Final Results

RNS Number : 7013W

Dawnay, Day Sirius

16 June 2008

 



Dawnay, Day Sirius Limited

Final Results

For the period ended 31 March 2008

Dawnay, Day Sirius Limited (the 'Group') is a real estate company established to acquire large mixed-use commercial sites for upgrading to flexible workspaces in Germany.

Highlights

• Acquired nine properties in addition to the 20 acquired at IPO for €175.5m at a net initial yield of 7.6% and occupancy of 78%
  
  

• Property assets were revalued at €376.0m as at 31 March 2008
  
  
• Adjusted NAV per share, excluding deferred tax, of 95.8c
  
  
• Post the period end:
  
  
• • completed the purchase of two further properties for a purchase price of €19.0m at a net initial yield of 7.0% which includes 37,900 m2 of land for development 
  • notarised the purchase of seven properties at a purchase price of €115.9m with a net initial yield of 8.2%
    
    
• Adjusted profit after tax attributable to equity holders was €10.1m*
  
  
• Adjusted EPS of 3.1c* 
  
  
• Proposed final dividend of 1.5c per share giving a total of 2.5c for the year
  
  
• Signed new leases (excluding renewals) on 42,089 m2 during the period 
  
  
• Signed three new-build pre-let development deals adding 1,567 m2 at a net initial yield of 11.5% in the period and two more for 900 m2 at a net yield of 16.0% post period end    
  
  
• Raised bank debt of €177m (of which €101m was drawn down post period end) at a weighted average interest rate of 5.52%

* Excluding revaluation and deferred tax.

Dick Kingston, Chairman of Dawnay, Day Sirius Limited, said: 'Sirius has made excellent progress, having acquired 29 properties across Germany since the IPO last May to period end and thereby establishing itself as the leading operator of branded business parks in Germany focused on the SME sector. We believe that these acquisitions will be increasingly valuable as the benefit of Sirius business model of transforming and developing these sites into modern flexible workspaces comes through in terms of higher rental and occupancy rates.'

A copy of the presentation to investors will be available on the Company's website at www.dawnaydaysirius.com

Enquiries:

Dawnay, Day Sirius Real Estate Asset Management Limited www.dawnaydaysirius.com	Kevin Oppenheim Alistair Marks	020 7834 8060
Cardew Group	Tim Robertson Shan Shan Willenbrock Catherine Maitland	020 7930 0777

Chairman's statement

I am pleased to announce the Group's first set of results for the period ended 31 March 2008. It has been a successful first period for the Group, despite the turmoil in the global credit markets. The Company has made significant progress acquiring well located German real estate for re-branding and upgrading into flexible workspace predominantly for the SME market.  

Since its IPO in May 2007, the Group completed the acquisition of the initial portfolio of 20 properties and up to 31 March 2008 had invested €175.5m in purchasing a further nine properties across Germany with a blended net initial yield of 7.6% and potential to add significant value. In addition, the acquisition of a further nine properties with a purchase price of €134.9m have been completed or notarised since the period end.  

The German economy continues to be robust and this is reflected in the high demand for the Group’s flexible workspace. As such, up to 31 March 2008, new leases were signed with 173 tenants for an additional 42,089 m². Renewal rates in the portfolio are in line with expectations, except at two sites where we were aware at acquisition that the major tenant was leaving. This created an excellent opportunity to refurbish and transform these assets into modern business parks attracting new occupiers at premium rents.

Significant progress has been made with the 'Sirius transformation' of the properties, for which we invested €5.5m in the period. Detailed plans have been completed for several sites with the full benefit of this investment expected to become evident over the next two to three years through higher rents and occupancies. The Group continues to see high demand for new-build developments on the substantial amount of surplus land within the portfolio, and three deals were signed in the period creating an additional 1,567 m2 of pre-let space at a net yield on cost of 11.5% with a further two deals signed since the period end for 900 m2 at a net yield of 16.0%.

Importantly, given the current credit environment, we have been able to secure bank financing. Facilities with ABN AMRO Bank N.V and Berlin-Hannoversche Hypothekenbank AG have been drawn down since the IPO.

