You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
Intervest Offices & Warehouses<br />
Belgium/Real Estate Analyser<br />
Intervest Offices & Warehouses (Accumulate)<br />
Accumulate<br />
from Hold<br />
Share price: EUR<br />
closing price as of 07/05/2012<br />
Target price: EUR<br />
Target Price unchanged<br />
Reuters/Bloomberg<br />
19.11<br />
22.00<br />
PRIF.BR/INTO BB<br />
Market capitalisation (EURm) 266<br />
Current N° of shares (m) 14<br />
Free float 45%<br />
Daily avg. no. trad. sh. 12 mth 4,524<br />
Daily avg. trad. vol. 12 mth (m) 0<br />
Price high 12 mth (EUR) 23.47<br />
Price low 12 mth (EUR) 17.42<br />
Abs. perf. 1 mth -5.82%<br />
Abs. perf. 3 mth -2.00%<br />
Abs. perf. 12 mth -16.00%<br />
Key financials (EUR) 12/11 12/12e 12/13e<br />
Gross Rental Income (m) 39 42 43<br />
EBITDA (m) 35 38 39<br />
EBITDA margin 84.4% 84.6% 84.6%<br />
Portfolio Result (m) 2 (2) (2)<br />
Net Financial Result (16) (12) (13)<br />
Net Profit (adj.)(m) 22 26 25<br />
Funds From Operations 22 26 25<br />
EPS (adj.) 1.60 1.85 1.81<br />
DPS 1.60 1.85 1.81<br />
IFRS NAVPS 20.42 19.27 19.09<br />
EPRA NAVPS 20.64 19.49 19.30<br />
Premium/(Discount) (11.1%) (0.8%) 0.1%<br />
Earnings adj. yield 8.4% 9.7% 9.5%<br />
Dividend yield 8.4% 9.7% 9.5%<br />
EV/EBITDA 15.8 15.0 14.8<br />
P/E (adj.) 11.3 10.3 10.6<br />
Int. cover(EBITDA/Fin.int) 2.9 3.2 2.9<br />
Net debt/(cash) (m) 293 305 308<br />
Net Debt/Total Assets 49.3% 51.6% 52.1%<br />
24 vvdsvdvsdy<br />
23<br />
22<br />
21<br />
20<br />
19<br />
18<br />
17<br />
Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12<br />
INTERVEST OFFICES & WAREHOUSES Belgium All Share (Rebased)<br />
Shareholders: VastNed Offices / Industrial NV 55%;<br />
Analyst(s):<br />
Dries Dury, Bank Degroof<br />
dries.dury@degroof.be<br />
+32 2 287 91 76<br />
Jean-Marie Caucheteux Bank Degroof<br />
jeanmarie.caucheteux@degroof.be<br />
+32 2 287 99 20<br />
Good 1Q12 results: from Hold to Accumulate<br />
The facts: Yesterday after market close, Intervest Offices & Warehouses<br />
published its 1Q12 results.<br />
The net recurring result per share in 1Q12 improved 35% yoy and 20% qoq to<br />
EUR 0.48, mainly reflecting the increase in rental income following the large wave<br />
of investments in logistics premises made in 2011, but also lower financing costs<br />
and stable property costs.<br />
The average interest rate for 1Q12 was 3.7%, including bank margins, compared<br />
with 4.9% in 1Q11, which can be explained by the effect of new interest rate<br />
swaps at lower interest rates. Intervest O&W does not need to carry out any major<br />
refinancing of its credit portfolio in 2012 and 2013.<br />
As a result of additional leases with Biocartis and Verhaeren & Co concluded in<br />
1Q12, 96% of the space previously leased by Tibotec-Virco has been re-leased.<br />
The occupancy rate of the total portfolio remained stable at 86%, made up of a<br />
stable 84% rate for the office portfolio and a slightly decreased 88% (91% at yearend<br />
2011) rate for the logistics portfolio.<br />
The fair value of the real estate portfolio slightly increased by EUR 2m to<br />
EUR 583m on 31 March 2012. No investments or divestments were done in 1Q12.<br />
IFRS NAV per share reached EUR 20.94, up 2.6% on the quarter.<br />
Management is guiding for a continuation of the 86% occupancy rate. Importantly,<br />
Intervest O&W has decided to adjust its dividend distribution policy with effect from<br />
financial year 2012 (i.e. dividend payable in 2013), so that the pay-out ratio will be<br />
between 80% and 100% of the operating result, depending on the compensation<br />
received for early termination of rental contracts and other compensation for rental<br />
damages.<br />
Our analysis: In the past we repeatedly said we expected strong improvement in<br />
2012, driven by important acquisitions achieved in 2011. 1Q12 results came out<br />
even better than expected, thanks to the particularly strong decrease in financing<br />
costs and the lease of most of the remainder of the space previously leased by<br />
Tibotec-Virco.<br />
Our 2012 bottom line estimate will thus probably prove to be too conservative, and<br />
a quick read-through of the 1Q12 results indicates that Intervest O&W is trading at<br />
a >10% recurring earnings yield, while the discount to last published NAVps (EUR<br />
20.94) is 9%.<br />
Conclusion & Action: Good 1Q12 results for Intervest O&W. We change our<br />
recommendation from Hold to Accumulate, reflecting the attractive valuation<br />
multiples (10% 2012 recurring earnings yield) and the resilience shown by the<br />
portfolio.<br />
Page 60 of 80 European Securities Network<br />
Please refer to important disclaimer on the last page
Change language