30th Jul 2009 07:00
30 July 2009
Speymill Deutsche Immobilien Company plc ("the Company")
Update on Interest Rate Swaps
Speymill Deutsche Immobilien Company plc (AIM: SDIC), the pan-German residential property investment company listed on AIM, announces an update in relation to its expected results for the year ended 30 June 2009.
The Company has a number of interest rate swaps outstanding and, in accordance with IFRS, is required to mark these swaps to market at each balance sheet date, irrespective of the intentions of the Company to hold the outstanding swaps to maturity or not (the maturity dates for the swaps being between September 2013 and December 2014). It is important to note that at no stage will the income statement movements, as a result of the swap revaluations, have any cash effect on the Company unless the swaps were to crystallise on their early termination by the Company.
In its results for the six months ended 31 December 2008, the Company reported that as a result of interest rate drops over the period, the accounting value of the swaps as at 31 December 2008 was negative, with a corresponding loss on the Company's income statement, as a result of the change in value, of EUR102 million.
Interest rates dropped again during the six month period to 30 June 2009, resulting in a further decline in value of the interest rate swaps outstanding, with the corresponding additional loss on the Company's income statement expected to be approximately EUR20 million.
Therefore, the total loss relating to the change in value of the Company's interest rate swaps outstanding, for the year ended 30 June 2009, is expected to be approximately EUR120 million.
Further interest rate movements prior to the maturity of the swaps will result in further changes in value and the corresponding profits or losses will again be recognised in future income statements. The swaps are tied to the Euribor 3 month rate which has fallen from 4.947% as at 30 June 2008 to 1.099% as at 30 June 2009.
Further details on the above swaps and their revaluation will be provided in the Company's results for the year ended 30 June 2009 which will be published in due course.
For more information, please visit www.speymilldeutsche.com or contact:
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Speymill Property Group Limited |
+44 1624 640 860 |
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(Manager) |
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Nigel Caine |
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Floris van Dijkum |
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Smith & Williamson Corporate Finance Limited |
+44 20 7131 4000 |
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(Nominated Adviser) |
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Azhic Basirov |
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Siobhan Sergeant |
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Fairfax I.S. PLC |
+44 20 7598 5368 |
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(Brokers) |
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James King |
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Andrew Cox |
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Tavistock Communications Limited |
+44 20 7920 3150 |
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(Media & Investor Relations) |
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Jeremy Carey |
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Simon Hudson |
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Gemma Bradley |
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Notes to Editors:
Speymill Deutsche Immobilien Company plc is a pan-German residential property investment company, which listed on the AIM market of the London Stock Exchange in March 2006, raising £170 million. In May 2007, SDIC raised a further €250 million through a C share placing. The Euro denominated fund aims to provide investors with an attractive level of income together with the prospect for long-term capital growth.
The German residential market is viewed as attractive to investors due to a number of factors including rising German economic activity and productivity, and the availability of assets at below replacement cost. Acquired properties should, through active management, also have the potential for increased rental rates and accordingly improved capital values and increased yield.
Speymill Property Group Limited is the appointed Manager of SDIC and, in conjunction with the Investment Advisor, Goal Service GmbH, it identifies acquisition opportunities for the Company, which fit within its investment criteria.
Related Shares:
Sdic Power.