I N T E R I M R E P O R T H 12013/14
TK DEvElOPMENT A/S | CvR NO. 24256782COMPANY ANNOUNCEMENT NO. 30/2013 | 26 SEPTEMBER 2013
PHOTO:
FUTURUM HRADEC KRÁLOVÉ, SHOPPING CENTRE
CZECH REPUBlIC
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TA B l E O f C O N T E N T S
3 Summary
5 Consolidated financial highlights and key ratios
6 Results in H1 2013/14 and outlook for 2013/14
12 market conditions
13 property development
17 Asset management
22 Discontinuing activities
23 other matters
24 Statement by the Board of Directors and executive Board on the Interim Report
25 Consolidated financial statements
34 Company information
page
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S U M M A R Y
R E s U LT s FO R T H E F I R s T H A L F O F 2 0 1 3 / 1 4 During the first six months of the 2013/14 financial year,
Tk Development recorded results before tax of Dkk -24.3
million, of which the results for the discontinuing activities
before tax amounted to Dkk -8.0 million. For the first half
of 2012/13, the results before tax amounted to Dkk -40.0
million.
The results after tax amounted to Dkk -30.1 million against
Dkk -186.6 million in the first half of 2012/13.
The balance sheet total amounted to Dkk 3,941.4 million
at 31 July 2013 against Dkk 4,009.3 million at 31 January
2013. Consolidated equity totalled Dkk 1,355.7 million, and
the solvency ratio stood at 34.4 %.
Cash flows for the period amounted to Dkk -3.1 million
against Dkk -23.6 million in the same period the year before.
net interest-bearing debt amounted to Dkk 2,183.4 million
at 31 July 2013 against Dkk 2,206.1 million at 31 January
2013.
P R O P E RT y D E V E LO PM E n T In June 2013 Tk Development sold a 20,000 m² retail park
project in Barkarby, Stockholm, Sweden, to a fund managed
by Cordea Savills. The sale is based on forward funding, and
73 % of the project premises have been let. The option to
purchase land for the project was exercised immediately be-
fore construction startup in August 2013. earnings from the
sale will be recognized in the 2014/15 financial year.
In the municipality of Danderyd near Stockholm, Tk Develop-
ment handed over the first 13,000 m² phase of a retail park
to an investor in 2010/11. The second phase of about 1,800
m² was completed in march 2013 and handed over to the in-
vestor in the first quarter of 2013/14. The total project has
been sold to the German investment fund Commerz Real on
the basis of forward funding.
In January 2013 construction of the first phase of 7,850 m²,
a total of 136 units, of Tk Development’s residential project
in Bielany, Warsaw, poland, was completed. The first units
were handed over to the buyers in February 2013, with
61 % of all the units being handed over in the first half of
2013/14. In total, 88 % (Q1 2013/14: 76 %) of the first-pha-
se units have been sold.
In addition, agreements regarding the letting and sale of
several minor retail projects have been concluded. The ear-
nings from these sales are expected to be recognized in the
2014/15 financial year upon handover of the projects to the
investors.
The Group’s project portfolio in the property development
area comprised 451,000 m² at 31 July 2013 (31 January
2013: 452,000 m²).
A s s E T M A n Ag E M E n T The total portfolio of own properties under asset manage-
ment, which thus generates cash flow, comprised 138,250
m² and amounted to Dkk 1,939.0 million at 31 July 2013, of
which investment properties accounted for Dkk 314.4 milli-
on. The annual net rent from the current leases corresponds
to a return on the carrying amount of 6.7 %. Based on full
occupancy, the return on the carrying amount is expected
to reach 7.9 %.
The operation of these properties is generally proceeding
satisfactorily. overall the revenue in the centres is devel-
oping positively, but the footfall is showing signs of decline
at a few centres.
D I s C O n T I n U I n g A C T I V I T I E s In June 2013 a minor investment property in Germany was
sold and handed over to the buyer.
After the reporting date, an agreement has been concluded
regarding the sale of a further German investment property,
expected to be handed over to the buyer in early october
2013. The selling price amounts to Dkk 43.8 million, equal
to the carrying amount.
In August 2013 Tk Development announced that a Group
project, Domuspro Retail park in vilnius, lithuania, had been
conditionally sold to BpT Baltic opportunity Fund, which is
managed by BpT Asset management. The project will be
handed over to the buyer once the usual commercial condi-
tions have been met, including those relating to project con-
struction and letting. The selling price is based on a return
requirement of 8.5 %. The project is to be built in phases,
and construction of the first phase of about 7,500 m2 star-
ted in August 2013, with the opening scheduled for spring
2014.
IllUSTRATIon:
bARKARby gATE, RETAIL PARK
SToCkHolm, SWeDen
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S U M M A R Y
M A R K E T C O n D I T I O n s In management’s opinion, the market conditions have not
changed appreciably during the past months.
The main challenge currently facing the property sector is
the difficult access to financing. Uncertainty on the inter-
national financial markets continues to adversely affect the
property sector, leading to consistently long decision-ma-
king processes among financing sources, tenants and inve-
stors alike.
The Group will make the startup of major new projects con-
tingent on obtaining full or partial financing for them and on
freeing up cash resources from the sale of major completed
projects.
F I n A n C I A L I s s U E sIncrease of capital base – to strengthen the group’s financial
platform
At the Company’s Annual General meeting on 22 may 2013,
the Board of Directors was authorized to carry out a capital
increase with gross proceeds of about Dkk 210-231 million.
The capital increase was implemented in September 2013.
A substantial portion of the proceeds from the capital in-
crease has been used to reduce the debt to credit instituti-
ons and project finance loans of Dkk 68.5 million granted by
a number of the Company’s major shareholders and mem-
bers of management.
Tk Development has a general agreement with the Group’s
main banker about operating and project credits. The agre-
ement has been extended for a two-year period, subject to
the condition that the operating credit limit be reduced by
Dkk 83.5 million after the implementation of the capital in-
crease. This reduction took place in September 2013.
Since 31 January 2013, Tk Development has entered into
agreements on the refinancing of project credits totalling
Dkk 1.2 billion. The most significant project credit refinan-
ced after the reporting date has been extended by two
years, subject to the condition that the credit be reduced
by Dkk 50 million after the implementation of the capital
increase. This reduction took place in September 2013.
now that the above-mentioned refinancing agreements
are in place, credits of Dkk 0.2 billion are due to mature in
2013/14. The Group is in ongoing dialogue with the relevant
credit institutions, and management anticipates being able
to either prolong or otherwise refinance project credits that
have not been prematurely repaid upon project sales.
With the implementation of the capital increase, the Group
has fulfilled its strategic goal of adjusting the balance sheet
and having a solvency ratio of about 40 %. moreover, the
Group has obtained interest margin reductions on several
major credits.
O U T LO O K FO R 2 0 1 3 / 1 4 management anticipates positive results before tax for the
continuing activities for the 2013/14 financial year. The ti-
ming and phase-out of the discontinuing activities are sub-
ject to major uncertainty, and the results of these activities
are therefore not included in the outlook for the 2013/14
financial year.
As mentioned previously, management has revised the sales
strategy for the Group’s projects and chosen to accept re-
duced prices for selected project sales. Thus, management
considers it important for the Group to sell some of its com-
pleted projects and plots of land in the 2013/14 financial
year.
The expectations mentioned in this Interim Report, including
earnings expectations, are naturally subject to risks and un-
certainties, which may result in deviations from the expected
results. various factors may impact on expectations, as out-
lined in the section “Risk issues” in the Group’s Annual Report
for 2012/13, particularly the valuation of the Group’s project
portfolio.
CO n s O L I DAT E D F I n A n C I A L H I g H L I g H Ts A n D K E y R AT I Os | H 1 2 0 1 3 / 1 4 | T k D e v e lo pm e n T A / S | 5 / 3 4
C O N S O l I D AT E D f I N A N C I A l H I G H l I G H T S A N D K E Y R AT I O S
Dkkm
H1
2013/14
H1
2012/13
Full year
2012/13
F I n A n C I A L H I g H L I g H T s :
net revenue 218.8 129.3 632.3
value adjustment, investment properties, net 0.0 -24.3 -37.8
Gross profit/loss 76.7 49.4 -139.5
operating profit/loss (eBIT) 29.5 -3.6 -241.1
Financing, etc. -54.6 -37.5 -87.4
profit/loss before tax and writedowns, etc. -21.4 -3.0 -0.3
profit/loss before tax -24.3 -40.0 -326.0
Profit/loss for the period -30.1 -186.6 -493.3
Balance sheet total 3,941.4 4,538.8 4,009.3
property, plant and equipment 491.1 427.2 498.8
of which investment properties/investment properties under construction 489.5 423.6 496.3
Total project portfolio 3,002.5 3,615.2 3,030.9
Equity 1,355.7 1,697.7 1,389.7
Cash flows from operating activities 43.1 -75.0 45.6
net interest-bearing debt, end of period 2,183.4 2,327.6 2,206.1
K E y R AT I O s :
Return on equity (Roe) *) -4.4 % -20.9 % -30.2 %
eBIT margin 13.5 % -2.8 % -38.1 %
Solvency ratio (based on equity) 34.4 % 37.4 % 34.7 %
equity value in Dkk per share 32.2 40.4 33.0
price/book value (p/Bv) 0.3 0.4 0.4
number of shares, end of period 42,065,715 42,065,715 42,065,715
earnings per share (epS) in Dkk -0.7 -4.4 -11.7
Dividend in Dkk per share 0 0 0
listed price in Dkk per share 9 15 13
K E y R AT I O s A Dj U s T E D FO R wA R R A n T s :
Return on equity (Roe) *) -4.4 % -20.9 % -30.2 %
Solvency ratio (based on equity) 34.4 % 37.4 % 34.7 %
equity value in Dkk per share 32.2 40.4 33.0
Diluted earnings per share (epS-D) in Dkk -0.7 -4.4 -11.7
The calculation of key ratios is based on the 2010 guidelines issued by the Danish Society of Financial Analysts. *) Annualized.
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Tk Development recorded results of Dkk -24.3 million before
tax in the first six months (H1) of 2013/14, compared to Dkk
-40.0 million in H1 2012/13. The results after tax amounted to
Dkk -30.1 million against Dkk -186.6 million in the same period
the year before.
The balance sheet total amounted to Dkk 3,941.4 million at 31
July 2013 against Dkk 4,009.3 million at 31 January 2013. Con-
solidated equity totalled Dkk 1,355.7 million, and the solvency
ratio stood at 34.4 %.