Results 

Gross rental income for the period was €20.6m. Excluding property revaluations and related deferred tax, profit after tax for the period was €10.1m. It should be noted that the company only traded for an 11 month period after IPO on 4 May 2007 and the contribution from the properties acquired is staggered throughout the period. As at 31 March 2008, the portfolio of 29 properties had an annualised gross rent roll of €29m and total lettable area of circa 800,000 m2. Occupancy was at 74% leaving an estimated rental value at market rate on the vacant space of circa €9 million. Including the properties completed or notorised after the period end the pro forma annualised gross rent roll is €42.5m and total lettable area is circa 1,100,000 m2.

The adjusted EPS, which excludes property revaluation and deferred tax, was 3.1c.  

Dividend

Our dividend strategy is to pay out between 60-80% of recurring profits. I am therefore pleased to announce that the Board has proposed a final dividend of 1.5c per share, giving a total dividend for the year of 2.5c, representing 80% of recurring profits. The final dividend will be paid subject to shareholder approval on 14 August 2008 to shareholders on the register as at 18 July 2008. The ex-dividend date will be 16 July 2008.

Revaluation and Net Asset Value

The portfolio has been valued independently by DTZ Zadelhoff Tie Leung GmbH as at 31 March 2008 at €376.0m. This represents a decline of €12.6m (-3.2%) from the total purchase price including acquisition costs and capital expenditure incurred in the period. Excluding acquisition costs of €13.0 million and capital expenditure of €5.5m, the corresponding surplus was €5.9m (+1.6%). It is important to note that the valuation does not fully reflect the effect of capital expenditure to date. We do not expect to see the full benefits from this until next year.  

The adjusted net asset value per share, which excludes deferred tax, was 95.8c as at 31 March 2008.

Finance

As at 31 March 2008, the Group's borrowings totalled €122m. The weighted average interest rate on these facilities is fixed at 5.38%.  

In addition to a €76m draw down with ABN AMRO Bank in November 2007, the Group has, after the period end, drawn down a €101m facility with Berlin-Hannoversche Hypothekenbank AG and has secured credit approval with the same bank for a further €78m acquisition facility, for the purchase of a portfolio of 5 properties. The Group is confident of its continued ability to access the credit markets to enable it to fund its proposed acquisitions.  

Share buyback

The Company commenced a share buy back programme in January 2008 and had purchased 8.1m shares at an average price of 70.5c by period end. The Board considers that with the shares trading at a substantial discount to NAV it was a good use of capital to buy back stock opportunistically, as it is both NAV and EPS accretive, and will selectively continue with this policy so long as it remains in the best interests of shareholders. Since the period end the Company has purchased a further 13.8m shares at an average price of 66c. All share buy backs are held on the Company's balance sheet as Treasury Shares.  

Asset Manager

Dawnay, Day Sirius Real Estate Asset Management Limited (the 'Asset Manager') has continued to develop its team in Germany in line with the continued growth in the portfolio. The team now comprises of 95 employees, compared to 27 at IPO, dedicated to the active management of the portfolio and delivery of the business plan. The main focus since the IPO has been on making acquisitions, creating the individual site business plans, and establishing the local teams to implement these plans. Its focus is to identify and execute strategies to significantly increase the value of the portfolio. This level of active management is one of the key advantages we have over our competitors.

Outlook & Strategy

We are pleased with our progress to date. Since the IPO we have established ourselves as the leading operator of business parks providing flexible workspace in Germany. We have acquired a portfolio with significant potential to enhance value through our core business strategy of transforming the existing space to improve occupancies and drive rental growth, and developing surplus land. The tightening of credit and debt markets has reduced competition for acquisitions and allowed us to purchase at more attractive initial yields. However, our strategy is to be extremely selective in our progress towards full investment.

The Group is finding the real estate market in Germany to be positive as the active management and value adding business model we operate differentiates us from most other German property companies and mitigates the yield expansion we have seen this year. In addition, the German economy remains resilient and the demand from tenants for our workspace remains high. We have the infrastructure in place to take full advantage of this and we look to the future with confidence.  

I would like to thank my fellow board members for their contributions during the period and the Asset Manager's team for building an excellent portfolio.  

