RCS - Neinor Homes - Business Update

Neinor Homes SAAnnouncement

28/03/2023 08:45

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RNS Number : 4420U  Neinor Homes  28 March 2023

 

28 March 2023

Neinor Homes to distribute €600mn in dividends while it plans to invest
+€1bn to pursue growth opportunities

 

§     Neinor approves a shareholder remuneration plan of 600 million euros
over the next five years.

§    Targeting capital-efficient growth with a direct investment plus
co-investment plan of more than 1 billion euros.

§   Strategy will enable us to optimize the balance sheet through improved
shareholder returns and accelerating our growth strategy.

 

Since 2019 Neinor Homes ('Neinor') has overachieved its targets and delivered
8,671 homes (+11%) and generated 518 million euros in EBITDA (+15%) and 344
million euros in net income (+23%), making it the most profitable Spanish
residential developer.

In addition, the company combined excellent operating and financial results
with non-financial results and was acknowledged by Sustainalytics as the
world's lowest ESG risk developer for two years in a row.

Strong fundamentals provide excellent visibility for the next few years

In 2023, the Spanish residential sector is one of the most attractive markets
 in the world, benefiting from a very low level of supply, low leverage
across the board and house prices that remain below the level at the time of
the Global Financial Crisis.

However, capital markets continue to overlook the company's performance and
solid market fundamentals. Today, Spanish developers are trading at one of the
highest valuation discounts in their history, which limits and undermines the
growth potential.

Strong commitment to optimize balance sheet through shareholder remuneration
and capital-efficient growth

Neinor has decided to develop a growth strategy based on two pillars. On one
hand, a clear commitment to the shareholder, using its privileged cash
generation potential to increase dividend payments and implying very
attractive yields for investors.

The Board of Neinor Homes unanimously approved a strategic plan that will
distribute 600 million euros in the form of dividends, of which 450 million
euros will take place in the next three years, effectively accelerating the
crystallization process of its land bank and optimizing its balance sheet.

On the other hand, faced with the challenge of continuing its growth
trajectory in a capital-efficient manner, Neinor has designed a powerful
investment plan of more than 1 billion euros. To this end, in addition to
direct investment, Neinor is launching a new co-investment business line for
build-to-sell, build-to-rent and senior living that will allow it to grow and
continue to optimize its balance sheet while improving returns.

The company is already under discussions with several investors to create
different vehicles for BTS, BTR and Senior Living and expects to materialize
this process throughout the year.

 

Borja García-Egotxeaga CEO of Neinor Homes, commented: "We are delighted to
announce the launch of our co-investment model. This will enable investors to
partner with Neinor, the leading residential provider in Spain, to enhance the
Company's growth trajectory in a capital-efficient way and see a significant
uplift in our return on equity.

"Spain has one of the lowest ratios of new supply per capita worldwide since
the GFC and with mortgage data showing a more sustainable demand environment,
Spain today is one of the markets with the best fundamentals worldwide. We
intend to leverage this position and drive significantly enhanced returns for
investors in our new business model as well as our shareholders."

 

Jordi Argemí, Deputy CEO and CFO of the Group said, "In the last five years,
the company has executed and delivered on its business plan both operationally
and financially despite a pandemic, the war in Ukraine, inflation and an
unprecedented global rate hike. Additionally, the fundamentals of the Spanish
residential sector remain intact. However capital markets have failed to
recognize these facts. In this context, Neinor will optimise its balance sheet
and increase its shareholder returns".

Powerscourt

Nick Dibden / Victoria Heslop / Oliver Banks

neinorhomes@powerscourt-group.comAbout Neinor Homes

Neinor Homes is the leading residential platform in Spain, with a land bank to
develop close to 15,500 homes, and a GAV as of December 2022 of €1.7bn. This
land bank is located in the most dynamic regions with the best economic
fundamentals in Spain: Madrid, Western and Eastern Andalusia, Levante, Basque
Country and Catalonia. Neinor is the only platform with a 360º offer,
covering the entire value chain of the development and rental business. In
addition, it complements its activity with a services division that has
extensive knowledge in urban management, delegated development and
construction. In 2022, Neinor was recognized for the second consecutive year
as the developer with the lowest ESG risk in the world by Sustainalytics,
being the first company out of a total of 284.

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