Wrap Text
Full Year Results For The Year Ended 30 September 2020
Schroder European Real Estate Investment
Trust plc
(Incorporated in England and Wales)
Registration number: 09382477
JSE Share Code: SCD
LSE Ticker: SERE
ISIN number: GB00BY7R8K77
("SEREIT"/ the "Company" / "Group")
FULL YEAR RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2020
Schroder European Real Estate Investment Trust plc, the company investing in European growth cities and
regions, today announces its full year results for the year ended 30 September 2020.
Diversified portfolio and execution of asset management initiatives in Paris and Hamburg underpinned
exceptional financial performance and further dividend increase, despite Covid-19 backdrop
- Rent collection remained strong at approximately 87% during the period
- Exchanged conditional contracts for a forward funding sale of the Boulogne-Billancourt office asset in Paris
(“Paris BB”) for approximately €104 million, which is expected to deliver a pre-tax profit of c. €28 million.
Transaction followed a new 10-year pre-let contract agreed with existing tenant Alten in June, which
reflected a 39% rental uplift on the previous rent paid
- Completed two new lease agreements for two floors at the Hamburg office investment, with a further floor
exchanged post period end
- Reflecting the profitable conditional forward funding sale of Boulogne-Billancourt and continued stable
level of rent collection, quarterly dividend up by 13% to 1.57 euro cents per share, an increase on the last
interim dividend of 1.39 euro cents per share declared in September. Dividend will continue to be reviewed,
particularly as Paris BB net proceeds are reinvested
Key Financial highlights
- Portfolio valued at €268.6 million (note 1), reflecting a 10.7% uplift during the period (30 September 2019
€242.7 million); the like-for-like valuation movements during the period by sector were Offices +24.9%,
DIY/Grocery +1.4%, Industrial +0.5%, Other -4.8% and Shopping centre -9.4%
- Net Asset Value (‘NAV’) of €201.8 million or 150.9 cps, an increase of 10.8% during the period (30 September
2019: €182.1 million or 136.2 cps)
- NAV total return of 16.2% (30 September 2019: 4.1%)
- Profit increased to €28.4 million (30 September 2019: €7.4 million) driven primarily by the portfolio
valuation uplift
- Underlying EPRA earnings of €8.6 million (30 September 2019: €10.5 million), with the 2019 earnings having
included receipt of a one-off surrender premium of €1.5 million
- Loan to value (‘LTV’) decreased to 24% net of cash (30 September 2019: 26% net of cash) at a weighted
average total interest rate of 1.4%
- Total dividends declared of 5.7 cps (30 September 2019: 7.4 cps)
- Dividend cover of 112% (30 September 2019: 107%)
Note 1: includes the Group’s share of the Seville property proportionally valued at €21.3 million.
Operational highlights
- Underlying property portfolio total return of 15.7%
- Increased portfolio occupancy to 96% (30 September 2019: 94%), with a 5.5 years average lease term to
expiry (30 September 2019: 6.4 years)
- Successful execution of asset management initiatives across the portfolio:
o Excluding Alten, concluded 10 leases and re-gears, at a rent similar to previous rent of those leases,
at a weighted lease term of 5 years
o Reflecting its increasing focus on ESG considerations, the Company increased its GRESB green star
rating to three, in recognition of the portfolio’s sustainability performance, whilst improving the
sustainability rating at the Company’s Hamburg office asset with the certification of BREEAM in use
o The Group continues to give support to its tenants, service providers and consumers in
understanding the impact Covid-19 is having on their respective positions.
Dividend Update
The Board will continue to review the dividend in 2021, in particular having regard to the reinvestment of the
Paris Boulogne-Billancourt sale proceeds, market conditions and the longer term sustainable rental income
collected from the portfolio.
As announced previously, whilst the refurbishment of Paris Boulogne-Billancourt is being undertaken, it is
expected dividend cover from net income will reduce. The Board expects to allocate some of the net sale
proceeds from the forward-funding disposal of this asset, towards covering the shortfall in income from Paris
Boulogne-Billancourt whilst it is being refurbished and pending reinvestment of the remainder of sale proceeds.
For dividend details, please see separate announcement released on 9 December 2020.
Sir Julian Berney, Chairman of the Board, commented:
“Our operationally strong portfolio, focused on the Winning Cities of Continental Europe, provided a solid
foundation coming into the pandemic, which has been borne out through our robust rent collection figures.
Through active asset management, in particular, the conditional forward sale of Paris Boulogne-Billancourt, we
have further strengthened the Company’s balance sheet and prospects over the period. We are looking forward
to next year with cautious optimism, with a focus on investing the sales proceeds into new acquisition
opportunities in high-growth sectors and cities in order to continue growing net income and the dividend and
favourably positioning the portfolio to drive the next phase of the Company’s growth.”
Jeff O’Dwyer, Fund Manager for Schroder Real Estate Investment Management Limited, added:
“Despite the challenges presented by Covid-19, significant progress has been made during the reporting period
in delivering on the stated strategy. Key to this was the successful execution of our Paris Boulogne-Billancourt
initiative, a transformational transaction that is highly accretive for shareholders and underpinned this
extremely strong set of results. Whilst we continue to deal with small pockets of underperformance in the
portfolio, the REIT is extremely well placed as we move into 2021 to deliver further income and capital growth
on behalf of shareholders.”
Salient features
- IFRS profit increased by 284% to €28.4million, from €7.4 million in the prior financial year.
- Earnings per share (“EPS”) increased by 279% to 21.2 euro cents per share, from 5.6 euro cents per share in
the prior financial year.
- Headline earnings per share (“HEPS”) decreased by 19% to 6.4 euro cents per share, from 7.9 cents per
share in the prior financial year.
- Dividends per share (“DPS”) decreased by 23% to 5.7 euro cents per share, from 7.4 euro cents per share in
the prior financial year.
- Net asset value per share (“NAVPS”) increased by 11% to 150.9 euro cents per share compared to 136.2
euro cents per share in the prior financial year.
Short-form announcement
This short-form announcement is the responsibility of the directors of the Company. It contains only a summary
of the information in the full announcement (“Full Announcement”) and does not contain full or complete
details. The Full Announcement can be found at:
https://senspdf.jse.co.za/documents/2020/JSE/ISSE/SCDE/SEREITFY20.pdf
Copies of the Full Announcement is also available for viewing on the Company’s website at
www.schroders.co.uk/sereit or may be requested in person, at the Company’s registered office or the office of
the sponsor, at no charge, during office hours.
Any investment decisions by investors and/or shareholders should be based on consideration of the Full
Announcement, as a whole.
These annual results have been audited by the Company’s auditors, PricewaterhouseCoopers LLP who expressed
an unmodified audit opinion thereon. The full auditor’s report includes details of key audit matters. This
auditor’s report is available, along with the annual financial statements, on the Company’s website at
www.schroders.co.uk/sereit.
The Company has a primary listing on the London Stock Exchange and a secondary listing on the JSE Limited.
London
9 December 2020
Sponsor
PSG Capital
Date: 09-12-2020 09:00:00
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