Final Results

RNS Number : 4924T

Sirius Real Estate Limited

08 June 2009

 



8 June 2009

Sirius Real Estate Limited

Final Results

For the year ended 31 March 2009

Sirius Real Estate Limited (the "Group", the "Company" or "Sirius") is a real estate company established to acquire large mixed-use commercial sites for upgrading to flexible workspaces in Germany.

Highlights

Financial highlights

• Adjusted NAV per share 83.8c1 (31 March 2008: 95.8c)

• Property assets were revalued at €500.4 million (31 March 2009)  

• Adjusted profit after tax of €4.9 million2 

• Adjusted EPS of 1.60c2 per share

• LTV across the portfolio at 54.8% (31 March 2009)

Operating highlights

• Signed new leases (excluding renewals) on 55,900 m² at €4.50 per m² per month

• Signed four new development deals adding 2,665 m² at a return on cost of 13.3%  and since the year end signed two further development deals adding 1,795 m² at a return on cost of 10.4%

• Business remains operationally cash flow positive

• Occupancy at 74% while average rate per m² increased from €3.84 to €4.15

• Signed banking facilities of €224 million in the year at an average cost of borrowing of 5.31%

• Banking facilities combined with existing cash provides sufficient capital for Sirius to maintain refurbishment and development programme

• Acquired nine properties for €139.7 million in mid 2008; now wholly focused on maximising the potential of the portfolio with no immediate plans for further acquisitions  

1 Excluding deferred tax and change in fair value of derivative financial instruments.

2 Excluding revaluation, related deferred tax and change in fair value of derivative financial instruments.

Dick Kingston, Chairman of Sirius Real Estate Limited, said: "This is a challenging environment for real estate companies, however, these results demonstrate the resilience of the Sirius business model as we achieve increases in average rents from €3.84 to €4.15 per m² through our programme of transforming the portfolio into modern flexible workspaces. Tenant demand remains encouraging and we continue to receive a high level of enquiries, helped by our ability to offer a quality, affordable, and flexible product, a key advantage in the current market."

A copy of the presentation to investors will be available on the Group's website at www.sirius-real-estate.com

Enquiries:

Principle Capital Sirius Real Estate Asset Management Limited	Kevin Oppenheim Alistair Marks	020 7632 4130
Cardew Group	Tim Robertson Shan Shan Willenbrock Catherine Maitland	020 7930 0777

Chairman's statement

Introduction

I am pleased to announce the Group's full year results for the year ended 31 March 2009.  We are now wholly focused on asset managing the portfolio of 38 business parks across Germany, which are being successfully transformed to maximise income and create value. There is now clear evidence that Sirius is achieving impressive rental growth from the relatively low levels we inherited. Our growing asset management team continues to attract encouraging levels of tenant demand with inquiry levels now consistently around 100 per week. Over the year the average rent achieved per m² has increased from €3.84 to €4.15. Uplift in rent is the Group's key performance metric as it demonstrates the Group's ability to add significant value to the properties acquired.

In mid 2008, the Group acquired nine properties plus an additional building at our Nabern site (near Stuttgart) for a total consideration of €139.7 million, with a blended net initial yield of 8%. Including these acquisitions the Group has now acquired 38 properties across Germany. The current lettable area of the portfolio totals 1.1 million m², with substantial scope to create further lettable area by developing on surplus land. The development opportunities provide excellent returns on investment, with a total of nine new deals now signed since IPO to date, all on a pre-let basis, adding 5,877m² at a 12.4% initial return on cost.  The asset management team is now fully focused on maximizing the potential of the portfolio, and there are no immediate plans for further acquisitions.

We continue to see extensive opportunities to create value by investing strategically across the portfolio. The Sirius transformation is working well and our position is strengthened by the fact that we have cash resources and committed facilities of €70 million to fund this capital expenditure programme.

Results 

Gross rental income for the period was €43.7 million. Excluding property revaluations, the related deferred tax and write down of interest rate derivatives, profit after tax for the period was €4.9 million. As at 31 March 2009, the portfolio of 38 properties had an annualised gross rent roll of €42 million and total lettable area of circa 1.1 million m².  Occupancy was 74% at the year end which, as anticipated at acquisition, includes the principal tenant at our Trippelsberg site in Dusseldorf moving out recently. Excluding this, occupancy has remained broadly level with March 2008. Estimated rental value at market rate on the vacant space is circa €14.3 million per annum. 

