Eurocastle Releases Financial Results for the Nine Months Ended 30 September 2019 and Announces Share Buyback Programme Transactions from 11 November 2019 to 13 November 2019 and end of Fifth Buyback Programme

Montag, 18.11.2019 08:00 von GlobeNewswire - Aufrufe: 345

Contact:                                                                                                                                                                                            
International Administration Group (Guernsey) Limited
Company Administrator
Attn:  Mark Woodall
Tel:  +44 1481 723450                                                                                          

Eurocastle Releases Financial Results for the Nine Months Ended 30 September 2019 and
Announces Share Buyback Programme Transactions from 11 November 2019 to 13 November 2019 and end of Fifth Buyback Programme


Guernsey, 18 November 2019 – Eurocastle Investment Limited (Euronext Amsterdam: ECT) today has released its financial results for the nine months ended 30 September 2019.

  • Net Asset Value (“NAV”) of €327.5 million, or €8.97 per share1.
  • Normalised FFO2 of €25.7 million, or €0.60 per share, for the third quarter of 2019; of which €0.45 per share from the sale of 5 million doValue shares in the quarter and the subsequent tender which settled on 16 September 2019.

       

    Q3 2019   Q2 2019   YTD 2019   YTD 2018
    € million € per share1   € million € per share1   € million € per share1   € million € per share1
NAV   327.5 8.97   428.2 9.81   327.5 8.97   418.7 8.80
Normalised FFO2   25.7 0.60   4.3 0.10   36.6 0.83   21.8 0.42
Distributions1   - -   6.5 0.15   13.3 0.30   31.7 0.63

       
             
THIRD QUARTER 2019 BUSINESS HIGHLIGHTS

doValue Business Update

  • On 8 August 2019, the Company sold 25% of its interest in doValue at €10.45 per doValue share, with net proceeds of €51.7 million, or €1.42 per Eurocastle share, realising 12% of the Company’s Q2 NAV in cash, and a 2.9x investment multiple on the portion of doValue shares sold.
  • First full quarter after completion of the Altamira acquisition in June 2019:
    • In addition to €10 billion of new AuM, which has been onboarded in 2019, doValue has recently been awarded new mandates with a total GBV of €7.8 billion bringing total AuM to €140 billion.
    • 44%3 year on year increase in gross revenues (5% year on year increase on a constant perimeter basis4).   
    • YTD 2019 EBITDA3 of €90.6 million and Net Income3 of €44.7 million, up by 61% and 30% respectively vs. YTD 2018 (up 13% and 17% respectively on a constant perimeter basis4).
    • EBITDA margin, excluding non-recurring items, up by 4% to 39% vs. YTD 2018 (up 3% on a constant perimeter basis4).
  • On 8 November 2019, doValue updated its 2020-2022 business plan targets; €7bn GBV per year growth on average along with an improvement in the group collection rate and lower outsourcing fees; targeting 3% to 5% annual CAGR in EBITDA (excluding non-recurring items).

       
Investment Performance

  • Following the announced sale of all assets in the listed real estate fund and significant realisations from one of the private funds, the Company realised €12.0 million in Q3 2019 from its real estate investments, representing 61% of the Company’s Q2 carrying value.

Capital Activity

  • Eurocastle completed a share tender on 16 September 2019, distributing the net proceeds from the doValue sale and additional available capital through a repurchase of €60.0 million of shares at €8.45 per share, at a premium to the share price at the time of announcement of approximately 12%.
  • In Q3 2019 Eurocastle bought back 75,697 ordinary shares under the buyback programme at an average price of €7.52 per ordinary share, representing a 16% discount to the Q3 NAV. The programme ended on 13 November 2019, with a further €0.7 million worth of shares bought back. The Company has chosen not to extend the programme in light of its realisation plan announced today.


EVENTS SUBSEQUENT TO 30 SEPTEMBER 2019

  • On 18 November 2019, the Company announced that the Board of Directors has resolved to realise the majority of the Company’s assets in order to accelerate the return of value to the Company’s shareholders (the “Realisation Plan”).
  • The Realisation Plan comprises the sale of the Company’s investments in the Italian loan pools (the “NPL Sale”) at a 5% to their Q3 2019 NAV and a tender offer to exchange Eurocastle shares for doValue shares together with the distributable proceeds from the NPL Sale.
  • As stated in the Circular published by the Company today, the Realisation Plan is subject to shareholder approval at the General Meeting scheduled for 2 December 2019.
  • The Company’s Distribution Policy, including the regular quarterly dividend, will not apply with effect from Q3 2019.

       
       
For further information of the Company as at 30 September 2019, please refer to the Company’s most recent Investor Factsheet and Circular, which can be found under the investor relations section on the Company’s website (www.eurocastleinv.com).