The results for H1 2013/14 and the balance sheet at 31 July
2013, broken down by business segment, appear from the ta-
bles below.
The activities within each individual business segment are de-
scribed in more detail on pages 13-22.
The property development segment is described on pages
13-16. The description includes information about the
development potential of Tk Development’s project portfolio,
including an outline of the individual development projects.
The asset management segment is described on pages
17-21. The description contains information about Tk
Development’s own properties under asset management, in-
cluding an outline of the operation and customer influx for the
individual projects.
The discontinuing activities are described on page 22, which
provides more details about Tk Development’s properties and
projects in the countries where management has decided to
phase out activities.
Therefore, the financial review below contains a description of
the results and balance sheet total at group level only.
R E S U lT S I N H 1 2 0 1 3 / 1 4 A N D O U T l O O K f O R 2 0 1 3 / 1 4
R E s U LT s H 1 2 0 1 3 / 1 4 ( D K K M )
Profit/loss H1 2013/14
Property
development
Asset
management Discontinuing Unallocated
Revenue 218.8 144.8 66.7 7.3 0.0
Gross profit/loss 76.7 20.3 57.9 -1.5 0.0
Costs 46.3 - - 3.5 42.8
operating profit/loss 29.5 20.3 57.9 -5.0 -43.7
Financing, net -54.6 -10.7 -33.6 -3.2 -7.1
profit/loss before tax -24.3 10.1 24.4 -8.0 -50.8
Tax on the profit/loss for the period 5.8 - - - 5.8
Profit/loss for the period -30.1 -56.6
b A L A n C E s H E E T s T R U C T U R E AT 3 1 j U Ly 2 0 1 3 ( D K K M )
Balance sheet 31 July 2013
Property
development
Asset
management Discontinuing Unallocated
Assets
Investment properties 469.8 - 314.4 155.4 -
Investment properties under construction 19.7 19.7 - - -
other non-current assets 170.6 3.6 3.3 - 163.7
projects in progress or completed 3,002.5 1,146.9 1,624.6 231.0 -
Receivables 223.4 58.2 143.5 21.2 0.5
Cash, cash equivalents, escrow accounts, etc. 55.4 13.5 13.9 0.4 27.6
Assets 3,941.4 1,241.9 2,099.7 408.0 191.8
Equity and liabilities
equity 1,355.7 606.1 696.2 209.3 -155.9
Credit institutions 2,252.3 523.8 1,240.4 186.2 301.9
other liabilities 333.4 112.0 163.1 12.5 45.8
Equity and liabilities 3,941.4 1,241.9 2,099.7 408.0 191.8
Solvency ratio 34.4 % 48.8 % 33.2 % 51.3 % -81.3 %
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AC C O U n T I n g P O L I C I E sThe Interim Report is presented in accordance with IAS 34, In-
terim Financial Reporting, as adopted by the eU, and Danish dis-
closure requirements for listed companies.
The Interim Report has been presented in accordance with
the financial reporting standards (IFRS/IAS) and IFRIC interpre-
tations applicable for financial years beginning at 1 February
2013.
The implementation of new and amended financial reporting
standards and interpretations that have entered into force as
of the 2013/14 financial year has not impacted recognition and
measurement in the consolidated financial statements and
thus has no effect on the earnings per share and the diluted
earnings per share.
In march 2013 the Board of Directors decided to change the
internal reporting procedure. In this connection, the segment
definition has been revised, and segments are now divided into
property development, asset management and discontinuing
activities. The comparative figures have been restated accord-
ingly.
The accounting policies have been applied consistently with
those presented in the Annual Report for 2012/13. Reference
is made to the Annual Report for a complete description of the
Group’s accounting policies.
no interim financial statements have been prepared for the
parent Company. The Interim Report is presented in Dkk, which
is the presentation currency for the Group’s activities and the
functional currency of the parent Company. The Interim Report
has not been audited or reviewed by the Company’s auditors.
AC C O U n T I n g E s T I M AT E s A n D j U D g M E n T sThe most significant accounting estimates and judgments
made by management in applying the Group’s accounting pol-
icies, and the associated, estimated material uncertainty, are
the same as those made in the preparation of the Annual Re-
port for 2012/13. For a more detailed description, reference is
therefore made to the Annual Report.
I n C O M E s TAT E M E n TRevenue
The revenue for the period under review totalled Dkk 218.8 mil-
lion against Dkk 129.3 million in H1 2012/13.
The revenue stems from the sale of projects, rental and fee in-
come, etc.
Handed-over projects
Retail park, Enebyängen, Danderyd, Sweden
In the municipality of Danderyd near Stockholm, Tk Develop-
ment handed over the first 13,000 m² phase of the retail park
to an investor in 2010/11. The second phase of about 1,800 m²
was completed in march 2013 and handed over to the investor
in the first quarter of 2013/14. The second phase is fully let
and tenanted by plantagen (2012/13: 100 %). The total project
has been sold to the German investment fund Commerz Real on
the basis of forward funding.
Residential park, Bielany, Warsaw, Poland
Construction of the first phase of 7,850 m², a total of 136 units,
was completed in January 2013, and the first units were hand-
ed over to the buyers in February 2013. 88 % of the units (Q1
2013/14: 76 %) have been sold, and 50 % of the units were
handed over to buyers in Q1, with an additional 11 % being
handed over in Q2 2013/14. The residential units are being sold
as owner-occupied apartments to private users.
gross margin
The gross margin for the first half of 2013/14 amounted to Dkk
76.7 million against Dkk 49.4 million in H1 2012/13. The gross
margin derives from the operation of the Group’s completed
projects, the operation and value adjustment of the Group’s in-
vestment properties and profits on handed-over projects.
The value adjustment of the Group’s investment properties
amounted to Dkk 0.0 net, with Dkk -0.6 million relating to
the German investment properties and Dkk 0.6 million relat-
ing to remaining investment properties. The value adjustment
amounted to Dkk -24.3 million in the first half of 2012/13.
staff costs and other external expenses
Staff costs and other external expenses amounted to Dkk 46.3
million for H1 2013/14 against Dkk 51.8 million in H1 2012/13,
a reduction of about 11 %.
Staff costs amounted to Dkk 32.8 million against Dkk 36.2 mil-
lion in the same period the year before, a decline of about 9
%. The number of employees totalled 102 at 31 July 2013 (31
January 2013: 112), including employees working at operation-
al shopping centres.
other external expenses amounted to Dkk 13.5 million, a re-
duction of about 13 % compared to H1 2012/13.
A number of measures have been initiated to reduce the cost
level by about 20 % relative to 2012/13, with half of the reduc-
tion deriving from the discontinuation of activities in Germany,
Finland and the Baltic States.
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R E S U lT S I N H 1 2 0 1 3 / 1 4 A N D O U T l O O K f O R 2 0 1 3 / 1 4
Development in costs:
Costs, DKKm Costs, trend
0
30
60
90
120
150
180
H1 2013/14
H1 2012/13
2014/15E
2013/14E
2012/13
2011/12
2010/11
2009/10
2008/09
Financing
Tk Development realized net financing expenses of Dkk 54.6
million against Dkk 37.5 million in H1 2012/13. The increase is
attributable partly to higher financing costs on individual proj-
ect credits and partly to the declining volume of projects on
which interest is capitalized following the decision to sell some
of the Group’s plots of land.
Corporate income tax
Tax on the results for the year amounts to Dkk 5.8 million. The
tax amount has been negatively affected by a Dkk 8.5 million
impairment of the Group’s Danish tax asset following the adop-
tion of new legislation to gradually reduce the corporate tax
rate, which has lengthened the time horizon for utilizing the
Group’s Danish tax asset.
b A L A n C E s H E E TThe Group’s balance sheet total amounted to Dkk 3,941.4 mil-
lion, which is a decline of Dkk 67.9 million compared to 31 Jan-
uary 2013.
goodwill
Goodwill is unchanged compared to 31 January 2013, amount-
ing to Dkk 33.3 million at the reporting date. Goodwill relates
to the Group’s property development and asset management
activities in poland and the Czech Republic. There are no indica-
tions of any need to impair the value of goodwill.
Investment properties and investment properties under con-
struction
Tk Development’s investment properties consist of:
Futurum Hradec králové, shopping centre, the Czech Repub-lic (a 20 % interest)
Galeria Tarnovia, shopping centre, Tarnów, poland (a 30 % interest)
German investment properties.
The total value of the Group’s investment properties amounted
to Dkk 469.8 million against Dkk 479.4 million at 31 January
2013. Dkk 155.4 million of the value at 31 July 2013 is attrib-
utable to the Group’s German investment properties, which are
described in more detail in the section “Discontinuing activities”
below. The two remaining investment properties belong to the
asset management segment and are described in more detail
under that heading.
The valuation of the Czech investment property, the Futurum
Hradec králové shopping centre, made at 31 January 2013 was
based on the ongoing sales process. This valuation was upheld
at 31 July 2013.
Tk Development’s 30 % ownership interest in Galeria Tarnovia
has been valued at fair value based on the return on the prop-
erty agreed upon in December 2012 in connection with the sale
of 70 % to Heitman. In management’s opinion, the rate of return
agreed upon in December 2012 is still consistent with the cur-
rent market level.
Tk Development’s investment properties under construction
consist of the Group’s ownership interest in the Jelenia Góra
development project in poland. no value adjustment of this
project was made at 31 July 2013, pending fulfilment of the
conditions in the agreement with the investor, and thus startup
of the project.
Deferred tax assets
Deferred tax assets were recorded at Dkk 128.1 million in the
balance sheet against Dkk 127.0 million at 31 January 2013.
The valuation of the tax assets is based on existing budgets
and profit forecasts for a five-year period. For the first three
years, budgets are based on an evaluation of specific projects
in the Group’s project portfolio. The valuation for the next two
years is based on specific projects in the project portfolio with
a longer time horizon than three years as well as various project
opportunities.
Due to the substantial uncertainties attaching to these val-
uations, provisions have been made for the risk that projects
are postponed or not implemented and the risk that project
profits fall below expectations. A change in the conditions and
assumptions for budgets and profit forecasts, including time
estimates, could result in the value of the tax assets being low-
er than that computed at 31 July 2013, which could have an
adverse effect on the Group’s results of operations and finan-
cial position.
Project portfolio
The total project portfolio came to Dkk 3,002.5 million against
Dkk 3,030.9 million at 31 January 2013. The decline is a com-
bined result of an increase in the Group’s portfolio of ongoing
projects and a decrease due to the sale of projects.
