Last checked at 28 Feb 2018 07:00
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this information is considered to be in the public domain.
28 February 2018
Globalworth Real Estate Investments Limited
("Globalworth" or the "Company")
Business Update
Globalworth is pleased to publish a brief update for its operations, along with the publication of its Consolidated Statement of Comprehensive Income and Consolidated Statement of Financial Position for the year ended 31 December 2017.
The Company's audited 2017 Annual Report and Financial Statements for the year ended 31 December 2017 will be published in early March 2018.
Key Highlights:
· Completion of our strategic investment in Griffin Premium RE.. N.V. ("GPRE") resulting in a shareholding of 71.66% in December 2017. GPRE has now been fully consolidated into Globalworth's financial statements for the year ended 31 December 2017.
· As at 31 December 2017, Globalworth's combined real estate portfolio1 was valued at €1,815.4 million. Total contracted rental income for the combined portfolio stood at €115.9 million, including pre-leases on developments, an increase of 134% compared to 31 December 2016. The weighted average lease length is 5.7 years2.
· The combined standing portfolio was valued at €1,710.3 million, representing a total gross leasable area of 791.0k sqm.
· Total average occupancy of the commercial standing portfolio was 93.3% (95.4% including tenant expansion options) at 31 December 2017, compared to 83.1% at 31 December 2016. Like-for-like occupancy of the Romanian portfolio improved by 10.2% in 2017.
· At the Globalworth Campus office development, occupancy at Tower I (completed in Q3-2017) as at 31 December 2017, where Amazon is the largest tenant, was 46.8% (73.6% including tenant expansion options), increasing to 54.5% (88.9% including tenant expansion options) as at 15 February 2018. Tower II (due to complete in Q1-2018) is now 28.0% pre-leased. Commencement of Phase B of this project, primarily comprising the 34.8k sqm Tower III, is anticipated in H1-2018.
· The Company has now completed the acquisition of two additional land plots adjacent to its assets on the Gara Herastrau/Barbu Vacarescu corridor of Bucharest's new CBD, announced on 22 December 2017, for an aggregate consideration of approximately €16 million. These plots are anticipated to allow for the development of approximately 40.0k sqm of commercial (predominantly office) space.
· Successful closing of a €340 million equity placing on 8 December 2017 with solid support from both existing and new shareholders, increasing the free float of the Company's shares.
· Combined with Globalworth's debut €550 million Eurobond in June 2017, the Company raised €890 million from the capital markets in 2017.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2017
| 2017 €'000 | 2016 €'000 |
Revenue | 77,866 | 68,231 |
Operating expenses | (26,772) | (24,678) |
Net operating income | 51,094 | 43,553 |
Administrative expenses | (10,231) | (7,707) |
Acquisition costs | (10,809) | (105) |
Fair value movement | 6,727 | 6,710 |
Bargain purchase gain on acquisition of subsidiaries | 28,897 | - |
Gain on sale of subsidiary | - | 272 |
Share-based payment expense | (143) | (14) |
Depreciation on other long-term assets | (150) | (183) |
Other expenses | (4,091) | (1,857) |
Other income | 5 | 3,111 |
Foreign exchange loss | (317) | (119) |
| 9,888 | 108 |
Profit before net financing cost | 60,982 | 43,661 |
Net financing cost |
|
|
- Finance cost | (38,465) | (32,222) |
- Finance income | 1,447 | 749 |
| (37,018) | (31,473) |
Share of profit of joint venture | 2,188 | - |
Profit before tax | 26,152 | 12,188 |
Income tax expense | (2,405) | (873) |
Profit for the year | 23,747 | 11,315 |
Other comprehensive income | - | - |
Profit attributable to: | 23,747 | 11,315 |
- Equity holders of the Company | 24,426 | 11,315 |
- Non-controlling interest | (679) | - |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
| 2017 €'000 | 2016 €'000 |
ASSETS |
|
|
Non-current assets |
|
|
Investment property | 1,792,414 | 980,892 |
Goodwill | 12,349 | 12,349 |
Advances for investment property | 3,355 | 2,454 |
Investments in joint-ventures | 21,939 | - |
Other long-term assets | 689 | 722 |
Other receivables | 416 | 1,183 |
Prepayments | 1,578 | 1,022 |
Available for sale financial assets | 5,897 | - |
Long-term restricted cash | 2,958 | - |
| 1,841,595 | 998,622 |
Current assets |
|
|
Debentures | 18,389 | - |
Available for sale financial assets | 4,346 | - |
