Report
Jakub Caithaml

WOOD Flash – Graphisoft Park: 2Q18 recurring result in line, full-year guidance slightly moderate

Graphisoft Park reported its 2Q18 results yesterday (7 August), after the market closed. The results contained several one-offs, however, the recurring results were broadly in line with our forecasts. According to the report, blocks A and B of the new building in the southern development area were completed and handed over to the tenant in July; the two remaining blocks are expected to be delivered by the end of 3Q18E. This marks a slight delay vs. the original schedule, and management modified the 2018E guidance accordingly, decreasing the implied FFO from EUR 10.5m to EUR 10.1m, c.4% down. The change is hardly material, in our view. We note that FFO at this level would still represent slight upside to our 2018E FFO forecast of EUR 9.8m. As such, our investment case remains unchanged. Although we like the business model (and, trading at 9% FFO yield and c.0.6x P/NAV, the shares are not expensive), the 3-4% dividend yield Graphisoft Park offers is similar to that of companies such as GTC or CA Immo, both of which offer better growth profiles and diversification, in our view. We therefore continue to view the company as fairly valued.
Underlying
Graphisoft Park SE

Graphisoft Park SE Ingatlanfejleszto Europai Rt is a Hungary-based company engaged in the real estate operations. The Company operates as a holding and provides management, financial and administrative services to its subsidiaries. As of December 31, 2011, the Company operated two subsidiaries, Grpahisoft Park Kft, engaged in the real estate development; and Graphisoft Park Services Kft, responsible for property operation tasks. The total area of the Company's properties was nearly 18 hectares. As of December 31, 2011, the Company's two subsidiaries, Graphisoft Park Universitas Kft and GP3 Kft merged into Graphisoft Park Kft. As of December 31, 2011, the Company's parent entity was Graphisoft SE.

Provider
Wood and Company
Wood and Company

WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.

A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.

Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.

We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.

Analysts
Jakub Caithaml

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