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Total prepayments based on forward-funding agreements were
Dkk 6.3 million at 31 July 2013, compared to Dkk 369.6 million
at 31 January 2013. The decrease is due to the handover of
projects to investors in H1 2013/14. At 31 July 2013 forward
funding represented 18.8 % of the gross carrying amount of
sold projects.
The Group’s total portfolio of completed projects and invest-
ment properties amounted to Dkk 2,126 million at 31 July 2013
(31 January 2013: Dkk 2,132 million), and the Group’s net inter-
est-bearing debt amounted to Dkk 2,183 million (31 January
2013: Dkk 2,206 million).
Total project portfolio and net interest-bearing debt:
Net interest-bearing debt, DKKm
0
625
1,250
1,875
2,500
31 Jul 1331 Jan 1331 Jan 1231 Jan 1131 Jan 1031 Jan 09
Investment properties and completed projects, DKKm
Receivables
Total receivables amounted to Dkk 223.4 million, a decline of
Dkk 17.6 million from 31 January 2013 that relates mainly to
other receivables.
Cash and cash equivalents
Cash and cash equivalents amounted to Dkk 27.5 million
against Dkk 31.2 million at 31 January 2013. The Group’s total
cash resources, see note 4, came to Dkk 64.8 million against
Dkk 70.1 million at 31 January 2013.
Equity
The Group’s equity came to Dkk 1,355.7 million against
Dkk 1,389.7 million at 31 January 2013.
Since 31 January 2013, equity has partly been affected by the
results for the period and negative market-value adjustments
after tax of Dkk 4.2 million related to foreign subsidiaries and
hedging instruments.
The solvency ratio amounts to 34.4 %.
Equity and solvency:
Equity, DKKm Solvency ratio
0
500
1,000
1,500
2,000
31 Jul 1331 Jan 1331 Jan 1231 Jan 1131 Jan 1031 Jan 09
59 %
39.5
%
36.4
% 40.4
%
40.4
%
34.7
%
34,4
%
non-current liabilities
The Group’s non-current liabilities represented Dkk 96.3 million
against Dkk 141.0 million at 31 January 2013. The decline re-
sults mainly from debt to credit institutions being transferred
to current liabilities.
Current liabilities
The Group’s current liabilities represented Dkk 2,489.4 million
against Dkk 2,478.6 million at 31 January 2013.
CA s H F LO w s TAT E M E n T The Group’s cash flows from operating activities were positive
in the amount of Dkk 43.1 million (Q1 2013/14: positive in the
amount of Dkk 46.1 million). This amount is a combined result
of a reduction of funds tied up in projects due to project sales,
new project investments, a decline in receivables, interest and
tax paid, as well as other operating items.
The Group’s cash flows from investing activities were positive
in the amount of Dkk 6.8 million (Q1 2013/14: negative in the
amount of Dkk 1.0 million), a combined result of the sale of one
of the Group’s German investment properties and additional
investments in the Group’s investment properties and invest-
ment properties under construction.
The cash flows from financing activities were negative in
the amount of Dkk 53.0 million (Q1 2013/14: negative in the
amount of Dkk 49.6 million). The negative cash flows result
from a reduction of payables to credit institutions coupled with
the financing raised for project investments.
E x EC U T I O n O F A n n O U n C E D s T R AT E gyAs described in company announcement no. 6/2013 and the
Annual Report for 2012/13, in march 2013 management re-
solved to revise the Group’s strategy and business model and
to adjust its market focus.
As announced previously, the goal is to execute these adjust-
ments within a period of two years. In management’s opinion,
the strategy execution is progressing satisfactorily and as
planned.
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The initiatives adopted and the current status of their execu-
tion are outlined below:
The remaining activities will be limited to Denmark, Sweden,
poland and the Czech Republic.
• Tk Development’s activities in Germany, Finland and the
Baltic States are being discontinued, and the phase-out
is progressing satisfactorily. The German activities have
been downscaled through the sale of investment pro-
perties. In the Baltic States, a conditional agreement has
been concluded regarding the sale of the Group’s retail
park project Domuspro in vilnius, which will be handed
over to the buyer upon completion of construction. The
branch offices in Berlin, Germany, and Helsinki, Finland,
will be closed down before the end of 2013.
The portfolio of projects not initiated (plots of land) is to be
reduced from about Dkk 1.1 billion to about Dkk 500 million.
• This process is progressing satisfactorily and according
to plan.
The balance sheet is to be adjusted, with a solvency ratio of
about 40 %.
• Following the implementation of the capital increase in
September 2013, the solvency ratio constitutes about
40 %.
overheads are to be reduced by around 20 % relative to
2012/13, with half of the reduction deriving from the
discontinuation of activities in Germany, Finland and the Bal-
tic States.
• Cost-reducing measures have been implemented and
are expected to achieve full impact in the course of
2014/15.
Financing costs are to be normalized as a result of the initia-
tives implemented.
• In connection with the implementation of the capital
increase, the Group has reached agreements for a re-
duction of the interest payable on several major credits,
and is currently negotiating interest rate reductions for
other credits.
management believes that a platform for normalized earnings
will have been established once the above-mentioned adapta-
tions have been implemented.
F I n A n C I A L I s s U E sCapital increase
At the Company’s Annual General meeting on 22 may 2013,
the Board of Directors was authorized to carry out a capital in-
crease with gross proceeds of about Dkk 210-231 million. The
capital increase was implemented in September 2013.
For technical reasons, a capital reduction was implemented
before the capital increase, whereby the denomination of all
shares was written down from Dkk 15 to Dkk 1. The capital
reduction amounted to Dkk 588.9 million, which was allocated
to a special fund under equity. Subsequently, this special fund
can only be used following a resolution to this effect at a Gen-
eral meeting.
The capital increase was implemented by issuing 56,087,620
new shares of nominally Dkk 1 at a price of Dkk 4.11, thus
yielding gross proceeds of Dkk 230.5 million. The net proceeds
after costs amount to a total of Dkk 218.7 million.
A substantial portion of the proceeds from the capital increase
has been used to reduce the debt to credit institutions and
project finance loans of Dkk 68.5 million granted by a number
of the Company’s major shareholders and members of manage-
ment.
Adjustment of warrants
As a consequence of the capital reduction and capital increase
implemented, the Board of Directors resolved, in accordance
with the Company’s Articles of Association, to adjust the num-
ber of warrants allocated to the Company’s executive Board
and other executive staff members as well as the subscription
price for exercising the warrants. The adjustment was made to
ensure that the value of the warrants for the employees will
be maintained after implementation of the above-mentioned
alterations to Tk Development’s capital structure.
The adjustment means that the employees will be allotted a
number of additional warrants, and that the subscription price
upon exercise of the warrants will be reduced. Reference is also
made to company announcement no. 26/2013.
Other financial issues
The fact that a number of completed projects have not been
sold means a substantial portion of the Group’s financial re-
sources is tied up in these projects. The sale of completed
projects will free up the cash resources that are essential for
strengthening the Group’s financial platform. moreover, finan-
cial resources will be secured to regenerate momentum and
thus to realize the substantial development potential inherent
in several of the Group’s projects.
The Group’s ability to complete the development of its planned
projects and thereby achieve the expected results is contin-
gent on its continuing to obtain full or partial financing for exist-
ing and new projects, from either credit institutions or investors
in the form of forward funding, and on cash resources being
freed up from the sale of major completed projects.
Tk Development has a general agreement with the Group’s
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main banker about operating and project credits. The agree-
ment has been extended for a two-year period, subject to the
condition that the operating credit limit be reduced by Dkk 83.5
million after the implementation of the capital increase. This
reduction took place in September 2013.
Since 31 January 2013, Tk Development has entered into
agreements on the refinancing of project credits totalling Dkk
1.2 billion. The most significant project credit refinanced after
the reporting date has been extended by two years, subject to
the condition that the credit be reduced by Dkk 50 million after
the implementation of the capital increase. This reduction took
place in September 2013.
now that the above-mentioned refinancing agreements are in
place and instalments paid, credits of Dkk 0.2 billion are due to
mature in 2013/14. The Group is in ongoing dialogue with the
relevant credit institutions, and management anticipates being
able to either prolong or otherwise refinance project credits
that have not been prematurely repaid upon project sales.
O U T LO O K FO R 2 0 1 3 / 1 4management still anticipates positive results before tax for the
continuing activities for the 2013/14 financial year. The timing
and phase-out of the discontinuing activities are subject to ma-
jor uncertainty, and the results of these activities are therefore
not included in the outlook for the 2013/14 financial year.
As mentioned previously, management has revised the sales
strategy for the Group’s projects and chosen to accept reduced
prices for selected project sales. Thus, management considers
it important for the Group to sell some of its completed proj-
ects and plots of land in the 2013/14 financial year.
The expectations mentioned in this Interim Report, including
earnings expectations, are naturally subject to risks and un-
certainties, which may result in deviations from the expected
results. various factors may impact on expectations, as out-
lined in the section “Risk issues” in the Group’s Annual Report
for 2012/13, particularly the valuation of the Group’s project
portfolio.
s U b s Eq U E n T E V E n T s The capital increase was implemented in September 2013, gen-
erating gross proceeds of Dkk 230.5 million; see above.
After the reporting date, an agreement has been concluded re-
garding the sale of a further German investment property, ex-
pected to be handed over to the buyer in early october 2013.
The selling price amounts to Dkk 43.8 million, equal to the car-
rying amount.
moreover, Tk Development has entered into a conditional
agreement for the sale of 80 % of the Group’s planned shop-
ping centre project of 14,800 m2 in Frýdek místek, the Czech
Republic; see below.
other than those mentioned in the management commentary,
no significant events of relevance to the Company have oc-
curred after the reporting date.
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In management’s opinion, the Group’s market conditions have
not changed appreciably during the past months. The current
market conditions are still leading to long decision-making pro-
cesses among investors, tenants and financing sources alike.
The Danish market in particular continues to be affected by
uncertainty, partly because of a weakened financial sector. In
management’s opinion, there are no indications of a significant
improvement during the period to come.
The access to project financing remains difficult and is current-
ly the greatest challenge facing the property sector. The finan-
cial sector is weakened and has sharpened its focus on credit
risks, and at the same time new rules have imposed stricter
capital requirements on banks. This means that credit institu-
tions remain reluctant to provide loans to finance real property,
with a resulting negative effect for the property sector, and
thus Tk Development as well. Tk Development is dependent
on its ability to continue obtaining full or partial project financ-
ing, from either credit institutions or investors in the form of
forward funding, and on freeing up substantial cash resources
from the sale of several of the major completed projects.
