Deutsche Euroshop increases dividend prognosis through 2016

It looks like it’s going to finish up as another very good year for listed shopping centre investor Deutsche Euroshop, probably the most consistently steady performer among Germany’s listed property companies over the last five years. The board recently announced that it plans a dividend increase for shareholders from €1.20 to €1.35 per share at its upcoming AGM.

From next year 2014 through to 2016 the company also plans to raise the dividend by a further €0.05 per share annually, so that it would be €1.40 per share in 2016 – an absolute increase of 16.6% by then, and an average annual increase of 3.9%. According to CEO Claus-Matthias Boege, “The aim of this measure is to respond to frequent requests for a long-term, predictable dividend policy.”

Given the stability of its business model, Deutsche Euroshop can reasonably predict its likely profits a couple of years out with less risk than other listed peers. Its dividend policy is also based on solid recent profits. The company has just lifted its full-year forecast, following the sale of a 33% stake in the Galeria Dominikanska in Wroclaw, Poland, which helped generate income of €15.7m. Pre-tax earnings for the year are now forecast at €130-132m (up from €113-116m), with FFO per share of up to €2.09 (up from €2.03).

Revenue during the first three quarters just reported increased to €138.2mn, 18% higher year-on-year than 2012. This was due to an acquisition in Hamburg (Herold-Center) and the complete takeover of Dresden's Altmarkt-Galerie shopping center.