DEFAMA DEUTSCHE FACHMARKT AG DEFAMA Deutsche Fachmarkt AG
(CDAX, Real Estate, DEF GR)
Value Indicators: | EUR |
NAV (WRe) 23e: | 33.40 |
FFO-Yield 23e: | 27.43 |
Description: |
Commercial real estate company |
focused on retail parks in Northern and Eastern Germany |
Successful capital increase offers additional growth opportunities
DEFAMA has carried out a successful capital increase with the issuance of 380k new shares (8.6% of existing shares). Settlement will be on April 4. The placement at EUR 27 per share will lead to gross proceeds of EUR 10.3m. The net proceeds will be used to finance the acquisition of additional properties and for the value-accretive investment in the existing portfolio. As DEFAMA has chalked up an excellent track record in portfolio expansion and the redevelopment of the portfolio in recent years, the dilution effect will be reduced with the investment of the proceeds. The capital increase did not come as a surprise to the market after management's soft announcement of a cap raise in February with the release of preliminaries.
The FFO-increase of 20% to EUR 8.5m currently targeted in 2022 should be achieved by a mixture of both activities. With the additional proceeds we are now assuming an acceleration in growth momentum in the course of the year. As management sees good acquisition opportunities in its focused property market we expect additional support for the FFO in 2023. Additionally, the acceleration could enable a faster achievement of DEFAMA's mid-term targets scheduled for 2025 which include portfolio volume of EUR 260-300m (vs. 218m in 2021), annualised rents EUR 24m (vs. 16.8m in 2021), annualised FFO EUR 11m (vs. 8.3m in 2021), annualised FFOPS EUR 2.50 (vs. ~1.88 in 2021).
The expansion of management capacity on the acquisition side should enable the identification of additional attractive targets. For this reason, DEFAMA should again exceed its previous target range for annual acquisition volume of EUR 15-20m in 2022 and 2023. We have already included a volume of EUR 22.5m p.a. for 2022 and 2023 so far. Assuming that DEFAMA invests the net proceeds from the cap raise in new properties, the additional acquisition volume of EUR ~50-60m should lead to a positive FFOPS-impact of ~0.42 (assumption: stable acquisition multiple & FFO margin). This could already lead to an FFO-yield of more than 10% (2024e).
We confirm our Buy recommendation. At first glance, the inclusion of the new number of shares in our model leads to a preliminary dilution effect for 2022 and 2023. Nevertheless, we are convinced that the dilution effect will have disappeared by 2023 due to selective investment in attractive properties.
Changes in Estimates:
Comment on Changes:
FY End: 31.12. in EUR m
2021e
+/ -2022e
+/ -2023e
+/ -
(old)
(old)
(old)
We adjust our estimates for 2021 after DEFAMA's release of prelims. Changes are mainly driven by temporary effects of successful acquisitions made in 2021 (acquisition volume of nearly EUR 30m).
FFO I FFOPS I Net income EPS
7.25 -2.7 %
8.41 -0.5 %
9.84 0.1 %
1.64 -2.7 %
1.90 -6.6 %
2.23 -7.8 %
5.13 -2.0 %
3.56 0.5 %
4.26 0.0 %
For 2022 and 2023 we include the new number of shares while leaving other estimates nearly unchanged.
