Plazacorp announces 10th consecutive annual dividend increase and its quarter end results

FREDERICTON, NB, Nov. 12, 2012 /CNW/ - Plazacorp Retail Properties Ltd. (TSXV:PLZ) today announced that its Board of Directors has approved the 2013 annual dividend increase to $0.225 per share, representing a 4.7% increase from the prior year.  In addition, the Company announced its results for the quarter ended September 30, 2012.

The increased dividend will be effective for the regularly scheduled dividend payment dates for 2013 that are expected to be February 15, May 15, August 15, and November 15 in the amount of 5.625 cents per common share at each payment date, subject to Board approval at that time.

For the nine months ended September 30, 2012, Plazacorp reported funds from operations ("FFO") of $12.1 million compared to $10.4 million for the prior year.  FFO per share was $0.200 for the nine months ended September 30, 2012 ($0.200 per share diluted), compared to $0.203 per share for the same period in the prior year ($0.203 per share diluted).  FFO was positively impacted by growth in net property operating income, savings in one-time administrative costs incurred in 2011 and a decrease in financing costs, partly offset by the net effects of the internalization of property and corporate management that occurred effective July 1, 2011.  FFO per share was impacted in the short term by an 18.3% increase in the weighted average shares outstanding mainly due to the issuance of shares through the equity raise in the third quarter of 2011, the funds of which have been deployed on active developments which have yet to move to income producing status.  Many of the Company's current developments are larger-scale projects which take longer to become income producing.

Plazacorp reported FFO of $4.2 million for the three months ended September 30, 2012 compared to $3.7 million for the prior year.  FFO per share was $0.069 for the quarter ended September 30, 2012 ($0.069 per share diluted) compared to $0.071 per share for the quarter ended September 30, 2011 ($0.071 per share diluted).  FFO was positively impacted by a decrease in financing costs, partly offset by a decrease in net property operating income.  FFO per share was impacted by the same factors affecting the year-to-date per share numbers.

Michael Zakuta, Plazacorp's President and CEO said, "The dividend increase represents the eleventh increase over a ten year period.  Our track record of dividend increases confirms our ability to grow the business and deliver results to our shareholders.  We are also very pleased with the financial results for the quarter.  The growth in FFO continues to confirm our business strategy that is based on creating value for our shareholders by developing high quality retail projects leased to national retailers and financing these projects with long term fixed rate financing for terms of ten years or more."

Profit for the nine months ended September 30, 2012 was $44.9 million compared to $21.0 million recorded for the same period in the prior year.  Profit was mainly impacted by non-cash fair value adjustments on investment properties as a result of decreases in capitalization rates, net of deferred taxes on those amounts, as well as the same factors described above affecting FFO.

Plazacorp's summary of FFO is presented below:

(000s - except per share amounts and debt coverage ratios)	3 Months Ended September 30, 2012 (unaudited)	3 Months Ended September 30, 2011 (unaudited)	9 Months Ended September 30, 2012 (unaudited)	9 Months Ended September 30, 2011 (unaudited)
Profit for the period attributable to shareholders	$  12,493	$  5,653	$  42,540	$ 20,203
Add (deduct):
Gain on disposal of surplus land	-	-	(8)	-
Deferred income tax expense	3,958	1,000	13,248	7,520
Fair value adjustment to investment properties	(12,297)	89	(40,724)	(15,479)
Fair value adjustment to investments	(349)	330	(4,784)	(1,997)
Fair value adjustment to convertible debentures	(53)	(3,556)	126	(344)
Net revaluation of interest rate swaps	(10)	189	(21)	198
Non-controlling interest adjustment	503	4	1,753	301
Basic FFO	$   4,245	$ 3,709	$   12,130	$  10,402
Interest on dilutive convertible debentures	7	229	-	-
Diluted FFO	$   4,252	$ 3,938	$   12,130	$  10,402
Basic Weighted Average Shares Outstanding	61,538	52,341	60,646	51,253
Diluted Weighted Average Shares Outstanding	61,639	55,718	60,646	51,253
Basic and diluted FFO per share	$   0.069	$  0.071	$     0.200	$    0.203
Debt coverage ratios
Interest coverage ratio(1)	2.1 times	1.8 times	2.1 times	1.8 times
Debt service coverage ratio(2)	1.7 times	1.5 times	1.6 times	1.5 times

A copy of Plazacorp's quarterly report can be found on the Corporation's web site at www.plaza.ca or on SEDAR at www.sedar.com.

Plazacorp Retail Properties Ltd. is an owner of shopping malls and strip plazas throughout Atlantic Canada, Quebec and Ontario.  Plazacorp owns interests in 118 properties comprising 5.1 million square feet of retail real estate.

CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING INFORMATION

This news release contains forward looking statements relating to our operations and the environment in which we operate, which are based on our expectations, estimates, forecasts and projections.  These statements are not future guarantees of future performance and involve risks and uncertainties that are difficult to control or predict.  Therefore, actual outcomes and results may differ materially from those expressed in these forward looking statements.  Readers, therefore, should not place undue reliance on any such forward looking statements.  Further, a forward looking statement speaks only as of the date on which such statement is made.  We undertake no obligation to publicly update any such statement, to reflect new information or the occurrence of future events or circumstances, except for forward-looking information disclosed in prior disclosures which, in light of intervening events, requires further explanation to avoid being misleading.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

SOURCE: PLAZACORP RETAIL PROPERTIES LTD.