Aalborg, Denmark, 2010-12-22 08:45 CET (GLOBE NEWSWIRE) --
SUMMARY
- TK Development recorded a profit of DKK 10.2 million after tax, compared to DKK 49.4 million in the same period the year before.
- Consolidated equity totalled DKK 1,818.7 million at 31 October 2010, corresponding to a solvency ratio of 40.4 %.
- The Group’s 10,900 m² retail park in Uppsala, Sweden, was completed and opened fully let in March 2010. The retail park was sold, based on forward funding, and handed over to the investor, an institutional fund of German IVG Funds, in April 2010.
- The Group’s Sillebroen Shopping Centre in Frederikssund, Denmark, was completed and opened as planned on 25 March 2010. The shopping centre has a current occupancy rate of 92 %, and negotiations with tenants for the remaining premises are ongoing. The shopping centre has a satisfactory influx of customers that meets expectations and is also performing satisfactorily.
- The Group’s total project portfolio amounted to DKK 3,397 million at 31 October 2010, of which DKK 2,114 million is attributable to projects that have been completed and thus generate cash flow. The annual net rent from the current leases amounts to DKK 147.3 million, equal to a return on invested capital of 7.0 %.
- In August 2010, the Group took over the development of a 5,400 m² property project at Trøjborgvej in Århus, Denmark. A building permit has been granted, and the project has been fully financed. The project will be carried out in cooperation with Nordica Real Estate A/S via a jointly owned project company in which the Group has a 20 % stake.
- In conjunction with the takeover of the Trøjborgvej project in Århus, Denmark, the Group sold two completed retail parks to the jointly owned project company.
- Based on satisfactory pre-construction letting, TK Development began building the second phase of the Fashion Arena Outlet Center, Prague, the Czech Republic, of about 7,000 m² in April 2010. Construction progressed as planned, and the second phase opened on schedule in October 2010.
- At 31 October 2010, the Group’s project portfolio comprised 981,000 m² (31 January 2010: 957,000 m²).
- Since the beginning of 2010, the market situation has developed favourably. The general investment climate is marked by cautious optimism and a higher propensity to invest. There is increasing demand for real property from investors who continue to attach crucial importance to quality and location.
- Management believes that land prices, construction costs, rent levels and property prices have stabilized at a new level. The new price levels underpin the profitability of future property development, and new projects in the portfolio are thus expected to generate a normal profit.
- An Extraordinary General Meeting was held on 1 July 2010, at which the General Meeting resolved to carry out a capital increase in the form of a rights issue with total gross proceeds of DKK 210.3 million. The capital increase was implemented in August 2010.
- The capital increase has placed TK Development in a stronger position to seize the project opportunities in the present market.
- For the 2010/11 financial year, the Group still expects to generate a profit after tax of about DKK 100 million.
Further information is available from Frede Clausen, President and CEO, on tel. +45 8896 1010.
The expectations for future developments presented in this announcement, including earnings expectations, are naturally subject to risks and uncertainties and may be affected by various factors, such as global economic conditions and other significant issues, including credit-market, interest-rate and foreign-exchange developments. Reference is also made to the section “Risk issues” in the Group’s 2009/10 Annual Report.
