24 July 2015 – El Economista
Renta Corporación has launched a new five-year strategic plan (for the period 2016-2020), in which it details its plans to double its profit to €20 million by 2020, compared with the €9 million that it expects to generate this year, according to the real estate company.
Thus, the company, which exited from bankruptcy proceedings last year, embarks on a new growth phase, driven by the economic recovery and the real estate sector.
In this context, the real estate company, which specialises in the purchase of buildings for their renovation and subsequent sale, will focus on “taking advantage” of the opportunities that arise in the sector “mainly, in the management of assets for third parties” and in increasing the number and size of its transactions.
In this sense, Renta Corporación expects its turnover to almost double (+88%) over the next five years to reach €340 million by 2020.
The real estate company will combine this new policy with its compliance with a creditors agreement (through which it emerged from bankruptcy in June 2014), as well as a unilateral agreement it made with the Tax Authorities to repay its senior debt.
During the first half of the year, Renta Corporación recorded a net profit of €4.5 million, i.e. 47% less than in 2014, because of the effect of a reclassification that it had to record for part of the debt it holds with the Tax Authorities.
Appeal to the Supreme Court regarding its debt with the Tax Authorities
Specifically, as a result of a ruling issued by the Provincial Court of Barcelona, the real estate company had to classify €9.3 million of the amount it owes to the Tax Authorities as senior debt.
Nevertheless, the company has appealed against the ruling to the Supreme Court and estimates that “the effects of this reclassification may be reserved in the event that this judicial review considers it appropriate”.
Renta Corporación’s half year results were also affected by the extraordinary items that the company recorded in 2014. Profits remained stable during H1 2015 at €4.4 million; meanwhile, the company recorded a negative EBITDA of €500,000), compared with an EBITDA loss of €25.2 million a year earlier.
At the end of June, Renta Corporación held net financial debt amounting to €17.6 million, roughly in line with its debt balance at the beginning of the year.
The company’s new strategic plan also envisages a gradual reduction in its level of indebtedness, from a liability of €17.5 million forecast for the end of 2015, to €4.9 million in 2019, to a positive balance by 2020.
Original story: El Economista
Translation: Carmel Drake