Ori­gi­nal-Re­se­arch: pu­bli­ty AG (von GBC AG): Hold

Ori­gi­nal-Re­se­arch: pu­bli­ty AG – von GBC AG

Clas­si­fi­ca­ti­on of GBC AG to pu­bli­ty AG

Un­ter­neh­men: pu­bli­ty AG
ISIN: DE0006972508

Re­ason for the re­se­arch: Re­se­arch Re­port (Note)
Re­com­men­da­ti­on: Hold
Tar­get pri­ce: 17.00 EUR
Tar­get pri­ce on sight of: 31.12.2024
Last ra­ting ch­an­ge:
Ana­lyst: Mat­thi­as Greif­fen­ber­ger, Mar­cel Schaf­fer

Fo­cus on sus­tainable of­fice pro­per­ties. Po­si­ti­ve out­look.

The busi­ness tra­jec­to­ry in the first half of 2023 re­flects no­te­wor­t­hy ad­vance­ments for pu­bli­ty AG de­spi­te pr­e­vai­ling chal­lenges in the real es­tate in­dus­try. Ho­we­ver, re­ve­nues ex­pe­ri­en­ced a sub­stan­ti­al down­turn, de­cre­asing to €2.01 mil­li­on in the first half of 2023 (com­pared to €9.95 mil­li­on in the pre­vious year). The­se re­ve­nues were ge­ne­ra­ted th­rough publity’s suc­cessful tran­sac­tions as an as­set ma­na­ger.

The si­gni­fi­cant dip in re­ve­nue con­se­quent­ly led to a de­cli­ne in EBITDA to €-1.46 mil­li­on (com­pared to €6.63 mil­li­on in the pre­vious year). On a po­si­ti­ve note, other ope­ra­ting in­co­me had a no­ta­ble im­pact, rea­ching €1.02 mil­li­on (a si­gni­fi­cant in­crease from €0.03 mil­li­on in the pre­vious year), pri­ma­ri­ly stem­ming from a le­gal dis­pu­te. Over­all, ope­ra­ting cos­ts re­main­ed pre­do­mi­nant­ly sta­ble, with mar­gi­nal ad­jus­t­ments in the cost of ma­te­ri­als (-2.0%) and a slight up­tick in per­son­nel ex­pen­ses (+3.3%). Con­ver­se­ly, other ope­ra­ting ex­pen­ses rose to €3.43 mil­li­on (com­pared to €2.31 mil­li­on in the pre­vious year) due to par­ti­al re­ve­nue from the PREOS con­ver­ti­ble bond, tran­sac­ted be­low the ori­gi­nal pri­ce. Ad­jus­ted for this ef­fect, cos­ts ac­tual­ly ex­pe­ri­en­ced a re­duc­tion.

In­co­me from other se­cu­ri­ties wit­nessed a 14.5% de­cli­ne to €2.95 mil­li­on (com­pared to €3.45 mil­li­on) owing to the di­mi­nis­hed vo­lu­me of PREOS Glo­bal
Of­fice Real Es­tate & Tech­no­lo­gy AG bonds on the ba­lan­ce sheet. Fur­ther­mo­re,
in­te­rest and si­mi­lar ex­pen­ses in­creased by 17.7% to €-2.74 mil­li­on (com­pared to €-2.33 mil­li­on) due to the aug­men­ta­ti­on of the pu­bli­ty bond, is­sued in the se­cond half of 2022, by €20 mil­li­on to €97.76 mil­li­on (com­pared to €77.76 mil­li­on in the pre­vious year).

The sharp de­crease in re­ve­nue re­sul­ted in a ne­ga­ti­ve net re­sult of €-1.53 mil­li­on (com­pared to €5.23 mil­li­on in the pre­vious year).

publity’s fi­nan­cial state­ment mir­rors a ty­pi­cal pro­fi­le for in­vest­ment com­pa­nies, mark­ed by a sub­stan­ti­al le­vel of fi­nan­cial as­sets, no­ta­b­ly the shares held in PREOS con­sti­tu­ting the ma­jo­ri­ty. De­spi­te the im­pres­si­ve equi­ty in­te­rest of 94.3%, the­se shares in the sub­si­dia­ry are not ful­ly con­so­li­da­ted but are ack­now­led­ged as fi­nan­cial as­sets. The ab­sence of full con­so­li­da­ti­on me­ans that the lia­bi­li­ties of the real es­tate com­pa­nies GORE and PREOS are not en­ti­re­ly re­flec­ted, con­tri­bu­ting to pu­bli­ty AG con­sis­t­ent­ly main­tai­ning an abo­ve-avera­ge equi­ty ra­tio. Va­ria­ti­ons in equi­ty stem from both ope­ra­tio­nal busi­ness dy­na­mics and the app­re­cia­ti­on or de­pre­cia­ti­on of fi­nan­cial as­sets. As of June 30, 2023, the­re was no ex­ten­si­ve reva­lua­ti­on of fi­nan­cial as­sets.

