Secure Property Development & Invest : – RNS Final Results 2014

Secure Property Development & Invest PLC/ Index: AIM / Epic: SPDI / Sector: Real Estate

Secure Property Development & Investment PLC ('SPDI' or 'the Company') Final Results27 May 2015

Secure Property Development & Investment PLC, the AIM quoted South Eastern European focused property and investment company, is pleased to announce its full year financial results for the year ended 31 December 2014.

Financial Highlights· 59% increase in total asset value to €62 million (2013: €39million) reflecting the transformational acquisitions made during the year across the region

· 33% increase in rental income to €3.6 million (2013: €2.7million)

· 300% increase in EBITDA to €0.8 million (2013: €0.2million)

· £0.75 per share of Net Asset Value at year end (2013: £1.13) significant premium to current share price - provides strong asset backing

Operational Highlights· Successfully implemented strategy to expand geographic spread of the portfolio to encompass fast growing South Eastern European countries which offer high yields and capital growth

· Acquired three income producing assets in Romania & Greece that generate ~€3.5 million of Net Operating Income ('NOI') annually, increasing the Company's annualised NOI by ~230%

o Blue chip tenants include Danone, Nestle & Kuehne+Nagel

o Long lease terms providing revenue visibility

· Platform in place to take advantage of highly positive South Eastern European property market fundamentals

Post Balance Sheet Highlights· €26 million of net asset value acquisitions made in Romania and Bulgaria in 2015

o increases total Assets under Management (AuM) to €126 million

o provides further geographic diversification of portfolio, and

o ensures its position as a regional property company

· €8 million cash raised via Open Offer in March 2015

Lambros G. Anagnostopoulos, Chief Executive Officer, said, '2014 has been a transformational year for the Company, one that has seen us embark on the roll-out of our regional growth strategy. Thanks to this, the Company has ended the year with a presence in three countries and a geographically diversified portfolio of prime real estate in Southeastern Europe, which generates visible income streams and offers significant capital growth potential.'In 2014, we added three income producing properties in Greece and Romania to our portfolio, all of which fit our investment criteria: prime locations; strong covenants with blue chip tenants on long term rental contracts; secured at attractive, double digit yields. As a result we now have a broad asset backed, revenue generative property portfolio. With a strong management team in place with a proven track record in emerging Europe, coupled with positive market fundamentals for the region, I look forward to the year ahead, as we continue to implement our strategy towards our goal of creating the leading institutional South Eastern European income producing and dividend yielding property company.'* * ENDS * *For further information please visit www.secure-property.eu or contact:

Lambros Anagnostopoulos SPDI Tel: [phone]

Constantinos Bitros

Tercel Moore

SPDI

SP Angel Corporate Finance LLP

Tel: [phone]

Tel: [phone]

Jeff Keating SP Angel Corporate Finance LLP Tel: [phone]

Lottie Brocklehurst St Brides Partners Ltd Tel: [phone]

Frank Buhagiar St Brides Partners Ltd Tel: [phone]

1. Chairman's Statement2014 was a pivotal year for SPDI, as the Company embarked upon its acquisition strategy in earnest. The logic behind this strategy remains unchanged: to take advantage of the low prices of commercial property on offer in South East Europe with strong tenants and competitively priced financing. The objective is to build a diversified portfolio of fully let prime commercial real estate, which generates high levels of income from a blue chip tenant base on long leases, and at the same time offers the potential for significant capital growth.

With the above in mind, the year under review has seen excellent progress made. The numbers speak for themselves: 57% increase in total assets to €61 million (2013: €39million), a reflection of the transformational acquisitions made during the year across the region; a 33% increase in rental income to €3,6 million (2013: €2,7million); and a 300% increase in EBITDA to €0,8 million (2013: €0,2million). We have ended the year with a Net Asset Value of £0,75 per share (2013: £1,13) which, even after taking into account the new shares issued during 2015, remains substantially higher than our current market valuation and provides us with considerable asset backing.

Finding the right properties across Europe to meet our strict investment criteria against a backdrop of a property market that is on a rising trend, requires a management team with a proven track record. The year under review has demonstrated that SPDI has one such team, and as a result we believe that we are very well positioned to continue to source a strong pipeline of suitable opportunities due to our wealth of experience and contacts, as we look to add to our growing number of properties owned and managed across the region.

Indeed post period end we have done just that. In April 2015, we announced the acquisition of an interest in a fully let and income generating office building in Sofia, while in May we followed this up by announcing the acquisition of a series of prime property assets in Romania and Bulgaria, including a 100% interest in a prime location big box retail property in Craiova, Romania (wholly let to Praktiker) as well as a 24,35% interest in Delea Nuova, a Class A office building in Bucharest city centre, which is fully let mainly to the telecommunications regulator of Romania.

