Result of DKK 89.8 million after tax in 2009/10 (18 months)
Tower Group A/S announces Annual Report for 2009/10 (18 months). The Annual Report is attached to this announcement and will be available on the Company's website, www.towergroup.dk.
Here are selected highlights:
- The Going Concern of Tower Group depends on the Company obtaining an agreement with the lenders to improve the long-term financing conditions and a strengthening of the liquidity through a a planned rights issue to complete the restructuring.
- A reconstruction of Tower Group A/S begun In July 2009. The reconstruction was completed in the beginning of 2010 with a strengthening of the capital base of about DKK 900 million, of which DKK 162.1 million were liquid funds. In connection herewith the Company got a new majority shareholder; BXR Tower B.V.
- The group's net result for 2009/10 (18 months) was a profit of DKK 89.8 million, an increase of DKK 347.7 million compared to the result of the accounting year 2008/09 of DKK -257.9 million. The result before value adjustments, tax and the effect of the reconstruction is DKK -230.0 million compared with the result expectations announced most recently in company release no 45 of 18 November 2010 of DKK -145 to -155 million.
- The group has realised a gross result of DKK -106.9 million in 2009/10, corresponding to a decrease of DKK -263.7 million compared with 2008/09 where the realized gross result was DKK 156.8 million.
- The group has realised a total net turnover of DKK 412.4 million in 2009/10 (18 months) compared with DKK 282.1 million for 2008/09, which represents a 2,54% annualized decrease.
- During 2009/10, Tower Group has made accruals for loss on rent receivables of DKK 78.8 million, which corresponds to a 19% annualized increase compared to 2008/09.
- Book value of the investment properties as per 31 December 2010 is DKK 4.295.9, compared to DKK 4,557.7 million as per 30 June 2009.
- The Company’s balance sheet amounted to DKK 4,456.7 million as per 31 December 2010, compared to DKK 4,887.7 million as per 30 June 2009.
- The total equity as of 31 December 2010 amounts to DKK 581.3 million, compared to DKK 263.6 million as of 30 June 2009. During the financial year, the equity has been favourably affected mainly by conversion of debts and the pre-emptive rights issue which was completed in March 2010 leading to a share capital increase by DKK 278.7 million. Significant positive effect on the equity also resulted from the current year net profit.
- The rent level is expected to increase by an average of about 2% p.a. during the period 2011-2012 with the largest increases in the most urbanised areas. Given the fact that the Company's property is mainly situated in Berlin and larger cities in NRW, the Company remains optimistic that there are grounds to expect both a positive development on rent levels and a potential for value development of the Company’s properties.
Chairman of the Board Jens Erik Christensen comments: ”The result for the period 2009/10 is overall unsatisfactory. The company’s liquidity is very strained, and the Company cannot fully pay interest and make repayments on its debt obligations. The Going Concern of Tower Group depends on a successful completion of the planned rights issue and that acceptable agreements are reached with the Company’s lenders
The positive trends which were registered in the fourth quarter 2010 and continued in 2011, and the expectations to the effect of the financial and administrative restructuring, the Company is in the process of, which is expected to be fully implemented during autumn 2011, however, provide the management with reason to believe that the Company can still meet its long-term goal of creating added value in the portfolio."
Best regards
Tower Group A/S
Jens Erik Christensen
Chairman
Questions regarding this release can be directed to chairman Jens Erik Christensen, on tel.: +45 40 61 90 90.
