Plazacorp announces strong second quarter results
Aug 22, 2011
FREDERICTON, NB, Aug. 22, 2011 /CNW/ - Plazacorp Retail Properties Ltd. (TSXV: PLZ) today announced its results for the quarter ended June 30, 2011.
For the quarter ended June 30, 2011, Plazacorp reported FFO of $3.5 million, an increase of 11.3% over the same period in the prior year. FFO per share was $0.068 for the three months ended June 30, 2011 ($0.068 per share diluted) compared to $0.063 per share for the three months ended June 30, 2010 ($0.063 per share diluted).
Plazacorp reported funds from operations ("FFO") of $6.7 million for the six months ended June 30, 2011, an increase of 4.8% over the same period for the prior year. FFO per share was $0.132 for the six months ended June 30, 2011 ($0.132 per share diluted) compared to $0.129 per share for the six months ended June 30, 2010 ($0.129 per share diluted).
If one-time IFRS implementation costs and costs incurred for the potential conversion to a REIT structure had not occurred, FFO would have increased by 8.3% for the six months ended June 30, 2011 and 14.3% for the three months ended June 30, 2011, over the same periods respectively in the prior year.
Subsequent to quarter end, Plazacorp completed the internalization of its property management and corporate management through the purchase of the shares of Plaza Group Management Limited at book value of approximately $120 thousand.
Michael Zakuta, Plazacorp's President and CEO said, "We are pleased with the strong financial results for the quarter ended June 30, 2011. Currently we have 9 projects under development and 4 land assemblies in progress, which upon completion will deliver growth in our FFO. We are pleased to report that we completed the internalization of our property and corporate management which will increase cash flows and which led to a mid-year increase in our annual dividend per share from 20.25¢ to 21.00¢."
Profit for the six months ended June 30, 2011 was $15.2 million compared to $16.2 million recorded for the same period in the prior year. Profit was impacted by: the increase in FFO; a fair value gain on investment properties of $15.6 million compared to $14.8 million for the same period in the prior year; and transaction costs incurred in the prior year for the issuance of convertible debentures of $565 thousand. These were more than offset by: an increase in deferred taxes of $2.0 million mainly due to the increase in fair value gain on investment properties mentioned above; and an increase in net loss from fair value adjustments to convertible debentures of $1.3 million.
For the quarter ended June 30, 2011, Plazacorp reported profit of $8.3 million compared to $14.4 million for the same period in the prior year. Profit was mainly impacted by the fair value gain on investment properties of $9.2 million compared to $13.9 million for the same period in the prior year, and an increase in the net loss from fair value adjustments to convertible debentures of $1.1 million.
Plazacorp's summary of FFO is presented below:
(000's - except per share amounts and
debt coverage ratios) (unaudited)
|Profit for the period attributable to shareholders||$ 8,168||$ 13,306||$ 14,550||$ 14,804|
|Loss (gain) on disposal of investment properties||-||(4)||-||125|
|Deferred income tax expense||4,009||3,679||6,520||4,513|
|Fair value adjustment to investment properties||(9,162)||(13,859)||(15,568)||(14,787)|
|Fair value adjustment to investments||(1,345)||(1,511)||(2,327)||(1,746)|
|Fair value adjustment to convertible debentures||1,766||644||3,212||1,956|
|Net revaluation of interest rate swaps||71||-||9||-|
|Non-controlling interest adjustment||(23)||851||297||954|
|Adjustment for debenture issuance costs||-||24||-||565|
|Basic and diluted FFO - adjusted||3,484||3,130||6,693||6,384|
|Basic Weighted Average Shares Outstanding||51,013||49,463||50,722||49,353|
|Diluted Weighted Average Shares Outstanding||51,014||49,475||50,723||49,364|
|Basic and diluted FFO - adjusted per share||$ 0.068||$ 0.063||$ 0.132||$ 0.129|
|Debt coverage ratios|
|Interest coverage ratio||1.9 times||1.8 times||1.8 times||1.8 times|
|Debt service coverage ratio||1.5 times||1.5 times||1.5 times||1.5 times|
Plazacorp Retail Properties Ltd. is an owner of shopping malls and strip plazas throughout Atlantic Canada, Quebec and Ontario. Plazacorp owns interests in 112 properties comprising 5.1 million square feet of retail real estate.
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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.
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For further information:
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Floriana Cipollone, Chief Financial Officer (416) 848-4583 or Kim Sharpe, Director of Business Development at (506) 451-1826