The adjusted EPS, which excludes property revaluation, deferred tax and write down of interest rate derivatives, was 1.6c.  

Revaluation and Net Asset Value

As at 31 March 2009, the portfolio was valued independently by DTZ Zadelhoff Tie Leung GmbH at €500.4 million. This represents a €42.7 million write off against our profit for the period or a 7.9% like-for-like fall in values.  Included in the revaluation write off is €7.4 million of acquisition costs and €20.2 million of capital expenditure ("capex"). This capex write-off represents a consistent accounting approach whereby the value of the capex will be realised in future periods. The balance of the write off relates to an outward movement in market yields to reflect current market conditions.

The portfolio, including vacant space, is now valued on an average net initial yield of 7% and an average capital value per m² of €453. The valuation takes no account of the surplus land.

The adjusted net asset value per share, which excludes deferred tax and the interest rate derivatives write down, was 83.8c as at 31 March 2009 (31 March 2008: 95.8c).

 Finance

As at 31 March 2009 Sirius's borrowings excluding capitalised loan costs totalled €274.2 million, ABN Amro Bank N.V. ("ABN") provide €99 million and Landesbank Landesbank Berlin AG and Berlin-Hannoversche Hypothekenbank AG ("LBB") provide €175.2 million, representing an overall loan to value ratio ("LTV") of 54.8%. 

As announced on 2 March 2009, the Group secured a new €45 million credit facility with LBB. The facility is secured against properties currently valued at €80.7 million. LBB agreed to consolidate the new credit facility with its two existing facilities with Sirius for covenant testing purposes, creating an LTV of 56% and sufficient headroom to withstand a 26.9% drop in property values for the new enlarged facility. This, together with existing cash reserves, means the Group has approximately €70 million to fund its ongoing programme of upgrading and developing the portfolio as planned.

The Group's banking facilities are within their respective covenants with the exception of one of the ABN facilities which, on the basis of our own valuations, we believe would be in breach of its LTV covenant.  The lender has commissioned its own valuation reports which are yet to be finalised. ABN finances two of Sirius's portfolios of which the second has significant headroom.  The intention is for these portfolios to be consolidated, after which the values could withstand a further 17.8% decline before a breach would occur.  We are working with the lender to resolve this issue. There is no parent or other guarantees or cross collateralisation with any properties outside this ABN facility. In addition the Group has uncharged assets outside of these facilities.

Dividend

As reported at the time of the Interim Results statement in December 2008, in order to sustain investment in the Group's portfolio whilst also keeping LTV at modest levels and ensuring cash resources are preserved, the Board decided to keep dividend payments suspended. We will continue to review this policy.

Asset Manager

On 19 September 2008, the 48% interest in the Asset Manager previously held by Dawnay, Day Group was purchased by Principle Capital Partners Limited ('Principle') and the Group, together with the Asset Manager, has been renamed to reflect the changes that have taken place. 

On 27 October 2008, the Group's name was changed to Sirius Real Estate Limited (AIM: SRE), and the Group's website at which information required by rule 26 of the AIM Rules is available, was changed to .  

Outlook and Strategy

Sirius has established itself as the leading operator of business parks providing flexible workspace in Germany to the SME sector and we continue to see the benefits of our business model coming through, as evidenced by our ability to increase rental income from relatively modest base levels.

Although market conditions are more difficult than a year ago, our Asset Management team is extremely responsive to local conditions and tenant demands. Our understanding of the local markets, combined with the flexibility of the business model, means that we are able to tap into the considerable trend we have identified of small start-up companies looking for affordable flexible space; this in turn will allow us to benefit from their future growth.  

  Asset Manager's Report

Asset Management

Our Asset Management team in Germany is now completely focused on adding value to the portfolio by progressing the transformation and development processes and there are no immediate plans for acquisitions.  We continue to work very closely with current and prospective tenants and are continually looking for new innovative flexible solutions for the occupational requirements of the SME sector. As a result, demand for Sirius's affordable, good quality, flexible workspace remains buoyant, with enquiry levels averaging at around 100 per week.  

