In a pre-close update ahead of its FY24 accounts, Neinor Homes confirms that it has fulfilled its FY24 Adjusted Net Income target of €65mn
On 24 January, the company will complete the first distribution payment of €62mn (gross €0.83/sh) approved at the EGM held in December 2024
Furthermore, given the fulfilment of FY24 targets, the Board of Directors approved a second distribution of €62mn (gross €0.83/sh), to be paid on 14 March
2024 was the company’s strongest commercialization year on record, with pre-sales of +2,600# units (c.€840mn), more than doubling its total orderbook vs 2023 to +3,600# units (c.€1.3bn)
Madrid, 20 January 2025.- Neinor Homes ("Neinor" HOME SM) informs that although consolidated accounts are yet to be formulated and approved by the company relevant corporate bodies, it has sufficient visibility to reiterate the fulfilment of its Adjusted Net Income guidance of €65mn. Neinor will publish its FY24 results on 25 February after market close.
In the last 18-months, Neinor Homes distributed a total of €325mn to shareholders
At a meeting held last week, the Board of Directors (BoD) confirmed the second distribution to shareholders as approved at the December 2024 Extraordinary General Meeting (EGM). The payment date is scheduled to take place on 14 March and, the last trading date entitled to receive the distribution of €62mn (gross DPS of €0.83/sh) is 11 March.
The first distribution to shareholders approved at the EGM will be paid on 24 January, and Tuesday, 21 January is the last trading date for shareholders to receive this distribution of €62mn (gross DPS of €0.83/share).
After these distributions, Neinor will have successfully distributed a total of €325mn to its shareholders in the last year and a half, which represents 54% of the 5-year €600mn target set out in its Strategic Plan (2023-27). Both payments will be executed through a capital reduction with a return of contributions to shareholders, following the same structure used in recent years. As a result, it will be subject to a 1% tax on the value of the returned contributions, which Neinor Homes will withhold, self-assess, and remit to the Bizkaia Regional Tax Authority.
Furthermore, for FY25, the company expects to distribute an additional €125mn to its shareholders (gross DPS of €1.67/sh). In total, and until 1Q26, the company expects to distribute €250mn (gross DPS of 3.33/sh), equivalent to +20% yield at the current market price.
Highly dynamic commercialization environment and acceleration of JV business drives +47% annual growth in pre-sales
Over the course of 2024, Neinor has achieved pre-sales of +2,600 housing units for a total consideration of c.€840mn – including joint-ventures. If we consider only the core build-to-sell (BtS) business, pre-sales stood at +2,100 housing units (c.€750mn and Average Selling Price c.€350k/#), implying an annual growth of +47%.
By the end of 2024, the total orderbook managed by Neinor exceeded 3,600 housing units, which have a combined value of c.€1,300mn. This compares to 1,283 units and considerations of €434mn from the previous year. This performance highlights the strong commercialization environment and the faster-than-expected growth of Neinor’s joint-venture business, with contributions from the agreement with Habitat Inmobiliaria and the vehicles with Orion Capital and Axa IM Alts.
Strong macro tailwinds with Spanish GDP expected to have grown by +3% in 2024
Despite further macroeconomic uncertainty during the year, the Spanish economy is expected to have expanded by +3.0%, significantly ahead of the average of European Union countries (+0.9%). Throughout the year, GDP growth expectations for Spain have been revised successively upwards, more than doubling the initial forecast of 1.4%. For 2025, the Spanish economy is expected to grow by +2.2% - outpacing the average EU forecast growth of +1.3%. (source: Bloomberg consensus).
In addition to the buoyant tourism sector in Spain, the Spanish economy has been thriving due to strong internal demand and private consumption, which represent the most important drivers of GDP growth. Contributing to this, the Spanish economy created more than 500,000 new jobs in 2024, while the number of registered contributors to Social Security in Spain has reached a new historical high of 21.3mn in 2024. In addition, the unemployment rate is expected to have dropped to 11.5%, from 12.2% the previous year (source: Bloomberg).
Furthermore, Spanish households continue to benefit from strong balance sheets with low leverage and savings rates above the historical average. The pivotal change in the interest rate cycle, signalled by the ECB throughout 2024 with four cuts from 4.0% to 3.0%, is expected to strengthen consumer confidence, helping to drive spending.
Borja García-Egotxeaga, CEO of Neinor Homes, commented: "Looking into 2025, our main goal is to continue growing our earnings whilst pursuing an equity efficient strategy. Our target equity investment is €140mn, which will be achieved by leveraging our existing Joint Ventures, signing new ones, while also resuming our own land acquisitions programme.”
Jordi Argemí, Deputy CEO and CFO, explained: " We are extremely proud of the operational and financial results achieved during 2024 where we took decisive steps to put in value our JV venture business thanks to the agreements with Bain, Avenue or Octopus. However, I would like to highlight the successful comeback to the bond market as an important milestone in the execution of our business plan as we extend maturities and get more flexibility to pursue our equity efficient growth strategy and shareholder remuneration targets.”
Neinor Homes is the leading residential property developer in Spain, with a land bank to develop c12,000 homes, and a GAV to June 2024 of €1.5bn. This land bank is located in some of the fastest growing regions with the best economic fundamentals in Spain: Madrid, Western and Eastern Andalusia, Levante, Basque Country and Catalonia.
Neinor is a fully integrated and well-established residential platform of scale in Spain, covering the entire development value chain from land buying, planning and urban management, product design, delegated development and construction, sales and marketing and rentals. We are committed to creating and delivering attractive risk adjusted returns for shareholders through our disciplined capital allocation strategy and our excellence in operations and risk management.
We are the only listed residential property developer with a multi-sector strategy to market in Spain, and our strategies include Build-to-rent (BTR); Build-to-sell (BTS); and the largely untapped senior living rental market in Spain, which we are progressing.
Neinor’s operational excellence, investment strategy and results achieved since 2019 have enabled us to deliver on our 5-year business plan, launched in March 2023, in a sustainable and capital-efficient manner. This plan combines a €600 million shareholder remuneration plan and an investment of €1 billion in new opportunistic land acquisitions, half of which are expected to be undertaken in joint ventures with strategic partners through co-investment agreements, with a +20% IRR target.
We offer shareholders attractive risk adjusted returns in a country where there are strong and sustainable supply and demand fundamentals, and supported by a resilient macroeconomic environment and outlook. Spain remains one the most attractive and safest residential markets worldwide, with one of the lowest ratios of new supply per capita globally since 2007.