Asset Manager's Report

German Economy and Market

The German economy has so far proved resilient in the face of the prevailing global macroeconomic uncertainties. According to consensus estimates, German GDP is forecast to grow by 2.2% in 2008, against a Euroland average of 1.6%. Unemployment has fallen and currently stands at 7.9%, close to its lowest level since 1992.

Asset Management

The focus since IPO has been on making acquisitions, building the team and establishing the base from which to develop the portfolio in future years. We have made excellent acquisitions which we discuss in more detail below, the team has grown from 27 at IPO to 95 and we have firmly established ourselves in the German real estate sector as the leading operator of business parks in Germany focused on the SME sector.  

We achieved new lettings of 42,089 m2 in the period from IPO to 31 March 2008 and have signed a further 12,021 m2 in April and May 2008. Demand remains encouraging and we are increasing the team we have on the ground in order to convert the high level of enquiries.  

The transformation process is underway and has now progressed from conception to implementation at many sites. The initial branding and signage has been completed at 25 of the 29 sites owned at period end. We invested €5.5m on master planning, branding, refurbishing and building on-site cafes and fitness centres to 31 March 2008. We expect to step up the transformation process significantly over the next 12 months as a result of the regional infrastructure we have created. Detailed master plans are being created for all the major business parks.

We are already seeing evidence of material rental growth at some of the more mature sites where the transformation process is in the later stages. Demand for new-build premises remains strong, both from existing tenants looking to expand, and also through new inquiries. The attraction is our ability to create bespoke units for tenants who can also benefit from the shared on-site services like restaurants, health clubs, and conference/meeting room facilities. To the date of this report five deals were signed adding 2,467 m² of pre-let space for an investment of €2.8m at a net yield of 12.7%. We are in negotiation on a further 17,350 m² which we hope to sign soon and the pipeline for more deals is constantly growing. Construction has been completed on two of the signed deals both on budget and well within the timeframe agreed. 

Acquisitions 

Subsequent to the IPO, the Group completed the purchase of nine properties located throughout Germany for €175.5m including acquisition costs which represents a net yield on total consideration of 7.6%. The acquisitions have added 388,573 m² of lettable space to the portfolio of which 78% was let at acquisition. We believe that many of the properties are under rented and significant scope to improve returns exists

Portfolio Analysis

As at 31 March 2008, the portfolio comprised 29 properties with lettable area of more than 800,000 m2 and gross rent roll of €29m. The average net yield of the portfolio as at 31 March 2008 was 6.5% rising to 9.4% once fully let at market value. Since then we have completed the purchase of two more sites and notarised the purchase of a further seven properties for a total purchase price of €135m at a blended net yield of 8.0%. This will take the book value of the portfolio to €511m with a gross rent roll of €42.5m and total lettable area of 1,100,000 m2.  

The following analysis is for the properties owned at 31 March 2008. Average rents achieved of €3.84 per m² per month and capital values of €466 per m² remain low compared to the market as a whole. The vacant space across the portfolio was 208,917 m². Plans are underway to transform this into the flexible workspace solutions from which we obtain premium rents. The total lettable space is made up of 22% office, 32% production, 35% storage, 2% retail and 9% others. The properties are located throughout the whole of Germany with our main areas of exposure, based on lettable area, being Bremen 22%, Munich 15%, Bonn-Cologne 7%, and Berlin 5%. We have continued to operate a dual strategy of ensuring we acquire properties with a combination of long term stable cash flows from strong covenants as well as local SME tenants on shorter-term flexible lease contracts where we can generate premium rents. As such the top tenants occupy 25% of the total lettable area and contribute 31% to the total rent roll. The average length of lease remaining as at 31 March 2008 was 3.0 years.  

Finance

As at 31 March 2008, the Group's borrowings totaled €122m which is secured on 18 of the 29 properties owned giving a loan to value (LTV) ratio of 33%. The loans, provided by ABN AMRO Bank N.V. and Helaba Bank, had a weighted average interest rate of 5.38%. The Helaba loans of €23.7m have now matured and were repaid in May 2008. The ABN AMRO loan expires in 2012. Financing costs for the period came to €4.3m of which €0.4m related to amortisation of bank fees and financing charges. Finance income of €3.7m was mainly earned on cash deposits held in Guernsey. In May 2008 a €101m facility with Berlin-Hannoversche Hypothekenbank AG secured against the seven properties we acquired post IPO was completed. The term of the loan is five years with a weighted average interest rate fixed at 5.53%. Further to this, credit approval has been obtained for a €78m facility with the same bank which we will use to acquire a portfolio of five properties. This will take the Group's debt to €279m and LTV to 55%. 