We achieved new lettings of 55,900 m² during the year and we had 74,737 m² of space vacated. Importantly, the effects of the Sirius transformation continue to be demonstrated by our ability to achieve higher rents; new lettings achieved an average rental rate of €4.50 per m² compared to the €3.63 per m² that was being achieved on the subsequently vacated space. Since the year end, during April and May 2009, the Group generated further new lettings of 29,425 m².  Much of this space was technical and equipment rooms which would not have previously been considered lettable. This further demonstrates our innovative ability to maximise rental income from the space we acquire.

Having identified a high level of demand for small premises across the office, storage and production sectors, Sirius has launched a new campaign that we have labelled 'smartspace'. This initiative is run by a dedicated team which targets start-up companies and very small businesses. We offer an integrated service for office, production, and storage space requirements let on flexible terms in sizes starting from 20 m² on terms from one month upwards, with the flexibility to grow as their businesses progress and expand. The smartspace product is now available at eight sites across the portfolio with the intention of running smartspace offerings across the board.

The Asset Management team has now grown to 134 people and we continue to strengthen our resources in sales, administration and property management. 

Developing surplus land on a pre-let basis continues to be a key component of the Group's strategy. As at 31 March 2009 a total of seven pre-let development deals have been signed since IPO, creating an additional 4,082 m² of pre-let space at a net initial yield on cost of 13%. Construction has been completed on three of the signed deals all on budget and well within the timeframe agreed.  Since the year end, we have signed two further deals with ZK Glasbau in Maintal and with OPC in Dusseldorf. Together the two new developments add 1,795 m² at a net initial yield of 10.4%. We continue to see a healthy pipeline of development deals. 

Occupancy dropped at year end to 74% because at our Trippelsberg site in Dusseldorf, the principal tenant, occupying 18,000 m², approximately 2% of the Group's total lettable area, did not renew its lease. This site was acquired on the basis that the tenant would vacate enabling the site to be sub divided, refurbished and upgraded into multiple flexible work spaces providing the opportunity to add significant value. The new signings in April and May 2009 will restore occupancy to 76%.

Acquisitions 

During the period the Group acquired nine properties plus an additional building at our Nabern site for a total consideration of €139.7 million. The focus of our asset management team in Germany is now entirely centered on developing the portfolio rather than on making further acquisitions.  

Portfolio Analysis

As at 31 March 2009, the portfolio comprised 38 properties with a lettable area of approximately 1.1 million m². The total rent roll of the portfolio, including car parking income, now stands at €42 million for which the average remaining lease length is 2.6 years. We have leases in place with 1,219 tenants across the 38 sites. The top five tenants are listed on the following table:

	Annual Rent		% of Annual
	€ m		Rent Roll
Siemens AG	6.38		15%
GKN Aerospace GmbH	1.96		5%
Dematic GmbH	1.81		4%
VAG-Armaturen GmbH	1.28		3%
British American Tobacco	1.16		3%

The average net yield of the portfolio as at 31 March 2009 was 6.9% which reverts to 10.6% if the vacant space was let at market value.  The 1.1 million m² of lettable space is made up of 23% office, 30% production, 29% storage, 3% retail and 15% other. At 31 March 2009 we had 290,000 m² of vacant space which was predominantly office (25%) and production/storage (47%).    

  CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 MARCH 2009

		Year ended	20 February 2007
		31 March 2009	to 31 March 2008
	Notes	€000	€000
Gross rental income	2	43,742	20,609
Direct costs	3	(19,271)	(6,211)
Net rental income		24,471	14,398
Deficit on revaluation of investment properties	8	(42,721)	(12,624)
Administrative expenses	3	(5,159)	(2,312)
Other expenses	3	(947)	(565)
Operating loss		(24,356)	(1,103)
Finance income	4	1,714	3,796
Finance expense	4	(15,219)	(4,268)
Change in fair value of derivative financial instruments		(13,523)	-
Loss before tax		(51,384)	(1,575)
Taxation	5	(1,283)	(2,862)
Loss for the period		(52,667)	(4,437)
Attributable to:
Equity holders of the parent		(51,989)	(3,980)
Minority interests		(678)	(457)
Loss for the period		(52,667)	(4,437)
Earnings per share
Basic and diluted, for loss for the year/ period attributable to ordinary equity holders of the Parent Company	6	(17.05)c	(1.47)c

