Reported via StockWise to the Copenhagen Stock Exchange on 28 February 2007
In August 2006, the Supervisory Board decided to strengthen the information to
the shareholders and the market with newsletters (Q1 News and Q3 News) for the
quarters in which the Group does not publish announcement of interim or
full-year financial performance.
Accordingly, the following is a short briefing about the Group's activities in
the first quarter of the financial year 2006/07 and subsequently:
General Meeting
Keops A/S held the Annual General Meeting on 26 January 2007 in Keops Huset.
For the first time, the General Meeting was also filmed and broadcast live on
the Company's website.
The Supervisory Board Chairman Jørgen Basso Larsen made a verbal review which
was adopted by the General Meeting. The General Meeting also unanimously
adopted the annual report presented for 2005/06, the Supervisory Board's
recommendation not to distribute dividends as well as other recommendations
made by the Supervisory Board.
New Supervisory Board
After the General Meeting, the newly elected Supervisory Board constituted
itself, so that it now consists of:
• Executive Officer Steen Hundevad Knusen (new election), Chairman
• Director Skarphédinn Berg Steinarsson (re-election), Vice-Chairman
• Director Jørgen Basso Larsen (re-election)
• General Manager Eiríkur S. Jóhannsson (re-election)
• Professor Thomas Plenborg (new election)
• CEO Jesper Eigen Møller (new election)
Status of six-point plan
In December, Keops' Supervisory Board adopted the so-called six-point plan, the
purpose of which is to consolidate, focus and increase professionalism of Keops
and thereby ensure a solid foundation for the Group's continued development.
The implementation of this plan comprises:
• strengthening of corporate governance
• consolidation
• geographic and product focus
• separation of Development into an independent unit
• simplifying and focusing the organisation
• preparation of a five-year strategy
In December 2006 and January 2007, a number of steps were taken to achieve
improved compliance with guidelines of good corporate governance. Most
recently, after the election of the new Supervisory Board, an audit committee
has been appointed, which is to ensure that financial reporting, risk
management and control environment meet relevant standards and rules. The audit
committee consists of:
• Director Jørgen Basso Larsen
• Professor Thomas Plenborg
As a part of the consolidation, a number of the Group's property portfolios
have been designated as ready for sale. There is contact to a number of
interested acquirers, and the sales process follows the determined plan. If
sale is realised as planned, the cash flow proceeds at Group level are expected
to be of a size exceeding the Parent's external interest-bearing debt as
previously informed in notice to the stock exchange no. 286 dated 14 January
2007.
In connection with the geographic and product focus of the Group's activities,
Keops' Spanish residential project has been sold. This sale releases a
three-digit million figure in favour of Keops, and the selling price is based
on Keops' total investment in the project plus a satisfactory return. The
continued work on the project and 13 employees were transferred to the acquirer
in the beginning of 2007.
By the beginning of 2007, the business area Development has been separated into
a more independent unit, which i.a. results in adjustment of the organisation
to be equipped for future challenges and a physical separation of this business
from the rest of the Group during 2007.
In this connection, it has been decided that the remaining part of Keops Group
will move to new headquarters in Holte after the summer of 2007.
As a part of the general simplifying and focusing of the Group, the
organisation has been strengthened and structured in a simplified manner in
January 2007. Preparation of a five-year strategy for the Group has also been
initiated with the involvement of a number of the Group's key employees.
Asset Management
By the end of the first quarter of 2006/07, Keops Asset Management handles the
operation of the Group's property companies in the Nordic region with a total
of 497 properties at a total carrying amount of DKK 21.7 billion at 31 December
2006. Among these are the properties in two portfolios acquired in the first
quarter of 2006/07:
Firstly, the so-called Nordic Light portfolio with 37 commercial properties
located in Norwegian, Swedish and Finnish provincial towns and with the Nordea
group as largest tenant. The Group acquired this portfolio in October 2006 at
approx. DKK 1.6 billion including costs.
Secondly, the so far largest portfolio acquired by the Group, i.e. the Sverige
III portfolio, which consists of 172 commercial properties located across
Sweden. This portfolio was acquired in November 2006 at approx. DKK 5.4 billion
including costs.
In order to ensure the continued strategic management and financial control of
the growing number of property companies in the Group, the organisation has
been strengthened, especially Keops Asset Management in Sweden, where several
new employees were employed in the first quarter.
Investment
After a period of handling very large acquisitions of property portfolios for
the Group, in the first quarter of 2006/07, Keops Investment has focused on
mediation projects. A total
of three projects have been mediated at a project total of DKK 629 million.
In the first half of the second quarter of the period, further six property
investments have been marketed with a project total of DKK 1.3 billion. Among
these are two hotel properties located in Northampton and Cardiff, which means
that after a few years' pause, Keops is again active on the British property
market.
Development - briefly on selected projects
Hillerød Port
The bank, Sydbank, moved in on 1 February 2007, the bank, Svenska
Handelsbanken, will be moving in during the spring, and a conditional agreement
has been concluded with the Danish National Courts Administration as to renting
the remaining areas on a 20-year lease. Moving in is expected on 1 February
2008. Furthermore, the first hole has been dug for the new construction of
Hillerød Port, which will be an entirely new office building of approx. 1,600
sqm. The project has been sold in advance.
Næstved Kaserne
A conditional agreement has been concluded with the Danish National Courts
Administration as to renting the refurbished barracks, Næstved Kaserne, on a
20-year lease. The tenancy is of approx. 6,000 sqm., and moving in is expected
on 1 May 2008.
Holbæk Rådhus
Kim Utzon Arkitekter have drawn the new town hall of Holbæk, where the digging
of stage 1 was initiated around the turn of the year, and the construction is
expected completed on 1 December 2007.
Galleri K
In Galleri K, the last rental agreements have been concluded on i.a. letting
out of the basement floor.
RO's Torv
The expansion of RO's Torv proceeds as planned. After completed refurbishment,
the centre will accommodate 96 shops, 84,000 square metres and 1,200 parking
spots.
Christianshave, Hillerød
In Christianshave, all 61 owner-occupied flats have been sold, and the first
residents moved in on 1 February 2007. The residents of 2nd stage will be
moving in on 1 March 2007, 3rd stage on 1 May 2007. Project total of approx.
DKK 175 million.
Mølledammen, Kokkedal
The last residents will be moving into Mølledammen during February 2007, after
which the project with a total of 72 flats has been sold and handed over. Now,
only establishment of miscellaneous outdoor areas remains, such as square,
parking and planting. Project total of approx. DKK 160 million.
Outlook
Management maintains the most recently reported expectations of Keops Group's
total consolidated profit before tax for this financial year. Expectations of
profit before tax for 2006/07 accordingly constitute DKK 500-700 million. The
expectations of profit include value adjustments of properties and debt of a
total of DKK 170 million.
Please address questions relating to this Notice to Head of Communications
Susanne Lindø on tel. +45 3341 0000.