We have focused much attention towards ensuring that we have the debt in place to allow us to grow and develop the portfolio as planned and are very pleased with the response that we are getting from the banks that we have spoken to. The volatile credit markets have obviously had an impact on the number of options available to us but we remain confident the liquidity in the debt markets is there for us should we require it.

Consolidated Income statement

For the period from 20 February 2007 to 31 March 2008

		(Unaudited)
	Notes	20 February 2007 to 31 March 2008 €000
Gross rental income	2	20,609
Direct costs	3	(6,211)
Net rental income		14,398
Deficit on revaluation of investment properties	9	(12,624)
Administrative expenses	3	(2,312)
Other expenses	3	(565)
Operating loss		(1,103)
Finance income	5	3,796
Finance expense	5	(4,268)
(Loss) before tax		(1,575)
Taxation	6	(2,862)
(Loss) for the period		(4,437)
Attributable to:
Equity holders of the parent		(3,980)
Minority interests		(457)
(Loss) for the period		(4,437)
Earnings per share
Basic and Diluted, for loss for the period attributable to ordinary equity holders of the parent	7	(1.47)

Dividends of €3,278,000 were paid during the period 

Consolidated Balance sheet as at 31 March 2008

		(Unaudited)
	Notes	2008 €000
Non-current assets
Investment properties	9	375,950
Property, plant and equipment	10	3,236
Total non-current assets		379,186
Current assets
Trade and other receivables	11	14,116
Prepayments		446
Cash and cash equivalents	12	49,523
Total current assets		64,085
Total assets		443,271
Current liabilities
Trade and other payables	13	(12,497)
Interest-bearing loans and borrowings	14	(24,515)
Current tax liabilities	6	(1,013)
Total current liabilities		(38,025)
Non-current liabilities
Interest-bearing loans and borrowings	14	(97,419)
Deferred tax liabilities	6	(1,849)
Total non-current liabilities		(99,268)
Total liabilities		(137,293)
Net assets		305,978
Equity
Issued capital	15	-
Share premium		-
Other distributable reserve	16	311,625
Retained earnings		(7,258)
Total equity attributable to the equity holders of the parent		304,367
Minority interests		1,611
Total equity		305,978

Consolidated Statement of changes in equity

For the period from 20 February 2007 to 31 March 2008

(Unaudited)	Notes	Issued capital	Share premium	Other distributable reserve	Retained earnings	Total equity attributable to the equity holders of the parent	Minority interests	Total Equity
		€000	€000	€000	€000	€000	€000	€000
As at 20 February 2007		-	-	-	-	-	-	-
Loss for the period		-	-	-	(3,980)	(3,980)	(457)	(4,437)
Issue of share capital	15	-	327,800	-	-	327,800	-	327,800
Transaction costs of share issue		-	(10,460)	-	-	(10,460)	-	(10,460)
Court approved capital reduction		-	(317,340)	317,340	-	-	-	-
Minority interests in companies acquired		-	-	-	-	-	2,068	2,068
Own shares acquired		-	-	(5,715)	-	(5,715)	-	(5,715)
Equity dividends		-	-	-	(3,278)	(3,278)	-	(3,278)
As at 31 March 2008		-	-	311,625	(7,258)	304,367	1,611	305,978

Consolidated Cash flow statement for the period from 20 February 2007 to 31 March 2008