  CONSOLIDATED BALANCE SHEET

AS AT 31 MARCH 2009

		2009	2008
	Notes	€000	€000
Non-current assets
Investment properties	8	500,400	375,950
Assets under construction	9	2,222	-
Plant and equipment		3,452	3,236
Total non-current assets		506,074	379,186
Current assets
Trade and other receivables	10	7,586	14,116
Prepayments		136	446
Cash and cash equivalents	11	29,652	49,523
Total current assets		37,374	64,085
Total assets		543,448	443,271
Current liabilities
Trade and other payables	12	(18,248)	(12,497)
Interest-bearing loans and borrowings	13	(102,447)	(24,515)
Current tax liabilities		(1,663)	(1,013)
Derivative financial instruments		(13,523)	-
Total current liabilities		(135,881)	(38,025)
Non-current liabilities
Interest-bearing loans and borrowings	13	(167,821)	(97,419)
Deferred tax liabilities	5	(2,482)	(1,849)
Total non-current liabilities		(170,303)	(99,268)
Total liabilities		(306,184)	(137,293)
Net assets		237,264	305,978
Equity
Issued capital	14	-	-
Share premium		-	-
Other distributable reserve		300,111	311,625
Retained earnings		(63,780)	(7,258)
Total equity attributable to the equity holders of the Parent Company		236,331	304,367
Minority interests		933	1,611
Total equity		237,264	305,978

  CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR YEAR ENDED 31 MARCH 2009

						Total equity
						attributable to
						the equity
				Other		holders of
		Issued	Share	distributable	Retained	the parent	Minority	Total
		capital	premium	reserve	earnings	company	interests	equity
Group	Notes	€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	14	-	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	15	-	-	-	(3,278)	(3,278)	-	(3,278)
As at 31 March 2008		-	-	311,625	(7,258)	304,367	1,611	305,978
Loss for the period		-	-	-	(51,989)	(51,989)	(678)	(52,667)
Own shares acquired		-	-	(11,514)	-	(11,514)	-	(11,514)
Equity dividends	15	-	-	-	(4,533)	(4,533)	-	(4,533)
As at 31 March 2009		-	-	300,111	(63,780)	236,331	933	237,264

  CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 MARCH 2009

		Year ended	20 February 2007
		31 March 2009	to 31 March 2008
	Notes	€000	€000
Operating activities
Loss before tax		(51,384)	(1,575)
Deficit on revaluation of investment properties	8	42,721	12,624
Deficit on revaluation of derivative financial instruments		13,523	-
Depreciation	3	416	43
Finance income	4	(1,714)	(3,796)
Finance expense	4	15,219	4,268
Cash flows from operations before changes in working capital		18,781	11,564
Changes in working capital
Increase in trade and other receivables		(2,228)	(5,863)
Increase in trade and other payables		3,791	9,416
Cash flows from operating activities		20,344	15,117
Investing activities
Purchase of investment properties		(138,187)	(387,507)
Development expenditure		(22,137)	(5,791)
Purchase of plant and equipment		(722)	(3,278)
Proceeds on disposal of Plant and Equipment		89	-
Interest received		1,703	3,796
Cash flows from investing activities		(159,254)	(392,780)
Financing activities
Dividends paid to equity holders of the Parent Company	15	(4,533)	(3,278)
Proceeds from issue of share capital		-	327,800
Transaction costs of share issue		-	(10,460)
Purchase of own share capital		(11,514)	(5,715)
Proceeds from loans		178,110	121,717
Repayment of loans		(29,309)	(223)
Finance charges paid		(13,715)	(2,655)
Cash flows from financing activities		119,039	427,186
(Decrease)/ Increase in cash and cash equivalents		(19,871)	49,523
Cash and cash equivalents at the beginning of the year/ period	11	49,523	-
Cash and cash equivalents at the end of the year/ period		29,652	49,523

  NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MARCH 2009

1.    BASIS OF PREPERATION

The financial information is abridged and does not constitute the Group's full Financial Statements for the year ended 31 March 2009, but has been prepared under International Financial Reporting Standards ("IFRS") as adopted by the EU.

