LONDON (Alliance News) - Commercial real estate business Summit Germany Ltd Thursday reported a leap in profit for the first half, following strong valuation gains.
The company, which was admitted to trading on AIM in February, posted pretax profit of EUR44.5 million for the six months to June 30, up from EUR18.0 million a year earlier, following a valuation surplus of EUR28 million compared with a EUR1.3 million loss in the previous year.
Rental income remained largely unchanged at EUR20.3 million compared with EUR20.4 million a year earlier.
Summit Germany said its net asset value per share rose to 79 cents compared with 70 cents a year earlier. At the end of December the company's net asset value per share stood at 64 cents.
In total, the portfolio which was valued at EUR576 million at the period-end generates net rent of EUR45.7 million a year.
Chairman Harry Hyman said it was a "successful" half for the company, during which it joined AIM and raised EUR35 million in new equity. The fund raising was followed by the acquisition of 11 commercial properties that the group had previously owned but had lost.
The total lettable area of the 11 commercial properties is 90,000 square metres.
Due to a breach of covenants in 2012, the group lost control of this portfolio and ceased to consolidate it within the financial statements. However, control was re-established during the period via the acquisition of a loan facility for EUR45 million, plus expenses, reflecting an yield of 13.7%. The loan facility has a face value of EUR73.5 million.
Overall the occupancy rate across the portfolio stood at 86% in line with 2013, the company said.
At an operating level, the company signed 99 new leases and renewals worth EUR4.5 million in rent a year. The company also sold a property in Berlin at a yield of 5.2% generating a EUR600,000 gain.
"We are confident that the German market positive trends and our in-house successful management team will maintain the demand for Summit properties and support delivery of capital growth as well as rental increase," Hyman said in a statement.
"The work of the first six months of 2014 has further strengthened the group's balance sheet and we will continue to pursue implementation of our acquisition and asset management strategies to generate further earnings and value-enhancing opportunities, increasing total return to our shareholders. We look forward to the second half of 2014," he added.
Following a dividend of 0.5 cents per share paid in June, a second dividend of 0.55 cents per share will be paid on September 30, Summit Germany said. A further dividend is expected to be paid at the end of 2014.
Summit Germany shares were quoted up 1.6% at 0.625 pence Thursday afternoon.
By Anthony Tshibangu; anthonytshibangu@alliancenews.com; @AnthonyAllNews
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