The past year has seen cautious investor optimism and in-
creased interest in investing in selected segments of retail
projects, with location, returns and quality being key factors
in the investment decision. However, the decision-making pro-
cesses continue to be lengthy, in part because of the investors’
requirement for lower project risk.
Institutional investors need options for placing their funds,
and this paves the way for setting up partnerships with such
investors for the purpose of cooperating on the execution of
new projects. These opportunities fall in line with the Group’s
business model, according to which Tk Development wishes
to enter into partnerships regarding completed properties and
new development projects, and thus to improve the allocation
of the Company’s equity, diversify risks and better utilize the
Group’s development competencies.
In the letting market for retail property, tenants continue
to focus on location. Tk Development is experiencing a good
amount of interest in prime-location projects, and several
strong national and international retail chains are expanding,
although decision-making processes are protracted in light of
the sustained weak economic growth.
The rental level is expected to remain fairly stable in the period
ahead. However, the rental level for secondary locations is ex-
pected to be under pressure.
The scope of residential projects launched in Warsaw, poland,
is diminishing, and the supply of housing is stabilizing. Follow-
ing the realignment of prices referred to in Tk Development’s
Annual Report for 2012/13, the Group is experiencing rising de-
mand for housing and is regularly concluding agreements for
the sale of apartments in its completed residential project in
Bielany. Therefore, in the opinion of management, housing de-
velopment in poland will become attractive again, particularly
in the Warsaw area.
M A R K E T C O N D I T I O N S
M A n Ag E M E n T COM M E n TA Ry | H 1 2 0 1 3 / 1 4 | T k D e v e lo pm e n T A / S | 1 3 / 3 4
The Group’s primary business area is the development of real
property, termed property development.
strategy for business area – Property development
Developing projects from the conceptual phase through to project completion, based on one of several models:
• Sold projects (forward funding/forward purchase)
• projects with partners
• on Tk’s own books based on a high degree of confidence in the letting and sales potential
• Services for third parties.
Property development
Countries: Denmark, Sweden, poland
and the Czech Republic
Revenue: H1 2013/14: Dkk 144.8 million
(H1 2012/13: Dkk 43.9 million)
Gross profit/loss: H1 2013/14: Dkk 20.3 million
(H1 2012/13: Dkk 2.6 million)
Balance sheet total: 31 July 2013: Dkk 1,241.9 million
(31 January 2013: Dkk 1,284.5 million)
In its property development segment, Tk Development focuses
on executing existing projects in the portfolio, as well as on se-
curing robust pre-construction letting or sales. In addition, the
Group continuously works on new project opportunities.
The Group will make the startup of major new projects con-
tingent on obtaining full or partial financing for them and on
freeing up cash resources from the sale of major completed
projects.
The gross margin for development activities amounted to
Dkk 20.3 million in H1 2013/14 against Dkk 2.6 million in H1
2012/13.
The Group’s retail projects on which construction is already on-
going or about to start are still attracting a good amount of in-
terest from tenants. During the period under review, the Group
also concluded lease agreements for several of these projects.
moreover, agreements regarding the letting and sale of several
minor retail projects have been concluded. The earnings from
these sales are expected to be recognized in the 2014/15 fi-
nancial year upon handover of the projects to the investors.
The development potential of the project portfolio represented
451,000 m² at 31 July 2013, of which sold projects accounted
for 22,000 m² and remaining projects for 429,000 m². The proj-
ect portfolio had a total development potential of 452,000 m²
at 31 January 2013.
The development in the Group’s project portfolio is outlined be-
low:
DKKm
31 jan
2012
31 jan
2013
31 jul
2013
sold
Completed 0 15 14
In progress 17 17 0
not initiated 10 6 12
Total 27 38 26
Remaining
Completed 0 38 16
In progress 286 198 194
not initiated 938 901 911
Total 1,224 1,137 1,121
net project portfolio 1,251 1,175 1,147
Forward funding 293 370 6
Gross project portfolio 1,544 1,545 1,153
Forward funding in % of gross
carrying amount of sold
projects 91.6 % 91.1 % 18.8 %
Table 1
By means of forward funding, the Group reduces the funds tied
up in the portfolio of sold projects. Forward funding has fallen
since 31 January 2013 due to the handover of projects to in-
vestors.
The development potential of the Group’s project portfolio is
shown below (in square metres):
m² (’000)
31 jan
2012
31 jan
2013
31 jul
2013
sold
Completed 0 4 2
In progress 7 3 0
not initiated 29 0 20
Total 36 7 22
Remaining
Completed 0 3 1
In progress 39 20 19
not initiated 560 422 409
Total 599 445 429
Total project portfolio 635 452 451
number of projects 50 37 36
Table 2
P R O P E R T Y D E v E l O P M E N T
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P R O P E R T Y D E v E l O P M E N T
Project outline
The outline below lists the key projects in the portfolio in the property development segment.
Project City/town Country segment
TKD’s
share of
area (m2)
TKD’s
ownership
interest
Construction start /
expected construc-
tion start
Opening/
expected
opening
Completed
Residential park, Bielany, phase I Warsaw pl Residential/services 2,950 100 % mid-2011 January 2013
In progress
Amerika plads, underground car park Copenhagen Dk Underground car park 16,000 50 % 2004 Continuously
vasevej Birkerød Dk mixed 3,400 100 % - -
not initiated
BRoen, shopping centre esbjerg Dk Retail 29,800 100 % Autumn 2013 Autumn 2015
Østre Teglgade Copenhagen Dk office/residential 32,700 1) 100 % Continuously Continuously
Amerika plads, lot C Copenhagen Dk mixed 6,500 50 % 2014 2016
Amerika plads, lot A Copenhagen Dk office 5,900 50 % 2014 2016
Aarhus South, phase II Aarhus Dk Retail 2,800 100 % 2013 2014
ejby Industrivej Copenhagen Dk office 12,900 100 % - -
Østre Havn/Stuhrs Brygge Aalborg Dk mixed 36,000 1) 50 % Continuously Continuously
Retail park, marsvej Randers Dk Retail 5,200 100 % 2013 2014
Development of town centre køge Dk mixed 26,500 100 % 2013 Continuously
The kulan commercial district Gothenburg Se mixed 45,000 100 % 2014 2016
Barkarby Gate, retail park Stockholm Se Retail 20,000 100 % August 2013 Autumn 2014
Retail park, Söderhamn Söderhamn Se Retail 10,000 100 % 2014 2015
Retail park, Gävle, phase II Gävle Se Retail 15,800 100 % Continuously Continuously
Shopping centre, Jelenia Góra Jelenia Góra pl Retail 7,200 30 % 2013 2015
Residential park, Bielany,
remaining phases Warsaw pl Residential/services 48,350 100 % Continuously Continuously
Bytom Retail park Bytom pl Retail 25,800 100 % Continuously Continuously
Shopping centre, Frýdek místek Frýdek místek CZ Retail 14,800 100 % 2013 2014
most Retail park, phase II most CZ Retail 2,000 100 % - -
Property development, total floor space approx. 370,000
1) Share of profit on development amounts to 70 %.
geographical segmentation of the development potential in square metres:
Sweden
Denmark
Czech Republic
Poland
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C O M P L E T E D P R Oj EC T s Residential park, bielany, warsaw, Poland
Tk Development owns a tract of land in Warsaw allowing for
the construction of about 56,200 m², distributed on 900-1,000
residential units. The plan is to build the project in four phases.
Construction of the first phase of 7,850 m², consisting of 136
units, was completed in January 2013. Sluggish demand in the
polish residential market has affected the pre-completion sale
of the units. The sales process has now picked up, and 88 % of
the first-phase units (Q1 2013/14: 76 %) have been sold. The
residential units are being sold as owner-occupied apartments
to private users, and 61 % (Q1 2013/14: 50 %) of the units had
been handed over to the buyers at 31 July 2013. management
expects the remaining units to be sold in the course of the
2013/14 financial year.
P R O j E C T s I n P R O g R E s sAmerika Plads, underground car park, Copenhagen, Denmark
kommanditaktieselskabet Danlink Udvikling (DlU), which is
owned 50/50 by Udviklingsselskabet By og Havn I/S and Tk
Development, owns three projects at Amerika plads: lot A, lot C
and an underground car park. part of the underground car park
in the Amerika plads area has been built. The Group expects to
sell the total parking facility upon final completion. For a de-
scription of Amerika plads, lots A and C, please see the section
“projects not initiated” below.
Vasevej, birkerød, Denmark
Tk Development owns a property of about 3,000 m² at vasevej
in Birkerød, rented by SuperBest. The project consists of a re-
furbishment of the existing property and a minor extension
comprising a few stores and dwellings. The combined project is
expected to comprise about 3,400 m².
P R O j E C T s n OT I n I T I AT E DbROEn, shopping centre, Esbjerg, Denmark
In esbjerg, Tk Development owns a plot earmarked for a shop-
ping centre project, BRoen, of about 29,800 m², to be built
at esbjerg station. The shopping centre is expected to com-
prise about 70 stores. The current occupancy rate is 72 %
(Q1 2013/14: 74 %), with tenants including H&m, kvickly, Aldi,
Imerco, Skoringen, Sport-master, Bahne, panduro Hobby, kong
kaffe and Gina Tricot. The fitness facilities have been let to Fit-
ness World. Construction is expected to start in autumn 2013,
with the opening scheduled for autumn 2015. Tk Development
is currently working on the planning, design, startup and sale
of the project.
Østre Teglgade, Copenhagen, Denmark
Tk Development owns an attractively located project area at
Teglholmen of about 32,700 m². Current plans involve estab-
lishing a church and possibly a residential care facility in part
of the project area. Discussions are also being held with sever-
al interested parties regarding the construction of residential
property in the area.
Amerika Plads, lots A and C, Copenhagen, Denmark
kommanditaktieselskabet Danlink Udvikling (DlU), which is
owned 50/50 by Udviklingsselskabet By og Havn I/S and Tk
Development, owns three projects at Amerika plads: lot A, lot
C and an underground car park. A building complex with about
11,800 m² of office space is to be built on lot A, and a building
complex with about 13,000 m² of commercial and residential
space on lot C. Construction will take place as the space is let.
Østre Havn/stuhrs brygge, Aalborg, Denmark
In the area previously occupied by Aalborg Shipyard at Stuhrs
Brygge, Tk Development is developing a business and residen-
tial park of about 72,000 m² through a company jointly owned
with Frederikshavn maritime erhvervspark on a 50/50 basis.
The area was acquired by the jointly owned company, with pay-
ment being effected for the development rights acquired in
step with the development and execution of specific projects.