With a running annualized NOI of €8 million, a portfolio of seven income producing properties covering four countries we now have a cash generative platform from which to accelerate the roll- out of our strategy to build a portfolio of prime real estate in Southeastern Europe. We continue to evaluate additional opportunities that fit the Company's investment criteria of high yields and blue chip tenants in Southeastern European population hubs, as we look to expose our shareholders to both immediate cash flows with long term visibility, as well as the potential for significant capital uplift, as the on-going European yield compression play gathers momentum across the continent.

The very low interest rates across Europe should work in favour of continued yield compression in commercial property, and we remain confident that we are very well positioned to make 2015 another year of carefully structured acquisitions of undervalued property assets and improving financial performance.

Paul Ensor
Chairman of the Board
26 May 2015

2. Letter to the Shareholders26 May 2015

Dear Shareholders,

2014 was the year that the Company's strategy of diversifying regionally and acquiring high yielding income producing assets was kicked off in earnest. SPDI started the year, as it had always done in the past, as a wholly Ukraine based company, and by year-end it owned and managed more properties in other countries in terms of Asset Value.

The directors of SPDI embarked on its growth and diversification strategy with a view to identifying ways to acquire undervalued income producing assets and extending its reach beyond its traditional one country. The Company then moved forward to identify and negotiate to acquire a number of portfolios of assets, all class A with substantial income generation capacity and capital appreciation potential, while at the same time it moved to identify a number of investors that would want to contribute assets or capital. By year end the Company had identified key participants on both efforts, having signed preliminary agreements. The stage was set to take a big step forward.

During the year, SPDI acquired four income producing assets. The logistics park that Nestle is using in Bucharest, Romania , the headquarters of Danone also in Bucharest, Romania, a residential portfolio of let apartments in the same city and the logistics park leased to Kuehne+Nagel in Athens, Greece (transaction completed in 2015). These new assets, generate annually ~€3,6 million of Net Operating Income ('NOI'), increasing the Company's annual running NOI by ~230%. To underpin its asset management capability in the new regions it invested in, the Company hired a small number of seasoned executives in Bucharest that can help its effort to grow further in Romania. By year end, the Company is well poised to grow as it attracts more investor shareholders who share the Company's vision of creating the leading institutional property company in the region.

Set against the macroeconomic environment and geopolitical events that unfolded during the year, our growth and diversification strategy has been vindicated. For much of the year, Eastern Europe was growing fast and hopes were high that it would contribute to a regeneration of European GDP growth that was in the making. By year-end though, the mood and the facts were not as positive. The crisis in Ukraine continued unabated, despite the election of the new president in May and the new government in October, with more intensive fighting in the East of the country and the Hryvnia spiralling down as the country's economy was moving closer to collapse. Greece, which had been expected to be able to regain market access and had seen its government bond rates dropping substantially close to those of other EU nations by mid year, experienced a marked setback with snap elections being called for January 2015, which created political and economic instability. Romania, among the countries we gained exposure to during the year, experienced solid economic growth through the year, had the fastest GDP growth rate of any EU country in Q3 2014 and showed signs of even faster growth by year end. At the same time,

Europe as a whole was inching to recession with the ECB deciding to commence a QE package of its own, mirroring what the Fed did in the US three years earlier.
In addition to growing and rebalancing our portfolio of assets, the year under review also saw considerable progress made with regards to strengthening our balance sheet. In December 2014, twenty months after having finalised negotiations with the European Bank for Reconstruction and Development ('EBRD') on rescheduling the amortisation plan of the Brovary construction loan and twelve months after having received the written agreement of the 'B' Lender on the restructuring, we finally managed to sign all legal documents and eliminate the pending legacy balance sheet risk factor by formalising the loan agreement.

The 2014 accounts show a much better and more different operational picture than any prior ones. If we disregard the asset revaluation and FX losses as a result of the Ukrainian Crisis, the operating results are positive and promising. It is the first year in the history of the Company that our revenues topped €3,6 million, while our EBITDA surpassed €0,8 million, more than quadrupling in comparison to 2013. Finally the Company has profits after tax of ~€1 million indicating an even better year to come.

Having successfully put the Company on a solid foundation, both financially and operationally, against the backdrop of the global economic and financial sector issues between 2010 - 2013 (including the Cypriot economic crisis in 2013 and the Ukrainian crisis in 2014), we are highly confident that 2014 was a turnaround year for SPDI. With property assets and people on the ground now in the capitals of the three largest economies/countries in South East Europe, SPDI is well positioned to take the necessary steps forward that the shareholders have mandated us to perform. Even though some of these countries are going through considerable change, their property markets are in need of international investors and capital to grow. We plan to play our part in assisting them to do just that. With the support of our shareholders and partners that share our vision, we plan to exert every effort in achieving our common goals.

Best regards,

Lambros G. Anagnostopoulos
Chief Executive Officer