Peach Property Group AG: Publication of half-year results – Extraordinary General Meeting to approve equity increase, among other things

[ Report ]

Zürich (pta007/22.08.2024/07:00) - Ad-hoc notification pursuant to Art. 53 LR

* Increase in rental income in HY 1/2024 to EUR 63.2 million - up by 3.3 percent on a like-for-like basis compared to the previous period
* FFO I amounts to EUR 8.9 million in the reporting period; full year forecast confirms guidance
* FFO II amounts to EUR 15.5 million due to sale of 200 residential units
* Market value of the real estate portfolio largely stable at approx. EUR 2.4 billion
* Portfolio strategy with strategic portfolio comprising 20,630 residential units
* Board of Directors invites to an Extraordinary General Meeting on September 27, 2024, to propose an ordinary capital increase and other agenda items relating to the statutes of the Company

Peach Property Group AG ("Peach Property Group"), a real estate investor focused on residential real estate in Germany, published its half-year results. The Group with its total portfolio of approx. 27,300 residential units increased its rental income before collection risks to EUR 63.2 million in the first half-year of 2024 (up by 3.3 percent on a like-for-like basis compared to the previous period) on the back of consistently high demand in the German residential real estate market. The increase in rental income was achieved despite an increase in the vacancy rate in the portfolio from 7.2 percent in the previous period to 7.8 percent, which is mainly due to a deferral of refurbishment measures from the previous year. Peach Property Group significantly increased investment in its portfolio from approx. EUR 10 million in the first half-year of 2023 to approx. EUR 17 million in the first half-year of 2024, thus paving the way for a reduction in vacancies.

FFO I guidance for 2024 confirmed

Due to increased maintenance, operating and interest expenses, consolidated funds from operations (FFO I) reduced as expected by EUR 0.6 million from EUR 9.5 million in the previous period, to EUR 8.9 million in the reporting period. Due to lower planned financing costs and its focus on vacancy reduction, Peach Property Group is however confirming its previously issued full year FFO I guidance of EUR 17 million to EUR 19 million.

FFO II increases to EUR 15.5 million

The sale of around 200 residential units in the first half-year of 2024 increased FFO II (rental business and sales business) from EUR 9.6 million to EUR 15.5 million.

In the first half-year of 2024, the real estate portfolio was further impaired by approx. 1.7 percent of the 2023 year-end value. This valuation adjustment led to negative earnings before taxes (EBT) of EUR 26.9 million and a negative result after taxes of EUR 22.8 million. The market value of the real estate portfolio, which currently comprises approx. 27,300 residential units, approximates EUR 2.4 billion.

In the second quarter of 2024, the Board of Directors resolved to adjust the Group's portfolio strategy through defining a strategic and non-strategic portfolio. The strategic portfolio, consisting of 20,630 residential units was defined as part of a comprehensive analysis focusing on key criteria such as proximity to core regions, property quality, and earnings potential, with the aim of achieving a sustainable growth in EBITDA. The non-strategic portfolio is to be sold gradually over time and sale proceeds will be used to finance investment measures in the strategic portfolio. The non-strategic portfolio comprises approx. 6,700 units.

Extraordinary General Meeting on the capital increase and other agenda items

Peach Property Group also announces the convening of an Extraordinary General Meeting on September 27, 2024. The Board of Directors proposes an ordinary capital increase of CHF 22,729,450 by issuing 22,729,450 fully paid up registered shares with a nominal value of CHF 1.00 each, while maintaining the subscription rights. The issue price for the new shares shall be CHF 5.00 each. The Board of Directors shall ensure that the subscription rights granted are traded in an orderly manner.

The capital increase is intended to strengthen the Group's liquidity, to reduce the debt ratio and to finance upcoming investments into the portfolio.

Other items on the agenda concern partial amendments to the Articles of Association, with which the shareholders' right to nominate representatives to the Board of Directors is to be cancelled and with which adjustments are to be made to the provisions on conditional capital and its intended use as well as adjustments to the provisions on the capital reserve.

Finally, at the request of a shareholder, changes to the composition of the Board of Directors will be proposed.

Michael Zahn, Chairman of the Board of Directors: "We have now set the course for the comprehensive strategic development of Peach Property Group. With our forward-looking portfolio strategy and the planned capital measures, we are providing the decisive impetus for the repositioning of the Group and at the same time addressing the refinancing requirements in 2025 with a significant reduction in leverage."

Gerald Klinck, CEO: "At the center of our strategy is our property platform, which forms the operational backbone of our new strategic portfolio and delivers the decisive added value in terms of performance, sustainability and profitability. It is a great pleasure to be part of the Peach team and I am convinced that our clients, shareholders and investors will benefit significantly from the measures we have developed together over the past three months. There is still a long way to go and some homework ahead of us, but our agenda is set, and we will now implement it consistently."

The detailed half-year report 2024 in English is available on the website at the following link:
https://www.peachproperty.com/en/news-en/interim-reports/

An analyst and media conference call including Q&A in English with CEO Gerald Klinck will take place today at 10 a.m. CEST.

Registration for the webcast under the following link:
https://onlinexperiences.com/scripts/Server.nxp?LASCmd=AI:4;F:QS!10100&ShowUUID=3E0FA2A2-6581-4FD0-9D6A-A05B014EA343

Registration for Audio:
https://pinconnect.conferenceconsole.com/PINConf?a8d1affe-6854-4829-8646-007315da1c7f

Contacts:

Media, investors and analysts

Gerald Klinck, Chief Executive Officer
+41 44 485 50 00 | investors@peachproperty.com

Media Germany

Feldhoff & Cie, Anke Sostmann, Executive Director
+49 159 04028505 | as@feldhoff-cie.de

About Peach Property Group AG

Peach Property Group is a property investor focused on residential investment in Germany. The group stands for many years of experience, expertise and quality. Innovative solutions for tenants' needs, strong partnerships and a broad value chain complete the profile, while digitalization and sustainability characterize the operational business. The portfolio consists of high-yield properties, typically in German Tier II cities in the catchment areas of major metropolitan areas. Activities therefore cover the entire value chain, from site evaluation and acquisition to active asset management and the letting or sale of properties.

In addition, the Group is developing selected properties in Switzerland for sale as condominiums, the latest of which is the "Peninsula Wädenswil" project.

Peach Property Group AG is headquartered in Zurich and has its German headquarters in Cologne. Peach Property Group AG is listed on the SIX Swiss Exchange (PEAN, ISIN CH0118530366). Since the 2024 Annual General Meeting, the Board of Directors has comprised Michael Zahn (Chairman of the Board of Directors), Annette Benner, Cyrill Schneuwly, Beat Frischknecht and John Ruane.

(Ende)