Plaza Retail REIT announces solid 2013 annual results driven by new developments and KEYreit acquisition
Feb 27, 2014
FREDERICTON, NB, Feb. 27, 2014 /CNW/ - Plaza Retail REIT (successor to Plazacorp Retail Properties Ltd.) (TSX: PLZ.UN) ("Plaza") today announced its results for the year ended December 31, 2013.
Plaza had four significant events that contributed to our success during 2013. Plaza (1) converted to a REIT structure; (2) acquired KEYreit for $348,000,000; (3) graduated to the TSX; and (4) announced the 11th annual increase in distributions to 24¢ per unit for 2014. These activities created significant one-time costs. Excluding these costs, our funds from operations per share would have been $0.278 for the year, compared to $0.264 for the prior year, an increase of 5.3%.
Including these one-time costs, Plaza reported funds from operations ("FFO") of $19.3 million, an increase of 19.0% over the same period in the prior year. FFO per share was $0.260 for the year ended December 31, 2013 ($0.260 per share diluted) compared to $0.264 per share for the year ended December 31, 2012 ($0.264 per share diluted). FFO was positively impacted by growth in total net property operating income and same-asset net property operating income as well as net property operating income from the acquisition of KEYreit. These were partly offset by: (i) an increase in administrative expenses, some of which are one-time in nature (relating to the integration of KEYreit, the move to the TSX and the conversion to a REIT structure); and (ii) an increase in finance costs mainly related to the acquisition of KEYreit.
For the quarter ended December 31, 2013, Plaza reported FFO of $4.9 million, an increase of 18.1% over the same period in the prior year. FFO per share was $0.057 for the quarter ended December 31, 2013 ($0.057 per share diluted) compared to $0.064 per share for the quarter ended December 31, 2012 ($0.064 per share diluted). Excluding the one-time administrative expenses, FFO per share would have been $0.067, compared to $0.064 per share for the prior year, or a 4.7% increase.
Overall, Plaza recorded a loss for the year ended December 31, 2013 of $13.1 million compared to a profit of $47.1 million for the prior year. Included in this loss are a non-cash negative fair value adjustment to investment properties of $24.0 million, the one-time administrative costs mentioned previously of $1.4 million and $1.6 million of debenture issuance costs required to be expensed under accounting standards.
Michael Zakuta, President and CEO said, "2013 was a transformative year. We are very pleased with our accomplishments. Plaza's success is a confirmation of our value-added and opportunity-driven strategy."
Plaza's summary of FFO is presented below:
|(000s - except per share amounts)||(unaudited)||(unaudited)||(unaudited)||(unaudited)|
|Profit (loss) for the period attributable to shareholders||$||(9,204)||$||1,058||$||(11,591)||$||43,598|
|Loss (gain) on disposal of investment properties and land||(15)||51||90||43|
|Transaction-related costs on acquisition of KEYreit||-||-||9,061||-|
|Deferred income taxes||(3,553)||(72)||668||13,176|
|Tax (refundable tax ) on disposals||(256)||835||(882)||835|
|Fair value adjustment to investment properties||18,082||4,168||23,989||(34,603)|
|Fair value adjustment to investments||839||(3,236)||(98)||(9,973)|
|Fair value adjustment to convertible debentures||(266)||547||(1,628)||673|
|Equity accounting adjustment||(16)||(27)||558||(48)|
|Non-controlling interest adjustment||(2,388)||789||(2,479)||2,542|
|Adjustment for debenture issuance costs||1,634||-||1,634||-|
|Basic FFO - adjusted||$||4,857||$||4,113||$||19,322||$||16,243|
|Interest on dilutive convertible debentures||-||-||-||-|
|Diluted FFO - adjusted||$||4,857||$||4,113||$||19,322||$||16,243|
|Basic Weighted Average Shares Outstanding||85,359||63,833||74,426||61,447|
|Diluted Weighted Average Shares Outstanding||85,359||63,833||74,426||61,447|
|Basic and diluted FFO per share - adjusted||$||0.057||$||0.064||$||0.260||$||0.264|
Plaza Retail REIT is a leading retail property owner and developer, particularly in Eastern Canada. Plaza has an entrepreneurial focus with strong "value-add" capabilities. Plaza's current portfolio includes interests in 334 properties totaling approximately 6.6 million square feet across Canada and additional lands held for development. Plaza's properties include a mix of strip plazas, stand-alone small box retail outlets and enclosed shopping centres, anchored by approximately 89% national tenants. Total assets have reached almost $1 billion. Plaza is fully internalized, therefore providing unitholders directly with the synergies that come with an internalized management structure. Plaza has proven its strong "value-add" capabilities to develop, redevelop and acquire retail real estate throughout Canada. Plaza has a strong track record of generating growth in distributions, having increased its distributions at least once every year in the last 11 years.
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 nor its Regulation Services Provider (as that term is defined in policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Plaza Retail REIT
For further information:
on Plaza Retail REIT, visit our website at www.plaza.ca
Floriana Cipollone, Chief Financial Officer (416) 848-4583 or Kim Sharpe, Director of Business Development at (506) 460-8261