As of June 30, 2023, equi­ty re­main­ed ne­ar­ly un­ch­an­ged at €370.66 mil­li­on (com­pared to €372.19 mil­li­on on De­cem­ber 31, 2022), pri­ma­ri­ly in­fluen­ced by
an an­nu­al loss of €1.53 mil­li­on. Con­se­quent­ly, the equi­ty ra­tio also held ste­ady at 76.2% (com­pared to 76.4% on De­cem­ber 31, 2022).

pu­bli­ty AG’s ba­lan­ce sheet pro­min­ent­ly fea­tures in­vest­ments in af­fi­lia­ted com­pa­nies, amoun­ting to €367.3 mil­li­on (com­pared to €366.94 mil­li­on on De­cem­ber 31, 2022), con­sti­tu­ting 75.5% of to­tal as­sets (com­pared to 75.3% on De­cem­ber 31, 2022). Ad­di­tio­nal­ly, pu­bli­ty AG holds bonds from PREOS Glo­bal Of­fice Real Es­tate & Tech­no­lo­gy AG va­lued at €81.0 mil­li­on (com­pared to €83.98 mil­li­on on De­cem­ber 31, 2021). The­se fi­nan­cial as­sets are en­com­pas­sed in the net fi­nan­cial as­sets, to­ta­ling €374.81 mil­li­on (com­pared to €377.87 mil­li­on on De­cem­ber 31, 2022).

The pri­ma­ry com­po­nent of debt ca­pi­tal is an out­stan­ding pu­bli­ty bond va­lued at €97.76 mil­li­on (un­ch­an­ged from De­cem­ber 31, 2022). This bond ma­tures in
2027, and its terms were ad­jus­ted at the end of 2022, in­clu­ding an ex­ten­si­on of the term to 19.12.2027 (ori­gi­nal­ly 19.06.2023), an in­te­rest rate in­crease from 5.5% to 6.25% from 19.06.2023, and the in­tro­duc­tion of an op­ti­on for ear­ly re­pay­ment. As of Oc­to­ber 18, 2023, the bond is tra­ding at 28.0% on Trade­ga­te at 15:34. The ex­ten­si­on of the pu­bli­ty bond is po­ten­ti­al­ly sub­ject to chall­enge by bond­hol­ders.

Lia­bi­li­ties to banks re­main ste­ady at €4.3 mil­li­on (un­ch­an­ged from De­cem­ber 31, 2022), and cash and cash equi­va­lents amount to €0.38 mil­li­on (com­pared to €0.54 mil­li­on on De­cem­ber 31, 2022). The ma­nage­ment per­cei­ves the li­qui­di­ty si­tua­ti­on as sta­ble. Working ca­pi­tal has si­gni­fi­cant­ly in­creased to €3.39 mil­li­on, com­pared to €-0.19 mil­li­on as of De­cem­ber 31, 2022, pri­ma­ri­ly at­tri­bu­ted to the rise in trade re­ceiv­a­bles to €4.35 mil­li­on from €1.16 mil­li­on as of De­cem­ber 31, 2022. This in­crease is pre­su­med to be a re­spon­se to the cur­rent chal­len­ging si­tua­ti­on in the real es­tate in­dus­try, po­ten­ti­al­ly lea­ding cus­to­mers to ex­haust their pay­ment terms.

Due to the ab­sence of a pu­blished cash flow state­ment, a more com­pre­hen­si­ve
li­qui­di­ty ana­ly­sis is curr­ent­ly un­fe­a­si­ble.

On Au­gust 16, 2023, the An­nu­al Ge­ne­ral Mee­ting sanc­tion­ed a ca­pi­tal in­crease from com­pa­ny funds, pro­po­sing an aug­men­ta­ti­on of share ca­pi­tal from €14.88 mil­li­on to €16.74 mil­li­on, in­vol­ving the is­su­an­ce of 1.86 mil­li­on new no-par va­lue shares with a no­mi­nal va­lue of €1.00 each. Ho­we­ver, the fi­na­liza­ti­on of the ca­pi­tal in­crease is still pen­ding.