NORMALISED FFO

Normalised FFO (“NFFO”) is a non-IFRS financial measure that, with respect to all of the Company’s Italian Investments other than doValue, recognises i) income on an expected yield basis updated periodically, allowing Eurocastle to report the run rate earnings from these investments in line with their expected annualised returns and ii) any additional gains or losses not previously recognised through NFFO at the point investments are realised. Cash flow receipts are therefore allocated by the Company between income and capital in accordance with this expected yield methodology. With respect to doValue, following the IPO, the Company recognises NFFO based on its share of doValue’s reported annual net income excluding non-recurring items after tax together with any gains or losses arising from the sale of its shares. The income cash flow profile of each of the Company’s investments may not exactly equal the NFFO recognised by the Company each period but will do so over the life of each investment.

Normalised FFO for the Nine Months Ended 30 September 2019 Average Net Invested Capital5 Annualised   YTD 2019
  € Thousands Yield   € Thousands
doValue 78,901 67%   39,683
Italian NPLs & Other Loans 116,144 18%   15,457
Real Estate Fund Investments 29,874 (18)%   (4,008)
Italian Investments NFFO before expenses 224,919 30%   51,132
Legacy portfolios       261
Manager base & incentive fees       (12,211)
Other operating expenses       (2,594)
Normalised FFO       36,588
€ per share       0.83


Normalised FFO for the Three Months Ended 30 September 2019
Average Net Invested Capital1 Annualised   Q3 2019
  € Thousands Yield   € Thousands
doValue 74,401 164%   30,512
Italian NPLs & Other Loans 123,635 16%   5,068
Real Estate Fund Investments 27,999 (10)%   (673)
Italian Investments NFFO before expenses 226,035 62%   34,907
Legacy portfolios       37
Manager base & incentive fees       (8,263)
Other operating expenses       (950)
Normalised FFO       25,731
€ per share       0.60


Income Statement for the Nine and Three Months ended 30 September 2019 (Unaudited) YTD 2019 Q3 2019
  € Thousands € Thousands
Portfolio Returns    
doValue 28,691 (29,321)
Italian NPLs & Other Loans 11,286 4,633
Real Estate Funds 925 355
Fair value movement on Italian investments 40,902 (24,333)
Fair value movements on residual Legacy entities 261 37
Loss on foreign currency translation (3) 2
Total income 41,160 (24,294)
     
Operating Expenses    
Interest expense 102 12
  Manager base and incentive fees 12,211 8,263
  Remaining operating expenses 2,489 940
Other Operating expenses 14,700 9,203
Total expenses 14,802 9,215
     
Net profit / (loss) for the period 26,358 (33,509)
€ per share 0.60 (0.78)

                                                              


Balance Sheet and NAV Reconciliation as at 30 September 2019 (Unaudited)
  Italian Investments
€ Thousands
 

Corporate
€ Thousands
Total
€ Thousands
Assets        
Cash and cash equivalents   - 38,157 38,157
Other assets   - 147 147
Investments:        
  doValue   153,294 - 153,294
  Italian NPLs & Other Loans   131,141 - 131,141
  Real Estate Funds   15,546 - 15,546
Total assets   299,981 38,304 338,285
         
Liabilities        
Trade and other payables   - 2,508 2,508
Manager base and incentive fees   - 8,263 8,263
Total liabilities   - 10,771 10,771
         
Net Asset Value   299,981 27,533 327,514
         
FINO deferred purchase price commitment   17,826 (17,826) -
NAV (segments adjusted for outstanding commitments)6   317,807 9,707 327,514
NAV (€ per share)7   8.71 0.26 8.97



Share Buyback Programme Transactions from 11 November 2019 to 13 November 2019 and end of Fifth Buyback Programme

The Company announces that between 11 November 2019 and 13 November 2019, under its fifth non-discretionary share buyback programme with Liberum Capital Limited (acting as the Company's broker) announced on 9 August 2019 and commenced on 16 September 2019 (the “Fifth Buyback Programme”), it bought back 9,825 of its ordinary shares at an average price of €7.08 per ordinary share. The purchased shares will all be held as treasury shares. The Fifth Buyback Programme ended on 13 November 2019.

The purpose of the share buyback programme is to reduce the share capital of the Company and the programme is executed in compliance with the provisions of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 and the Commission Delegated Regulation (EU) 2016/1052 of 8 March 2016, collectively referred to as the Safe Harbour rules.