A new local plan comprising about 31,000 m² of housing, offic-
es and parking facilities has been launched.
Retail park, Marsvej, Randers, Denmark
In october 2010 the Group took over a plot of land on marsvej
in Randers, intended for a retail development project of 5,200
m². letting has been initiated, and there is a satisfactory level
of interest among potential tenants.
Development of town centre, Køge, Denmark
Tk Development is working on a potential project in køge. In
February 2012 køge kyst and Tk Development entered into a
conditional agreement under which Tk Development is to buy
land for constructing a project of about 26,500 m². The project,
to be built immediately next to køge Station and the town cen-
tre shopping area, comprises retail stores of about 11,500 m²,
public service facilities of about 8,700 m² including a town hall
and rehabilitation centre, residential premises of about 3,300
m² and office premises/fitness facilities of about 2,900 m² as
well as a 14,000 m² underground car park. The local plan was
adopted in June 2013. Tk Development expects to enter into
an agreement with køge municipality regarding the municipal-
ity’s takeover of both town hall and rehabilitation centre. let-
ting of the retail premises has started, and potential tenants
are showing a good amount of interest in the project. The proj-
ect allows for phased construction.
The Kulan commercial district, shopping centre and service/
commercial space, gothenburg, sweden
Tk Development and the Swedish housing developer Jm AB
have entered into a cooperation agreement with SkF Sverige AB
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to develop SkF’s former factory area in the old part of Gothen-
burg. The contemplated project comprises a total floor space
of about 75,000 m²: 30,000 m² for a shopping centre, 15,000
m² for services/commercial use and 30,000 m² for housing. Tk
Development will be in charge of developing the 45,000 m² for
a shopping centre, services and commercial facilities, while Jm
AB will have responsibility for the 30,000 m² of housing. The
local plan is being drawn up and is expected to be approved
in 2013. The project is being discussed with potential tenants,
and a number of lease agreements have been concluded.
barkarby gate, retail park, stockholm, sweden
In Barkarby in the northwestern part of Stockholm, Tk Develop-
ment has an option on an area for the development of a 20,000
m² retail park. The retail park is expected to consist of 12-14
units, of which 9-10 units will be retail stores. The current occu-
pancy rate is 73 % (Q1 2013/14: 73 %), and lease agreements
have been concluded with various major tenants, including XXl
(sports store), Clas ohlson, Intersport, lager 157, Grizzly, kjell &
Co., Burger king and the fitness chain nordic Wellness. In June
2013 the project was sold to a fund managed by Cordea Sav-
ills. The sale is based on forward funding. After the reporting
date, the option to purchase land for the project was exercised
immediately before construction startup in August 2013. The
opening has been scheduled for autumn 2014. earnings from
the sale will be recognized in 2014/15 upon handover of the
project to the investor.
Retail park, phase II, gävle, sweden
In 2012/13 Tk Development sold and handed over an 8,300 m²
retail park in the Swedish town of Gävle to the Swedish proper-
ty company nordika Fastigheter AB. moreover, Tk Development
has an option to buy a plot of land for developing additional
retail park premises of about 15,800 m².
shopping centre, jelenia góra, Poland
Tk Development has bought a plot of land in Jelenia Góra and
has an option on additional land for the development of a shop-
ping centre of about 24,000 m². The project will comprise a su-
permarket of about 2,200 m² and retail, restaurant and service
premises totalling about 21,800 m². The local plan for the area
is in place and the letting of premises has started. Construction
is expected to start in late 2013, with the opening scheduled
for late 2015. In December 2012 70 % of the project was hand-
ed over to Heitman, and in this connection the Group’s 30 %
ownership interest was classified under “Investment properties
under construction”. Tk Development will receive fee income
from the jointly owned company established for developing, let-
ting and managing the construction of the project.
Residential park, bielany, warsaw, Poland
Tk Development owns a tract of land in Warsaw allowing for
the construction of residential units of about 56,200 m² in all;
see above under “Completed projects”. Construction of the first
phase of 7,850 m² has been completed. The plan is to initiate
construction of the remaining 48,350 m² in three successive
phases in continuation of the completion of the first phase and
once pre-construction sales have reached a satisfactory level.
Tk Development is currently planning the second phase, con-
sisting of about 300 residential units and service facilities. The
pre-construction sales process for the second phase is expect-
ed to start at the end of 2013.
bytom Retail Park, bytom, Poland
Tk Development intends to develop a retail park with total leas-
able space of about 25,800 m² on its site at the plejada shop-
ping centre in Bytom, which is centrally located in the katowice
region. Construction of the project will be phased in step with
letting. letting efforts are ongoing, and construction will start
as space is let.
shopping centre, Frýdek Místek, the Czech Republic
In the Czech town of Frýdek místek, Tk Development is planning
to build a 14,800 m² shopping centre, consisting of about 60
stores. After the reporting period, Tk Development has condi-
tionally sold 80 % of the project to a business partner. Tk De-
velopment will receive fee income for letting and managing the
construction of the project and related services. The current
occupancy rate is 80 % (Q1 2013/14: 71 %), and lease agree-
ments have been concluded with such tenants as Billa, Inter-
sport, H&m, newYorker and euronics. Construction is expected
to start in autumn 2013, and the retail park is scheduled to
open in 2014.
P R O P E R T Y D E v E l O P M E N T
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The Group’s secondary business area is asset management,
which consists of owning, operating, running in, maturing and
optimizing completed projects for a medium-long operating pe-
riod whose length matches the potential for adding value.
strategy for business area – Asset management
Owning, operating, maturing and optimizing completed projects for
a medium-long operating period that matches the potential for add-
ing value.
Asset management
Countries: Denmark, Sweden,
poland and the Czech Republic
Revenue: H1 2013/14: Dkk 66.7 million
(H1 2012/13: Dkk 78.5 million)
Gross profit/loss: H1 2013/14: Dkk 57.9 million
(H1 2012/13: Dkk 42.5 million)
Balance sheet total: 31 July 2013: Dkk 2,099.7 million
(31 January 2013: Dkk 2,100.7 million)
number of employees
at centres:
31 July 2013: 13
(31 January 2013: 12)
breakdown of own properties under asset management by
country (carrying amount):
Czech Republic
Denmark
Poland
The gross margin for asset management activities amounted
to Dkk 57.9 million in the first half of 2013/14 against Dkk 42.5
million in the first half of 2012/13.
Although these properties have been classified under asset
management, Tk Development will focus on selling them in
whole or in part, as their sale will substantially strengthen the
Group’s financial platform. Therefore, the process of selling sev-
eral of the Group’s completed projects continues. management
anticipates being able to conclude final sales agreements for
one or more of these properties within a short period of time.
The total portfolio of properties under asset management
amounted to Dkk 1,939.0 million at 31 July 2013 (30 April
2013: Dkk 1,938.7 million), of which investment properties ac-
counted for Dkk 314.4 million (30 April 2013: Dkk 314.0 mil-
lion). The operation of these properties, which largely consist
of shopping centres, is generally proceeding satisfactorily. The
annual net rent from the current leases corresponds to a return
on the carrying amount of 6.7 % (Q1 2013/14: 6.7 %). Based on
full occupancy, the return on the carrying amount is expected
A S S E T M A N A G E M E N T
Project Country TypeTKD’s ownership
interest Floor space m2
Investment properties
Futurum Hradec králové Czech Republic Shopping centre 20 % 28,250
Galeria Tarnovia, Tarnów poland Shopping centre 30 % 16,500
Other completed projects
Sillebroen, Frederikssund Denmark Shopping centre 100 % 25,000
Fashion Arena outlet Center, prague Czech Republic outlet centre 75 % 25,000
Galeria Sandecja, nowy Sącz poland Shopping centre 100 % 17,300
Ringsted outlet Denmark outlet centre 50 % 13,200
most Retail park Czech Republic Retail park 100 % 6,400
Aabenraa Denmark Retail park 100 % 4,200
Brønderslev Denmark Shopping-street property 100 % 2,400
Total 138,250
The Group’s own properties under asset management comprise the following nine properties:
1 8 / 3 4 | T k D e v e lo pm e n T A / S | H 1 2 0 1 3 / 1 4 | M A n Ag E M E n T COM M E n TA Ry
to reach 7.9 % (Q1 2013/14: 7.9 %).
overall, the individual centres recorded favourable develop-
ment in 2012, with the positive trend in revenue continuing
into 2013, but the footfall is showing signs of decline at a few
centres.
The development of the individual centres appears from pages
19-21.
Generally, Tk Development’s properties have a satisfactory let-
ting status, and the current occupancy rates are:
40 % 50 % 60 % 70 % 80 % 90 % 100 %
Brønderslev, shopping-street property
Aabenraa, retail park
Most Retail Park
Ringsted Outlet
Galeria Sandecja, Nowy Sacz
Fashion Arena Outlet Center, Prague
Sillebroen, Frederikssund
Galeria Tarnovia, Tarnów
Futurum Hradec Králové
A S S E T M A N A G E M E N T
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Opening November 2000/May 2012
leasable area 28,250 m²
Occupancy rate 100 % (Q1 2013/14: 100 %)
footfall 2012 5.6 million
In 2012 an extension of almost 10,000 m² was added to the shopping centre, and the existing centre was also modernized. The number of retail stores now totals 110. The shopping centre is fully let and conti-nues to have a satisfactory occupancy rate, operating profit and cust-omer influx.
Major tenants: Cinestar, Tommy Hilfiger, H&m, new Yorker, Adidas, Re-served, Intersport, Takko Fashion, Foot locker, Gant, C & A, lindex, Da-tart.
Opening November 2009
leasable area 16,500 m², including a 2,000 m² supermarket
Occupancy rate 94 % (Q1 2013/14: 95 %)
footfall 2012 1.8 million
The shopping centre’s revenue has shown an increase during the first seven months of the year compared to the same period last year. The annual footfall is on a par with the previous year. Tk Development’s focus is on enhancing the centre’s attraction value, and current initi-atives are aimed at bolstering occupancy and customer influx, among other things.
