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Research: Real Estate
S Immo’s FY21 results saw a gross profit recovery very close to 2019 and EPS setting an all-time record of €3.24 per share. This was accompanied by a positive outlook statement. The shares closed at €22.75 on 29 April, representing a c 22% discount to its FY21 EPRA NAV of €29.29. On 2 May, it was announced that CPI had raised its bid for S Immo to €23.50 (cum dividend), which the management board has accepted.
S Immo |
FY21 results show continued solid recovery
Real estate |
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4 May 2022 |
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S Immo’s FY21 results saw a gross profit recovery very close to 2019 and EPS setting an all-time record of €3.24 per share. This was accompanied by a positive outlook statement. The shares closed at €22.75 on 29 April, representing a c 22% discount to its FY21 EPRA NAV of €29.29. On 2 May, it was announced that CPI had raised its bid for S Immo to €23.50 (cum dividend), which the management board has accepted.
FY21 results reflect a strong recovery
FY21 was a strong year, with funds from operations increasing 43% to €60.8m driven largely by dividends (absent in 2020) and interest income on the convertible bond, gross profit from the hotel operations and increased rent from transactions. The total gross margin increased from 52.6% to 55.6% driven at least in part by the recovery in the hotel operations. Boosted further by revaluations, reported EPS rose to €3.24/share and S Immo ended the period with an EPRA NAV of €29.29/share, up from €24.32/share in 2020. S Immo is proposing a dividend of €0.65/share for 2022.
CPI bid increased to €23.50/share and accepted
On 2 May, it was announced that 42.6% shareholder CPI Property Group had raised its bid to €23.50 and that the management board had accepted this higher offer. S Immo management and CPI have found an arrangement to bring the planned AGM forward by 10 days to 1 June, and S Immo has agreed not to oppose the deletion of the voting rights cap, in contrast to last year. The offer price will become effective only after the deletion of the voting cap and relevant anti-trust approvals have been received in various countries, which may be forthcoming in late summer/early autumn. The 2021 IMMOFINANZ bid for S Immo was €22.25/share, cum dividend.
Valuation: Significant discount to EPRA NAV
The shares closed at €22.75/share on 29 April, which represents a discount of c 22% versus the FY21 EPRA NAV of €29.29/share (and peer average of 32% discount). The outlook for S Immo is viewed positively by the company as it points towards continued ‘profitable long-term growth’. Based on Refinitiv consensus, S Immo’s FY22e and FY23e Funds From Operations (FFO1) yields currently stand at 4.1% and 4.7% respectively, versus a peer mean average of 7.8% and 8.5% respectively following sharp underperformance of some names since August 2021.
Consensus estimates
Source: S Immo, Refinitiv. Note: *Funds from operations defined as net income excluding property revaluation/disposal gains, D&A and selected other non-cash charges. |
S Immo is a research client of Edison Investment Research Limited
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Research: Real Estate
Triple Point Social Housing REIT (SOHO) delivered a strong performance in FY21 with its portfolio of long lease specialised social housing assets continuing to perform as expected. With predominantly uncapped index-linked rent uplifts and fully fixed borrowing rates it is extremely well positioned in the current inflationary environment, while capital remains available for further accretive acquisitions.
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