Park Street A/S – Annual Report 2022
April 05 2023 - 8:05AM
Park Street A/S – Annual Report 2022
Park Street A/S – Annual Report 2022
Copenhagen, 5 April 2023
In 2022, the Group achieved an EBVAT (profit
excluding value adjustments and tax) of DKK 42.9 million (2021:DKK
56.8 million), as compared to expectations of DKK 50 million
(published in the Park Street Interim Report Half Year 2022 results
announcement in Aug 2022), primarily driven due to reduction in
number of assets from sale of properties, leading to lower
income, combined with an increase in financial expenses due to
changes in interest rates. Furthermore there was an increase in new
leasing adding to costs for marketing activity, and an increase in
energy costs related to vacant units.
We expect the EBVAT for 2023 to be DKK 55m in
view of our expectations to close new leases in pipeline, launch of
Pulse N and expected optimisation of operating costs offsetting
higher finance costs. This outlook assumes the portfolio to remain
same and could change with any significant sales or additions to
properties.
The evolution of the EBVAT is influenced by the
following factors:
- Gross profit in 2022 is DKK 104.7 million (2021: DKK 117.4
million), equivalent to a decrease of DKK 12.7 million. The
reduction in gross profit is primarily due to a reduction in rental
income (- DKK 8 million) offset by an increase in income received
from the hotels in the group (DKK 5.8 million), and an increase in
Opex of DKK 7.8 million, driven in part by increased energy
costs.
- The Group's overheads were DKK 31.8 million in 2022 against DKK
34.7 million in 2021. The decrease of DKK 2.9 million is caused by
a savings in external advisor expenses.
- Net financial items amounts to DKK -29.9 million in 2022
against DKK -25.9 million in 2021, representing a negative change
of DKK 4 million driven by an increase in interest costs due to an
increase in the debt in 2021 with financial institutions including
development loan for Pulse N.
The decrease in the Net Profit for the period
from DKK 145.4 million in 2021 to DKK 55 million in 2022 is due to
the following effects:
- Fair value adjustment in 2022 with a net of DKK 36.1 million
while the fair value adjustment in 2021 had a net effect of DKK
128.9 million. In both periods an evaluation of the domicile and
investment properties have been made adjusting the yield and the
estimated profit and loss by the entire portfolio of Park Street
A/S and subsidiaries.
The Group's equity as at 31 December 2022 was
DKK 1,087 million, compared to DKK 1,217 million as at 31 December
2021. The decline in equity is due to the purchase of treasury
shares.
Subsequent events after 31 December
2022
In January 2023, we have hedged the interest
rate exposure on the floating rate non-mortgage debt through
purchase of interest rate caps. These caps are now in the positive
value.
Mortgage loans due for interest rate fixing in
April 2023 have now been fixed as F3 loans.
From the balance sheet date until the date of
presentation of this Annual Report no additional events have
occurred other than the above mentioned which significantly affect
the assessment of the annual report.
Management comments on the Annual
report
In connection with Annual Report 2022, CEO
Pradeep Pattem states the following:
“In 2022 at Park Street we made substantial
progress in signing new leases, and disposal of assets noncore to
our future operations. Our conversion of a floor of shopping center
at Glostrup into an office with long-term lease showcases the
prospects of creating long term value deploying capital and using
the design, leasing, and development capacity of our team. We
expect to continue to dispose assets in the regional centers of
Denmark while deploying further capital in core Pulse Living
strategy and large commercial assets in core locations (Spark
strategy). Higher costs associated with financing and operations,
primarily related to vacant units, combined with reduced top line
from sale of assets reflects in the EBVAT of DKK 43 million which
is below our expectations.
2023 is expected to be both a year of
opportunities and challenges for us and the overall sector. Denmark
as our base, is uniquely well positioned with its strong economy,
governance to navigate the challenges of inflation and high
interest rates. The real estate sector has relatively lower debt
and direct participation of long-term capital which is expected to
facilitate a smoother transition to a high rates environment. The
changing landscape even more pushes us to retain the keen
management focus on running a tightly managed operations, which
building up liquid capital to deploy into core assets related to
Pulse and Spark. We are exploring to accelerate the divestments of
regional portfolio over the next 12 to 24 months while recycling
the capital towards scaling up Pulse assets – both with the launch
of Pulse Norrebro, development of Pulse Taastrup but also seek
further selective acquisitions. Based on the current portfolio of
assets, the company expects that the EBVAT for the year 2023 will
be in the range of DKK 50 - 55 million."
Attached files
The Annual Report 2022 and the Statement of the
mandatory review of Corporate Governance, cf. section 107b of the
Danish Financial Statement Act, is attached to this
announcement.
Copenhagen,
Anita Nassar Pradeep Pattem Chairman CEO
Further information
For further information please contact Pradeep Pattem, CEO at
parkstreet@parkstreet.dk
Company Website: www.psnas.com
Telephone Number: +45 33 33 93 03
- Park Street Annual Report 2022
- Park Street Corporate governance statement - Annual Report
2022
- 213800VGJC18MRKMZC33-2022-12-31-en
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