Intershop announces record result
Intershop Holding reports a net profit of CHF 119.6 million for fiscal year 2018. This is almost twice as much as in the previous year.
Net income of CHF119.6 million, or CHF59.84 per share, was nearly 90% higher than the previous year, Intershop says. The sale of investment and promotional properties resulted in a pre-tax gain of 82 million, which contributed to a strong increase in return on equity to 19.3%, it said. Shareholders' equity stood at 690 million as of Dec. 31, 2018, corresponding to an equity ratio of 47%.
As of the balance sheet date, Intershop's portfolio comprised 54 properties including development and promotion properties with a value of CHF 1.3 billion. This is 60 million less than in the previous year. The decline was mainly due to sales, the company said.
Due to property sales and the intended de-letting of individual development properties, rental income fell slightly byTP1.4% to88 million in 2018. The gross yield on investment properties remained unchanged at 6.3%. The vacancy rate of investment properties decreased to 9.8%. Property expenses decreased by 1.6% to 9.7 million, corresponding to 11% of rental income. The net yield of the investment portfolio was 5.4%.
The Board of Directors will again propose to the Annual General Meeting a dividend of CHF 22.00 per registered share, corresponding to a distribution volume of 44 million. Based on the share price on the balance sheet date, this would result in a distribution yield of 4.5%, the company said. The overall performance of the share (price gain and dividend) reached 4.7% in the financial year.
"Confidence" for 2019
Intershop is confident about the current fiscal year. However, sales successes on the level of the reporting year are not expected and no promotion project will be completed. As a result of the sales of investment properties and the vacating of several development properties, the Company expects a decline in rental income of around 10%.
The focus of operating activities will therefore remain on marketing the vacancies. For the year as a whole, Intershop expects the vacancy rate for investment properties to remain at the current level. Intershop expects to generate a return on equity of at least 8% on a multi-year average.
Share buyback planned
The outstanding result has led to a further increase in the already comfortable equity base, Intershop says. As attractive acquisitions are unlikely in the current interest rate environment, the Board of Directors has decided to buy back up to a maximum of 5% of the outstanding shares by means of a fixed price offer of CHF 515 per share.
At the Annual General Meeting on April 4, 2019, the reduction of the share capital by cancellation of the acquired registered shares shall be proposed. After reduction of the share capital by a maximum of 5%, the annual dividend amount will be reduced by up to 2.2 million. The detailed buyback offer is to be published on March 5, 2019.
Following the death of long-time Board member Charles Stettler, this position is being filled. To this end, the Board of Directors has already proposed the election of Kurt Ritz. Ritz will stand for election at this year's Annual General Meeting. (ah)
