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Secure Property Development & Invest PLC/ Index: AIM / Epic: SPDI / Sector: Real Estate 30 June 2016

Secure Property Development & Investment PLC ('SPDI' or 'the Company') Final Results

Secure Property Development & Investment PLC, the AIM quoted South Eastern European focused property company, is pleased to announce its full year financial results for the year ended 31 December 2015.

Financial Highlights
  • 87% increase in total asset value to €125 million (2014: €67million) reflecting the acquisition of prime real estate with blue chip tenants in the South Eastern European region

  • 64% increase in net operating income to €5.9 million (2014: €3.6 million)

  • 31% increase of net assets to €42.5 million (2014: €32.5 million), while NAV per share was

    €0.35 from €0.75, principally as a result of dilution created by the issuance of new shares (from the Open Offer in March 2015 and as consideration for certain of the acquisitions and, to a lesser extent, revaluation of the Ukraine assets

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

    Operational Highlights
  • Continued to successfully implement strategy to expand geographic spread of the portfolio

  • Acquisition of three income producing properties let to blue chip tenants located in South Eastern European countries which offer high yields and capital growth, bringing the total portfolio to seven as at year end

  • Strengthened Board with appointments of Calypso Nomikos and Vagharshak Barseghyan - two highly qualified entrepreneurial members with extensive investment and real estate knowledge in the region

    Post Balance Sheet Highlights
  • Proposed sale of the Brovary Terminal in Ukraine with fixed four-year lease agreement (with an affiliate of the prospective buyer) raising the warehouse occupancy rate to 100% generating ~US$150,000 of Net Operating Income ('NOI') per month until the sale is concluded

  • Sale of the Linda residential portfolio in Bucharest for €660,000 (gross of debt)

  • In discussions with Nestle in Romania relating to the termination of its rental contract in the Innovations Logistics Park, which is expected to result in a settlement being payable to SPDI by Nestle

Lambros G. Anagnostopoulos, Chief Executive Officer, said, "2015 saw us delivering on our strategy of expanding our portfolio in the South Eastern European region with properties let to blue chip tenants in countries which offer high yields and capital growth. The injection of three more income producing properties into our portfolio increased our total asset value by an impressive 87% to €125 million and boosted our revenues by 64% to €5.9 million. The year witnessed strong

shareholder support demonstrated by the €8 million Open Offer in March 2015, a bolstering of our highly competent Board, and this, coupled with the significant growth of our solid income producing portfolio, puts us in a strong position to continue this progress in 2016 and beyond."

* * ENDS * *

Copies of the Annual report and Accounts are being posted to Shareholders and are available on the Company's website at www.secure-property.eu

For further information please visit www.secure-property.eu or contact:

Lambros Anagnostopoulos

SPDI

Tel: +30-210-7226470

Constantinos Bitros

Tercel Moore

SPDI

SP Angel Corporate Finance LLP

Tel: +30-210-7226470

Tel: +44 (0) 20 3463 2260

Jeff Keating

SP Angel Corporate Finance LLP

Tel: +44 (0) 20 3463 2260

Lottie Brocklehurst

St Brides Partners Ltd

Tel: +44 (0) 20 7236 1177

Frank Buhagiar

St Brides Partners Ltd

Tel: +44 (0) 20 7236 1177

1. Chairman's Statement

2015 saw significant momentum build behind our strategy: to turn SPDI into the leading London listed property company focused on South East European region, and during the year under review we have doubled the number of our income producing properties. SPDI has undergone a structural shift, which has seen us build a portfolio of prime real estate properties with a broad geographic spread, highly attractive yields and significant capital growth potential. To put the year into context, SPDI has gone from having just one income producing property in 2012, to a portfolio of seven properties in four South Eastern European countries at the end of 2015.

The acquisitions we completed in 2015 lie behind the financial performance we have reported today, specifically a 50% increase in the asset value of our property portfolio to €117 million; and a 52% step-up in our revenues from income producing assets to €5.5 million. Our acquisition-led strategy is overlain with a strict risk management policy that requires all potential targets match our stated investment criteria. It is with risk management very much in mind that we look to invest in prime real estate that: benefits from excellent addresses and transport links; is let out to blue chip customers on long leases with strong covenants; generates visible income streams, and offers scope for significant capital appreciation by providing exposure to the on-going European yield convergence play.

All acquisitions made in 2015 are representative of what we look for: a fully let logistics park west of Athens predominantly let to Kuehne + Nagel generating a ~€1.5 million net operating income ('NOI'); a fully let office building in Sofia let to one of Bulgaria's largest insurance companies, generating €2.9 million gross rental income; a fully let retail property in Craiova, Romania rented to Praktiker with

~€1 million of gross rental income, and a fully let office building in Bucharest mostly let to Romania's

Telecom Regulatory Authority generating ~€1.85 million of gross rental income. As well as providing a cash flow generative platform that we can use to acquire additional properties in our area of interest, by acquiring these assets we have proven our ability to source, identify, and execute transactions at attractive yields in South Eastern Europe, a market that continues to offer the right dynamics for the execution of our strategy. Furthermore, the commencement of the European Central Bank's (ECB) quantitative easing programme early in 2015 provides a significant tailwind to the on-going European yield compression play, which in our view has a long way to run, particularly in the exciting emerging European countries which are our core area of focus.

