29.04.2024 08:00:37 - EQS-News: The Grounds ends 2023 with a decline in sales revenues and negative consolidated earnings - positive outlook for financial year 2024

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EQS-News: The Grounds Real Estate Development AG / Key word(s): Annual Results/Forecast
The Grounds ends 2023 with a decline in sales revenues and negative consolidated earnings - positive outlook for
financial year 2024
2024-04-29 / 08:00 CET/CEST
The issuer is solely responsible for the content of this announcement.
The Grounds ends 2023 with a decline in sales revenues and negative consolidated earnings - positive outlook for
financial year 2024
. Consolidated sales revenues reduced to EUR 23.9 million (previous year: EUR 36.8 million)
. Consolidated EBIT declines to EUR -4.8 million (previous year: EUR 3.4 million)
. Consolidated balance sheet total increases by around EUR 9.0 million to EUR 147.8 million (previous year:
EUR 138.3 million)
. Planning for 2024 assumes significantly higher sales and balanced Group EBIT
Berlin, 29 April 2024 - The business performance of The Grounds Real Estate Development AG (The Grounds / ISIN:
DE000A2GSVV5) during 2023 was characterised by declining sales revenues in a challenging market environment. At around
EUR 23.9 million, consolidated sales revenues in the reporting year were around EUR 12.9 million, or 35%, lower than in
the previous year, in which sales totalled EUR 36.8 million. However, a significant portion of the EUR 4.9 million
decline in sales revenues is attributable to a single event, the cancellation of the contract concluded in 2022 for the
sale of the Terra Homes project. This was carried out by mutual agreement at the end of December 2023 at the buyer's
request. Overall, The Grounds was unable to escape the general market trend in Germany during 2023, which was
characterised by strong reluctance on the part of institutional and private buyers. This was reflected in massive
declines in transaction volumes in almost all property market segments.
The majority of The Grounds' consolidated sales revenues totalling EUR 19.1 million resulted from construction progress
of the development projects, which is accounted for using the percentage-of-completion method. Specifically, this
related to the "Maggie" project in Berlin-Lichtenberg and the "LennéQuartier" and "Property Garden" projects in
Magdeburg. The two other sources of revenue, privatisation and letting, contributed EUR 2.3 million and EUR 2.0 million
respectively to consolidated sales revenues. Other factors that reduced earnings were impairment losses on investment
property, totalling around EUR 1.3 million, and other operating expenses, which include risk provisions for a company
investment accounted for using the equity method that was sold after the reporting date - the end of January 2024.
Ultimately, EBIT in 2023 totalled EUR -4.8 million, compared to EBIT of EUR 3.4 million in the previous year.
Consolidated earnings after taxes totalled EUR -7.6 million (previous year: EUR 1.3 million). This corresponds to
earnings per share of EUR -0.39 (previous year: EUR 0.07).
In a year-on-year comparison, the Grounds' total assets increased by around EUR 9 million to EUR 147.8 million,
although this was also linked to changes in the balance sheet structure. Non-current assets remained almost unchanged
at EUR 43.4 million (previous year: EUR 43.2 million). Impairment losses on investment property totalling EUR 1.0
million were offset by an increase in deferred income tax assets of EUR 1.4 million. The increase in current assets by
EUR 9.3 million to EUR 104.4 million is mainly due to the increase in inventories by EUR 8.6 million to EUR 91.5
million. The majority of the increase is attributable to properties under construction, which together with work in
progress, properties ready for sale and prepayments made, comprise the inventories. The company's cash and cash
equivalents totalled EUR 3.0 million as at the balance sheet date on 31 December 2023, and were therefore around
EUR 0.7 million higher than at the end of the previous year.
Financial liabilities and bonds increased by EUR 19.8 million, in particular due to the expansion-related increase in
liabilities to banks and the financing provided by H.I.G. in the amount of EUR 10.0 million. The increase in current
liabilities with a simultaneous decrease in non-current liabilities is partly due to the fact that the liabilities from
the convertible bond in the amount of EUR 16.8 million were reclassified from non-current to current liabilities. This
item also includes the financing of EUR 10.0 million concluded with H.I.G. in the fourth quarter of 2023.
Commenting on the 2023 Annual Financial Statements, Jacopo Mingazzini, Management Board of The Grounds, says: "Our
expectations at the beginning of 2023 were not fulfilled in a market environment characterised by rising interest
rates, high construction prices and considerable uncertainty. Nevertheless, there were some positive developments that
will continue to strengthen in the current financial year and should then lead to a significant improvement in sales
and earnings again. Our owner-occupied residential units in Meppen have now been completely sold, the purchase
agreement for the last available flat in our new construction and re-densification project in Margaretenstrasse in
Berlin-Lichtenberg was notarised a few days ago, and there were also increased sales in Dallgow-Döberitz. On the other
hand, there were delays in promising negotiations for the sale of an office project and the postponement of the
realisation of the debtor warrant in connection with a sold property in Hangelsberg. We were particularly pleased that
we were able to gain a new investor in the shape of the UK's H.I.G. Realty, which not only provided short-term bridge
financing but also secured an option to acquire a majority stake in the company via a capital increase. This gives The
Grounds a solid starting point for the 2024 financial year, the first weeks of which have already seen a significant
improvement in the market environment."
The Management Board expects that The Grounds 2024 will again be able to match the success of 2022 and generate sales
revenues of between EUR 48 million and EUR 52 million and a balanced Group EBIT. The sales of the Börde Bogen
neighbourhood development in Magdeburg and the terraced house project in Erkner are key to achieving these targets. In
addition, The Grounds plans to generate initial sales revenues from the sale of owner-occupied residential units from
properties in the Berlin area.

