MRM Press release
2023 annual results
- Full effect of the integration of the Flins and Ollioules shopping centres acquired in late 2022
- Net rental income up 56% at €12.7m
- Improvement in ratio of operating expenses to net rental income
- Net operating cash flow up 19% at €4.8m
- Good operating performance
- Retailer revenues up 3%
- 28 leases signed, corresponding to 10% of the rental base and limiting the impact of vacated units
- Resilient key indicators
- Debt under control: net LTV ratio of 47.8% despite 3.8% reduction in portfolio value
- EPRA NDV of €38.5 per share
- Target of annualised net rents of over €16m by 2025 confirmed
- Annualised net rents of €14.5m as at
1 January 2024 , including the impact of strategic vacancy within the Flins shopping centre for a redevelopment / renovation project currently under study
- Annualised net rents of €14.5m as at
- Proposed payout of €1.30 per share
Increase in retailer revenues
The retailers in MRM’s portfolio achieved year-on-year revenue growth1 of 3% in 2023, in line with figures from French retail federation
Following growth of 6% in the first half of the year, sales by retailers in MRM’s portfolio were stable in the second half of the year.
This full-year growth came from a 2% increase in revenues from stores of over 500 sqm and a 3% increase for retailers in units of less than 500 sqm.
Good rental activity
Rental activity remained brisk throughout 2023. This is reflected by the signing of 28 new leases or lease renewals, representing a total floor area of 11,850 sqm and cumulative rents of €1.6 million, equal to 10% of MRM’s rental base. The average reversion rate was +7%.
MRM signed 12 new leases, in particular:
- A lease signed with Carrefour for a total of 3,500 sqm at Les Halles du Beffroi in Amiens. The retailer – which currently occupies 2,900 sqm of retail space – plans to extend its store by 600 sqm by taking over a vacant unit. This lease is still subject to the condition precedent of obtaining the necessary commercial authorisations.
- Three new retailers (beauty clinic Qipao, La Retoucherie et Fitness Record) have moved into Le Passage
du Palais in Tours, enhancing the range of services offered by the city centre shopping gallery. Food anchorAuchan also renewed its lease. - Three new leases at the Flins shopping centre acquired in
November 2022 . MRM specifies that due to planned redevelopment/renovation works currently being considered, the shopping centre had a strategic vacancy of 1,700 sqm at the end ofDecember 2023 , with an additional 1,200 sqm due to become vacant in the near future. This 2,900 sqm in total represents 29% of the space owned by MRM within the shopping centre.
With conditions remaining challenging for many companies in the retail sector, MRM’s solid letting performance limited the impact from a number of units being made vacant by struggling retailers, both national chains in liquidation and independent retailers.
The physical occupancy rate was 90% at
Annualised net rents totalled €14.5 million at
- a positive indexation effect of €0.8 million;
- the increase in non-recovered operating expenses and the impact of tenant rotation, representing -€0.7 million;
- the strategic vacancy of the Flins shopping centre, representing -€0.5 million.
Change in portfolio value
The portfolio value stood at €235.5 million at
| €m | Change | ||
| Portfolio value excl. transfer taxes | 235.5 | 244.9 | -3.8% |
Financial results
Full effect of acquisitions on net rental income
Gross rental income rose by 48.5% to €15.2 million in 2023. On a like-for-like basis2, i.e. excluding the acquisition of the Flins and Ollioules shopping centres, the increase was 0.7%. This evolution comes from, on the one hand, a positive indexation effect, and on the other hand, the tenant rotation within the existing portfolio.
Despite the acquisitions carried out in late 2022, non-recovered property expenses saw a relatively modest increase from €2.1 million in 2022 to €2.5 million in 2023. This includes the effect of changes in the scope of consolidation, the impact of strategic vacancies and higher costs as a result of inflation.
Net rental income totalled €12.7 million compared with €8.1 million in 2022, up 55.7%.
| Net rental income €m | 2023 | 2022 | Change | Like-for-like change6 |
| Gross rental income | 15.2 | 10.2 | +48.5% | +0.7% |
| Non-recovered property expenses | (2.5) | (2.1) | +19.0% | |
| Net rental income | 12.7 | 8.1 | +55.7% |
Increase in net operating cash flow3
Taking account of the rise in net rental income and better absorption of operating expenses, which represented 23.7% of net rental income compared with 29.5% in 2022, EBITDA increased by 61.2% to €9.4 million in 2023.
Net cost of debt rose from €1.8 million in 2022 to €4.6 million in 2023. This was due to the full-year effect of the new bank loan taken out in
Net operating cash flow came to €4.8 million, up 18.9% compared with €4.0 million in 2022. However, net operating cash flow per share fell from €1.80 to €1.50 taking account of the increase in the weighted average number of shares between 2022 and 2023 due to the capital increases carried out in 2022.
| €m | 2023 | 2022 | Change |
| Net rental income | 12.7 | 8.2 | +54.9% |
| Tenant support measures | - | 0.4 | |
| Operating expenses | (3.0) | (2.4) | +24.9% |
| Other operating income and expenses | (0.4) | (0.4) | |
| EBITDA | 9.4 | 5.8 | +61.2% |
| Net cost of debt | (4.6) | (1.8) | |
| Net operating cash flow | 4.8 | 4.0 | +18.9% |
Solid financial position maintained
Despite the reduction in the value of the portfolio, net LTV remained at a controlled level of 47.8% at
Outstanding bank debt totalled €118.7 million at
The average cost of debt was 377 basis points in 2023 compared with 207 basis points in 2022. All of this debt is subject to interest at a variable rate and 75% is covered by caps4.
