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 |
Acquisitions announced hot on the heels of successful capital increase
DEFAMA announced a large transaction with the acquisition of five new properties for a purchase price of EUR ~15m. The properties are located in the federal state of Rhineland-Platine and generate current annual rental income of EUR ~1.3m which leads to an acquisition multiple of 11.5. Financially strong tenants in these properties are e.g. DM, Getränke Hoffmann, Jysk, Tedi, KiK, Matratzen Concord and a Total fuel station, which represent 80% of the rental income.
The acquisitions have no meaningful vacancy and the estimated vacancy rate should be below the current rate in the total portfolio (~5%). The WALT of rental contracts of these properties should be comparable to the existing portfolio figure of 4.7 years. For these reasons, the acquisition multiple seems to be attractive.
The transaction is a great step forward within DEFAMA's growth strategy and should reduce the dilution from the recent capital increase to a negligible impact with an estimated FFO contribution of EUR 0.52m (WRe) or EUR 0.11 per share. The annualised FFO improved to EUR 9.1m or EUR 1.91 per share. Therefore, DEFAMA seems to be well on track to achieve its annualised FFO-target of EUR 10m at year-end 2022. The acquisitions will presumably contribute to rental income as of 1 January 2023.
We confirm our Buy recommendation and our price target of EUR 31.90, which is based on the fair values of our NAV model and FFO-yield (2023e). We will update our model after the release of DEFAMA's annual report expected in the second week of May.
Rel. Performance vs CDAX: | |
1 month: | 0.4 % |
6 months: | 21.2 % |
Year to date: | 9.9 % |
Trailing 12 months: | 51.9 % |
FY End: 31.12. | CAGR |
(20-23e) | |
in EUR m | 2017 | 2018 | 2019 | 2020 | 2021e | 2022e | 2023e |
Rental income | 5.10 | 7.61 | 9.53 | 12.19 | 14.31 | 16.76 | 19.31 |
Change yoy | 67.9 % | 49.2 % | 25.1 % | 27.9 % | 17.4 % | 17.1 % | 15.2 % |
EBIT | 2.67 | 3.59 | 4.50 | 5.62 | 9.16 | 7.62 | 8.69 |
FFO I | 2.58 | 3.65 | 4.62 | 5.87 | 7.06 | 8.37 | 9.85 |
FFO I-margin | 50.6 % | 47.9 % | 48.4 % | 48.2 % | 49.3 % | 49.9 % | 51.0 % |
EBT | 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 | 0.38 | 0.46 | 0.51 | 0.57 | 1.14 | 0.74 | 0.89 |
FFOPS I | 0.73 | 1.01 | 1.14 | 1.33 | 1.60 | 1.78 | 2.05 |
DPS | 0.34 | 0.40 | 0.45 | 0.48 | 0.51 | 0.54 | 0.58 |
Dividend Yield | 3.8 % | 3.4 % | 2.9 % | 2.7 % | 1.8 % | 2.0 % | 2.1 % |
Book Value / Share | 3.18 | 4.10 | 5.50 | 5.61 | 6.24 | 8.04 | 8.34 |
23.2 x | 25.0 x | 30.1 x | 30.9 x | 24.2 x | 37.1 x | 31.1 x | |
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 | |
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 % | |
61.1 % | 62.0 % | 58.2 % | 60.2 % | 60.1 % | 58.0 % | 58.8 % |
P / E
Price / Book P / NAVPS
FFO I-Yield ROE
Company events:
LTV Guidance:
2022e: FFO of EUR ~8.5m, Net profit (HGB) of EUR ~3.5m
Analyst
Andreas Pläsier
COMMENT
Published 22.04.2022 14:15
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").
Geogr. 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 m
Source: Warburg Research
Operating 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 1.41 151.90 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 | 153.78 | 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 | 163.96 | 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 0.92 | 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 | 136.38 | 138.64 | 151.91 |
Total liabilities and shareholders' equity | 55.41 | 85.79 | 104.28 | 136.71 | 163.96 | 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
Source: Warburg Research
ROE in %
Source: Warburg Research
Book Value per Share in EUR
Source: Warburg Research
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Defama Deutsche Fachmarkt AG published this content on 22 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 April 2022 13:07:02 UTC.