Major tenants: H&m, new Yorker, euro RTv AGD, Reserved, Deichmann, Douglas, Rossmann, Stradivarius, Takko Fashion, Simply market.
f U T U R U M H R A D E C K R Á l O v É , C Z E C H R E P U B l I C
G A l E R I A TA R N O v I A , S H O P P I N G C E N T R E , TA R N Ó W , P O l A N D
Opening March 2010
leasable area 25,000 m², including 5,000 m² supermarket units
Occupancy rate 92 % (Q1 2013/14: 92 %)
footfall 2012 3.0 million
In the continuing difficult economic climate with subdued private con-sumption, the centre’s footfall and revenue have showed a slight decli-ne compared to 2012. Tenants are regularly replaced and newcomers move in to optimize the centre. In spring 2013 both Gina Tricot and Signal opened outlets in the centre, and the most recent newcomer is Sisters point. negotiations with tenants for several of the remaining rental units are ongoing. The centre is still being run in and matured, and continued efforts are being made to position the centre on the market. Tk Development’s focus is on strengthening the occupancy and revenue levels for the centre.
Major tenants: kvickly, Fakta, H&m, Fona, Gina Tricot, matas, Sport-ma-ster, Frederikssund Isenkram, Deichmann, vero moda, Designersmarket, Wagner, Frederikssund Apotek, Tøjeksperten, Skoringen, Companys, Bog & Idé, Café vivaldi.
S I l l E B R O E N , S H O P P I N G C E N T R E , f R E D E R I K S S U N D , D E N M A R K
A S S E T M A N A G E M E N T
2 0 / 3 4 | T k D e v e lo pm e n T A / S | H 1 2 0 1 3 / 1 4 | M A n Ag E M E n T COM M E n TA Ry
Opening November 2007/October 2010
leasable area 25,000 m²
Occupancy rate 96 % (Q1 2013/14: 96 %)
footfall 2012 2.2 million
In recent years the Fashion Arena outlet Center has truly distinguished itself as one of the most successful outlet centres in Central europe. Since the second phase opened in 2010, the centre has recorded a highly positive development in footfall and revenue, including a 24 % hike in revenue in 2012 compared to 2011. This positive trend in the centre’s revenue has continued into the first seven months of 2013.
Major tenants: Tommy Hilfiger, nike, Adidas, Benetton, Tom Tailor, ecco,
Gant, lacoste, levi Strauss & Co., esprit.
Opening October 2009
leasable area 17,300 m², including a 5,000 m² hypermarket
Occupancy rate 97 % (Q1 2013/14: 96 %)
footfall 2012 2.4 million
The operation of Galeria Sandecja is still proceeding satisfactorily. The shopping centre had a footfall of almost 2.4 million in 2012, slightly below the previous year’s figure. nevertheless, the shopping centre’s revenue rose by about 14 % in 2012 compared to 2011. During the first seven months of 2013, the shopping centre’s revenue and footfall in-creased compared to the same period the year before.
Tk Development continues its efforts to optimize the centre and is exploring various initiatives to help improve operations, footfall and occupancy. For one thing, most of the vacant premises are let under short-term leases on a continuing basis, which helps boost centre per-formance.
Major tenants: Carrefour, H&m, new Yorker, Reserved, Deichmann, Dou-glas, Camaieu, Carry, euro RTv AGD.
fA S H I O N A R E N A O U T l E T C E N T E R , P R A G U E , C Z E C H R E P U B l I C
G A l E R I A S A N D E C J A , S H O P P I N G C E N T R E , N O W Y S Ą C Z , P O l A N D
Opening March 2008
leasable area 13,200 m²
Occupancy rate 62 % (Q1 2013/14: 60 %)
footfall 2012 1.1 million
After a long running-in period, Ringsted outlet has recorded pleasing progress in the past two years. Despite the difficult letting situation and intensified competition in the Danish retail trade sector, in 2012 Ring-sted outlet recorded the highest number of visitors and the highest re-venue since its opening. However, the 25 % growth in revenue should be viewed in light of the centre’s relatively low revenue the year before.
lease agreements have been concluded with several new tenants, and a number of new stores have opened for business in 2013, including Su-perdry, Saint Tropez, envii and mio my mio. moreover, Haglöfs is due to open a store in the outlet centre in october 2013. In terms of revenue and footfall, the centre has continued the positive development from
2012 in the first six months of 2013.
Major tenants: Hugo Boss, nike, puma, Diesel, G-Star Raw, Redgreen, Ticket to Heaven, mcDonald’s, Superdry, le Creuset, levi’s, Sparkz, Sam-søe & Samsøe, Rosendahl, noa noa, Helly Hansen, Saint Tropez, Asics, envii, Signal.
R I N G S T E D O U T l E T, R I N G S T E D , D E N M A R K
A S S E T M A N A G E M E N T
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Tk Development is developing an 8,400 m² retail park in the Czech town of most, to be built in phases. The first phase of 6,400 m² opened in April 2009, and the current occupancy rate for this phase is 91 % (Q1 2013/14: 91 %). one vacant rental unit remains, and efforts are being made to let this unit. management believes the vacant rental unit should be let before the project can be sold.
Tk Development built a retail park of approx. 4,200 m² in Aabenraa in 2009. In Q2 2013/14 the retail park’s occupancy rate declined to 71 % (Q1 2013/14: 100 %) after Biva went bankrupt and vacated its premises. The tenants in the retail park include jem & fix, T. Hansen and Sport24.
M O S T R E TA I l PA R K , C Z E C H R E P U B l I C
R E TA I l PA R K , A A B E N R A A , D E N M A R K
Tk Development has developed retail stores of about 2,400 m2 in the for-mer Føtex property at mejlstedgade in Brønderslev. premises have been let to Deichmann, Fitness World and Intersport. The current occupancy
rate is 93 % (Q1 2013/14: 93 %).
S H O P P I N G - S T R E E T P R O P E R T Y, B R Ø N D E R S l E v, D E N M A R K
A S S E T M A N A G E M E N T
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As described previously, management has chosen a market
focus that targets the countries expected to contribute with
long-term, profitable operations in future. This means that the
Group will phase out its activities in Finland, Germany, the Bal-
tic States and Russia. The phase-out, which will result in office
closures and employee dismissals, will be carried out as soon
as possible, while taking into account that all the countries in
question have projects that need to be handled so as to retain
as much of the value of the existing portfolio as possible.
Discontinuing activities
Countries: Germany, Finland, lithuania,
latvia and Russia
Revenue: H1 2013/14: Dkk 7.3 million
(H1 2012/13: Dkk 6.9 million)
Gross profit/loss: H1 2013/14: Dkk -1.5 million
(H1 2012/13: Dkk 4.3 million)
Balance sheet total: 31 July 2013: Dkk 408.0 million
(31 January 2013: Dkk 425.4 million)
number of employees: 31 July 2013: 9
(31 January 2013: 11)
The results for the discontinuing activities before tax amount-
ed to Dkk -8.0 million in H1 2013/14 against Dkk -3.7 million in
H1 2012/13. The value adjustments of the German investment
properties amounted to Dkk -0.6 million in H1 2013/14 against
Dkk 0.0 million in the same period the year before.
g E R M A n y Following the sale of one of the residential properties in June
2013, the Group now has three investment properties left in
Germany. These properties consist of a combined commercial
and residential rental property in lüdenscheid in western Ger-
many and two residential rental properties on the outskirts of
Berlin. management considers it essential to continue down-
scaling the German activities.
After the reporting date, an agreement has been concluded re-
garding the sale of a further German investment property, ex-
pected to be handed over to the buyer in early october 2013.
The selling price amounts to Dkk 43.8 million, equal to the car-
rying amount.
The value of these properties totalled Dkk 155.4 million at 31
July 2013 (30 April 2013: Dkk 167.2 million). The valuation of
the properties is based on a return requirement of 6.5 % p.a.
calculated on the basis of a discounted cash-flow model over
a ten-year period and recognition of the terminal value in year
ten. In the cases where sales negotiations are ongoing with
potential investors, these negotiations form the basis for the
valuation.
In addition to these investment properties, the Group owns a
share of a minor shopping centre and a few plots of land.
The employees have been given notice and their employment
terminates at the end of September 2013. The office will close
down in autumn 2013.
F I n L A n DThe Group’s activities in Finland are fairly limited and, apart from
a few project opportunities, comprise the projects listed below:
Project City/town segment Floor space (m²)
pirkkala Retail park,
phase II Tammerfors Retail 5,400
kaarina Retail park Turku Retail 6,600
efforts will be made to phase out the activities in the course
of the current financial year. The employees have been given
notice, and the branch office is expected to close in 2013/14.
b A LT I C s TAT E sThe Group’s Baltic activities comprise the following projects:
Project City/town segment Floor space (m²)
Domuspro Retail park vilnius (lT) Retail 11,100
milgravja Street Riga (lv) Residential 10,400
Ulmana Retail park Riga (lv) Retail 12,500
DomusPro Retail Park, Vilnius, Lithuania
Tk Development owns a plot of land in vilnius reserved for
building an 11,100 m² retail park. The project has been con-
ditionally sold to BpT Baltic opportunity Fund, which is man-
aged by BpT Asset management. The project will be handed
over to the buyer once the usual commercial conditions have
been met, including those relating to project construction and
letting. The selling price is based on a return requirement of
8.5 %. The project is to be built in phases, and construction of
the first phase of about 7,500 m2 started in August 2013, with
the opening scheduled for spring 2014. Tk Development is en-
gaged in constructive dialogue with potential tenants, and 79
% of the first-phase premises have been let, with supermarket
operator RImI as the anchor tenant. Construction of the second
phase will start once a satisfactory occupancy level has been
reached.
efforts will be made to phase out the remaining activities in the
Baltic States in the course of the current financial year.
R U s s I AThe Group owns a minor project in moscow, consisting of Scan-
dinavian-style dwellings that are used for rental, mainly to in-
ternational company employees stationed in moscow. efforts
will be made to sell this project.
D I S C O N T I N U I N G A C T I v I T I E S
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T R A n s AC T I O n s w I T H R E L AT E D PA RT I E sno significant or unusual transactions were made with related
parties in the first half of the 2013/14 financial year other than
interest payments on project finance loans granted by a num-
ber of major shareholders, including members of management.
As regards transactions with related parties, reference is made
to note 7 in the Interim Report.
F I n A n C I A L TA R g E T sTo provide for sufficient future financial resources, liquidity
targets have been formulated for the whole Group. In addition,
management has adopted a solvency target for the whole
Group corresponding to a solvency ratio of about 40 %, calcu-
lated as the ratio of equity to total assets.
The Group has undertaken a commitment towards its main
banker to meet a liquidity target and a solvency target. Both
targets were met during the period under review.