		(Unaudited)
	Notes	20 February 2007 to 31 March 2008 €000
Operating activities
(Loss)before tax		(1,575)
Deficit on revaluation of investment properties	9	12,624
Depreciation	10	43
Finance income	5	(3,796)
Finance expense	5	4,268
Cash flows from operations before changes in working capital		11,564
Changes in working capital
Increase in trade and other receivables		(5,863)
Increase in trade and other payables		9,416
Cash flows from operating activities		15,117
Investing activities
Purchase of investment properties		(387,507)
Purchase and development of property, plant and equipment		(9,069)
Interest received		3,796
Cash flows from investing activities		(392,780)
Financing activities
Dividends paid to equity holders of the parent company		(3,278)
Proceeds from issue of share capital		327,800
Transactions costs of share issues		(10,460)
Purchase of own share capital		(5,715)
Proceeds from loans		121,494
Finance charges paid		(2,655)
Cash flows from financing activities		427,186
Increase in cash and cash equivalents	12	49,523
Cash and cash equivalents as at 20 February 2007		-
Cash and cash equivalents at 31 March 2008		49,523

Notes to the financial statements

For the period from 20 February 2007 to 31 March 2008

1.    BASIS OF PREPARATION

The financial information which is unaudited, is abridged, does not constitute the Group's full Financial Statements for the period ended 31 March 2008 and has been prepared under International Financial Reporting Standards ('IFRS').

2.    REVENUE

	(Unaudited)
	20 February 2007 to 31 March 2008 €000
Rental income from investment properties	20,609

3.    OPERATING PROFIT  

The following items have been charged or (credited) in arriving at operating profit

Direct costs

	(Unaudited)
	20 February 2007 to 31 March 2008 €000
Service charge expense recoverable	7,905
Service charge income	(7,905)
Non-recoverable property costs	4,118
Property management fee (see note 25)	858
Asset management fee (see note 25)	1,235
	6,211

Administrative expenses

	(Unaudited)
	20 February 2007 to 31 March 2008 €000
Audit fees	292
Legal and professional fees	1,241
Other administration costs	779
	2,312

No fees, charged to administrative expenses, are receivable by the auditors and their associates in respect of other non-audit services.

Other expenses

	(Unaudited)
	20 February 2007 to 31 March 2008 €000
Directors’ fees	220
Depreciation	43
Bank fees	216
Marketing, insurance and other expenses	86
	565

4.    EMPLOYEE COSTS

The day to day management of the property is carried out by the asset manager.

5.    FINANCE REVENUE AND EXPENSE

	(Unaudited)
	20 February 2007 to 31 March 2008 €000
Interest from subsidiaries	-
Bank interest receivable	3,796
Finance revenue	3,796
Bank interest payable	(3,828)
Amortisation of capitalised finance costs	(440)
Finance expense	(4,268)
Net finance expense	(472)

6.    TAXATION

	(Unaudited)
Consolidated income statement	20 February 2007 to 31 March 2008 €000
Current income tax
Current income tax charge	1,013
Deferred tax
Relating to origination and reversal of temporary differences	1,849
	1,849
Income tax expense reported in the income statement	2,862

The income tax rate applicable to the Company in Guernsey is nil. The current income tax charge of €1,012,621 represents tax charges on profit arising in Germany, that is subject to corporate income tax of 26.375% for 2007 and 15.83% in 2008. The effective income tax rate for the period is lower than the standard rate of corporation tax in Germany, the differences are explained below:

	(Unaudited)
	20 February 2007 to 31 March 2008 €000
Loss before tax	(1,575)
Loss before tax multiplied by rate of corporation tax in Germany of 23.5% (average for the period)	(370)
Effects of:
Income exempt from tax	(408)
Expenses deductible for tax purposes	(964)
Non-taxable items including revaluation movement	2,966
Other	(211)
Total income tax expense in the income statement (as above)	1,013

DEFERRED TAX LIABILITY

	(Unaudited)
	2008 €000
As at 20 February 2007	-
Revaluation of investment properties to fair value	1,849
Balance as at 31 March 2008	1,849

Deferred tax assets have not been recognised in respect of these revaluation losses as they may not be used to offset taxable profits elsewhere in the Group.

There are no income tax consequences for the Company attaching to the payment of dividends in the period by the Company to its shareholders.

