euro adhoc: Vivacon AG
Financial Figures/Balance Sheet
VIVACON AG increases
net income to EUR 44m (+95%) in 2006
Disclosure announcement transmitted by euro adhoc. The issuer is responsible for the content of this announcement.
annual report
26.02.2007
Cologne, 26th February 2006. VIVACON AG (ISIN DE0006048911) today announced preliminary full-year results for 2006, which are subject to the final auditors report and to its approval by the supervisory board.
In 2006, VIVACON sold apartments valued at a total of EUR 571m, which is an increase of 55% on the EUR 368m achieved in the previous year. In total 12,946 units were sold in 2006, which represents an increase of 53% year-on-year. The majority of the transactions were disposals of individual asset-holding companies, so called "share deals". As in such "share deals" only the realised margin is recognised as revenue, rather than the total value of the real estate portfolio sold (transaction volume), stated revenues are significantly lower than transaction volume. In 2006, group revenues reached EUR 122m, compared to EUR 55m in the year before (+122%).
EBIT increased to EUR 79m (+110%) from EUR 37.4m in the previous year. All costs incurred by VIVACON AG relating to the postponed IPO of Vivacon German Properties PLC, amounting to EUR 4.0m, are fully reflected in this figure. Group net income improved to EUR 44m (+95%) from EUR 22.6m in 2005. Earnings per share increased to EUR 2.28 (+77%) following EUR 1.29 in the previous year.
The aforementioned results reflect an adjustment in accounting and valuation methods as against the previous year, which is described in detail in the additional clarification.
Outlook: In 2007, VIVACON AG expects strong growth in all business areas. Internal operating structures as well as the overall number of employees (+48% in 2006) have been developed accordingly. As a result of the continuing very positive market environment as well as the outstanding growth prospects of the Company, VIVACON expects an increase in net income to EUR 54-58m and in EPS to EUR 2.80-3.00 in 2007. The Company plans for the first time to propose the payment of a dividend amounting to EUR 0.40 per share in respect of 2006 at the Annual General Meeting.
Additional clarification of the change in accounting policy and valuation methods in 2006
Up to and including 2005, the Company accounted for revenue recognition of production orders in the landmark and design business unit according to the IAS 11 percentage of completion method. Given the recent discussions of the IFRIC, so-called "pre-completion real estate sales" will, in the Companys view, no longer fall under IAS 11 but under IAS 18. Accordingly, corresponding orders have been reflected according to IAS 18 as of 2006. In order to facilitate comparison, the figures for 2005 have been adjusted accordingly. This change from IAS 11 to IAS 18 leads to a reduction in revenues of EUR 7.9m (2005) and EUR 14.3m (2006), a reduction in EBIT of EUR 2.3m (2005) and EUR 4.0m (2006) as well as a reduction in net income of EUR 1.4m (2005) and EUR 2.4m (2006). The result is a periodic shift of revenues and earnings to 2007 and the following years.
In 2005, the Company sold a real estate portfolio to an institutional investor which had been sold in 2004 and subsequently bought back in 2005. This transaction was accounted for in revenues and material expenses according to the legal facts. However, in order to better reflect the economic circumstances, it was decided as part of the adjustment of the previous years figures to reflect this transaction as if the Company had acted as an intermediary. Material expenses - because of the repurchase - as well as the corresponding revenues - because of the resale - have therefore been eliminated. The adjustment results solely in a change in revenues (a reduction of EUR 22.4m), but not in any change in the transaction volume or earnings shown in the annual accounts for 2005.
Furthermore, as a result of the ongoing high volatility of VIVACON AG shares, the Company has changed the method used for calculating the costs of the stock option programme. The change affects mainly the implied volatility in the context of stock option programme valuation. By contrast to the previous year, the Company now takes into account only the actual long-term historic market volatility of VIVACON AG shares. In the previous year, the volatility of comparable companies was also taken into consideration. This results in an increase of the volatility of VIVACON shares used in the calculation from 26.9% p.a. to 45% p.a. in 2005. The change results in an increase in personnel expenses of EUR 0.6m in 2005.
Cautionary note with regard to forward-looking statements This document contains forward-looking statements and statements of future expectations that reflect management's current views and assumptions with respect to future events. Such statements are subject to known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied and that are beyond Vivacon AG's ability to control or estimate precisely. In addition to statements which are forward-looking by reason of context, the words 'may, will, should, expects, plans, intends, anticipates, believes, estimates, predicts, potential, or continue' and similar expressions in the German or English language identify forward-looking statements. Actual results, performance or events may differ materially from those statements. Vivacon AG does not assume any obligation and does not intend to update any forward-looking statements to reflect events or circumstances after the date of these materials.
end of announcement euro adhoc 26.02.2007 07:35:25
Further inquiry note:
Sven Annutsch
Head Corporate Finance
Tel: + 49 221 / 1305621 630
Sven.Annutsch@vivacon.de
Lars Schriewer
Director Communication
Tel: + 49 221 / 1305621 631
Lars.Schriewer@vivacon.de
Vivacon AG
Bayenthalgürtel 4
50968 Köln
Fax: + 49 221 / 1305621 950
http://www.vivacon.de
Branche: Real Estate
ISIN: DE0006048911
WKN: 604891
Index: CDAX, SDAX, Prime All Share, Classic All Share
Börsen: Frankfurter Wertpapierbörse / official dealing/prime standard
Börse Berlin-Bremen / free trade
Hamburger Wertpapierbörse / free trade
Baden-Württembergische Wertpapierbörse / free trade
Börse Düsseldorf / free trade
Bayerische Börse / official dealing