OT H E R M AT T E R sFor a more detailed review of other matters relating to the
Group, including risk issues, reference is made to the Group’s
Annual Report for 2012/13, which is available at the Company’s
website: www.tk-development.com
O T H E R M AT T E R S
2 4 / 3 4 | T k D e v e lo pm e n T A / S | H 1 2 0 1 3 / 1 4 | sTAT E M E n T by T H E b OA R D O F D I R ECTO Rs A n D E x EC U T I V E b OA R D
S TAT E M E N T B Y T H E B O A R D O f D I R E C T O R S A N D E x E C U T I v E B O A R D O N T H E I N T E R I M R E P O R T
The Board of Directors and executive Board have today consid-
ered and adopted the Interim Report of Tk Development A/S
for the period from 1 February to 31 July 2013.
The Interim Report, which has not been audited or reviewed by
the Company’s auditors, is presented in accordance with IAS
34, Interim Financial Reporting, as adopted by the eU, and Dan-
ish disclosure requirements for listed companies.
In our opinion, the Interim Report gives a true and fair view of
the Group’s financial position at 31 July 2013 and of the results
of the Group’s operations and cash flows for the period from 1
February to 31 July 2013.
moreover, we consider the management’s review to give a fair
presentation of the development in the Group’s activities and
financial affairs, the results for the period and the Group’s over-
all financial position, as well as a true and fair description of
the most significant risks and elements of uncertainty faced
by the Group.
Aalborg, 26 September 2013
E x EC U T I V E b O A R D
b O A R D O F D I R EC TO R s
frede Clausen
president and Ceo
Robert Andersen
executive vice president
Peter Thorsen
Deputy Chairman
Per Søndergaard Pedersen Arne Gerlyng-Hansen
Niels Roth
Chairman
Kim Mikkelsen Morten Astrup
CO n s O L I DAT E D F I n A n C I A L sTAT E M E n Ts | H 1 2 0 1 3 / 1 4 | T k D e v e lo pm e n T A / S | 2 5 / 3 4
I n C O M E s TAT E M E n T
Dkkm Note H1 2013/14 H1 2012/13 q2 2013/14 Q2 2012/13Full year
2012/13
net revenue 218.8 129.3 87.2 74.6 632.3
external direct project costs 2 -142.1 -55.6 -41.1 -40.6 -734.0
value adjustment of investment properties, net 0.0 -24.3 -1.6 -24.0 -37.8
Gross profit/loss 76.7 49.4 44.5 10.0 -139.5
other external expenses 13.5 15.6 6.9 7.6 30.2
Staff costs 32.8 36.2 16.2 17.5 69.2
Total 46.3 51.8 23.1 25.1 99.4
Profit/loss before financing and depreciation 30.4 -2.4 21.4 -15.1 -238.9
Depreciation and impairment of non-current assets 0.9 1.2 0.4 0.6 2.2
Operating profit/loss 29.5 -3.6 21.0 -15.7 -241.1
Income from investments in associates 0.8 1.1 0.4 1.0 2.5
Financial income 2.7 2.7 1.5 1.3 5.6
Financial expenses -57.3 -40.2 -28.2 -19.7 -93.0
Total -53.8 -36.4 -26.3 -17.4 -84.9
Profit/loss before tax -24.3 -40.0 -5.3 -33.1 -326.0
Tax on profit/loss for the period 5.8 146.6 8.6 -1.4 167.3
Profit/loss for the period -30.1 -186.6 -13.9 -31.7 -493.3
E A R n I n g s P E R s H A R E I n D K K
earnings per share (epS) of nom. Dkk 1 -0.7 -4.4 -0.3 -0.7 -11.7
Diluted earnings per share (epS-D) of nom. Dkk 1 -0.7 -4.4 -0.3 -0.7 -11.7
C O M P R E H E n s I V E I n C O M E s TAT E M E n T
profit/loss for the period -30.1 -186.6 -13.9 -31.7 -493.3
Items that may be re-classified to profit/loss:
Foreign-exchange adjustments, foreign operations -5.1 10.8 -5.8 3.7 6.1
Tax on foreign-exchange adjustments, foreign operations 2.1 -4.7 2.9 -0.6 -2.9
value adjustment of hedging instruments -1.5 1.4 1.8 0.5 3.1
Tax on value adjustment of hedging instruments 0.3 -0.2 -0.3 0.0 -0.6
Other comprehensive income for the period -4.2 7.3 -1.4 3.6 5.7
Comprehensive income for the period -34.3 -179.3 -15.3 -28.1 -487.6
C O N S O l I D AT E D f I N A N C I A l S TAT E M E N T S
2 6 / 3 4 | T k D e v e lo pm e n T A / S | H 1 2 0 1 3 / 1 4 | CO n s O L I DAT E D F I n A n C I A L sTAT E M E n Ts
C O N S O l I D AT E D f I N A N C I A l S TAT E M E N T S
b A L A n C E s H E E T
Dkkm Note 31 jul 2013 31 Jan 2013 31 Jul 2012
ASSETS
non-current assets
Goodwill 33.3 33.3 33.3
Intangible assets 33.3 33.3 33.3
Investment properties 469.8 479.4 423.6
Investment properties under construction 19.7 16.9 0.0
other fixtures and fittings, tools and equipment 1.6 2.5 3.6
Property, plant and equipment 491.1 498.8 427.2
Investments in associates 2.2 1.7 1.0
Receivables from associates 4.6 4.6 2.5
other securities and investments 0.8 0.8 1.6
Deferred tax assets 128.1 127.0 152.3
Other non-current assets 135.7 134.1 157.4
Total non-current assets 660.1 666.2 617.9
Current assets
Projects in progress or completed 3,002.5 3,030.9 3,615.2
Trade receivables 78.3 73.2 70.1
Receivables from associates 19.2 19.0 18.1
Corporate income tax receivable 0.5 4.0 4.3
other receivables 102.4 122.4 100.4
prepayments 23.0 22.4 23.8
Total receivables 223.4 241.0 216.7
Securities 4.0 4.3 4.0
Deposits in blocked and escrow accounts 4 23.9 35.7 51.6
Cash and cash equivalents 4 27.5 31.2 33.4
Total current assets 3,281.3 3,343.1 3,920.9
ASSETS 3,941.4 4,009.3 4,538.8
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C O N S O l I D AT E D f I N A N C I A l S TAT E M E N T S
b A L A n C E s H E E T
Dkkm Note 31 jul 2013 31 Jan 2013 31 Jul 2012
EQUITY AND lIABIlITIES
Equity
Share capital 42.1 631.0 631.0
other reserves 5 590.0 5.3 6.9
Retained earnings 723.6 753.4 1,059.8
Total equity 1,355.7 1,389.7 1,697.7
Liabilities
Credit institutions 56.8 102.2 40.7
provisions 0.8 2.3 1.3
Deferred tax liabilities 37.2 35.0 40.0
other debt 1.5 1.5 3.8
Total non-current liabilities 96.3 141.0 85.8
Credit institutions 2,195.5 2,189.1 2,387.8
Trade payables 104.3 106.3 192.2
Corporate income tax 4.8 5.0 5.8
provisions 12.5 13.1 11.1
other debt 163.4 150.2 145.9
Deferred income 8.9 14.9 12.5
Total current liabilities 2,489.4 2,478.6 2,755.3
Total liabilities 2,585.7 2,619.6 2,841.1
TOTAl EQUITY AND lIABIlITIES 3,941.4 4,009.3 4,538.8
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C O N S O l I D AT E D f I N A N C I A l S TAT E M E N T S
s TAT E M E n T O F C H A n g E s I n Eq U I T y
Dkkm Share
capitalother
reservesRetained earnings
Total equity
equity at 1 February 2012 631.0 139.8 1,105.6 1,876.4
profit/loss for the period 0.0 0.0 -186.6 -186.6
other comprehensive income for the period 0.0 7.3 0.0 7.3
Total comprehensive income for the period 0.0 7.3 -186.6 -179.3
Special reserve transferred to distributable reserves 0.0 -140.2 140.2 0.0
Share-based payment 0.0 0.0 0.6 0.6
Equity at 31 July 2012 631.0 6.9 1,059.8 1,697.7
equity at 1 February 2013 631.0 5.3 753.4 1,389.7
profit/loss for the period 0.0 0.0 -30.1 -30.1
other comprehensive income for the period 0.0 -4.2 0.0 -4.2
Total comprehensive income for the period 0.0 -4.2 -30.1 -34.3
Capital decrease -588.9 588.9 0.0 0.0
Share-based payment 0.0 0.0 0.3 0.3
Equity at 31 July 2013 42.1 590.0 723.6 1,355.7
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C O N S O l I D AT E D f I N A N C I A l S TAT E M E N T S
C A s H F LO w s TAT E M E n T
Dkkm H1 2013/14 H1 2012/13
Full year
2012/13
operating profit/loss 29.5 -3.6 -241.1
Adjustments for non-cash items:
value adjustment of investment properties, net 0.0 24.3 37.8
Depreciation and impairment 3.7 1.1 290.1
Share-based payment 0.3 0.6 0.9
provisions -2.0 -3.1 0.4
Foreign-exchange adjustment -13.4 2.2 7.5
Increase/decrease in investments in projects, etc. 38.3 -68.2 139.9
Increase/decrease in receivables 32.3 48.9 22.4
Changes in deposits on blocked and escrow accounts 11.8 -6.4 9.5
Increase/decrease in payables and other debt 6.0 19.8 -61.1
Cash flows from operating activities before net financials and tax 106.5 15.6 206.3
Interest paid, etc. -66.6 -69.8 -142.9
Interest received, etc. 3.1 2.4 4.3
Corporate income tax paid 0.1 -23.2 -22.1
Cash flows from operating activities 43.1 -75.0 45.6
Investments in equipment, fixtures and fittings 0.0 -0.2 -0.2
Sale of equipment, fixtures and fittings 0.0 0.2 0.4
Investments in investment properties -4.7 -7.0 -11.3
Sale of investment properties 11.2 0.0 17.3
purchase of securities and investments 0.0 -0.7 -0.7
Sale of securities and investments 0.3 0.3 0.9
Cash flows from investing activities 6.8 -7.4 6.4
Repayment, long-term financing 0.0 0.0 -0.7
Raising of long-term financing 0.0 7.1 13.0
Raising of project financing 35.2 71.6 149.5
Reduction of project financing/repayments, credit institutions -88.2 -19.9 -238.0
Cash flows from financing activities -53.0 58.8 -76.2
Cash flows for the period -3.1 -23.6 -24.2
Cash and cash equivalents, beginning of period 31.2 55.1 55.1
Foreign-exchange adjustment of cash and cash equivalents -0.6 1.9 0.3
Cash and cash equivalents, end of period 27.5 33.4 31.2
The figures in the cash flow statement cannot be inferred from the Consolidated Financial Statements alone.