MRM does not have any significant debt repayments falling due before the end of 2028 and benefits from an available credit facility of €2.8 million for investment in value-enhancement projects or energy efficiency and decarbonisation works.
At the end of
After the financial year-end date, MRM took out a revolving credit facility in
NAV of €38.5 per share at
EPRA NDV stood at €123.3 million at
Adjusted for dividend payouts, EPRA NDV per share fell from €41.6 at end-2022 to €38.5 at
Non-financial performance: focus on climate concerns
At the end of 2023, MRM was ahead of schedule in achieving the energy efficiency and decarbonisation targets set for its property portfolio by 2030:
- Energy consumption totalled €73 kWh per sqm in 2023, down 45% relative to the baseline years5 and 5 points ahead of the target of a 40% reduction by 2030 in line with the French Tertiary Decree. In total, 90% of the portfolio already complies with the 2030 regulation, seven years ahead of schedule.
- Greenhouse gas emissions decreased by 48% relative to the baseline years5 at 10.3 kg of CO2eq per sqm in 2023, a level for 2023 below the theoretical trajectory towards the target of 8.1 kg of CO2eq per sqm by 2030. This trajectory is aligned with a scenario of +1.5° global warming by 2030 according to the Carbon Risk Real Estate Monitor (CRREM), a benchmark which has nevertheless been tightened in 2023.
Payout to shareholders
MRM’s Board of Directors has decided to propose a payout premiums of €1.30 per share in respect of 2023, corresponding to a total payout of €4.2 million.
This amount is down by
This would represent a yield of 6.8% on the share price as at
Outlook
MRM will continue in 2024 to pursue its asset management strategy based on:
- Analysing and implementing investment programmes aimed at enhancing the value of the properties in its existing portfolio as well as the two shopping centres acquired in late 2022: one of the priorities is the partial redevelopment/renovation of the Flins regional shopping centre.
- Proactive management of the retailer mix and letting of available space: MRM intends to take advantage of opportunities for repositioning vacated units to expand its offering while also adapting to market conditions, maintaining the convenience positioning of its centres, and continuing to capitalise on discount retail.
- The rollout of the ESG action plan and the Climate Plan adopted by the Company, paying particular attention to continuing to reduce energy consumption and greenhouse gas emissions.
MRM confirms its target of annualised net rents of over €16 million in 2025. This target is based on the current portfolio (excluding any acquisitions and disposals).
Finally, MRM intends to continue to look into potential acquisitions and disposals, and maintain its policy of regular payouts to shareholders.
Calendar
Financial information for the 1st quarter of 2024 will be published before the market opens on
About MRM
MRM is a listed real estate investment company that owns and manages a portfolio of retail properties across several regions of
For more information:
| MRM 5, avenue Kléber 75795 Paris Cedex 16 T +33 1 58 44 70 00 relation_finances@mrminvest.com | T +33 6 42 37 54 17 isabelle.laurent@oprgfinancial.fr |
Website:www.mrminvest.com
Appendix 1: Retail mix
| Sector breakdown (CNCC classification) As % of annualised gross rents | ||
| Household goods | 19% | 18% |
| Food and drink | 18% | 18% |
| Health and beauty | 16% | 16% |
| Personal goods | 14% | 17% |
| Culture, gifts and leisure | 12% | 11% |
| Services | 9% | 8% |
| Recreation | 8% | 7% |
| Offices | 4% | 5% |
Appendix 2: Income statement
| Simplified IFRS income statement €m | 2023 | 2022 |
| Net rental income | 12.7 | 8.1 |
| Operating expenses | (3.0) | (2.4) |
| Provisions net of reversals | (0.5) | 0.8 |
| Other operating income and expenses | (0.6) | (1.1) |
| Operating income before disposals and change in fair value | 8.5 | 5.4 |
| Change in fair value of properties | (11.9) | (8.8) |
| Operating income | (3.4) | (3.4) |
| Net cost of debt | (4.6) | (1.8) |
| Other financial income and expenses | (2.0) | 1.6 |
| Net income before tax | (10.0) | (3.6) |
| Tax | - | - |
| Consolidated net income | (10.0) | (3.6) |
Appendix 3: Balance sheet
| Simplified IFRS balance sheet €m | ||
| Investment properties | 235.5 | 244.9 |
| Current receivables and other assets | 9.3 | 11.0 |
| Cash and cash equivalents | 6.0 | 10.0 |
| Total assets | 250.8 | 265.9 |
| Equity | 123.2 | 139.0 |
| Bank debt | 118.7 | 116.7 |
| Other debt and liabilities | 8.9 | 10.2 |
| Total equity and liabilities | 250.8 | 265.9 |
Appendix 4: Net Asset Value
Net Asset Value | ||||
| Total €m | Per share € | Total €m | Per share € | |
| EPRA NDV | 123.2 | 38.5 | 139.0 | 43.4 |
| EPRA NRV | 138.1 | 43.1 | 152.8 | 47.7 |
| Number of shares (adjusted for treasury stock) | 3,200,263 | 3,201,950 | ||
1 Based on revenue figures available for tenants already in place during the comparison period
2 Like-for-like changes are calculated by deducting rents generated by assets acquired from reported gross rental income for year n, and rents generated by assets sold from reported gross rental income for year n-1.
3 Net income before tax adjusted for non-cash items
4 Strike rate of 1% to 2.5%
5 The Tertiary Decree and the CRREM (Carbon Risk Real Estate Monitor) threshold apply relative to a baseline year defined on a case-by-case basis for each building
6 Total percentages do not correspond to exactly 100% because of figures being rounded
Attachment
- MRM PR 2023 Results
© OMX, source
