2021 annual results
Press release
2021 annual results
- Improvement in all key
indicators
- Physical occupancy rate up 3 points at
90% and financial occupancy rate up 4 points at 88%
- Annualised net rents1
up 5.6%
-
Increase1 in portfolio
value of 3.5% to €162.0m
- Net operating cash flow up
33.6% (up 33.1% vs. 2019)
- Healthy and controlled
financial position
- Early refinancing of all bank
debt with repayment due in 2028
- Net LTV ratio of
40.0%
- Dynamic
asset portfolio management
- Robust letting
activity
- Completion of Valentin
shopping centre investment programme
- Disposal of two non-strategic
assets
- Annualised net rents target of
over €10m maintained, despite the disposals carried
out
- Proposed
pay-out2 of
€0.09 per
share
Paris, 24 February 2022: MRM
(Euronext code ISIN FR0000060196), a real estate investment
company specialising in retail property, today announced its
results for the financial year ended 31 December 2021. This
press release follows on from the review and closing of the
financial statements by MRM’s Board of Directors at its meeting on
24 February 2022.
François Matray, Chief Executive Officer of MRM,
noted: “All of MRM’s management indicators were positive in
2021. Thanks in particular to its
excellent letting activity,
annualised net rents rose
further, portfolio occupancy
rates went up
and the portfolio value
increased. Net operating cash flow was well above the level
reached in 2019, the last year before the health crisis. At the
same time, we have refinanced all of
our bank debt maturing between June 2022 and June
2023, under satisfactory terms
reflecting the quality of our portfolio and with a maturity period
of seven years. This was one of our
main priorities for 2021.
On the back of its solid financial
position, MRM can focus fully on managing
its portfolio of diversified retail properties with a view
to capitalising on their remaining potential for value
creation and continuing to
adapt it to changes in
retail. Taking environmental and social factors
into account will be a key aspect of our action plan as
well. Bricks-and-mortar retail
still offers a promising future if it is managed dynamically, with
a pragmatic vision in line with changing
consumption trends. Finally, despite the
disposal of two non-strategic assets in 2021, we reiterate our
target of annualised net rents of at least
€10 million
on the basis of the current
portfolio.”
Higher physical and financial occupancy
rate reflecting successful letting activity
Despite the ongoing sensitive health crisis in
2021, letting activity was very brisk, with agreed rents of
€1.7 million, representing 16% of the rental base. The 18
leases3 signed representing a total floor area of 10,300 sqm
generated a positive reversion rate4 of 1%.
New signatures concern in particular:
-
Five leases for a total of 800 sqm within the Valentin
shopping centre, bringing the occupancy rate of the gallery to
90%;
-
Two new discount retailers within the Aria Parc retail park
(Allonnes) over a total of 4,000 sqm, including Centrakor as
additional anchor store occupying 3,300 sqm;
-
The renewal of the lease held by Habitat, which occupies a
2,500 sqm medium-sized unit at Carré Vélizy;
-
A lease signed5 for a medical centre occupying 700 sqm at Les
Halles du Beffroi (Amiens).
Robust letting activity resulted in improvement
in all management indicators:
-
The physical occupancy rate6 was 90% as at 31 December 2021,
compared with 87% one year earlier;
-
The financial occupancy rate6 was 88% as at 31 December
2021 compared with 84% one year earlier;
-
Annualised net rents6 totalled €9.3 million at 1 January 2022
compared with €9.1 million at 1 January 2021, despite the
impact of -€0.3 million relating to the disposal7 of two
non-strategic assets in October 2021. On a like-for-like basis,
annualised net rents increased by 5.6%.
To date, MRM has collected 88% of rents and
charges for 2021, or 92% excluding the support measures for
tenants, for which accruals have been set aside.
Completion of Valentin shopping centre
investment programme
The programme to transform the Valentin shopping
centre was completed during the first half of the year,
significantly enhancing the appeal of the shopping gallery attached
to the Carrefour hypermarket, the leader in the Greater Besançon
area.
The extended and refurbished Valentin shopping
centre is now home to 50 stores (including three medium-sized
units) over a floor area of 6,700 sqm, of which 90% is let.
The addition of Action, improved foodservice offering (Crescendo,
Crêp’eat and Jules & John) and new ready-to-wear retailers
(Christine Laure, Comme des Loups, Excellence, Mise Au Green) have
helped to enhance the retailer mix alongside existing stores
(Chausport, Histoire d’Or, Maty, Orange, Poulaillon, etc.).