As of De­cem­ber 30, 2022, the share pri­ce for the in­vest­ment in PREOS Glo­bal Of­fice Real Es­tate & Tech­no­lo­gy AG was €3.40 (Xe­tra), re­pre­sen­ting a mar­ket
ca­pi­ta­liza­ti­on of €385.79 mil­li­on. Con­side­ring pu­bli­ty AG’s sub­stan­ti­al 94.3% share­hol­ding, the re­por­ted va­lue of the held share ca­pi­tal in publity’s ba­lan­ce sheet was €363.8 mil­li­on. Ho­we­ver, the PREOS share pri­ce has ex­pe­ri­en­ced a si­gni­fi­cant de­cli­ne sin­ce De­cem­ber 30, 2022, curr­ent­ly stan­ding at €0.41 (XETRA, Oc­to­ber 23, 2023). This de­cli­ne po­ses a no­ta­ble va­lua­ti­on dis­count af­fec­ting ear­nings. In our reva­lua­ti­on, we do not rely on the cur­rent PREOS share pri­ce; in­s­tead, we uti­li­ze the pu­blished equi­ty of PREOS Glo­bal Of­fice Real Es­tate & Tech­no­lo­gy AG, which amoun­ted to €203.56 mil­li­on as of De­cem­ber 31, 2022, as a con­ser­va­ti­ve lower li­mit. Cor­re­spon­ding to the 94.3% share­hol­ding ra­tio, this equa­tes to a va­lue of €191.96 mil­li­on.

As of June 30, 2022, lo­ans to af­fi­lia­ted com­pa­nies stood at €81.0 mil­li­on. The­se lo­ans are in the form of con­ver­ti­ble bonds is­sued by PREOS Glo­bal Of­fice Real Es­tate & Tech­no­lo­gy AG in 2019 and ma­tu­ring in 2024. The cur­rent pri­ce of the con­ver­ti­ble bond is 1.26% (Frank­furt, Oc­to­ber 19, 2023). Klaus Nie­ding, la­wy­er and Vice Pre­si­dent of Deut­sche Schutz­ver­ei­ni­gung für Wert­pa­pier­be­sitz, has been ap­poin­ted as the cont­act per­son for the bond­hol­ders. The next step in­vol­ves en­ga­ging in dis­cus­sions with the joint re­pre­sen­ta­ti­ve to ex­plo­re po­ten­ti­al res­truc­tu­ring op­ti­ons for the PREOS con­ver­ti­ble bond. Gi­ven the con­sidera­ble po­ten­ti­al for the con­ver­ti­ble bond to be writ­ten down, we have in­iti­al­ly as­su­med a 50% im­pair­ment in our va­lua­ti­on.

De­spi­te fa­cing per­sis­tent chal­lenges such as high in­te­rest ra­tes, in­creased con­s­truc­tion cos­ts, and un­cer­tain­ties in the eco­no­mic land­scape wi­thin the
real es­tate sec­tor, the com­pa­ny re­mains op­ti­mi­stic about its re­co­very, at­tri­bu­ting this con­fi­dence to its po­si­ti­on as a green as­set ma­na­ger. In re­spon­se to macroe­co­no­mic chal­lenges and evol­ving trends in real es­tate, the com­pa­ny is stra­te­gi­cal­ly fo­cu­sing on sus­tainable of­fice pro­per­ties. The goal is to ma­na­ge at least 50% ESG-com­pli­ant buil­dings by 2030, with a long-term ob­jec­ti­ve of achie­ving 100%. The ap­proach is ho­li­stic, en­com­pas­sing en­vi­ron­men­tal con­side­ra­ti­ons, in­no­va­ti­ve de­sign op­ti­ons, and so­cial aspects. pu­bli­ty AG has al­re­a­dy se­cu­red se­ve­ral cer­ti­fi­ca­ti­ons for its pro­per­ties, show­ca­sing high ESG and di­gi­ta­liza­ti­on stan­dards. Ad­di­tio­nal­ly, the­re are plans to con­vert the Cen­tu­ri­on Tower in Frank­furt into a green of­fice buil­ding, ser­ving as a mo­del for the fu­ture of of­fice spaces.