2.    REVENUE

	Year ended	20 February 2007
	31 March 2009	to 31 March 2008
	€000	€000
Rental income from investment properties	43,742	20,609

3.    OPERATING LOSS

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

Direct costs 

		Year ended	20 February 2007
		31 March 2009	to 31 March 2008
		€000	€000
Service charge income		(18,965)	(7,905)
Service charge expenditure and other property costs		33,633	12,023
Irrecoverable property costs		14,668	4,118
Property management fee		1,496	858
Asset management fee		2,834	1,235
Development fee		273	-
		19,271	6,211

Administrative expenses

	Year ended	20 February 2007
	31 March 2009	to 31 March 2008
	€000	€000
Audit fee	253	292
Legal and professional fees	2,763	1,241
Other administration costs	2,143	779
	5,159	2,312

Included in administrative expenses is €155,000 (2008: nil) receivable by the auditors and their associates in respect of other nonߛaudit services.

  Other expenses

	Year ended	20 February 2007
	31 March 2009	to 31 March 2008
	€000	€000
Directors' fees	214	220
Depreciation	416	43
Bank fees	120	216
Marketing, insurance and other expenses	197	86
	947	565

4.    FINANCE REVENUE AND EXPENSE

	Year ended	20 February 2007
	31 March 2009	to 31 March 2008
	€000	€000
Bank interest receivable	1,714	3,796
Finance revenue	1,714	3,796
Bank interest payable	(14,232)	(3,828)
Amortisation of capitalised finance costs	(987)	(440)
Finance expense	(15,219)	(4,268)
Net finance expense	(13,505)	(472)

5.    TAXATION

Consolidated income statement

	Year ended	20 February 2007
	31 March 2009	to 31 March 2008
	€000	€000
Current income tax
Current income tax charge	650	1,013
Deferred tax
Relating to origination and reversal of temporary differences	633	1,849
	633	1,849
Income tax expense reported in the income statement	1,283	2,862

  The income tax rate applicable to the Company in Guernsey is nil. The current income tax charge of € 650,000 represents tax charges on profit arising in Germany, that is subject to corporate income tax of 15.83%. The effective income tax rate for the period differs from the standard rate of corporation tax in Germany, the differences are explained below: 

	Year ended	20 February 2007
	31 March 2009	to 31 March 2008
	€000	€000
Loss before tax	(51,384)	(1,575)
Loss before tax multiplied by rate of corporation tax in Germany of 15.825% (2008: 23.5%)	(8,132)	(370)
Effects of:
Income exempt from tax	340	(408)
Expenses deductible for tax purposes	(336)	(964)
Non-taxable items including revaluation movements	8,901	2,966
Other	(123)	(211)
Total income tax expense in the income statement (as above)	650	1,013

Deferred tax liability

	2009	2008
	€000	€000
As at 31 March 2008/ 20 February 2007	1,849	-
Revaluation of investment properties to fair value	633	1,849
Balance as at 31 March	2,482	1,849

The Group has tax losses of €16,692,191 that are available for offset against future profits of its subsidaries in which the losses arose. Deferred tax assets have not been recognised in respect of the 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.

6.    EARNINGS PER SHARE

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

	Year ended	20 February 2007
	31 March 2009	to 31 March 2008
	€000	€000
Earnings
Loss for the period attributable to the equity holders of the parent	(51,989)	(3,980)
Basic and diluted earnings	(51,989)	(3,980)
Add back revaluation deficits (net of related tax)	43,354	14,100
Add back change in fair value of derivative instruments	13,523	-
Adjusted earnings	4,888	10,120
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings per share	304,840,217	270,580,362
Weighted average of ordinary shares for the purpose of adjusted earnings per share	304,840,217	327,119,543
Basic earnings per share	(17.05)c	(1.47)c
Adjusted earnings per share	1.60c	3.09c

The number of shares has been reduced by 25,576,824 shares (2008: 8,086,824) that are held by the Company as Treasury Shares at 31 March 2009, for the calculation of basic and adjusted earning per share.

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 deferred tax and the revaluation deficits on the investment properties and derivative instruments. 