Particular emphasis has been placed on
integrating the shopping centre into its environment from the
design stages, including zero net land artificialisation of more
than 400 sqm despite the extension, eco-responsible accessibility,
a “green worksite” charter and planting of trees. All new leases
include an environmental appendix.
Portfolio value up 3.5% like-for-like
The value of the portfolio was
€162.0 million as at 31 December 2021, up 0.6% relative to the
end of 2020. This includes an impact of -€4.4 million relating
to disposals carried out in 2021.
On a like-for-like basis, the value of the
portfolio rose by 3.5%, reflecting primarily the increase in
occupancy rates and net rents.
|
€ million |
31.12.2021 |
31.12.2020 |
Change |
Like-for-like change8 |
|
Portfolio value excl. TT |
162.0 |
161.0 |
+0.6% |
+3.5% |
Financial results
- Net rental
income up 3.9%
Gross rental income for 2021,
corresponding to rents billed, increased by 2.5% relative to 2020
to €9.7 million after taking account of the limited impact of
the spreading out of rent write-offs granted in respect of the
first lockdown in 2020 and accompanied by counterparts amending the
terms of leases9. On a like-for-like basis, i.e. adjusted for the
impact of disposals, gross rental income was up 3.4%.
MRM benefited from the full effect of new leases
signed in 2020 as well as leases signed in 2021 already in force.
The positive indexation effect is marginal.
Taking account of a non-recovered property
expense of €1.8 million, net rental income
rose by 3.9% to €8.0 million compared with €7.7 million
in 2020.
|
€ million |
2021 |
2020 |
Change |
Like-for-like change10 |
|
|
Gross rental income |
9.7 |
9.5 |
+2.5% |
+3.4% |
|
|
Non-recovered property expenses |
(1.8) |
(1.8) |
-3.0% |
|
|
|
Net rental income |
8.0 |
7.7 |
+3.9% |
|
|
- Sharp
increase in operating income before disposals and change in fair
value
Operating income before disposals and change in
fair value totalled €4.5 million in 2021, up 16.6% compared
with 2020.
This includes in particular operating expenses
of €2.5 million as well as a net expense of €0.3 million
relating to tenant support measures in respect of the three
lockdowns in 2020 and 2021.
- Positive
impact of the change in fair value on net income
After taking account of investments made during
the period, the increase in appraisal values resulted in a positive
change in the portfolio’s fair value of €2.6 million, compared
with a negative change of €10.0 million in 2020.
As a result, operating income came to
€7.6 million compared with an operating loss of
€5.8 million in 2020.
Net financial expense was -€2.0 million
compared with -€1.4 million in 2020. This change is due in
particular to the costs related to the refinancing of the bank
debt.
Consequently, consolidated net
income came to a profit of €5.6 million in 2021
compared with a loss of €7.2 million in 2020.
A condensed income statement is included in the
appendix.
-
Significant improvement in net operating cash flow,
exceeding the 2019 level
Net operating cash flow11 came to
€3.9 million in 2021, up 33.6% compared with 2020 and 33.1%
compared with 2019, the last year before the crisis.
After taking account in particular of the
-€0.2 million relating to tenant support measures, compared
with -€1.4 million in 2020, EBITDA increased
sharply by 45.8% to €4.5 million.
Net cost of debt was €1.2 million and other
financial expenses related to the bank debt were €0.4 million.
|
€ million |
2021 |
2020 |
Change |
|
Net rental income |
8.0 |
7.7 |
+4.1%12 |
|
Tenant support measures |
(0.2) |
(1.4) |
|
|
Operating expenses |
(2.5) |
(2.3) |
|
|
Other operating income and expenses |
0.2 |
(0.2) |
|
|
EBITDA |
5.5 |
3.8 |
+45.8% |
|
Net cost of debt |
(1.2) |
(1.2) |
-2.5% |
|
Other financial expenses |
(0.4) |
- |
|
|
Other |
- |
0.4 |
|
|
Net operating cash flow |
3.9 |
2.9 |
+33.6% |
Healthy financial position
maintained and increase in NAV of around
5%
In December 2021, MRM took out a new
loan of a total of €82.1 million with a term of seven
years. This new mortgage loan is secured against MRM’s real estate
portfolio. It consists of a €75.7 million credit facility
which allowed for early repayment of all of MRM’s bank debt
maturing in 2022 and 2023, and a €6.4 million credit
facility13 to finance new investments.