The Annual Report for the 2023 financial year is now available for download at https://www.thegroundsag.com/en/
investor-relation/financial-reports-and-presentations/annual-reports/

Company contact:
The Grounds Real Estate Development AG
Jacopo Mingazzini, Management Board
Charlottenstrasse 79 - 80, 10117 Berlin, Germany
Tel.: +49 (0) 30 2021 6866
Fax: +49 (0) 30 2021 6849
E-mail: info@tgd.ag
Web: www.thegroundsag.com
Investor Relations:
UBJ. GmbH
Ingo Janssen, Managing Director
Haus der Wirtschaft, Kapstadtring 10
22297 Hamburg, Germany
Tel.: +49 (0) 40 6378 5410
E-mail: ir@ubj.de
Web: www.ubj.de
Press contact:
RUECKERCONSULT GmbH
Peter Dietze-Felberg
Wallstrasse 16
10179 Berlin, Germany
Tel.: +49 (0) 30 284 49 87 62
E-mail: dietze@rueckerconsult.de
Web: www.rueckerconsult.de
About The Grounds
The Grounds Group implements residential projects in German metropolitan regions. The Grounds Group also holds a
steadily-growing residential portfolio in its fixed assets. The Grounds Real Estate Development AG is listed in the
upper free market segment of Düsseldorf Stock Exchange's primary market (ISIN: DE000A2GSVV5), and has its headquarters
in Berlin and an office in Stuttgart.
2024-04-29 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The EQS Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com  
Language:     English 
Company:      The Grounds Real Estate Development AG 

Charlottenstraße 79-80
10117 Berlin
Germany
Phone:        030 2021 6866 
Fax:          030 2021 6489 
E-mail:       info@tgd.ag 
Internet:     www.thegroundsag.com 
ISIN:         DE000A2GSVV5, DE000A3H3FH2, 
WKN:          A2GSVV, A3H3FH, 
Listed:       Regulated Unofficial Market in Berlin, Dusseldorf (Primärmarkt), Frankfurt, Munich, Stuttgart, Tradegate 

Exchange
EQS News ID: 1890887

End of News EQS News Service
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1890887 2024-04-29 CET/CEST

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END) Dow Jones Newswires

April 29, 2024 02:00 ET (06:00 GMT)
Name WKN Börse Kurs Datum/Zeit Diff. Diff. % Geld Brief Erster Schluss
GROUNDS R.EST. NA O.N. A2GSVV Frankfurt 0,645 31.05.24 09:03:52 +0,005 +0,78% 0,000 0,000 0,645 0,645

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