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n OT E 1 . s Eg M E n T I n FO R M AT I O n
The internal reporting in Tk Development is split into the business units development, asset management and discontinuing
activities. The segment information has been disclosed accordingly.
DkkmDevelopment
Asset management
Discontinuingactivities Unallocated Total
31 Jul 2013
net revenue, external customers 144.8 66.7 7.3 0.0 218.8
profit/loss before tax 10.1 24.4 -8.0 -50.8 -24.3
Segment assets 1,241.9 2,099.7 408.0 191.8 3,941.4
Segment liabilities 635.8 1,403.5 198.7 347.7 2,585.7
DkkmDevelopment
Asset management
Discontinuingactivities Unallocated Total
31 Jul 2012
net revenue, external customers 43.9 78.5 6.9 0.0 129.3
profit/loss before tax 7.1 11.2 -3.7 -54.6 -40.0
Segment assets 1,459.4 2,371.7 480.1 227.6 4,538.8
Segment liabilities 755.4 1,532.5 211.3 341.9 2,841.1
n OT E 2 . E x T E R n A L D I R EC T P R Oj EC T C O s T s
H1 2013/14 H1 2012/13Full year
2012/13
project costs 139.2 42.9 446.1
Impairment losses on projects in progress or completed projects 2.9 12.7 303.5
Reversal of impairment losses on projects in progress or completed projects 0.0 0.0 -15.6
External direct project costs, total 142.1 55.6 734.0
page
C O N S O l I D AT E D f I N A N C I A l S TAT E M E N T S
30 note 1. Segment information
30 note 2. external direct project costs
31 note 3. Share-based payment
31 note 4. liquidity reserves
32 note 5. other reserves
32 note 6. Changes in contingent assets and contingent liabilities
33 note 7. Transactions with related parties
33 note 8. Financial instruments
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n OT E 3 . s H A R E - b A s E D PAyM E n T
For a more detailed description of the Group’s incentive schemes, reference is made to the Group’s 2012/13 Annual Report.
The development in outstanding warrants is shown below:
number of warrants 31 jul 2013 31 Jan 2013 31 Jul 2012
outstanding warrants, beginning of year 930,315 1,707,812 1,707,812
lapsed due to termination of employment -24,000 -16,000 0
expired during the period -446,315 -761,497 -761,497
Outstanding warrants, end of period 460,000 930,315 946,315
number of warrants exercisable at the reporting date 0 446,315 446,315
Share-based payment recognized in the profit or loss (Dkk million) 0.3 0.9 0.6
n OT E 4 . L I q U I D I T y R E s E RV E s
31 jul 2013 31Jan 2013 31Jul 2012
The liquidity reserves break down as follows:
Cash and cash equivalents 27.5 31.2 33.4
Unutilized credit facilities 13.4 3.2 12.9
Total 40.9 34.4 46.3
Deposited funds for later release 23.9 35.7 51.6
Total liquidity reserve 64.8 70.1 97.9
C O N S O l I D AT E D f I N A N C I A l S TAT E M E N T S
3 2 / 3 4 | T k D e v e lo pm e n T A / S | H 1 2 0 1 3 / 1 4 | CO n s O L I DAT E D F I n A n C I A L sTAT E M E n Ts
n OT E 5 . OT H E R R E s E RV E s
Special reserve
Reserve for value adjust-
ment of avail-able-for-sale
financial assets
Reserve for val-ue adjustment
of hedging instruments
Reserve for foreign-exchange
adjustments Total
other reserves at 1 February 2012 140.2 -0.1 -3.2 2.9 139.8
Special reserve transferred to distributable reserves -140.2 0.0 0.0 0.0 -140.2
other comprehensive income:
exchange-rate adjustment, foreign operations 0.0 0.0 0.0 10.8 10.8
value adjustment of hedging instruments 0.0 0.0 1.4 0.0 1.4
Deferred tax on other comprehensive income 0.0 0.0 -0.2 -4.7 -4.9
Other comprehensive income, total 0.0 0.0 1.2 6.1 7.3
Other reserves at 31 July 2012 0.0 -0.1 -2.0 9.0 6.9
other reserves at 1 February 2013 0.0 -0.1 -0.7 6.1 5.3
Capital decrease 588.9 0.0 0.0 0.0 588.9
other comprehensive income:
exchange-rate adjustment, foreign operations 0.0 0.0 0.0 -5.1 -5.1
value adjustment of hedging instruments 0.0 0.0 -1.5 0.0 -1.5
Deferred tax on other comprehensive income 0.0 0.0 0.3 2.1 2.4
Other comprehensive income, total 0.0 0.0 -1.2 -3.0 -4.2
Other reserves at 31 July 2013 588.9 -0.1 -1.9 3.1 590.0
In may 2013 the shareholders in General meeting resolved to reduce the Company’s share capital by Dkk 588.9 million from
Dkk 631.0 million to Dkk 42.1 million by an equal writedown of all shares from Dkk 15.00 to Dkk 1.00, as part of the planned
capital increase that was subsequently implemented in September 2013. The capital reduction was carried out in June 2013,
and the amount of the reduction has been allocated to a special reserve fund that can only be used following a resolution to
this effect at a General meeting.
The reserve for value adjustment of financial assets available for sale comprises the accumulated net change in the fair value
of financial assets classified as available for sale. The reserve is dissolved as the relevant financial assets are sold or expire.
The reserve for value adjustment of hedging instruments comprises unrealized losses on forward-exchange transactions and
interest-rate hedging transactions concluded to hedge future transactions.
The reserve for foreign-exchange adjustments comprises all foreign-exchange adjustments arising on the translation of finan-
cial statements for enterprises with a functional currency other than Danish kroner; foreign-exchange adjustments relating
to assets and liabilities that are part of the Group’s net investment in such enterprises; and foreign-exchange adjustments
relating to any hedging transactions that hedge the Group’s net investment in such enterprises. on the sale or winding-up
of subsidiaries, the accumulated foreign-exchange adjustments recognized in other comprehensive income in respect of the
relevant subsidiary are transferred to the profit or loss.
C O N S O l I D AT E D f I N A N C I A l S TAT E M E N T S
n OT E 6 . C H A n g E s I n C O n T I n g E n T A s s E T s A n D C O n T I n g E n T L I A b I L I T I E s
There have been no significant changes in the Group’s contingent assets and contingent liabilities since the most recently pub-
lished Annual Report.
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n OT E 7 . T R A n sAC T I O n s w I T H R E L AT E D PA RT I E s
The Company has no related parties with a controlling interest.
The Company has the following related parties:
- Board of Directors and executive Board (and their related parties)
- Joint ventures and associates.
31 jul 2013 31 Jan 013 31 Jul 2012
Board of Directors and Executive Board (and their related parties)
Holding of shares, in terms of number (balance) *) 11,307,769 1,940,251 1,771,224
obligation towards executive Board, employee bonds (balance) 1.5 1.5 1.5
Fees for Board of Directors 0.8 1.8 0.9
Salaries etc., executive Board 2.7 6.2 3.3
Interest expenses, project finance loans from Board of Directors and executive Board 1.1 0.4 0.0
project finance loans from Board of Directors and executive Board (balance) 20.7 21.7 0.0
Accrued interests, project finance loans from Board of Directors and executive Board (balance) 0.2 0.3 0.0
Joint ventures
Fees from joint ventures 0.8 1.5 1.0
Interest income from joint ventures 1.5 2.5 1.2
Interest expenses to joint ventures -1.5 -1.3 -0.6
Receivables from joint ventures (balance) 78.7 46.2 71.9
payables to joint ventures (balance) 103.6 88.4 89.7
Associates
Interest income from associates 0.2 0.4 0.2
Receivables from associates (balance) 23.8 23.6 20.6*) The increase results mainly from the change in the Board of Directors’ composition following the election of Directors at the Company’s Annual
General meeting in may 2013.
The Group has taken out second mortgages on two projects of Dkk 5 million each as security for project finance loans granted
by the Board of Directors and the executive Board. moreover, as security for the total project finance loans granted by a group
of the Company’s major shareholders, of which the share granted by the Board of Directors and the executive Board amounts
to Dkk 20.7 million, the Group has granted a mortgage of Dkk 70 million on the land for the project to be financed by the loans.
Receivables and payables are settled by payment in cash. no losses were realized on receivables from related parties. In H1
2013/14 no impairment was made to provide for any probable losses (H1 2012/13: Dkk 0.0 million).
C O N S O l I D AT E D f I N A N C I A l S TAT E M E N T S
n OT E 8 . F I n A n C I A L I n s T R U M E n T s
Tk Development has no significant financial instruments that are measured at fair value.
During the period under review, no changes were made to the classification within the fair-value hierarchy. There have been
no changes in the Group’s situation or the financial markets that materially affect the disclosures regarding financial instru-
ments measured at fair value as appearing from the Group’s Annual Report for 2012/13.
3 4 / 3 4 | T k D e v e lo pm e n T A / S | H 1 2 0 1 3 / 1 4 | COM PA n y I n FO R M AT I O n
Aalborg
vestre Havnepromenade 7
Dk-9000 Aalborg
T: (+45) 8896 1010
berlin
Ahornstraße 16
D-14163 Berlin
T: (+49) 30 802 10 21
Helsinki
Uudenmaankatu 7, 4.
FIn-00 120 Helsinki
T: (+358) 103 213 110
Vilnius
Gynėjų str. 16
lT-01109 vilnius
T: (+370) 5231 2222
warsaw
ul. mszczonowska 2
pl-02-337 Warsaw
T: (+48) 22 572 2910
Prague
karolinská 650/1
CZ-186 00 prague 8
T: (+420) 2 8401 1010
stockholm
Gamla Brogatan 36-38
S-101 27 Stockholm
T: (+46) 8 751 37 30
Copenhagen
Islands Brygge 43
Dk-2300 Copenhagen S
T: (+45) 3336 0170
C O M PA N Y I N f O R M AT I O N
TK Development A/S
CVR no.:
24256782
IsIn code:
Dk0010258995 (TkDv)
Municipality of registered office:
Aalborg, Denmark
website:
www.tk-development.com
e-mail:
Executive board:
Frede Clausen and Robert Andersen
board of Directors:
niels Roth, peter Thorsen, per Sønder-
gaard pedersen, Arne Gerlyng-Hansen,
kim mikkelsen and morten Astrup.
The group’s missionThe overall mission of TK Development is to create added value by devel-
oping real property. The Group is a development and service enterprise
specialising in being the productive and creative liaison between tenants
and investors.
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