7.    EARNINGS PER SHARE

The calculation of the basic, diluted and adjusted earnings per share is based on the following data:

	(Unaudited)
	2008 €000
Earnings
Earnings for the purpose of basic and diluted earnings per share (profit for the period attributable to equity holders of the parent)	(3,980)
Revaluation net of deferred tax (attributable to equity holders)	14,100
Adjusted earnings	10,120
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings per share	270,580,362
Weighted average of ordinary shares for the purpose of adjusted earnings per share	327,119,543
Basic earnings per share	(1.47)
Adjusted net assets per share	3.09

The number of shares has been adjusted for the 8,086,824 shares held by the Group as Treasury shares at 31 March 2008.

The Directors have chosen to disclose adjusted earnings per share in order to provide a better indication of the Group's underlying business performance; accordingly it excludes the effect of the revaluation deficit and deferred tax. The Directors have also chosen to calculate the weighted average number of shares from the IPO.

As there are no share options in issue, the diluted earnings per share is identical to the basic earnings per share.

Since the period end, as at 12th June 2008, the Group has purchased a further 13,840,000 shares, which are also being held as Treasury shares, as part of the Group's buy back program (see note 18).

8.    NET ASSETS PER SHARE

	(Unaudited)
	2008 €000
Net assets
Net assets for the purpose of assets per share (assets attributable to the equity holders of the parent)	304,367
Deferred tax arising on revaluation surpluses	1,849
Adjusted net assets attributable to equity holders of the parent	306,216
Number of shares
Number of ordinary shares for the purpose of net assets per share	319,713,176
Net assets per share	95.20
Adjusted net assets per share	95.78

The number of shares has been adjusted for the 8,086,824 shares held by the parent company as Treasury shares.

As there are no share options, the diluted net assets per share is identical to net assets per share.

9.    INVESTMENT PROPERTIES

	(Unaudited)
	2008 €000
As at 20 February 2007	-
Additions	388,574
Deficit on revaluation	(12,624)
Balance as at 31 March 2008	375,950

The fair value of the Group's investment properties at 31 March 2008 has been arrived at on the basis of a valuation carried out by DTZ Zadelhoff Tie Leung GmbH, an independent valuer.  

The value of each of the properties has been assessed in accordance with the RICS Valuation Standards on the basis of Market Value. Market Value was primarily derived using comparable market transactions on arms lengths terms.  

10.    Property, plant and equipment

			(Unaudited)
	Plant and equipment €000	Fixtures and fittings €000	Total  €000
Cost
As at 20 February 2007	-	-	-
Additions in period	3,226	53	3,279
As at 31 March 2008	3,226	53	3,279
Depreciation
As at 20 February 2007	-	-	-
Charge for the period	(35)	(8)	(43)
As at 31 March 2008	(35)	(8)	(43)
Net book value as at 31 March 2008	3,191	45	3,236
Net book value as at 20 February 2007	-	-	-

11.    TRADE AND OTHER RECEIVABLES

	(Unaudited)
	2008 €000
Trade receivables	4,082
Other receivables	10,034
	14,116

12.    CASH AND CASH EQUIVALENTS

	(Unaudited)
	2008 €000
Cash at banks and in hand	20,523
Short-term deposits	29,000
	49,523

Cash at banks earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and two months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates. The weighted average effective interest rate on short-term deposits is 4.07% per annum. The fair value of cash and short-term deposits is €49,523,000.

As at 31 March 2008, €5,340,109 of cash is held in blocked accounts. Of these balances under the control of lenders who have made loans to the Group to be used for capital expenditure on the properties totaled €5,087,208. Balances relating to deposits received from tenants total €252,901. 

13.    TRADE AND OTHER PAYABLES

	(Unaudited)
	2008  €000
Trade payables	4,238
Accrued expenses	4,433
Accrued interest	1,172
Other payables	701
Related party payables	1,953
	12,497

Terms and conditions of the above financial liabilities:

• Trade payables are non-interest bearing and it is the Group's policy to pay within the stated terms which vary from 14 - 60 days.

• Other payables are non-interest bearing and as above are paid within stated terms.

