Fusion Antibodies Regulatory News (FAB)

30 Jul 2008 07:00

30 July 2008

Fabian Romania Limited (FAB.LN)

Net asset value as at 30 June 2008

Fabian Romania Limited ("Fabian"), the AIM listed dedicated investor in the Bucharest and wider Romanian real estate market announces its Net Asset Value ("NAV") as at 30 June 2008.

Fabian seeks to generate attractive total returns for its shareholders through a portfolio of income producing buildings, co-development residential, office, logistics and retail projects, with experienced partners and land investments. Fabian receives investment advice from Fabian Capital Limited, an independent investment management firm that specialises in Romanian real estate investment advice (Fabian Capital Limited does not carry out any regulated activities in the UK).

Highlights

* The basis for calculating the value of the development projects was revised in the quarter to exclude the development profit from the project valuation included in the NAV. Prior period valuations have been restated accordingly and a full explanation together with the financial effect is set out below.

Net Assets of €1.667 per share 

Fabian's NAV as at 30 June 2008 is €1.667 per share, a decrease of 0.06 per cent. from the first quarter's NAV of €1.668 (restated) per share and an increase of 0.06 per cent. for the year to date (31 December 2007 restated: €1.666). Over the last twelve months, the NAV has risen by 7.7 per cent. from €1.548 (restated) per share as at 30 June 2007.

The published NAV was calculated according to Fabian's Articles of Association although the basis used to value the development projects was revised in the quarter. Previously, the value attributed to the New Town development project was based on the value of the site as a whole as determined by DTZ Echinox ("DTZ") and included an element of the future profitability from the development to reflect the stage of completion of the development. The Directors however consider it more appropriate to value each development by using the DTZ value of the land prior to the start of construction, to which the cost of the construction work in progress less any advance payments received for sales of units is added. This method ensures the future profits to be generated from the development during the construction of the project are excluded and not recognised until realised on completion. An estimate of these development profits are given in the DPNAV calculation. The effect of the change in calculation basis has resulted in a reduction of the 31 March 2008 NAV per share by €0.035 from €1.703 to €1.668, a decrease of 2.06 per cent., and a reduction of €0.034 from €1.700 at 31 December 2007 to €1.666, a decrease of 2 per cent.. The NAV for 30 September 2007 and earlier is unaffected by the change in the calculation basis.

An analysis of Fabian's NAV by project is summarised below:

Future Development Profit of €0.652 per share

Under the revised methodology of valuing the development property, all future development profits are excluded. Therefore, in order to provide transparency to Fabian's shareholders as to the potential level of such future development profits that may accrue, an estimate of these future development profits is given below. The calculations are based on the DTZ site valuations referred to above, at 30 June 2008 which include estimates of these development profits. These estimates by their very nature are forecasts, relying on future events and accordingly are subject to uncertainty. Shareholders may then choose to discount these profits to estimate their net present value in today's terms based on current market conditions.

The forecast development profit figures are stated gross and do not include all costs that may be incurred by Fabian over the course of the projects (in particular transaction fees and any carried interest payable to the investment manager). The implied share of future development profit figures for the New Town, Timisoara, Oradea and Satu Mare residential schemes and the Cubic Centre, Lakeview, and Romana office schemes, based on Fabian's calculations using DTZ's estimates, is given in the table below:

Adding these forecast development profits of €33.2 million or €0.652 per share to the NAV produces what the Directors have called the DPNAV of €2.319 per share. This represents a rise of 5.9 per cent. over the 31 March 2008 DPNAV (restated) of €2.190 and a rise of 6.4 per cent. for the year to date (31 December 2008 restated: €2.180).

Mark Holdsworth and Jan-Olof Hansson 

Fabian Capital Limited

30 June 2008

The directors of Fabian Romania Limited accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the directors of the Company (who have taken all reasonable care to ensure that such is the case) the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

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