The Board of Directors of Pirelli & C. Real Estate has approved the Strategic Plan for the three years 2006-2008. The three-year plan targets average compound annual growth in operating profit including income from equity participations of between 10% and 15%, corresponding to cumulative growth of 35-50% after growth of over 80% over the period 2003-2005.
Net debt will remain substantially stable over the period 2006 2008. Net debt before shareholder loans is due to increase, but will enable the Company to maintain a substantially unchanged gearing of around 0.6-0.8.
Assets under management are estimated to increase from a book value of 9.9bn at 30 June 2005 to 16-18bn at the end of 2008. Over the three years the long-term portfolio is expected to account for up to approximately 43% (34% at 30 June 2005) of the total, with assets concentrated entirely in Italy. This will be accompanied by a reduction in the opportunistic portfolio, which should settle at approximately 57% (66% at 30 June 2005).
Asset and fund management activities are projected to achieve a 10% to 14% CAGR in operating profit including income from equity participations, with a different mix of the risk and opportunity profiles of investments and product types.
Operating profit from the provision of services operated directly and in franchising is expected to grow at an average annual rate of 14-18%, thanks to the focus on high value added services and a general improvement in earnings. The three-year plan aims to have 1,750 affiliate agencies in place by the end of 2008, compared with 803 at 30 September of this year.
Source: Pirelli RE