The cor­po­ra­te stra­tegy of pu­bli­ty AG cen­ters on for­ti­fy­ing and ex­pan­ding its po­si­ti­on as a port­fo­lio hol­der in the real es­tate sec­tor th­rough its sub­si­dia­ries. The pri­ma­ry fo­cus re­mains on the Ger­man com­mer­cial real es­tate mar­ket, whe­re at­trac­ti­ve va­lue crea­ti­on po­ten­ti­al is iden­ti­fied. Le­ver­aging its ex­per­ti­se in real es­tate as­set ma­nage­ment, pu­bli­ty AG aims to ca­pi­ta­li­ze on the sus­tained de­mand for Ger­man com­mer­cial real es­tate, par­ti­cu­lar­ly from for­eign in­ves­tors.

While the im­pacts of the co­ro­na­vi­rus pan­de­mic, the con­flict in Ukrai­ne, the en­er­gy cri­sis, and ri­sing in­te­rest ra­tes on the company’s eco­no­mic tra­jec­to­ry are chal­len­ging to pre­dict, the Ma­nage­ment Board an­ti­ci­pa­tes sta­bi­liza­ti­on and po­si­ti­ve de­ve­lo­p­ment.

The Exe­cu­ti­ve Board ex­pects to break even af­ter ta­xes in the cour­se of the 2023 fi­nan­cial year, with a slight­ly po­si­ti­ve EBIT fo­re­cast. In ad­di­ti­on, the Exe­cu­ti­ve Board ex­pects to be able to meet all fi­nan­cial ob­li­ga­ti­ons in full and on time in the fu­ture.

We as­su­me that the­re will be an in­crease in real es­tate tran­sac­tions in the 2023 fi­nan­cial year com­pared to the pre­vious year 2022. Ho­we­ver, the mar­ket is curr­ent­ly hea­vi­ly im­pac­ted by the tur­n­around in in­te­rest ra­tes. For the cur­rent fi­nan­cial year 2023, we fo­re­cast re­ve­nue of €11.5 mil­li­on, fol­lo­wed by €15.0 mil­li­on in 2024 and €20.1 mil­li­on in 2025.

In ac­cordance with the company’s gui­dance for the 2023 fi­nan­cial year, the Exe­cu­ti­ve Board ex­pects to break even af­ter ta­xes and achie­ve a slight­ly po­si­ti­ve EBIT. The com­pa­ny con­ti­nues to re­spond with strict cost ma­nage­ment in or­der to meet the cur­rent chal­lenges. Our ear­nings fo­re­casts do not in­clude any po­ten­ti­al wri­te-downs on the fi­nan­cial as­sets held.

We as­su­me that the gui­dance can curr­ent­ly be ea­si­ly achie­ved. For the cur­rent fi­nan­cial year 2023, we ex­pect EBIT of €0.3 mil­li­on, fol­lo­wed by €3.32 mil­li­on in 2024 and €6.64 mil­li­on in 2025.

Over­all, we ex­pect net in­co­me of €0.28 mil­li­on in the cur­rent fi­nan­cial year 2023, €2.39 mil­li­on in 2024 and €4.71 mil­li­on in 2025.

Die voll­stän­di­ge Ana­ly­se kön­nen Sie hier down­loa­den:
http://​www​.more​-ir​.de/​d​/​2​8​3​2​5​.​pdf

Kon­takt für Rück­fra­gen
GBC AG
Hal­der­stra­ße 27
86150 Augs­burg
⁰⁸²¹⁄₂₄₁₁₃₃ 0
research@​gbc-​ag.​de
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Of­fen­le­gung mög­li­cher In­ter­es­sens­kon­flik­te nach § 85 WpHG und Art. 20 MAR Beim oben ana­ly­sier­ten Un­ter­neh­men ist fol­gen­der mög­li­cher In­ter­es­sen­kon­flikt ge­ge­ben: (5a,11); Ei­nen Ka­ta­log mög­li­cher In­ter­es­sen­kon­flik­te fin­den Sie un­ter:
http://​www​.gbc​-ag​.de/​d​e​/​O​f​f​e​n​l​e​g​ung
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Date and time of com­ple­ti­on of the stu­dy: 17.11.2023 (12:00) Ger­man ver­si­on: 13.11.2023 (10:00)
Date and time of the first pu­bli­ca­ti­on of the stu­dy: 17.11.2023 (12:30) Ger­man ver­si­on: 13.11.2023 (11:30)

——————-über­mit­telt durch die EQS Group AG.——————-

Für den In­halt der Mit­tei­lung bzw. Re­se­arch ist al­lei­ne der Her­aus­ge­ber bzw.
Er­stel­ler der Stu­die ver­ant­wort­lich. Die­se Mel­dung ist kei­ne An­la­ge­be­ra­tung
oder Auf­for­de­rung zum Ab­schluss be­stimm­ter Bör­sen­ge­schäf­te.