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

7.    NET ASSETS PER SHARE

	2009	2008
	€000	€000
Net assets
Net assets for the purpose of assets per share (assets attributable to the equity holders of the parent)	237,264	304,367
Deferred tax arising on revaluation surplus	2,482	1,849
Derivative financial instruments	13,523	-
Adjusted net assets attributable to equity holders of the parent	253,269	306,216
Number of shares
Number of ordinary shares for the purpose of net assets per share	302,223,176	319,713,176
Net assets per share	78.51c	95.20c
Adjusted net assets per share	83.80c	95.78c

The number of shares has been reduced by 25,576,824 shares (2008: 8,086,824) that are held by the Company as Treasury Shares at 31 March 2009, for the calculation of basic and adjusted net assets per share.

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

8.    INVESTMENT PROPERTIES

	2009	2008
	€000	€000
As at 31 March 2008/ 20 February 2007	375,950	-
Additions	167,171	388,574
Deficit on revaluation	(42,721)	(12,624)
Balance as at 31 March	500,400	375,950

The fair value of the Group's investment properties at 31 March 2009 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 a ten-year discounted cash flow model supported by comparable evidence. The discounted cash flow calculation is a valuation of rental income considering non-recoverable costs and applying a discount rate for the current income risk over a ten-year period. After ten years a determining residual value (exit scenario) is calculated.

9.    ASSETS UNDER CONSTRUCTION

	2009	2008
	€000	€000
As at 31 March 2008/ 20 February 2007	-	-
Additions	2,222	-
Balance as at 31 March	2,222	-

10.   TRADE AND OTHER RECEIVABLES

	2009	2008
	€000	€000
Trade receivables	2,343	4,082
Other receivables	5,243	10,034
	7,586	14,116

11.    CASH AND CASH EQUIVALENTS

	2009	2008
	€000	€000
Cash at banks and in hand	29,652	20,523
Short-term deposits	-	29,000
	29,652	49,523

Cash at banks earn interest at floating rates based on daily bank deposit rates. The fair value of cash and shortߛterm deposits is €29,652,000 (2008: €49,523,000).

As at 31 March 2009, €5,556,149 (2008: €5,340,109) of cash is held in blocked accounts. Of these €4,937,096 (2008: €5,087,208) are under the control of lenders who have made loans to the Group to be used for capital expenditure on the properties. Balances relating to deposits received from tenants total €619,053 (2008: €252,901). 

The Group has €45 million immediately available to drawdown on one of its debt facilities (see note 13). 

12.   TRADE AND OTHER PAYABLES

	2009	2008
	€000	€000
Trade payables	3,970	4,238
Accrued expenses	4,405	4,433
Accrued interest	1,675	1,172
Other payables	3,698	701
Related party payables	4,500	1,953
	18,248	12,497

Terms and conditions of the above financial liabilities:

• trade payables are nonߛinterest bearing and it is the Group's policy to pay within the stated terms which vary from 
  14-60 days; and

• other payables are nonߛinterest bearing and as above are paid within stated terms.

13.   INTERESTߛBEARING LOANS AND BORROWINGS 

	Effective
	interest		2009	2008
	rate %	Maturity	€000	€000
Current
ABN Amro loan*	5.45	15 October 2012	98,963	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
Berlin-Hannoversche Hypothekenbank AG loan - fixed rate facility	5.46	31 March 2013	1,010	-
Berlin-Hannoversche Hypothekenbank AG loan - hedged floating rate facility	Hedged floating**	31 March 2013 - 30 June 2013	3,519	-
Capitalised finance charges on all loans			(1,045)	(558)
			102,447	24,515
Non-current
ABN Amro Loan	5.45	15 October 2012	-	99,397
Berlin-Hannoversche Hypothekenbank AG loan - fixed rate facility	5.46	31 March 2013	49,748	-
Berlin-Hannoversche Hypothekenbank AG loan - hedged floating rate facility	Hedged floating**	31 March 2013 - 30 June 2013	120,936	-
Capitalised finance charges on all loans			(2,863)	(1,978)
			167,821	97,419
Total			270,268	121,934
The borrowings are repayable as follows:
On demand or within one year			103,493	25,073
In the second year			4,787	1,332
In the third to fifth years inclusive			165,896	98,065
Total			274,176	124,470

The Group has pledged 33 (2008: 18) properties to secure the interestߛbearing debt facilities granted to the Group. The 33 properties had a combined valuation of €449,850,000 as at 31 March 2009 (2008: €180,560,000).

