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UBM exploits the good markets to boost 2015 profits - more growth ahead in 2016 (Buy and 58 Euros affirmed)

(PresseBox) (Frankfurt, ) SRC Research the bank-independent analysts' house for Financial and Real Estate stocks today publishes a research update for Austrian real estate developer UBM Development AG. The company is developer and investor of premium properties, in particular residential, office and hotels and mainly active in three European core countries, namely Austria, Germany and Poland which stand for 90% of its activities.

On Monday, 25 April, UBM published its 2015 annual report and invited for a conference call to give more insights into numbers and strategy. The numbers have been favourable and were slightly ahead of our expectations. The output boosted after a very successful trading year by 73% from Euro 343m to Euro 593m which translated into a jump in revenues to Euro 308m (+38%). Our forecast was only at Euro 304m. With regards to the cash driven EBITDA profit it almost doubled from Euro 39m in 2014 to Euro 76.5m. Our projection was again a little bit lower at only Euro 71m.

UBM sold 13 properties in 2015 with a volume of about Euro 380m. We expect UBM to deliver again a high trading volume in the current FY 2016, at least in a magnitude of Euro 200m to Euro 350m, which should help to accelerate the profits but also helps to improve the balance.

Already in 2015, UBM did a lot to strengthen the balance sheet. Firstly, the company issued almost 1.5 million new shares in April 2015 (Euro 58m proceeds) and secondly, the company issued a 5 years corporate bond in December 2015 with a Euro 75m volume and a 4.25% coupon. Furthermore, UBM already repaid half of the relatively expensive Euro 100m mezzanine capital to PORR at year-end 2015 (6.5% coupon).

For 2016 we expect another significant hike in UBM's pre-tax profit which already doubled in 2015 to Euro 50m. In our view, a range of Euro 65m to Euro 75m is realistic. For the equity ratio we also expect another significant hike after it climbed from 24% to 28% in 2015. Here, in our view, a range of 32% to 35% is realistic. All in all, we slightly lift our EPS projections for 2016 from Euro 6.24 to Euro 6.54 and for 2017 from Euro 7.42 to Euro 7.74. We maintain our Buy recommendation and also our Euro 58.00 target price which is supported by a very high dividend yield of almost 5% after the dividend payment was lifted to Euro 1.60. For any queries regaring our UBM update please do not hesitate to contact us.


UBM Development will join our 2016 investor event Forum Financials & Real Estate on 8 September at the Frankfurt Hilton. You will find more information and the opportunity for a cost-free registration on www.src-research.de/forum