1.16 -2.0 %
0.81 -7.5 %
0.96 -7.9 %FY End: 31.12. in EUR mCAGR (20-23e)
2017
2018
2019
2020
2021e
2022e
2023e
Rental income Change yoy EBIT
FFO I
FFO I-margin EBT
5.10 67.9 % 2.67 2.58 50.6 %
7.61 49.2 % 3.59 3.65 47.9 %
9.53 25.1 % 4.50 4.62 48.4 %
12.19 27.9 % 5.62 5.87 48.2 %
14.31 17.4 % 9.16 7.06 49.3 %
16.76 17.1 % 7.62 8.37 49.9 %
19.31 15.2 % 8.69 9.85 51.0 %
1.77
2.25
2.78
3.49
6.53
4.80
5.68
Net income
1.36
1.68
2.06
2.51
5.03
3.58
4.26
EPS FFOPS I DPS Dividend Yield
0.38
0.46
0.51
0.57
1.14
0.74
0.89
0.73
1.01
1.14
1.33
1.60
1.78
2.05
0.34
0.40
0.45
0.48
0.51
0.54
0.58
3.8 %
3.4 %
2.9 %
2.7 %
1.8 %
2.0 %
2.1 %
Rel. Performance vs CDAX: | |
1 month: | -1.2 % |
6 months: | 19.4 % |
Year to date: | 8.7 % |
Trailing 12 months: | 51.0 % |
Book Value / Share
3.18
4.10
5.50
5.61
6.24
8.04
8.34
P / E
23.2 x
25.0 x
30.1 x
30.9 x
24.2 x
37.1 x
31.1 x
Price / Book P / NAVPS
2.8 x
2.6 x
2.5 x
3.1 x
4.4 x
3.4 x
3.3 x
1.1 x
1.2 x
1.3 x
1.2 x
1.6 x
1.6 x
1.5 x
FFO I-Yield ROE
8.2 %
8.7 %
7.5 %
7.6 %
5.8 %
6.4 %
7.4 %
12.4 %
12.3 %
10.2 %
10.2 %
19.2 %
10.8 %
10.8 %
Company events:
LTV Guidance:
61.1 %
62.0 %
58.2 %
60.2 %
60.1 %
58.0 %
58.8 %
2022e: FFO of EUR ~8.5m, Net profit (HGB) of EUR ~3.5m
Analyst
Andreas Pläsier
COMMENT
Published 31.03.2022 08:15
1
aplaesier@warburg-research.com+49 40 309537-246
EPRA-NAV per share development in EUR
FFO per share development in EUR
Source: Warburg Research
Source: Warburg Research
Company Background
Founded in 2014 and headquartered in Berlin, DEFAMA focuses on the acquisition, ownership and management of retail parks in German small and medium-sized cities, predominantly in Northern and Eastern Germany.
The investment strategy is to "buy and hold" assets with high occupancy and minor capex needs for a purchase price of ~10x annual rent.
Investment volumes are EUR 1 - 5 million per asset. Anchor tenants are nationwide retailers.
Competitive Quality
Real estate competence: founder, major shareholder and CEO Matthias Schrade, previously oversaw as a board member responsible for acquisitions for a non-listed real estate company based in Munich.
Unique focus: the company competes for assets that are too large for individual investors and too small for institutional investors and can "buy low".
Strong access to local public banks networks, for whom real estate financings for DEFAMA projects are large and important deals. They in turn know smaller tenants well.
Focus on leading centers in smaller cities ("big fish in a small pond").
Geographical breakdown of rental income % of total rental income
Rental income by sector % of rental income
Source: Warburg Research
Source: Warburg Research
Valuation
2017
2018
2019
2020
2021e
2022e
2023e
P / E
P / NAVPS Price / Book P / FFOPS I FFO I-Yield ROE Equity Ratio
23.2 x
25.0 x
30.1 x
30.9 x
24.2 x
37.1 x
31.1 x
1.1 x
1.2 x
1.3 x
1.2 x
1.6 x
1.6 x
1.5 x
2.8 x
2.6 x
2.5 x
3.1 x
4.4 x
3.4 x
3.3 x
12.2 x
11.5 x
13.4 x
13.2 x
17.3 x
15.5 x
13.5 x
8.2 %
8.7 %
7.5 %
7.6 %
5.8 %
6.4 %
7.4 %
12.4 %
12.3 %
10.2 %
10.2 %
19.2 %
