On 24 April 2018, Grupa Kapitałowa IMMOBILE S.A. published the financial report for 2017. We present the letter of the company’s Management Board attached to the report. It is a comprehensive commentary made on the Group’s results and achievements in the past year.

Dear Sirs and Madams, Dear Shareholders,

we have the honour to present the results of yet another successful year for Grupa Kapitałowa IMMOBILE S.A.

We are very pleased to inform you that we have seen an increase in our consolidated revenue (by 144%) as well as EBITDA result (by 62%) in comparison to the previous year. This resulted in another good year for our Shareholders, as, together with the paid out dividend, they received an almost 20% return on investment. It is true that the result is lower than the average annual return from the last 5 years, which amounts to over 30%, however, the Board hopes that the constantly improving results along with the growing dividend will allow us to maintain a high return rate on our shares. Since 2013, investment in our shares allowed to earn around 300%.

 

2017 was devoted to the consolidation of the heavy industry segment in Grupa Projprzem Makrum S.A., further expansion of the Focus Hotels chain, and in CDI Konsultanci Budowlani – to building our leadership position on the developer market.

 

In the second half of the year, we decided to publish the Group’s strategy with an outline of our plans for the coming years:

  • acquisition of interesting entities in order to enhance the market position of companies in Grupa Kapitałowa IMMOBILE S.A.,
  • floating Focus Hotels and CDI Konsultanci Budowlani on the stock exchange as this will allow to significantly speed up their growth.

Below you can find information about the key segments of our business activity.

 

PROJPRZEM MAKRUM S.A. – Heavy Industry Segment

 

In 2017, the Board of the industry group Projprzem Makrum S.A. focused on reorganisation of internal processes, selling unprofitable assets, and exapanding its sales. The changes introduced by Piotr Szczeblewski and Dariusz Szczechowski resulted in a significant improvement of its financial results as well as the prospects of the Group. They were positively received by the capital market as the Company’s share quotations grew by nearly 100% in 2017.

 

The revenue of the Projprzem Makrum S.A. Group amounted to PLN 199.2 million and increased by 61.8% in comparison to 2016. EBITDA increased by PLN 19.08 million and was 13 times higher than in the previous year. The EBITDA margin amounted to 9.58% (in comparison to 1.43% in 2016). The net result stood at PLN 10.8 million, compared to a PLN 4.7 million loss incurred the year before.

 

2017 brought about an increase in sales in all operating segments of the Heavy Industry Segment. In the handling systems segment, the revenue increased by 19.4% up to the level of PLN 110.4 million, and the operating result was at PLN 12.6 million (+80.6%). The segment of steel construction brought in PLN 60.5 million (an 135% increase), and the revenue in the industrial building segment amounted to PLN 25 million, which is a tenfold increase YoY. Moreover, in 2017, the export value increased by 30%.

 

One of the most important events last year was the conclusion of a deal to sell an unprofitable factory in Sępólno Krajeńskie. In September, the Company sold the loss-making facility for nearly PLN 16 million. The Company decided to focus on the development of its key production facility in Koronowo (near Bydgoszcz), which has the potential to allow for cumulating the production, and its further, gradual expansion. In 2017, we made investments in the development of automation of production processes, e.g. by introducing specialised welding robots.

 

The Company was also intensively developing the concept of automatic MODULO systems. In 2017, we saw the results of many months of work related to the technical and marketing preparation of a wide range of parking systems as the first revenues have been earned. Ensuring an increase in revenues from sales in this area is one of the strategic challenges faced by the Group.

 

The past year was also the first, full year of operation for PROJPRZEM Budownictwo Sp. z o.o. In September, it annouced the conclusion of its first significant general contracting agreement with Starion Poland Sp. z o.o. for the amount of nearly PLN 28 million, and concerning the construction of a production and warehouse hall with office facilities and technical infrastructure in Biskupice Podgórne. A month later, they signed another important agreement with Luvena S.A. for the construction of a warehouse hall with social and office facilities in Luboń for the net amount of PLN 26.9 million.

 

In November, Projprzem Makrum S.A. Group published its development strategy for the years 2018-22. Its main aim is to maximise the Shareholders’ profits, mainly by means of reorganisation and optimisation of internal processes, geographic expansion, development of the assembly and service network as well as further growth of product portfolio by way of acquisition of new entities.

 

FOCUS HOTELS S.A. – Hotel Segment

 

The consistent development of the Focus Hotels chain by its Board resulted in another year of dynamic growth of revenues. Almost 30% of the increase in sales in the company run by Paweł Mirski, Łukasz Płoszyński and Dariusz Burel was achieved thanks to enhanced sales, takover of the Focus Premium Pod Orłem hotel in Bydgoszcz and a full year of operation of the Focus PREMIUM Gdańsk hotel.

 

At the end of the reporting period, the company was operating in eight facilities with a total of 732 rooms. This year in April, the group was joined by Focus Premium Sopot *** (70). In addition, a hotel in Poznań *** (92) is planned to open this September, and in March 2019 – a hotel in Lublin *** (76). In next years, we are planning to open a hotel in Warsaw **** (238), Bydgoszcz *** (100), as well as to expand and raise the standard of the hotel in Łódź.

 

The strategic aim of FOCUS Hotels S.A. is to maintain dynamic growth by acquiring two to four new hotel facilties each year. At this rate, we should cross the threshold of 2,000 rooms already in 2022. One additional factor supporting the growth will be the chain’s foreign expansion. We are especially optimistic about the talks conducted on the Romanian market, and we are hoping to open a hotel abroad soon.

 

 

CDI Konsultanci Budowlani Sp. z o.o. – Developer Segment

 

After the sales success of the 0 stage of Platanowy Park housing estate, the Company run by Jacek Kazubowski, Andrzej Witkowski and Maciej Wawrzyniak spent 2017 on intensive preparations for further investments, which are expected to bring in good results in the coming periods.

 

The 1st stage of Platanowy Park housing estate was completed in January 2018. As at the date of publication of this report, the sales at this stage amounted to PLN 32.3 million net, which is 62% of the expected revenue. In view of this sales success, we have already began the construction of the 2nd stage of Platanowy Park housing estate, which is almost 30% bigger than the previous one. There still remains 1,000 apartments to be built in Platanowy Park housing estate. In the nearest future, CDI Konsultanci Budowlani company is planning to start building another large housing estate in the Fordon district in Bydgoszcz, with a target of around 600 apartments.

 

IMMOBILE K3 office building, with a rental area of 8,800 m2, will be commissioned in the second half of the year. At this stage, we are satisfied with the level of commercialisation. It is yet another big real estate development project carried out by CDI Konsultanci Budowlani that will contribute to the growth of our company as well as the entire city of Bydgoszcz.

 

We believe that the surpluses generated in the projects in Bydgoszcz will allow us to begin investments in other big Polish cities in the near future.

 

 

Dear Shareholders, we are trying to stay in touch with you to give you regular updates about what we have already achieved, and what is still ahead of us. Thank you for your continued support and presence in the development of Grupa Kapitałowa IMMOBILE S.A.

 

At the same time, we would like to invite you to the General Meeting of Shareholders, which will take place in June. We look forward to beating our last year’s record – we hosted over 80 individual investors. In the meantime, we encourage you to follow our website and blog, as well as our Facebook and Twitter profiles.

 

Grupa Kapitałowa IMMOBILE recommends the payment of the third dividend
Invitation to 2017 results meeting with President Rafał Jerzy

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