14.    INTEREST-BEARING LOANS AND BORROWINGS

			(Unaudited)
	Effective interest rate %	Maturity	2008 €000
Current
ABN Amro Loan	5.53	15 October 2012	1,332
Helaba Loan – fixed rate facility	4.86	31 May 2008	8,031
Helaba Loan – floating rate facility	Floating	31 May 2008	15,710
Capitalised finance costs on all loans			(558)
			24,515
Non-current
ABN Amro Loan	5.53	15 October 2012	99,397
Capitalised finance charges on all loans			(1,978)
			97,419
Total			121,934
The borrowings are repayable as follows:
On demand or within one year			24,515
In the second year			774
In the third to fifth years inclusive			96,645
Total			121,934

The Group has pledged 18 properties to secure related interest bearing debt facilities granted to the Group. The 18 properties had a combined valuation of €180,560,000 as at 31 March 2008.

ABN AMRO BANK N.V.

This facility had €100,951,940 drawn down, of which €223,391 has been amortised, resulting in a net liability of €100,728,549 at the period end. The interest is fixed at a weighted average interest rate of 5.53% per annum. The final repayment date of the latest drawdown is 15 October 2012. This loan is secured over certain property assets and is subject to various covenants with which the Group has complied.

Helaba Bank

Two facilities exist with a total of €23,741,123 drawn down at the period end. One facility is fixed at 4.86% with €8,031,123 drawn down and the other is floating based on a margin over Euribor with €15,710,000 drawn down. The final repayment date is 31 May 2008. These loans are secured over assets and undertakings. Subsequent to the period end these facilities have been repaid (see note 18).

15.    ISSUED CAPITAL    

Authorised:	Number of Shares	Share Capital €
Ordinary shares of no par	Unlimited	-
As at 31 March 2008	Unlimited	-
Issued and fully paid:	Number of Shares	Share Capital €
Ordinary shares of no par
Issue of ordinary shares	327,800,000	-
As at 31 March 2008	327,800,000	-

Holders of the ordinary shares are entitled to receive dividends and other distributions and to attend and vote at any general meeting.  

On 24 April 2007, the Company passed a resolution, which was approved by the Royal Court of Guernsey on 18 May 2007, to cancel the Company's share premium account.

Included within the costs charged to the share premium account are €359,376 of fees receivable by the auditors and their associates in respect of non-audit services.

Purchase of own shares:

On 15 January 2008, the Group commenced a share buy back programme. During the period the Company has bought back 8,086,824 ordinary shares with a total nominal value of nil, at a weighted average price of €0.71 per share. These shares are being held by the Company as Treasury Shares.

16.    OTHER RESERVES

Other distributable reserve

The other distributable reserve is a distributable reserve that was created for the payment of dividends and for the buyback of shares and is €311,625,000 in total at the period end.

                17.    CONTINGENCIES

Carried interest

Marba Holland B.V., has a right to a carried interest. In any year Marba Holland B.V. is not entitled to any carried interest unless the Group's net asset value total return per ordinary share has increased by an amount equal to the performance hurdle applicable to that financial period. The performance hurdle for this financial period is the initial net asset value per ordinary share increased on an annualised basis at the rate of 10%. per annum.

If the hurdle is achieved then Marba Holland B.V. will be entitled to 20% of the amount by which the performance hurdle is exceeded by the Group in respect of that financial period. The carried interest will also be payable on the occurrence of certain other events, such as a take-over or liquidation of the Group.

No amount has been provided as at 31 March 2008 as the minimum hurdle rate required has not been achieved.

18.    EVENTS AFTER THE BALANCE SHEET DATE

Since the period end, as at 12th June 2008, the Company has bought back a further 13,840,000 ordinary shares, at a weighted average price of €0.66 per share. These shares are being held by the company as Treasury shares for either cancellation or sale in the future. 

On 21 May 2008 the Group entered into a facility agreement with Berlin-Hannoversche Hypothekenbank AG. This facility agreement is for up to €101,000,000 of which €91,140,000 has been drawn down since the period end. The interest on the loan is fixed at a weighted average of 5.53%. The final repayment date is 20 May 2013. On 27 May 2008 the Group repaid the two drawn down facilities of €23,741,123 with Helaba Bank.

Since the period end the Group has completed the purchase of 2 properties in Dusseldorf for a total purchase price of €19.0 million (excluding related acquisition costs).

 

END

 

 

FR UOVORWKRNAAR