Wereldhave’s tenants are now paying rents on time. The underlying business wasn’t that dynamic but Q3 21 provided additional proof of stabilisation.
Companies: Wereldhave N.V.
On top of its H1 21 figures, Wereldhave disposed four out of six of its French malls for a cash consideration of €305m. The latter book value was €504m. Such a cash-in will rebalance the LTV ratio to a much affordable level of 42% pro forma.
Guidance wasn’t lowered but FY 21 will come in at the lower end of it (€1.80 – €2.00 FFO per share) due to the H1 21 lockdowns. Net Rental Income was down 21% yoy. With the LTV standing at 46%, it is too high in our view, but disposals are on track.
Consolidated vacancy was up by only 50bp from 5.4% to 5.9% yoy. It was down 10bp (improvement) in Q4 20 alone. This confirmed URW’s behaviour in Continental Europe, with low additional vacancy attributable to the very low number of retailers’ bankruptcies.
Following Mercialys, Wereldhave has confirmed some early signs of stabilisation in Q3 20. Local units have proven more resilient than bigger or in-town ones. Wereldhave didn’t pass the pass anyway but, following the negative Q2 20, Q3 20 looks to be something of a respite.
Our FY 20 EPS is too high and we will have to cut it. However, our valuation still accounts for the contribution of a capital increase in FY 21 and our target price should stay broadly stable. We maintain our Sell rating.
Wereldhave will be impacted by the “low” footfall of Q1 20, or “no” footfall of Q2 20. Progressive de-containment measures will probably lead to a long and slow recovery. The big issue will be the forward balance sheet. We stay negative.
Following its Finnish disposal in October 2018, Wereldhave will exit the French market. The strong negative revaluations of €450m in FY 19, or 13% of the full portfolio’s value, pushed the LTV ratio to 45%. The strategic plan will focus the company on both the Netherlands and Belgium. Should it fail, the risk of a right issue in the coming years will become much clearer.
We observed sequential decreasing rents in Q3 19. As H2 19 should be impacted by low occupancy rates, we keep away from Wereldhave and stick to our negative opinion.
Wereldhave’s negative revaluation (GAV lost 3.7%) was much higher than Klepierre’s and Mercialys’ in relative terms (c. -1% lfl). Here is confirmation of the beginning of a negative sequence in the Continental shopping malls’ universe.
Wereldhave posted nice Q1 19 lfl figures at first glance. From Q2 19, the performance should revert to an underlying less positive trend after the momentary positive impact of the pipeline’s full completion.
Wereldhave’s trading statement for Q3 18 shows a decreasing rental income for the first three quarters of FY18 to €167.4m (-1% yoy), due to lower rental income in France. The negative impact of gross rental income from disposals in 2017 has been offset by income growth in the Netherlands and Belgium. The occupancy rate increased by 0.1% in Q3 18, to reach 96.2% at September 2018 (+0.7% yoy), pushed by an improvement of 20bp in the Netherlands and 10bp in the other countries. Overall footfall inc
Wereldhave released its FY17 results, posting a net profit of €84.3m, down by 30.2% yoy. Gross rental income amounted to €223.4m, dropping by 3% compared to FY16, mainly due to a substantially lower rental income in France and disposals in the Netherlands. The value of the total investment portfolio amounted to €3.8bn. Overall, the results are below our estimates.
GRI stood at €207m, a jump from €126m in FY14, mainly coming from massive acquisitions: a portfolio of 6 shopping centres in France (from Unibail end-2014) and 9 additional shopping centres acquired from Klepierre in the Netherlands in 2015.
Net profit increased to €27m and EPS at €3.23 gained 9% yoy and the dividend proposed at €3.01 per share is up 5% and exceeds our expected €2.87.
Wereldhave also exited the office segment in France, with the disposal of the three remaining assets for €
Wereldhave has announced the acquisition of a 9 shopping centre Dutch portfolio from Klepierre for €730m, consisting of €687m for operational properties and €43m for the development (in the CityPlaza). The assets acquired at a 6.2% yield are expected to contribute as much as €45.1m to NRI from 2016. 25 professionals will be joining Wereldhave from Klépierre (o/w 15 entirely dedicated to the new portfolio). The transaction is expected to be EPS accretive as soon as 2016.
To finance the acquisiti
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We update our forecasts to take account of (1) Group 2020/2021 Annual Report & Accounts released in September (2) 1Q IMS released in October (3) End October 2021 FUM update in early November. Key points include:
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Strong investment performance across CLIG’s investment strategies (Exhibit 3 shows performance over 5 years relative to peers and benchmarks).
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Liontrust has reported a strong, in line H1 performance (+93% adj. PBT) on continued organic growth including £2.1bn net inflows YTD, as well as a full period contribution from Architas. The H1 outturn has covered 47% of our FY adj. PBT estimate, which we leave unchanged. AuM has continued to grow: +2.2% to £36.5bn in Q3 so far – momentum has been sustained. We think the valuation is not challenging given the outlook for growth. We set a 2450p 12m Target Price (18x FY23e PER) and a BUY recommend
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Liontrust has announced the acquisition of Majedie – developing further scale (£42bn+ proforma AuM). Consideration is up to £120m; initially £80m in shares – equating to 1.4% EV/AuM and 9x EV/EBITDA post-cost synergies. It also diversifies Liontrust into the institutional channel without creating risk to existing economics, whilst also creating a distribution opportunity for Liontrust into the institutional space and Majedie into the UK intermediary space. We update our forecasts for the acquisi
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Gore Street Energy Storage Fund (GSF) has announced that Kilmannock, one of the Company’s ROI
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addition to the 30MW). The initial 30MW benefits from a six-year fixed price contract, while the
remaining capacity can primarily derive revenues from extra capacity which could be used forwholesale
trading or the volume uncapped DS3 market (Delivering a Secure Sustainable Electricity System). GSF
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Mercia reported a strong rise in the NAV of its Northern Venture Trust (NVT) subsidiary, reflecting the IPO of musicMagpie and other successful exits, leading to Mercia receiving a net performance fee of £1.6m. As a result, together with Mercia’s substantially recurring management fees, management expects H122 PAT to exceed £10m, with the FY22 adjusted operating profit (excluding the NVT net performance fee) expected to be materially ahead of market forecasts. The shares trade at a larger discou
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Gore Street’s confirmation of a 90MW capacity increase at Kilmannock is a clear positive in our view and takes the fund’s portfolio to over 600MW of projects either operating or under construction. These are split between the GB market and the all-Ireland market with the fund now owning the largest portfolio of storage assets in Ireland. In the GB market price volatility continues to be strong and we expect the fund’s assets to be benefiting from this.