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Summarised consolidated financial results for the 12 months ended 31 December 2019
EPP N.V. (Incorporated in The Netherlands)
(Company number 64965945)
JSE share code: EPP
ISIN: NL0011983374
LEI code: 7245003P7O9N5BN8C098
("EPP" or "the company" or "the group")
SHORT-FORM SUMMARISED CONSOLIDATED FINANCIAL RESULTS FOR THE 12 MONTHS ENDED 31 DECEMBER 2019
FINANCIAL HIGHLIGHTS
Net property income up 3.8% to EUR148.1 million (2018: EUR142.6 million)
Distributable earnings up 9.6% to EUR105.5 million (2018: EUR96.3 million)
Distributable income per share up 0.2% to EUR11.62 cents (2018: EUR11.60 cents)
in line with guidance
Oversubscribed equity raise of EUR90 million
LTV declined to 50% in line with deleveraging strategy (2018: 51.9%)
Cost of debt 2.5% (2018: 2.3%)
Successfully executed acquisitions of over EUR200 million
NAV per share EUR1.32 (2018: EUR1.35)
OPERATIONAL HIGHLIGHTS
RETAIL
Successful opening of Galeria Mlociny - first flagship asset located
in Warsaw with over 75 000 m2 of retail space
Successful addition of over 200 000 m2 GLA of quality retail space,
total portfolio over 900 000 m2
Occupancy 99.5% (2018: 99.6%)
Footfall up +0.7% (2018: +1%)
Footfall increased to over 110 million
Tenant sales up +4.8% (2018: +1%)
Occupancy cost ratio 13.4% (2018: 13.6%)
Like-for-like NRI growth was +3.3%
WALT by GLA of 4.65 years (2018: 4.81 years)
This short-form announcement is the responsibility of the directors and is only a summary of the
information in the full announcement and does not contain full or complete details. The full
announcement is available on the JSE website at
https://senspdf.jse.co.za/documents/2020/jse/isse/EPPE/Annuals19.pdf and on the company's
website at https://www.epp-poland.com/s,91,financial-statements.html. Copies of the full
announcement may also be requested at the company's registered office and at the office of the
sponsor, Java Capital (6A Sandown Valley Crescent, Sandown, Sandton, 2196), at no charge,
during office hours from Thursday, 12 March 2020 to 19 March 2020. Any investment decision
should be based on the full announcement published on SENS and on the company's website.
EPP is one of the leading owners of retail space in Poland. As at 31 December 2019, the company
manages a portfolio of 25 retail centres and six high-quality offices located in the majority of
regional cities in Poland. In addition to these income-generating properties, EPP owns the
Towarowa 22 development in Warsaw. The flagship Warsaw development Galeria Mlociny successfully
opened in May 2019. By the end of 2020, EPP expects to own 29 shopping centres within a 30-minute
drive of 40% of Poland's wealthiest population.
The company successfully raised new equity of EUR90 million from an oversubscribed equity raise.
The equity was used for the funding of acquisitions for the year. The net operating profit for the
year amounted to EUR132.5 million (2018: EUR125.8 million) and distributable income totalled
EUR105.5 million (2018: EUR96.3 million). Net asset value ("NAV") amounted to EUR1 196 million
(2018: EUR1 118 million) equating to a NAV per share of EUR1.32 cents (2018: EUR1.35 cents per
share). The net loan-to-value ratio as of 31 December 2019 was 50% (2018: 51.9%).
Prospects
EPP holds a dominant portfolio of quality assets which is expected to perform better than the
market in general, and net operating income to grow on a like for like basis. However, management
is cognisant that the recent emergence of the COVID-19 virus globally, and especially in Poland
and Central Europe over the last couple of days, may temporarily impact the properties, and
therefore no guidance can be provided until the situation stabilises and can be properly assessed.
Once the company is confident that the risk is adequately assessed it will provide an update to
the market.
31 Dec 31 Dec Variance %
2019 2018 EUR change
Rental income and
recoveries* EUR'000 163 633 157 506 6 127 3.9%
Net property income EUR'000 148 100 142 674 5 426 3.8%
Net operating profit EUR'000 132 576 125 817 6 759 5.4%
Profit from operations EUR'000 131 836 143 290 (11 454) (8.0%)
Profit for the period EUR'000 66 165 124 165 (58 000) (46.7%)
Distributable earnings EUR'000 105 525 96 278 9 247 9.6%
HEPS** EUR cents per share 6.92 10.82 (4) (36.0%)
EPS EUR cents per share 7.5 15.4 (8) (51.2%)
Dividend EUR cents per share 11.62 11.6 - 0.2%
Net LTV % 50.0% 51.9% - 1.9 pp
* Rental income includes EUR729 000 of straight-line rental income accrual in 2019.
** Calculated based on actual number of shares in issue as at 31 December 2019 and
31 December 2018, respectively.
Dividend
EPP's dividend policy states that the company intends to declare 100% of its distributable income
to shareholders. The company intends declaring half-yearly dividends, which are expected to be
declared for the periods ended 30 June and 31 December of the relevant year. No assurance can be
made that dividends will be proposed or declared in any given year.
The EPP board of directors (the "board") has declared an interim dividend of EUR5.82000 cents
per ordinary share for the six months ended 31 December 2019. A further announcement informing
shareholders of the salient dates and tax treatment of the dividend will be released in due course.
Audit opinion
The auditors, EY, have issued their unmodified opinion, which includes disclosures on key audit
matters, on the annual financial statements for the year ended 31 December 2019 and a copy of
the audit opinion together with their underlying audited annual financial statements are available
for inspection at the company's registered office and on EPP's website at
https://www.epp-poland.com/s,128,annual-reports.html.
12 March 2020
Directors
Hadley Dean (chief executive officer)
Jacek Baginski (chief financial officer)
Robert Weisz* (chairman)
Marek Belka*
Maciej Dyjas**
Dionne Ellerine*
Andrea Steer*
Marc Wainer**
James Templeton*
Pieter Prinsloo**
Taco de Groot*
* Independent non-executive
** Non-executive
Registered office
Gustav Mahlerplein
28, 1082 Amsterdam
The Netherlands
JSE sponsor
Java Capital
6A Sandown Valley Crescent
Sandton
2196
www.epp-poland.com
Date: 12-03-2020 07:05:00
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