 30, 2024, Patrimoine & Commerce gross rents amounted to € 26.2m compared to € 24.7m as of June 30, 2023:
The increase in gross rental income is explained by asset portfolio movements (+€ 0.5m), mainly with the acquisition of the Saint-Parres-aux-Tertres asset (Grand Est) and the delivery of the Ville-du-Bois (Île-de-France) restructuring works. The increase in gross rents on a like-for-like basis (+€ 1.0m or +4.2%) is driven by the contractual indexation and the decrease in the amortization of Covid-19 rent free periods.
Net rental income increased by +7.2%, with the gross to net ratio remaining stable between the two periods (92% of gross rents in the first half of 2024 vs. 91% in 2023), mainly reflecting non-recoverable charges and provisions for credit losses (which represent approximately 1.1% of half-year invoicing):
Operating expenses and other revenues amounted to € 3.4m in 2024 (vs. € 2.7m in 2023). Thus, the current operational result amounted to € 20.7m as of June 30, 2024. The net cost of debt amounted to € 6.0m as of June 30, 2024, an increase of +10.6% compared to June 30, 2023. The company has low exposure to interest rate risk, with 76% of its debt at fixed or hedged variable rates, which limited the increase in the average interest rate over the period (2.99% in the first half of 2024 vs. 2.63% in the first half of 2023), in a context of a sharp rise in the 3-month Euribor rate between the two periods. Recurring net result (FFO) amounted to € 15.2m as of June 30, 2024, compared to € 14.8m as of June 30, 2023, an increase of +2.4%:
The external appraisal valuation campaign resulted in a fair value adjustment of +€ 1.0m in the 2024 half-year accounts, mainly reflecting the indexation of rents.
Taking into account the share of the result of companies accounted for using the equity method (-€0.5m), the fair value adjustment on financial instruments (-€ 0.6m), and other non-recurring income and expenses (-€ 0.6m), net profit amounted to € 14.4m as of June 30, 2024, and € 14.9m in group share, an increase of +16.2%.
Improvement of the LTV ratio, decrease of the NAV per share at 28.7 € (-1.3%) The Group consolidated net debt of € 358.6m as of June 30, 2024, implies a Loan-To-Value ratio of 42.5%, leaving a significant investment capacity compared to the target of 50% set by Patrimoine & Commerce.
Net asset value per share amounted to 28.7 € (€ 432.8m), a decrease of -1.3% versus December 31, 2023. Adjusted for the dividend distribution, the NAV would stand at € 453.6m (€30.1 per share), an increase of +3.4% compared to December 31, 2023.
Development and optimization of the portfolio As of June 30, 2024, the portfolio valuation (excluding transfer taxes and including properties accounted for using the equity method) reached € 859.4m, a slight increase compared to December 31, 2023. The capitalization rate of the properties in operation stands at 7.3%.
Over the first six months of 2024, Patrimoine & Commerce did not make any acquisitions of new properties. Investments during the period focused on its assets in operation.
Additionally, Patrimoine & Commerce continued its asset rotation policy with the disposal of a shopping gallery in Gaillon (Normandy).
Capital increase reserved for Crédit Agricole Centre France On April 25, 2024, Patrimoine & Commerce announced the project of a capital increase reserved for Crédit Agricole Centre France through its subsidiary CACF Investissements Fonciers. This operation, approved by the Supervisory Board and the General Meeting, aims to support the development of Patrimoine & Commerce and finance its future acquisitions. The issuance of 869,565 new shares, at a price of € 23 per share, will raise a total of € 20 million. This operation reflects the confidence of Crédit Agricole Centre France in the value creation strategy of Patrimoine & Commerce. The subscription date has been set for August 1st, 2024.
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