LEAPING LIZARDS!!!!
Melcor Developments earns $105.2-million in 2012
2013-03-07 06:08 ET - News Release
Mr. Brian Baker reports
MELCOR REPORTS RECORD RESULTS FOR ITS 89TH YEAR OF BUSINESS
Melcor Developments Ltd. had record results for the year ended Dec. 31, 2012. Melcor earned net income of $105.02-million or $3.49 per share (basic), an increase of 29 per cent from 2011. Revenue was $274.93-million, an increase of 25 per cent from 2011. Total assets grew 19 per cent to $1.45-billion with fair value gains of $59.10-million or $1.96 per share (basic) compared with fair value gains of $41.70-million or $1.39 per share (basic) in 2011.
Record fourth-quarter results contributed to Melcor's strong performance for the full year. Fourth-quarter net income was $55.47-million or $1.84 per share (basic) on revenue of $141.96-million compared with net income of $51.82-million or $1.73 per share (basic) on revenue of $129.43-million in the fourth quarter of 2011.
Funds from operations was $2.22 per share in 2012, an increase of 42 cents per share or 23 per cent from 2011. FFO per share adjusts for all non-cash items included in income such as fair value adjustments on investment properties and stock-based compensation expense.
Brian Baker, Melcor's president and chief operating officer, commented on the year: "Top- and bottom-line growth in 2012 was a result of the co-ordinated efforts and diligence of all operating divisions. Our company is comprised of the most talented and hardest-working team in the industry: a reality that is reflected in our record results for 2012. As we enter our 90th year, we are eager to compete and win in each of our divisions. With a solid base of assets and a strong financial position, managed by effective leaders and dedicated employees, we are well positioned for continued growth and success."
Highlights from 2012:
- Melcor achieved several records in 2012:
- Record consolidated revenues of $274.93-million;
- Record basic earnings per share of $3.49;
- Fair value gains of $59.10-million or $1.96 per share;
- Total assets of $1.45 billion (up 19 per cent).
- Revenues were higher across all divisions in 2012 as a result of increased activity and growth.
- The community development division had a record year, starting four new residential communities and continuing to build out existing developments. It also acquired strategic land parcels to maintain inventory levels and support future growth.
- The property development division completed 11 buildings totalling 125,000 square feet. These projects have been leased predominantly to well-recognized national and multinational tenants. In addition, the property development division broke ground on three new large-scale projects that will provide the division with a sustained activity pipeline. The division was also successful in advancing several future projects through the land use and development approvals process.
- Leasing activity in the investment properties division was strong with portfoliowide occupancy rates rising to 89 per cent. The division continues its capital expenditure strategies to enhance the efficiency and market desirability of existing assets through improvements.
- The recreational properties division increased both revenue and earnings in 2012 through effective and efficient operations management and an increased emphasis on its food and beverage operation. The number of rounds played at its four championship golf courses also increased by 3.4 per cent.
- Melcor paid an annual dividend of 45 cents per share to shareholders. The company has been paying dividends since 1969.
- Subsequent to the end of the year, Melcor announced that it had initiated a strategic process to advance its business interests through the potential creation of a real estate investment trust.
Investing in the future
The company continues to invest in land inventory, develop commercial properties and improve and lease its portfolio of income-producing properties:
- The community development division added several parcels of raw land for future development including:
- A 50-per-cent interest in 166 acres of land in St. Albert in the first quarter;
- 233 acres of land in the third quarter, strategically located near existing landholdings in St. Albert and Red Deer.
- The property development division had projects totalling over $62-million under development in 2012, compared with projects under development of $28-million in 2011. The division completed development of 125,000 square feet (11 buildings) in 2012 compared with 69,500 square feet (nine buildings) in the same period last year.
- The investment property division acquired a multitenant industrial warehouse in Lethbridge in the second quarter and took over management of approximately 70,000 square feet (including four free-standing bank buildings) transferred from the property development division.
Building capacity:
- Mr. Baker was appointed to the position of president and chief operating officer on June 1, 2012. Mr. Baker was previously executive vice-president and chief operating officer.
- The company expanded its production capacity in 2012 by expanding its team via the addition of 18 new staff in 2012. This resulted in an increase in overall head count by 21 per cent. This positions the company to execute on its growth strategies.
Outlook
The majority of Melcor's business operations and assets remain focused on Alberta. Alberta economic fundamentals remain strong, with low unemployment rates, net inmigration, higher than the national average weekly earnings, strong capital investment, stabilizing inflation and relative stability in the price of oil. These fundamentals create a favourable environment for both residential and commercial property development.
The company continues its focus on U.S. expansion by increasing its stable of residential rental properties, serviced lot inventory and raw development land. These assets now make up approximately 8.5 per cent of the company's total assets. Management believes that the economic indicators in its U.S. regions provide a strong outlook for overall business success for the foreseeable future. The United States continues its gradual economic recovery with clear signs of strengthening in the housing market and capitalization rate compression in the residential rental asset class.
With Melcor's inventory of raw and developed land, financial resources and strong management group, the company is well positioned to take advantage of market opportunities.
Annual results
Complete financial statements, notes to the financial statements, and management's discussion and analysis will be filed on SEDAR on March 6, 2013. Melcor's information circular and other material will be mailed on or about March 30, 2012.
Annual general meeting
The company invites shareholders to Melcor's annual meeting on April 25, 2013, at 11 a.m. MDT. The meeting will be held at the Fairmont Hotel Macdonald, Wedgewood Room, 10065 100 St. NW, Edmonton.
We seek Safe Harbor.