*Due to the single covenant breach detailed in the Chairman's statement, the entire ABN Amro facility has been shown as current, as a prudent measure while the discussions with the bank are ongoing. This facility is not cross-guaranteed by any other companies in the Group. Management are working with ABN Amro on a solution and are confident of resolving the issue and generating some comfortable headroom by consolidating the two portfolios for covenant testing. Once resolved the current portion of this debt would be €1,696,573.

** during the year the Group entered into a number of interest rate swap contracts to fix the cost of the floating rate facilities from Berlin-Hannoversche Hypothekenbank AG, the average fixed rate of the swap contracts is 4.74%, plus an average margin of 1.12% bringing the total cost to 5.86%.  

ABN Amro Bank N.V.

This facility had €100,951,940 drawn down, of which €1,988,311 (2008: €223,391) has been amortised, resulting in a net liability of €98,963,629 (2008: €100,728,549) at year end. The facility is split into two portfolios. The interest is fixed at a weighted average interest rate of 5.45% per annum. The final repayment date of the latest drawdown is 15 October 2012. This loan is secured over 16 property assets and is subject to various covenants. With the exception of one loan-to-value covenant (see the Chairman's statement) the Group complied with all the loan covenants. 

Helaba Bank

On 27 May 2008 the Group repaid both of the drawn down facilities of €23,741,000 with Helaba Bank.

Berlin-Hannoversche Hypothekenbank AG

Facilities of €224,000,000 have been granted by Berlin-Hannoversche Hypothekenbank AG, of which €179,000,000 has been drawn down. To date €3,786,125 has been amortised, resulting in a net liability of €175,213,875 at year end. The facility is split into three portfolios; Portfolio I is split with either an interest rate of 1.18 margin over three months EURIBOR fixed by a SWAP at 4.42% or a fixed rate of 5.46%, Portfolio II has an interest rate of 1.08 margin over three months EURIBOR fixed by a SWAP at 4.95% and Portfolio III which is yet to be drawn down is at a floating interest rate caped at 5.1%. This loan is secured over 17 property assets and is subject to various covenants with which the Group has complied.

A summary of the Groups debt covenants are set out below:

	Total loan outstanding at 31 March 2009	Value of secured properties at 31 March 2009	Loan to value ratio at 31 March 2009	Loan to value covenant	Interest Cover Ratio at 31 March 2009	Debt Service Cover Ratio at 31 March 2009	Interest Cover Ratio/ Debt Service Cover Ratio covenant
	€000	€000	€000	€000	€000	€000	€000
ABN Amro loan - Marba Portfolio	23,755	53,970	44.0%	85.0%	2.40	n/a	1.40
ABN Amro loan - Georg Simon Portfolio	75,208	84,630	88.9%	87.5%	1.28	n/a	1.10
Berlin-Hannoversche Hypothekenbank AG loan - Portfolio I, II and III	175,213	311,250	56.3%	77.0%	n/a	1.59	1.10
Unencumbered properties	-	50,550
Total	274,176	500,400	54.8%

14.   ISSUED CAPITAL

		Share
	Number	capital
Authorised:	of shares	€
Ordinary shares of no par value	Unlimited	-
As at 31 March 2009	Unlimited	-

		Share
	Number	capital
Issued and fully paid:	of shares	€
Ordinary shares of no par
Issue of ordinary shares	327,800,000	-
Shares bought back and held in Treasury	(25,576,824)	-
As at 31 March 2009	302,223,176	-

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

Purchase of own shares:

During the period the Company has bought back 17,490,000 (2008: 8,086,824) ordinary shares with a total nominal value of nil (2008: nil), at a weighted average price of €0.66 (2008: €0.71) per share. These shares are being held by the Company as Treasury Shares.

15.   DIVIDENDS

	2009	2008
Ordinary dividends paid	€000	€000
Interim dividend of 1.0c for the period ended 31 March 2008	-	3,278
Final dividend of 1.5c for the period ended 31 March 2008	4,533	-
	4,533	3,278

The Board has proposed to temporarily suspend dividend payments to allow the continuation of the refurbishment programme where strong returns are achieved.

 

END

 

 

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