10.8 %
10.8 %
21 %
19 %
24 %
18 %
17 %
22 %
21 %
Company Specific Items
NAV/Share Vacancy Rate
2017
2018
2019
8.42 2.7 %
11.02 4.3 %
13.46 4.0 %
2020
2021e
2022e
2023e
16.86 3.7 %
18.80 3.7 %
18.61 4.0 %
20.15 4.0 %
Consolidated profit and loss
In EUR m | 2019 | 2020 | 2021e | 2022e | 2023e |
*Adjustments made for: | |||||
2019 | 2020 | 2021e | 2022e | 2023e |
2017
2018
Total revenues | 5.83 | 9.09 | 11.21 | 14.58 | 17.04 | 19.96 | 22.98 |
Rental income Change yoy | 5.10 67.9 % | 7.61 49.2 % | 9.53 25.1 % | 12.19 27.9 % | 14.31 17.4 % | 16.76 17.1 % | 19.31 15.2 % |
Property operating costs Property management costs Rental profit Income from property sales Other revenues | 1.24 0.00 4.58 0.00 0.12 | 2.21 0.00 6.87 0.00 0.08 | 2.63 0.00 8.57 0.00 0.07 | 3.40 0.00 11.18 0.00 0.12 | 3.83 0.00 13.21 2.60 0.22 | 4.63 0.00 15.33 0.00 0.24 | 5.36 0.00 17.63 0.00 0.28 |
Gross profit | 4.70 | 6.95 | 8.64 | 11.30 | 16.03 | 15.57 | 17.90 |
Administration expenses Personnel expenses Other operating income/expenses Unfrequent items | 0.35 0.47 0.00 n.a. | 0.70 0.72 0.00 n.a. | 0.70 1.04 0.00 n.a. | 0.81 1.50 0.00 n.a. | 0.95 1.70 0.00 n.a. | 1.12 2.04 0.00 n.a. | 1.29 2.34 0.00 n.a. |
EBITDA | 3.89 | 5.53 | 7.04 | 8.99 | 13.37 | 12.41 | 14.27 |
Valuation result Depreciation of fixed assets | 0.00 1.22 | 0.00 1.95 | 0.00 2.55 | 0.00 3.36 | 2.60 4.21 | 0.00 4.79 | 0.00 5.59 |
EBITA | 2.67 | 3.59 | 4.50 | 5.62 | 9.16 | 7.62 | 8.69 |
Amortisation of intangible assets/Goodwill | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
EBIT | 2.67 | 3.59 | 4.50 | 5.62 | 9.16 | 7.62 | 8.69 |
Interest income Interest expenses Other financial income (loss) Financial result | 0.00 0.90 0.00 -0.90 | 0.00 1.34 0.00 -1.34 | 0.01 1.73 0.00 -1.72 | 0.01 2.14 0.00 -2.13 | 0.00 2.55 0.00 -2.63 | 0.00 2.82 0.00 -2.82 | 0.00 3.01 0.00 -3.01 |
EBT | 1.77 | 2.25 | 2.78 | 3.49 | 6.53 | 4.80 | 5.68 |
Margin | 30.4 % | 24.8 % | 24.8 % | 24.0 % | 38.3 % | 24.1 % | 24.7 % |
Total taxes thereof cash taxes | -0.41 -0.28 | -0.55 -0.36 | -0.71 -0.42 | -0.71 -0.42 | -0.71 -0.42 | -1.22 -0.73 | -1.41 -0.87 |
Net income from continuing operations Income from discontinued operations (net of tax) Net income before minorities Minority interest | 1.36 0.00 1.36 0.00 | 1.70 0.00 1.70 0.02 | 2.07 0.00 2.07 0.01 | 2.51 0.00 2.51 0.00 | 5.04 0.00 5.04 0.00 | 3.58 0.00 3.58 0.00 | 4.27 0.00 4.27 0.00 |
Net income | 1.36 | 1.68 | 2.06 | 2.51 | 5.03 | 3.58 | 4.26 |
Number of shares, average FFO (II) FFO I-margin FFOPS I EPS EPS adj. | 3.55 2.58 50.6 % 0.73 0.38 0.38 | 3.62 3.65 47.9 % 1.01 0.46 0.43 | 4.05 4.62 48.4 % 1.14 0.51 0.47 | 4.42 5.87 48.2 % 1.33 0.57 0.57 | 4.42 7.06 49.3 % 1.60 1.14 1.14 | 4.71 8.37 49.9 % 1.78 0.74 0.74 | 4.80 9.85 51.0 % 2.05 0.89 0.89 |
Guidance: 2022e: FFO of EUR ~8.5m, Net profit (HGB) of EUR ~3.5m
Financial Ratios
2017
2018
Property operating costs / Rental Income Operating Leverage (Real Estate) Rental profit / interest expenses | 24.4 % 2.4 x 5.1 x | 29.1 % 2.9 x 5.1 x | 27.6 % 5.0 x 5.0 x | 27.9 % 4.6 x 5.2 x | 26.8 % 6.9 x 5.2 x | 27.6 % 6.9 x 5.4 x | 27.7 % 7.8 x 5.9 x |