Consequently, the next repayment date has been
deferred to 2028.
Gross debt was reduced to
€74.4 million as at 31 December 2021 compared with
€76.8 million at the end of 2020.
77% of this debt, which is subject to interest
at a variable rate (3-month Euribor + 165 bps margin), is covered
by a cap.
At the end of December 2021, MRM had
cash and cash equivalents of €9.7 million
compared with €10.2 million a year earlier. The net LTV ratio
was 40.0% compared with 41.4% at the end of 2020.
Taking account of net operating cash flow
generated in 2021 (+€3.9 million), the positive change in the
fair value of properties (+€2.6 million) and the pay-out to
shareholders in respect of 2020 (-€2.2 million), EPRA
NDV increased by 4.6% to €97.4 million (€2.23 per
share) compared with €93.1 million (€2.13 per share) at the
end of December 2020 (see table in the appendix).
Factoring social and environmental criteria into the
operational management of properties
MRM’s environmental, social and governance
policy was set out formally in 2020 in order to aggregate and
monitor the initiatives taken at the level of its properties as
well as to define a clear roadmap for progress, particularly with
regard to energy sobriety.
MRM’s target is to reduce the energy consumption
of its portfolio by 40% between 2015 and 2030, in line with the
regulatory target, to the level of 42.7 kWh per sqm per year
(compared with 77.1 in 2015). The Group intends to step up its
investment as of 2022, thanks in particular to the credit facility
taken out in December 2021.
MRM’s other priorities are the rollout of
works plans related to the Tertiary
decree, the contribution
to the development of local economic and associative
activity in accordance with a “territorial anchoring”
charter adopted in 2021 and the launch of biodiversity
audits with a view to implementing concrete actions at its
sites.
Subsequent event
Early 2022, a lease14 was signed with a fitness
chain for the 2,000 sqm medium-sized unit vacated by Office
Dépôt in January 2022 within the Carré Vélizy mixed-use
development. This new retail offering, alongside Gautier, Habitat
and Indiana Café, fits in fully with the momentum of the
surrounding area.
Reverse stock split
At its meeting of 24 February 2022, the Board of
Directors decided to initiate the reverse stock split of the shares
making up MRM’s share capital at a ratio of 20 existing shares with
a par value of €1 for one new share with a par value of €20, in
accordance with the authorization and delegation of powers granted
by the general shareholders’ meeting of 24 June 2021. The reverse
stock split will begin on 21 March 2022 and end on 20 April
2022, the first day of trading of the new shares.
Pay-out to
shareholders
MRM’s Board of Directors has decided to propose
a pay-out of €0.09 per share (equal to €1.80 euro per share
post-reverse stock split) in respect of 2021, to be compared with a
limited distribution of 0.05 euro per share for the year 2020.
This pay-out represents a return of 7.1% on the share price. It
will consist of a dividend payment in the amount of €1.13 per share
post-reverse stock split and premiums payment in the amount of
€0.67 per share post-reverse stock split.
This pay-out will be subject to approval at the
general shareholders’ meeting on 9 June 2022. The planned
ex-dividend date is 13 June 2022, with payment on 15 June
2022.
Outlook
Although all retailers have gradually been able
to reopen their doors to the public since 19 May 2021, conditions
are still characterised by the potential risk of further
developments in the health crisis.
MRM’s priorities for 2022 as a whole are:
-
Analysis and deployment of investment programmes to enhance the
value of current portfolio assets;
-
Letting available space;
-
The deployment of the ESG action plan and the Climate Plan adopted
by the Company, with particular attention paid to reducing energy
consumption;
-
Dynamic management of the portfolio with analysis of potential
acquisitions and disposals.
Despite the disposals carried out in 2021, MRM
maintains its target of total annualised net rents in excess of
€10 million, based on an assumed physical occupancy rate of
95%. This target is based on the current portfolio (excluding
acquisitions and disposals).
Calendar
Financial information for the 1st quarter of
2022 will be published before the market opens on 5 May 2022.
The general shareholders’ meeting will be held
on 9 June 2022.
About MRM
MRM is a listed real estate investment company
that owns and manages a portfolio of retail properties across
several regions of France. Its majority shareholder is SCOR SE,
which owns 59.9% of share capital. MRM is listed in Compartment C
of Euronext Paris (ISIN: FR0000060196 - Bloomberg code: MRM:FP –
Reuters code: MRM.PA). MRM opted for SIIC status on 1 January
2008.