Trade and other receivables | 22,419 | 10,807 |
Guarantees retained by tenants | 304 | 277 |
Income tax receivable | 295 | 411 |
Prepayments | 325 | 348 |
Cash and cash equivalents | 273,272 | 221,337 |
| 319,350 | 233,180 |
Total assets | 2,160,945 | 1,231,802 |
EQUITY AND LIABILITIES |
|
|
Total equity |
|
|
Issued share capital | 894,509 | 538,114 |
Treasury shares | (270) | - |
Unissued share capital | - | 8,584 |
Share-based payment reserve | 2,240 | 2,139 |
Retained earnings | 172,405 | 166,557 |
Equity attributable to equity holders of the Company | 1,068,884 | 715,394 |
Non-controlling interest | 67,572 | - |
Total equity | 1,136,456 | 715,394 |
|
|
|
Non-current liabilities |
|
|
Interest-bearing loans and borrowings | 834,044 | 375,570 |
Deferred tax liability | 99,574 | 70,575 |
Guarantees retained from contractors | 2,616 | 33 |
Deposits from tenants | 8,931 | 2,261 |
Trade and other payables | 1,509 | 2,188 |
| 946,674 | 450,627 |
Current liabilities |
|
|
Interest-bearing loans and borrowings | 36,360 | 38,665 |
Guarantees retained from contractors | 1,057 | 2,394 |
Trade and other payables | 35,635 | 20,726 |
Other current financial liabilities | 2,638 | 3,574 |
Finance lease liabilities | - | 4 |
Deposits from tenants | 1,256 | 374 |
Income tax payable | 869 | 44 |
| 77,815 | 65,781 |
Total equity and liabilities | 2,160,945 | 1,231,802 |
For further information visit www.globalworth.com or contact:
Enquiries
Andrew Cox Tel: +44 20 3026 4027
Head of Investor Relations & Corporate Development
Jefferies (Joint Broker) Tel: +44 20 7029 8000
Stuart Klein
Panmure Gordon (Nominated Adviser and Joint Broker) Tel: +44 20 7886 2500
Andrew Potts
Milbourne (Public Relations) Tel: +44 7903 802545
Tim Draper
About Globalworth / Note to Editors:
Globalworth is an AIM-listed real estate company active in Central and Eastern Europe. It has become the leading office investor in the Romanian real estate market and now has established a significant platform in Poland, through a 72% shareholding in Griffin Premium R.E.. N.V. (GPRE), a pure-play Polish real estate platform listed on the Warsaw Stock Exchange. Globalworth acquires, develops and directly manages high-quality office and logistics/light-industrial real estate assets in prime locations, through which it benefits from a strong rental income profile from high quality tenants from around the globe. Managed by approximately 110 professionals across Romania and Poland, the combined value of its portfolio is €1.8 billion, of which over 90% is in income-producing assets, predominately in the office sector, and leased to some 440 national and multinational corporates from 28 countries and 37 different sectors. In Romania, Globalworth is present in Bucharest, Timisoara and Pitesti, whilst assets in Poland span Warsaw, Wroclaw, Lodz, Krakow, Gdansk and Katowice. For more information, please refer to http://www.globalworth.com/.
IMPORTANT NOTICE:
This announcement has been prepared for the purposes of complying with the applicable laws and regulations of the United Kingdom and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws and regulations of any jurisdiction outside of the United Kingdom.
This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "targets", "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward looking statements include all matters that are not historical facts and involve predictions. Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements reflect the Company's current view with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business, results of operations, financial position, liquidity, prospects, growth or strategies and the industry in which it operates. Forward-looking statements speak only as of the date they are made and cannot be relied upon as a guide to future performance. Save as required by law or regulation, the Company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements in this announcement that may occur due to any change in its expectations or to reflect events or circumstances after the date of this announcement.
1 Combined real estate portfolio is defined as the aggregation of all assets in the Company's portfolio, including consolidation of 100% of GPRE. The corresponding Investment Property recorded within the financial statements at 31 December 2017 was €1,792.4m, which does not include the value of the RBC project under development which is accounted for as a joint venture.
2 For commercial spaces only, including pre-leases on developments. For standing commercial portfolio only it is 5.3 years.