The following transactions have been made under the buyback programme:

Accumulated, most recent announcement Platform code Volume Volume Weighted Average Price Gross Value (€)
11/11/2019 BATE 161 7.04 1,133
  XLON 2,653 7.04 18,679
  CHIX 159 7.06 1,123
  TRQX 204 7.04 1,436
  Total 3,177 7.04 22,371
12/11/2019 BATE 153 7.08 1,083
  XLON 2,779 7.08 19,671
  CHIX 154 7.08 1,090
  TRQX 205 7.08 1,451
  Total 3,291 7.08 23,296
13/11/2019 BATE 152 7.12 1,082
  XLON 2,846 7.12 20,256
  CHIX 153 7.12 1,089
  TRQX 206 7.12 1,467
  Total 3,357 7.12 23,894

Following the above transactions:

  • The total number of ordinary shares of the Company in issue is 55,379,438
  • The total number of ordinary shares held by Eurocastle in treasury is 18,977,196 (equal to 34.3% of the Company’s share capital)
  • The total number of voting rights exercisable by holders of ordinary shares of the Company is 36,402,242 as voting rights of shares held in treasury are suspended.

Set out below are all trades completed between 11 November 2019 and 13 November 2019:

  Platform code Volume Price Gross Value (€)
11/11/2019 XLON 85 7.08   601.80
  XLON 412 7.08   2,916.96
  CHIX 100 7.06   706.00
  CHIX 59 7.06   416.54
  TRQX 100 7.04   704.00
  BATE 161 7.04   1,133.44
  TRQX 104 7.04   732.16
  XLON 463 7.04   3,259.52
  XLON 300 7.04   2,112.00
  XLON 128 7.04   901.12
  XLON 100 7.04   704.00
  XLON 100 7.04   704.00
  XLON 172 7.04   1,210.88
  XLON 66 7.02   463.32
  XLON 388 7.02   2,723.76
  XLON 439 7.02   3,081.78
    3,177 7.04 22,371.28
12/11/2019 XLON   17 7.08   120.36
  XLON   100 7.08   708.00
  XLON   100 7.08   708.00
  XLON   100 7.08   708.00
  XLON   98 7.08   693.84
  TRQX   205 7.08   1,451.40
  CHIX   154 7.08   1,090.32
  BATE   153 7.08   1,083.24
  XLON   225 7.08   1,593.00
  XLON   508 7.08   3,596.64
  XLON   31 7.08   219.48
  XLON   37 7.08   261.96
  XLON   492 7.08   3,483.36
  XLON   33 7.08   233.64
  XLON   210 7.06   1,482.60
  XLON   38 7.08   269.04
  XLON   492 7.08   3,483.36
  XLON   298 7.08   2,109.84
    3,291 7.08 23,296.08
13/11/2019 XLON 926 7.12   6,593.12
  BATE 152 7.12   1,082.24
  CHIX 153 7.12   1,089.36
  TRQX 206 7.12   1,466.72
  XLON 392 7.10   2,783.20
  XLON 360 7.12   2,563.20
  XLON 396 7.12   2,819.52
  XLON 412 7.12   2,933.44
  XLON 360 7.12   2,563.20
    3,357 7.12 23,894.00

ABOUT EUROCASTLE

Eurocastle Investment Limited is a publicly traded closed-ended investment company that focuses on investing in performing and non-performing loans and other real estate related assets primarily in Italy. The Company is Euro denominated and is listed on Euronext Amsterdam under the symbol “ECT”. Eurocastle is managed by an affiliate of Fortress Investment Group LLC, a leading global investment manager. For more information regarding Eurocastle Investment Limited and to be added to our email distribution list, please visit www.eurocastleinv.com.




1 Per share calculations for Eurocastle throughout this document are based on the weighted average of outstanding voting shares and therefore exclude shares held in treasury. As at 30 September 2019, 55.4 million shares were in issue of which 36.5 million were voting shares and 18.9 million were held in treasury. Amounts per share are therefore calculated on the following basis: Q3 2019 Net Asset Value per share (“NAV per share”) on 36.5 million voting shares, Q3 2019 NFFO on 42.8 million weighted average voting shares, YTD 2019 NFFO on 44.2 million weighted average shares. Q2 2019 NAV per share on 43.7 million voting shares, Q2 2019 NFFO on 44.9 million weighted average shares. 30 September 2018 NAV per share based on 47.6 million voting shares and YTD 2018 NFFO per share – based on 51.7 million weighted average voting shares. Q2 2019 distribution based on 6.5 million voting shares.

2 Normalised FFO (“NFFO”) is a non-IFRS measure used to explain the financial performance of the Company, as outlined on page 3 of this announcement.

3 EBITDA and Net Income excluding non-recurring items; YTD 2019 EBITDA reported at €78.8 million, YTD 2019 Net Income reported at €18.6 million.

4 To improve comparability with YTD 2019 results, doValue presented combined Altamira A.M. Q3 2018 results with their YTD 2018 results.

5 Time weighted average of invested capital (net of any capital returned) over the relevant period.

6 NAV segments adjusted for €17.8 million carrying value of unfunded committed investment relating to the deferred purchase price (“DPP”) of €18.1 million on FINO, payable in August 2020.

7 Amounts per share calculated on 36.5 million outstanding voting shares.


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