The food retailers Intermarché, Auchan and Carrefour will gradually replace the Casino group banners and therefore considerably improve the Company’s rental risk profile from 2024. On the basis of publicly available information, these three retailers are expected to respectively represent 5.2%, 4.1% and 2.0% of Mercialys’ pro- forma rental base.
Net recurrent earnings (NRE) came to Euro 109.0 million (+3.3%), with Euro 1.17 per share, up +3.3%, exceeding the target for growth of at least +2%. The basis for comparison for 2022 incorporated various elements relating to the health crisis. On a basis restated for these non-recurring impacts, 2023 NRE are up +11.0%.
The combination of the stabilization of the reversion rate, the +4.1% organic growth in invoiced rents and the limited vacancy rate of 2.9% fully contributed to the growth in NRE.
Tenant retailer sales, up +2.2% from 2022, illustrate the good level of resilience of business for the Company’s retailers, supported by the sustainable occupancy cost ratio of 10.7%, compared with 11.1% in 2022.
The EBITDA margin came to 83.9%, reflecting an improvement compared with 2022 (83.2%), thanks to the robust letting performance and the effective management of operating costs.
The portfolio value including transfer taxes is down -7.0% like-for-like at end-2023 (-3.7% for the second half of the year) factoring in an +86bp increase in the average appraisal rate to 6.61% (+40bp during the second half of the year). Mercialys’ asset portfolio offers a particularly high yield of 405pb above the risk-free rate. The EPRA NDV came to Euro 17.10 per share, down -18.4% for 2023 and -9.1% for the second half of the year, reflecting the decrease in the value of sites and the revaluation of fixed-rate debt in marked to market.
The Company’s growth potential remains intact and is in line with its focus on maintaining a sound financial structure. The loan to value ratio (excluding transfer taxes) for 2023 came to an effectively managed level of 38.9% despite the contraction in asset values, with an ICR of 5.1x.
Mercialys’ strong financial position will also enable it to deploy its project pipeline, which represented Euro 429 million at end-2023, with a view to supporting its future growth, while maintaining a very strict profitability criterion for projects of at least 250bp above the refinancing cost.
A proposed dividend of Euro 0.99 per share for 2023, up +3.1% from 2022. It represents 85% of NRE and offers a particularly high yield of 9.9% on the end-2023 closing price.
2024 objectives: The Company will maintain its highly selective approach for choosing its projects and will continue to focus on ensuring an attractive yield for its shareholders. Mercialys is targeting NRE per share growth of at least +2.0%, combined with a dividend ranging from 75% to 95% of 2024 NRE.
