Deutsche Annington Raises Profit Forecast on Gagfah Purchase

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Deutsche Annington Immobilien SE, Germany’s largest publicly traded homeowner, raised its profit forecast for 2015 because of the acquisition of Gagfah SA. The shares rose the most since they started trading in 2013.

Funds from operations excluding sales, a measure of a property company’s ability to generate cash, will be between 530 million euros ($581 million) and 550 million euros, Bochum-based Deutsche Annington said in a statement on Monday. The company previously said FFO would be between 340 million euros and 360 million euros.

“We are in the midst of integration, but we can already see that the merger will be more successful than expected,” Chief Executive Officer Rolf Buch said in the statement.

Deutsche Annington owns about 350,000 homes in Berlin, Cologne and other German cities after agreeing to buy Gagfah for 3.9 billion euros last year in the country’s biggest ever property deal.

Deutsche Annington accounted for about 40 percent of all German residential property transactions of more than 100 million euros last year. “We will go into 2015 with the same ambitions,” Buch said in a phone interview.

The company rose as much as 8.2 percent to 31.15 euros in Frankfurt trading. The shares were up 6 percent at 30.53 euros at 9:34 a.m.

FFO rose 87 percent in the first quarter to 115.7 million euros. FFO per share rose 27 percent to 33 cents as the company issued stock to pay for acquisitions.

Deutsche Annington plans to increase its dividend for 2015 by 28 percent to 1 euro a share, Buch said on a conference call with reporters.