Genova updates strategy and targets for strengthened profitable growth and decides on amended dividend policy with regular dividend payments
The Board of Directors of Genova has updated the company’s strategy and targets, and has adopted an amended dividend policy. In parallel, the company’s operational targets will cease to apply. Removing the operational targets will make Genova more flexible, enabling the company to focus on the property segments that offer the best potential for profitable growth. Under the amended dividend policy, at least one third of income from property management will be distributed to shareholders on a quarterly basis.
“Genova’s far-reaching expertise in the fields of property and finance, combined with its sound business insight, has created robust growth at limited risk over time. The company’s net asset value and income from property management have risen sharply since 2017. The updated strategy leverages Genova’s ability to continuously adapt the business, capitalise on business opportunities and thereby boost profitability,” says Michael Moschewitz, CEO of Genova, and continues: “Genova currently has a stable balance sheet, a balanced capital structure and a good platform for continued value generation and increased earnings. In view of this, Genova’s Board of Directors has also decided to introduce the payment of dividends to shareholders."
During the 2017-2023 period, Genova reported average annual growth in income from property management per share of 61% and growth in net asset value per share of 17%. The corresponding figures for the 2017-2022 period were 83% and 25%, respectively.
Updated strategic orientation
To better capitalise on Genova’s experience and expertise in various segments of the property market, the Board of Directors has decided that the company’s limitations in the form of operational targets will no long apply. This increases the company’s flexibility to generate greater value for shareholders where the potential for profitable growth is best. Historically, Genova has an excellent track record when it comes to its ability to continuously adapt the business to strengthen profitability. Genova will combine – and generate profitable growth – in its existing business areas: property management, urban development, project development and property transactions. Furthermore, the company will, to a greater extent, evaluate the sale of building rights, thereby realising the potential for strong value growth in the building rights portfolio. Unlocked capital will be reinvested in high-yielding properties or cash flow properties with development potential to reinforce earnings and cash flows.
Amended dividend policy
The Board of Directors has decided to amend the dividend policy as it believes that there is continuous scope to pay dividends to shareholders given the company’s forecasts. As of the 2025 Annual General Meeting, Genova’s aim is to pay annual dividends to shareholders that amount to at least one third of income from property management, unless the company’s financial position warrants otherwise. The dividend will be paid on a quarterly basis.
Targets and risk limitations
Genova’s operational targets for ongoing construction, share of rental income from residential and community service properties, and property portfolio value will no longer apply.
The loan-to-value ratio will be changed and will now be calculated as a share of total assets adjusted for cash and cash equivalents and should be less than 55% over time. The previous limit was calculated as a share of property value and amounted to 65%.
Genova’s other financial targets and risk limitations (below) are unchanged.
Net asset value per share
Achieve an average annual growth of at least 20% in long-term net asset value per share (including any value distributions to shareholders) over a business cycle.
Income from property management per share
Achieve an average annual growth of at least 20% in income from property management per share (before dividends) over a business cycle.
Equity/assets ratio
Over time, the equity/assets ratio shall be at least 35%.
Interest-coverage ratio
Over time, the interest-coverage ratio shall be higher than 2.0.
For further information, please contact:
CEO, Michael Moschewitz, mobile +46 (0)70 713 69 39, [email protected]
About Genova
Genova Property Group AB (publ) is a dynamic property company with extensive expertise in various segments of the property market. The company aims to drive sustainable value growth through active property management, urban development, project development and property transactions in Sweden. As of 30 June 2024, Genova owned properties valued at approximately SEK 9.5 billion and the company held a substantial building rights portfolio. Genova’s share has been listed on Nasdaq Stockholm since 2020.
This information is such information that Genova Property Group AB (publ) is obligated to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, on 30 September 2024 at 8:00 a.m. CEST.
Genova – Smålandsgatan 12 – SE-111 46 Stockholm – www.genova.se