WOOD Flash – GTC: 4Q19 – recurring in line, dividend decision postponed, focus on balance sheet
GTC reported its 4Q19 numbers yesterday (19 March). The recurring figures were in line – the FFO reached EUR 70m for the year, while we were pencilling in EUR 71m in our latest update. The 4Q19 revaluation line showed a small loss, while we (and the consensus, we believe) were expecting a small profit. That said, in the bigger scheme of things, this is hardly important. GTC’s share price is down more than 30% over the past month, in EUR terms. The company is trading at a 40% discount to its year-end EPRA NAV of EUR 2.47/share, and at over a 10% yield on our original 2020E FFO estimate – where we see a downside risk, considering that around 30% of GTC’s portfolio (by value) is retail assets, which will be affected by the current situation. The company is putting the dividend decision on hold now, subject to market dynamics. We believe this is a responsible decision. During the conference call, management highlighted that the company has analysed a number of scenarios, and concluded that it sees no risk of a going concern in the foreseeable future. We agree.Globe Trade Centre is the parent company of the capital group, Globe Trade Centre (the Group). The Group is engaged in the development and rental of office and retail space and the development and sale of residential units. The Group is a real estate company in Central and Eastern Europe and South-eastern Europe, operating in Poland, Romania, Hungary, Croatia, Serbia, Bulgaria, and Slovakia. Additionally, it co-owns land in Ukraine and Russia and operates in the Czech Republic. The Group's portfolio comprises: completed office buildings and office parks as well as retail and entertainment centres; residential projects; and undeveloped plots of land and suspended projects.
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