FREDERICTON, May 8, 2013 /CNW/ - Plazacorp Retail Properties Ltd. (TSXV:
PLZ) ("Plazacorp" or the "Company") today announced its results for the
quarter ended March 31, 2013.
For the quarter ended March 31, 2013, Plazacorp reported funds from
operations ("FFO") of $4.0 million, an increase of 5.6% over the same
period in the prior year. FFO per share was $0.063 for the quarter
ended March 31, 2013 ($0.063 per share diluted) compared to $0.064 per
share for the quarter ended March 31, 2012 ($0.064 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 an
increase in the Company's joint ownership position in one of
Plazacorp's properties coupled with improved results at that property.
These were partly offset by: (i) an increase in administrative
expenses affected by Restricted Share Units issued in late December
2012 under the Company's Restricted Share Unit plan; and (ii) an
increase in one-time refundable current income tax expense. Excluding
the impact of the one-time refundable current income tax expense, FFO
was $4.2 million or $0.066 per share.
Profit for the quarter ended March 31, 2013 was $8.5 million compared to
$14.7 million recorded for the prior year. Profit was mainly impacted
by non-cash fair value adjustments on investment properties and
investments 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.
During the quarter, the Company launched a friendly takeover of KEYreit
(TSX: KRE.UN) and on April 4, 2013, the Company announced that it
entered into a definitive agreement with KEYreit to increase its offer
to acquire 100% of the units of KEYreit. KEYreit unitholders will have
the option to tender their Units for either $8.35 per unit in cash, subject to a maximum aggregate cash amount of
approximately $62.1 million, representing approximately 50% of the
consideration, 1.7041 shares of the Company, or any combination
thereof, subject to proration. This revised offer is valued at
approximately $124 million. As part of the transaction, the asset
management and property management agreement with JBM Properties Inc.
(a company owned by John Bitove, CEO of KEYreit) will be terminated.
Based on synergies to be realized due to the Company's internalized
management team, the acquisition is estimated to be accretive to
adjusted funds from operations. As well, KEYreit's properties are
compatible with those of Plazacorp and the integration of those
properties will enhance the pro forma geographic diversification of
Plazacorp.
During the quarter, Plazacorp also received a positive ruling from
Canada Revenue Agency in respect of converting from a mutual fund
corporation to a real estate investment trust on a tax-deferred basis.
Completion of this conversion will occur later this year and will be
subject to shareholder approval.
Michael Zakuta, Plazacorp's President and CEO said, "We are pleased with
the financial results for the quarter. The company has continued to
execute on its strategy of creating value for our shareholders as
evidenced by the growth in FFO. We are also looking forward to
completing the acquisition of KEYreit and thereby growing our asset
base, as well as completing our conversion to a REIT, which has been in
process for over two years now. We believe that 2013 will be a
significant year for Plazacorp."
Plazacorp's summary of FFO is presented below:
|
|
|
|
|
|
(000s - except per share amounts and debt coverage ratios)
|
3 Months
Ended
March 31,
2013
(unaudited)
|
|
3 Months
Ended
March 31,
2012
(unaudited)
|
|
|
|
|
|
|
Profit for the period attributable to shareholders
|
$
|
8,287
|
|
$
|
14,192
|
Add (deduct):
|
|
|
|
|
|
Gain on disposal of surplus land
|
|
-
|
|
|
(8)
|
Deferred income tax expense
|
|
3,177
|
|
|
4,444
|
Fair value adjustment to investment properties
|
|
(6,515)
|
|
|
(12,496)
|
Fair value adjustment to investments
|
|
(1,282)
|
|
|
(2,475)
|
Fair value adjustment to convertible debentures
|
|
(350)
|
|
|
(79)
|
Equity accounting adjustment
|
|
747
|
|
|
(110)
|
Non-controlling interest adjustment
|
|
(43)
|
|
|
340
|
Basic FFO
|
$
|
4,021
|
|
$
|
3,808
|
Interest on dilutive convertible debentures
|
|
-
|
|
|
-
|
Diluted FFO
|
$
|
4,021
|
|
$
|
3,808
|
Basic Weighted Average Shares Outstanding
|
|
64,029
|
|
|
59,942
|
Diluted Weighted Average Shares Outstanding
|
|
64,029
|
|
|
59,942
|
Basic and diluted FFO per share
|
$
|
0.063
|
|
$
|
0.064
|
|
|
|
|
|
|
Debt coverage ratios
|
|
|
|
|
|
Interest coverage ratio
|
2.2 times
|
|
2.0 times
|
Debt service coverage ratio
|
1.7 times
|
|
1.6 times
|
A copy of Plazacorp's quarterly report can be found on the Company'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 119 properties comprising 5.2 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.