Final figures show significant improvement in Peach Property Group earnings and stronger balance sheet in 2015

Press release

- Profit before tax at CHF 3.3 million and after tax at CHF 1.2 million substantially improved compared to previous year

- Rental income increased by 12 percent to CHF 8.6 million (+20 percent in local currency)

- Market value of investment properties gains by around 20 percent to CHF 218.7 million

- Equity ratio rises to 33 percent

- Reduction of Management Board to three people

- Positive outlook for 2016

Zurich, 15 March 2016 - Peach Property Group AG, an investor in the residential property sector, today announced final figures showing a significant improvement in profit in the 2015 financial year. Earnings before taxes (EBT) increased to CHF 3.3 million following a loss of CHF 8.7 million in the previous year. This level of earnings is considerably higher than initially forecast and communicated in the preliminary figures as the sales offers for the Gretag property substantially exceeded the original expectations. The earnings figure includes negative currency effects of around CHF 2.4 million that arose after the Swiss National Bank abandoned the exchange rate floor against the Euro in January 2015. Profit after tax rose to CHF 1.2 million after a loss of CHF 10.4 million had been incurred in the previous year.

The further expansion of the investment portfolio through the acquisition of 636 apartments in North Rhine-Westphalia and significant operational improvements in relation to the properties already in Peach Property Group's portfolio led to a market value increase of the investment properties by around 20 percent to CHF 218.7 million. Rental income was up around 12 percent on the previous year to CHF 8.6 million (an increase of 20 percent in local currency).

Operating costs were cut once more by CHF 2 million to around CHF 10 million, due in particular to a 20 percent reduction in staff costs. Thus, the cost-cutting programme launched in spring 2015 was successfully implemented. Further effects thereof are expected in the 2016 financial year.

According to plan the completion of the "Living 108" project and the handover of apartments in other projects further reduced the proportion of developments in the Group's portfolio. Development projects now account for only around 30 percent of the entire portfolio. The handovers generated income from development properties of CHF 75.5 million in 2015. Due to the reduced development business, income from this segment was below the prior-year figure of CHF 126.7 million. Together with the TU Contract for "Peninsula Beach House" that was completed in the prior year operating income was down at CHF 112.6 million after CHF 194.6 million a year before, as expected.

As already reported, negative extraordinary effects totalling CHF 8.4 million were incurred for development projects that were coming to an end in the reporting period. Most of these resulted from the write-downs of receivables from a by now insolvent supplier and price concessions made to accelerate the exit from the premium development project sector. These charges are of a one-off nature and concern all the development business, which has now been substantially reduced.

The equity base developed positively. Due to the positive result and the successful placement of a hybrid bond with a volume of around CHF 25 million, equity has increased significantly. It amounted to approximately CHF 114.0 million, exceeding the prior-year figure by a good CHF 29 million. This results in an improved equity ratio in accordance with IFRSs of 31.3 percent (previous year: 19.8 percent) and at market value of around 32.6 percent (previous year: 22.6 percent).

Peach Property Group expects to continue its profitable growth in the current (2016) financial year. The Group aims to further reduce its operating costs and lift recurring income from rental income. This will be achieved by further optimising the rental situation of the investment portfolio and by purchasing additional residential properties that generate good yields, predominantly in Germany. With the recently announced acquisition in North Rhine-Westphalia a first success was already achieved. In addition, the proceeds from the recent property sales will be used to further improve the balance sheet and financing structure, and in particular to repay the outstanding bonds.

In connection with the focus on value-enhancing portfolio management, Bernd Hasse will step down from his position as CEO of Peach Property Group (Deutschland) AG and member of the executive management of the Peach Property Group at the end of April 2016, leaving the Group. Going forward, the newly built management team in Cologne will report directly to the executive board which as of May 2016 will comprise three members: CEO Dr. Thomas Wolfensberger, CFO Dr. Marcel Kucher and Head of Sales and Marketing Dr. Andreas Steinbauer. The executive management and the Board of Directors of Peach Property Group would like to thank Bernd Hasse for his strong commitment to the Group and wish him all the best for the future.

Peach Property Group AG will hold an investor and analyst conference to explain the 2015 results in Zurich today at 10 am.

The 2015 Annual Report is now available on the company's website by clicking the following link: www.peachproperty.com/GB2015

About Peach Property Group AG

Peach Property Group AG is a property investor and developer focused on investments in Germany and Switzerland. The Group stands for long time experience, competence and quality. Innovative solutions for modern housing needs, strong partnerships and a wide value chain complete the profile of the Group. The portfolio consists of an increasing number of high yield investment properties, typically in B-cities in close reach to metropolitan areas. In addition, the Group develops properties for its own portfolio or for the sale as condominium. Developments for sale focus on A-locations and encompass attractive architecture and high level furnishing for an international clientele. The business activities of the Group cover the entire value chain, from property acquisition and site selection to active asset management and finally to the sale or lease of properties.

Peach Property Group AG is headquartered in Zurich and has its German Group headquarters in Cologne. Peach Property Group AG is listed on the SIX Swiss Exchange (PEAN, ISIN CH0118530366).

For more information, see www.peachproperty.com

Contact:

Media, investors and analysts

Dr. Thomas Wolfensberger, Chief Executive Officer and Dr. Marcel Kucher, Chief Financial Officer
+41 44 485 50 00 | investors@peachproperty.com

German media

edicto GmbH, Axel Mühlhaus, Peggy Kropmanns
Eschersheimer Landstraße 42
60322 Frankfurt am Main
+49 (0) 69 90 55 05 52 | amuehlhaus@edicto.de

This release was published on openPR.