Revenues, EBITDA in EUR mOperating Performance in %
Performance per Share
Source:
Source: Warburg Research
Consolidated balance sheet
Assets | |||||||
Goodwill and other intangible assets thereof other intangible assets thereof Goodwill Property, plant and equipment Investment properties Financial assets Other long-term assets | 0.01 0.00 0.01 0.03 51.96 0.24 0.00 | 0.01 0.00 0.01 0.08 81.10 0.26 0.00 | 0.03 0.00 0.03 0.11 93.14 1.70 0.00 | 0.02 0.00 0.02 1.39 127.79 0.12 0.00 | 0.02 0.00 0.02 1.41 151.73 0.45 0.00 | 0.02 0.00 0.02 1.42 161.16 0.45 0.00 | 0.02 0.00 0.02 1.43 177.87 0.45 0.00 |
Fixed assets | 52.24 | 81.44 | 94.98 | 129.33 | 153.60 | 163.05 | 179.78 |
Inventories Accounts receivable Liquid assets Other short-term assets | 0.00 0.22 2.49 0.83 | 0.00 0.51 2.80 0.59 | 0.00 0.00 6.98 -2.56 | 0.00 0.80 4.28 -0.66 | 0.00 0.91 8.26 -4.75 | 0.00 0.93 12.21 -8.34 | 0.00 0.95 10.20 -6.35 |
Current assets | 3.17 | 4.34 | 9.29 | 7.38 | 10.18 | 14.16 | 12.18 |
Total Assets | 55.41 | 85.79 | 104.28 | 136.71 | 163.78 | 177.21 | 191.96 |
Liabilities and shareholders' equity | |||||||
Subscribed capital Capital reserve Retained earnings Other equity components | 3.55 6.15 1.59 0.00 | 3.90 10.03 2.06 0.00 | 4.42 17.31 2.56 0.00 | 4.42 17.31 3.07 0.00 | 4.42 17.31 5.85 0.00 | 4.80 26.93 6.84 0.00 | 4.80 26.93 8.31 0.00 |
Shareholders' equity | 11.29 | 15.99 | 24.29 | 24.81 | 27.58 | 38.57 | 40.05 |
Minority interest Provisions thereof provisions for pensions and similar obligations Financial liabilities (total) Short-term financial liabilities Accounts payable Other liabilities | 0.10 0.36 0.18 43.07 0.00 0.19 0.51 | 0.38 1.01 0.21 67.79 0.00 0.30 0.70 | 0.39 0.43 0.21 76.52 0.00 0.51 2.54 | 0.40 0.51 0.25 110.25 0.00 0.29 0.86 | 0.40 0.51 0.25 134.53 0.00 0.42 0.74 | 0.40 0.51 0.25 136.70 0.00 0.42 1.01 | 0.40 0.51 0.25 149.87 0.00 0.42 1.12 |
Liabilities | 44.13 | 69.79 | 79.99 | 111.91 | 136.20 | 138.64 | 151.91 |
Total liabilities and shareholders' equity | 55.41 | 85.79 | 104.28 | 136.71 | 163.78 | 177.21 | 191.96 |
In EUR m | 2017 | 2018 | 2019 | 2020 | 2021e | 2022e | 2023e |
Financial Ratios | |||||||
2017 | 2018 | 2019 | 2020 | 2021e | 2022e | 2023e |
Return on Capital ROA ROE FFO I / Equity Solvency Net Debt Net Financial Debt Net Fin. Debt / EBITDA LTV Equity Ratio | 3.1 % 12.4 % 0.2 x 40.76 40.58 10.4 x 61.1 % 20.5 % | 2.4 % 12.3 % 0.3 x 65.20 64.99 11.7 x 62.0 % 19.1 % | 2.2 % 10.2 % 0.2 x 69.75 69.54 9.9 x 58.2 % 23.7 % | 2.1 % 10.2 % 0.2 x 106.23 105.98 11.8 x 60.2 % 18.4 % | 3.3 % 19.2 % 0.3 x 126.52 126.27 9.4 x 60.1 % 17.1 % | 2.1 % 10.8 % 0.2 x 124.74 124.49 10.0 x 58.0 % 22.0 % | 2.3 % 10.8 % 0.2 x 139.92 139.67 9.8 x 58.8 % 21.1 % |
LTV
ROE in %
Source: Warburg Research
Book Value per Share in EUR
Source: Warburg Research
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Disclaimer
Defama Deutsche Fachmarkt AG published this content on 31 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 March 2022 09:55:04 UTC.
