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25 November 2009

M. Goldschmidt Group generated strong profit of around DKK 300 million in the first nine months of 2009

  • Satisfactory pre-tax profit of around DKK 300 million for only nine months.
  • Group cash and cash equivalents totalled DKK 1.4 billion.
  • Strong activity within the property segment produced a number of very attractive property and satellite portfolio acquisitions.
  • Overall property portfolio generated significant cash inflows after financing costs. Additional acquisition activity after the end of the financial year.
  • Imerco Holding is now a subsidiary of the Group. Going forward, Imerco is expected to contribute an annual free cash flow of more than DKK 100 million to the Group.
  • Financial reporting period was changed to end at 30 September instead of 31 December and the financial year thus only comprised nine months, i.e. 1 January 2009–30 September 2009.

Highlights of 2009

The M. Goldschmidt Holding Group’s main activities comprise investments in properties, securities and businesses, the latter particularly within retail trade.

Mikael Goldschmidt: “I’m extremely pleased to report a pre-tax profit of around DKK 300 million for only nine months. I consider our performance to be satisfactory in light of the difficult market conditions.”

The strategy of the M. Goldschmidt Holding Group is anchored in a policy of always having substantial cash and cash equivalents available. In this connection, Mikael Goldschmidt said: “Our strategy of always maintaining a very strong cash position proved to be prudent during the past year. Our strategy has enabled us to make a number of very attractive property market acquisitions and, as the Group still has a very significant cash reserve, we also plan to increase our investments in the property segment in the upcoming year.”

The financial year covers a nine-month period from 1 January 2009 to 30 September 2009. The Group has changed its financial year as a result of the integration of Imerco Holding A/S as a Group subsidiary. Management believes that the new financial reporting period is the natural choice for businesses in retail trade.

Segment reporting

Property investments

The Group’s property companies invest in properties for long-term and development purposes. Most of the property portfolio is situated in central Copenhagen.

Mikael Goldschmidt: “We significantly increased our property portfolio during the year by acquiring attractive properties at an average return of almost 8%. I consider this highly satisfactory.”

Acquisitions made during the year include Hellerupvej 10, Hellerup; Frederiksberg Alle 66, Frederiksberg; Gl. Kongevej 147, Frederiksberg; Skt. Nikolaj Vej 8, Frederiksberg; the Porthuset property complex, Ørestad; Kollegiet Lundestræde 55, Holbæk (renamed M. Goldschmidt Kollegiet); and Søhesten, Ishøj as well as the Baunetoften/Baunehøjen terraced housing estate.

After the end of the financial year, the Group has acquired the following properties: Store Kongensgade 118 / Hammerensgade 2, Copenhagen K and Vester Voldgade 7-9, Copenhagen V, as well as Sankt Pedersstræde 49, Copenhagen V.

Cash resources and securities investments

The return on the Group’s equity investments outperformed the benchmark by a wide margin. The Group’s extensive bond portfolio also generated a satisfactory return.

Corporate investments

Covering a total of 157 stores, Imerco Holding is the Group’s largest single-company investment and Denmark’s undisputed market-leading retail chain within houseware products. Generating retail revenue of approximately DKK 1.3 billion annually, Imerco has significant financial strength. The group has 1,000 employees.

Spurred by the financial crisis and our wish to substantially enhance the financial performance, Imerco has implemented extensive organisational changes and efficiency enhancements to ensure that we achieve the full scale economies inherent in operating a capital chain. Also, the composition of the board of directors was changed to the effect that Mikael Goldschmidt was appointed chairman and Mads Krage, former CEO of the Danish discount grocery chain Netto, joined the board of directors. In addition, Imerco’s executive management was significantly strengthened through the appointment of a new COO, Villy Gravengaard, who was formerly with Top-Toy, and a new CFO, Thomas Colding-Jørgensen, formerly of A.P. Moller-Maersk.

In light of the many challenges facing retail businesses, and based on a desire to ensure optimum conditions for Imerco, the group’s capital structure was enhanced by way of a rights’ issue in June 2009. As a result of the rights’ issue and the exercise of a number of warrants issued in connection with the investment in Imerco in 2007, Imerco Holding is today a 82%-owned subsidiary of the M. Goldschmidt Holding Group.

The Group’s other investments in portfolio companies include the subsidiary AQUAporin A/S as well as erik bagger as, Innovision A/S and Sprunk-Jansen A/S.

The subsidiary AQUAporin A/S develops a selective water membrane capable of purifying water 100% for industrial purposes and of desalinating seawater. Development of the technology continues to be satisfactory.

The associate company erik bagger as is a leading Danish design company known, for example, for designing glassware and tableware for the restaurants at the Copenhagen Opera. Erik bagger as is expected to generate a profit for the 2009/10 financial year.

The associate company Innovision A/S develops, manufactures and markets sophisticated medtech equipment for non-invasive examinations of the cardiac, pulmonary and circulatory function. The Innovision group is expected to generate a profit for the 2009/10 financial year.

The associate company Sprunk-Jansen A/S markets natural dietary supplements and creams internationally. Sprunk-Jansen’s main market is the USA, which is the world’s largest market for natural dietary supplements and creams. Sprunk-Jansen is in the process of raising capital from international investors.

For further information, please contact:

Owner and CEO Mikael Goldschmidt, phone +45 33 63 09 00

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