For more information
|
MRM5, avenue Kléber75795 Paris Cedex 16FranceT +33
(0)1 58 44 70 00 relation_finances@mrminvest.com |
Isabelle Laurent,
OPRG FinancialM +33 (0)6 42 37 54
17isabelle.laurent@oprgfinancial.fr |
Website:
www.mrminvest.com
Appendix 1: Retail mix
|
Sector breakdown (CNCC classification) As
% of annualised gross
rent |
31.12.2021 |
|
Household equipment |
19% |
|
Food |
12% |
|
Recreation (fitness) |
11% |
|
Personal goods |
10% |
|
Services |
9% |
|
Foodservice |
8% |
|
Culture, gifts and leisure |
8% |
|
DIY, gardening, pet shops |
7% |
|
Offices |
7% |
|
Health |
5% |
|
Beauty |
4% |
Appendix 2:
Income statement
|
Simplified IFRS income
statement€m |
2021 |
2020 |
|
Net rental
income |
8.0 |
7.7 |
|
Operating expenses |
(2.5) |
(2.3) |
|
Provisions net of reversals |
(0.9) |
0.6 |
|
Other operating income and expenses |
(0.1) |
(2.2) |
|
Operating income before disposals and change in fair
value |
4.5 |
3.8 |
|
Net gains/(losses) on disposal of assets |
0.5 |
0.4 |
|
Change in fair value of properties |
2.6 |
(10.0) |
|
Operating income |
7.6 |
(5.8) |
|
Net cost of debt |
(1.2) |
(1.2) |
|
Other financial income and expense |
(0.8) |
(0.2) |
|
Net income
before tax |
5.6 |
(7.2) |
|
Tax |
- |
- |
|
Consolidated net
income |
5.6 |
(7.2) |
Appendix 3:
4th quarter
revenues
|
€m |
Q4 2021 |
Q4 2020 |
Change |
Like-for-like change |
|
Gross rental
income |
2.38 |
2.43 |
-2.4% |
+0.7% |
Appendix 4:
Balance sheet
|
Simplified IFRS balance
sheet€m |
31.12.2021 |
31.12.2020 |
|
Investment properties |
162.0 |
161.0 |
|
Current receivables and other assets |
7.6 |
8.2 |
|
Cash and cash equivalents |
9.8 |
10.2 |
|
Total assets |
179.4 |
179.4 |
|
Equity |
97.4 |
93.9 |
|
Bank debt |
74.4 |
76.8 |
|
Other debt and liabilities |
7.6 |
8.7 |
|
Total Equity and
liabilities |
179.4 |
179.4 |
Appendix 5: Net Asset
Value
|
Net Asset Value |
31.12.2021 |
31.12.2020 |
|
Total€m |
Per share€ |
Total€m |
Per share€ |
|
EPRA NDV |
97.4 |
2.23 |
93.1 |
2.13 |
|
EPRA NRV |
108.0 |
2.48 |
104.5 |
2.39 |
|
Number of shares (adjusted for treasury stock) |
43,625,327 |
43,622,724 |
1 Like-for-like2 Proposed pay-out of dividend and premiums
subject to approval at the general shareholders’ meeting on
9 June 2022. Equal to €1.80 euro per share post-reverse stock
split
3 New leases or renewals4 Calculated on the
basis of market rental values for premises previously under
short-term lease, up 9% on the basis of rents in place5 Lease
signed subject to conditions precedent
6 Including leases already signed but not yet in
effect at 31.12.2021 7 An 8,600 sqm logistics warehouse let to
Gamm Vert and a vacant standalone unit of 1,600 sqm8 Change in
portfolio value adjusted for disposals carried out in 20219
Counterparts modifying the terms of leases in the sense of IFRS 16
(e.g., extension of lease duration, or waiver of termination rights
at the next three-year break option date)10 Like-for-like changes
are calculated by deducting rents generated by assets that have
been sold in year n from reported revenues in year n-1.
11 Net operating cash flow = consolidated net
income before tax adjusted for non-cash items12 Vs +3.9% in the
income statement. In the NOCF, the spreading out of rent write-offs
granted in respect of the 1st lockdown in 2020 and accompanied by
counterparts amending the terms of leases, is restated on the line
“Tenant support measures” 13 Credit line undrawn to date14 Subject
to conditions precedent
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