To be able to successfully navigate these markets requires a first rate management team and Board. SPDI has both and it is the team's vision and direction, which has not only been key to the turnaround of the Company, but is also a key differentiating factor for the Company. We have strengthened our team further this year and welcomed Kalypso Maria Nomikou and Vagharshak Barseghyan to the Board, two highly qualified entrepreneurial members with extensive investment and real estate knowledge in the region. They have already enhanced the capabilities of our highly skilled team and will help the Board identify and secure future acquisitions which offer material and sustainable cash flows.

As well as acquiring assets, the management team is also focused on actively managing our growing portfolio of real estate to ensure we maximise value for our shareholders. The performance of each asset as well as that of the local and regional property markets are all constantly monitored to ascertain the optimal strategy for each asset. All options are considered, including development and sale. With this in mind post period end we announced the proposed sale of the Brovary Terminal in Ukraine, as well as the sale of the Linda residential portfolio in Bucharest. Subject to the completion of the transactions, the proceeds will be reinvested both into growing our portfolio further as well as potentially returning some cash to our shareholders.

Having de-risked our portfolio through the acquisition of prime real estate, we now have an excellent platform from which to access further opportunities and in the process capitalise on the huge potential across the region. Our portfolio is our competitive advantage and having expanded our income-producing assets this year we aim to continue to grow, as we look to generate value by taking advantage of the highly positive regional macro and property market fundamentals. It is clear however that our current share price, which is trading at a significant discount to the net asset value of our existing properties, has not kept pace with SPDI's transformation into a diversified revenue- generative property company focused on the dynamic SEE region. We are confident this disconnect will narrow as the income generating capability of our existing portfolio becomes apparent and we move closer to the point at which we are in a position to sustainably distribute a portion of our earnings as dividends. In the meantime, we will continue to identify and invest in highly attractive growth opportunities in the real estate market whilst maintaining our focus on efficient asset management, as we look to repeat the successes of 2015 in the year ahead and beyond.

At the tail end of the period as well as in the first part of 2016 the Company faced some challenges created mainly by the continuing turmoil in the Ukrainian Economy as well as the recapitalization of

the Greek banks that took place in December 2015. Those factors resulted in the reduction of the occupancy of the Terminal Brovary in Kiev and substantially prolonged transaction times, respectively. As our Auditor's Report notes in an emphasis of the matter, at the end of 2015 our current liabilities in effect exceeded current assets by €21.1m, but this is qualified by Notes 36.7 and 37 of the accounts that explain the two current liabilities that create this imbalance (which relate to our residential business in Romania and Terminal Brovary in Ukraine) are either long term liabilities reclassified as short term or reflect an agreed but yet to be contractually approved practice to repay certain loans in tandem with the residential sales progress and as such there is every indication that these debts will be repaid in 2016 in the normal course of business. In parallel both tenant issues (Nestle replacement following the expression of their intent to vacate the Innovation Terminal, and Praktiker's tenancy extension for an additional five years) as well as the potential sale of Terminal Brovary have taken longer than originally expected which made it necessary for management to very carefully, and successfully, manage our cash position and banking relationships in 2016.

Another perennial challenge for the Company was that operating in Ukraine showed up in our accounts in 2015 with a €5m (2014: €7.5m) foreign exchange loss related to the EBRD loan and a

€13.6m unrealized foreign exchange loss (2014: loss €19.7m) stemming from intercompany loans. This was due to the continued weakness of the Ukrainian currency, both of which are expected to be mitigated upon the Terminal Brovary sale completion. In light of the continued problems in that country, the agreed sale of Terminal Brovary in June 2016 at a substantial profit to its Net Asset Value is all the more impressive. The 53% fall in NAV per share during 2015 is the result of a combination of factors: share issuance from the Open Offer and purchase of properties, and revaluation of assets caused by the continuing difficulties faced by the Ukrainian economy.

I would like to take this opportunity to thank our shareholders for their continued support throughout the year. This was further demonstrated by the raising of €8 million via an open offer in March 2015 which has helped facilitate our progress. Thanks to their support, we are delivering on our objective to position SPDI as the go to publicly traded vehicle for institutional and retail investors looking to gain exposure to the attractive yields available in SEE, a region that is increasingly gaining the recognition it deserves for its favourable supply and demand dynamics and attractive yields.

Paul Ensor

Chairman of the Board

2 Letter to the Shareholders

Dear Shareholders,

29 June 2016

During 2015 the Company continued its growth trajectory thanks to a number of acquisitions of high yielding income producing assets in South East Europe (the "Region") resulting in a substantial increase in our Assets Under Management ("AUM"). In parallel our strategy of diversifying regionally also continued with the Company entering one more SEE country. By the end of 2015, SPDI was present in four emerging economies of SEE owning seven income producing assets in the Region.

SPDI - Secure Property Development & Investment plc published this content on 30 June 2016 and is solely responsible for the information contained herein.
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