During the first six months of the 2007/08 financial year, the TK Development
Group recorded a profit of DKK 57.9 million after tax and minority interests
against DKK 3.8 million in the first half of 2006/07.
Consolidated equity totalled DKK 1,285.7 million at 31 July 2007, corresponding
to a solvency ratio of 31.3 %. The balance sheet total amounted to DKK 4,104.7
million at 31 July 2007.
The Group's project portfolio comprised 1,162,000 m² at 31 July 2007, about the
same level as at 31 January 2007.
The Group has expanded its project portfolio in the residential segment in
Poland and acquired a large tract of land in Warsaw for the purpose of building
900-1,000 apartments.
Phase 2 of the Vantaanportti Retail Park in Helsinki, Finland, was sold and
handed over to an international investor in the first half of 2007/08.
The construction of the Prague Outlet Center in Prague has commenced. The
construction and letting of premises is progressing according to plan, with the
centre scheduled to open in autumn 2007. In the first half of 2007/08, a DKK
85.0 million reversal was made in respect of a writedown on the site made in a
previous year.
During the first half of 2007/08, sales agreements were made with GE Real
Estate Central Europe regarding two Czech projects, the Kolin Shopping Centre
and the Liberec Retail Park. The total selling price is estimated to amount to
about DKK 330 million.
TK Development has exercised an option to buy half the stake in Euro Mall
Holding A/S held by the Investment Fund for Central and Eastern Europe, and has
thus increased its holding to 90 %.
The Group still expects a profit of minimum DKK 240 million after tax and
minority interests for the 2007/08 financial year.
In the first half of 2007/08, the Group continued expanding its activities in
existing markets to optimize TK Development's present market platform. For
example, the Group has acquired a large area of land in Warsaw for the purpose
of constructing 900-1,000 residential units, thus continuing the favourable
development within this segment.
During the period under review, the Group began developing several retail parks
in both Sweden and Finland, and also acquired land in the Czech Republic to
establish retail parks, including in Prague. All ongoing projects are showing
satisfactory progress.
Key events after the balance sheet date
Bazaar, Gothenburg, Sweden
TK Development and the Swedish housing developer JM AB have entered into a
cooperation agreement with SKF Sverige AB to develop SKF's former factory area
in the old part of Gothenburg. The contemplated project comprises a total floor
space of about 75,000 m²: 30,000 m² for a shopping centre, 15,000 m² for
services/commercial use and 30,000 m² for housing. TK Development will be in
charge of developing the 45,000 m2 for a shopping centre, services and
commercial facilities, while JM AB will have responsibility for the 30,000 m2
of housing. The acquisition of land for the project will be completed following
the adoption of a local plan, expected in autumn 2009.
Sale of land, Reduta, Warsaw, Poland
After the balance sheet date, TK Development has completed the sale of a plot
of land in Warsaw. In the first half of 2007/08, the investor signed a
conditional agreement to take over the plot and a blueprint project. The last
conditions for completion of the sale have now been fulfilled, and the plot
will be handed over to the investor in October 2007.
Outlook
The Group still expects a profit of minimum DKK 240 million after tax and
minority interests for the 2007/08 financial year. This estimate is based on
the planned completion during the financial year of a number of sold projects.
Projects covering about 29,000 m² were handed over during the first half of
2007/08. Projects of about 232,000 m² are expected to be handed over in the
second half of 2007/08, bringing the total of handed-over projects in 2007/08
to about 260,000 m².
Combined with a consistently good pipeline of blueprint projects representing
more than 1,100,000 m² and corresponding to 3-4 years' activity at the present
level, the sustained favourable outlook for the Northern and Central European
markets will help underpin the earnings expectations in the longer term.
This Interim Report is available at the TK Development Group's website,
www.tk-development.dk.
Further information regarding the 2007/08 Interim Report is available from
Frede Clausen, President and CEO, on tel. +45 8896 1010.
