Plazacorp announces 2012 dividend increase and 2011 third quarter results
Nov 8, 2011
FREDERICTON, Nov. 8, 2011 /CNW/ - Plazacorp Retail Properties Ltd. (TSXV: PLZ) today announced that its Board of Directors has approved the 2012 annual dividend increase to $0.215 per share, representing a 6.2% increase from a year earlier. This is the second increase in the last six months. The Board previously approved an increase to $0.21 per share effective August 2011. In addition, the Company announced its results for the quarter ended September 30, 2011.
The increased dividend will be effective for the regularly scheduled dividend payment dates for 2012 that are expected to be February 15, May 15, August 15, and November 15 in the amount of 5.375 cents per common share at each payment date, subject to Board approval at that time.
For the quarter ended September 30, 2011, Plazacorp reported funds from operations ("FFO") of $3.7 million, consistent with the same period in the prior year. FFO per share was $0.071 for the three months ended September 30, 2011 ($0.071 per share diluted) compared to $0.075 per share for the three months ended September 30, 2010 ($0.074 per share diluted). FFO was buoyed by growth in net property operating income (net of financing expense), offset by the effects of the internalization on FFO, as well as one-time administrative costs and one-time costs on mortgages defeased. The per share numbers were also impacted by the $27.7 million equity raise completed at the end of September.
Plazacorp reported FFO of $10.4 million for the nine months ended September 30, 2011, an increase of 3.1% over the same period for the prior year. FFO per share was $0.203 for the nine months ended September 30, 2011 ($0.203 per share diluted) compared to $0.204 per share for the nine months ended September 30, 2010 ($0.204 per share diluted).
Plazacorp completed a bought deal public equity offering of 6.6 million common shares at a price of $4.20 per common share to a syndicate of underwriters, for gross proceeds of $27.7 million (net proceeds of $26.2 million). The offering closed on September 27, 2011. Proceeds were used to repay debt and will be used for developments and redevelopments over the next 12 to 18 months. Subsequent to quarter end, the underwriters exercised in full their over-allotment option of 990 thousand common shares at a price of $4.20 per common share, for gross proceeds to the Company of $4.2 million (net proceeds of $4.0 million).
During the quarter, Plazacorp also completed the internalization of its property management and corporate management functions through the purchase of the shares of Plaza Group Management Limited at book value of $113 thousand.
Michael Zakuta, Plazacorp's President and CEO said, "The dividend increase represents the tenth increase over a nine year period. Our track record of dividend increases confirms our ability to grow the business and deliver results to our shareholders. We are also pleased with the financial results for the quarter ended September 30, 2011 and our other accomplishments of completing our first public equity raise and internalizing."
Profit for the nine months ended September 30, 2011 was $21.0 million compared to $24.3 million recorded for the same period in the prior year. Profit was mainly impacted by non-cash fair value adjustments on investment properties and convertible debentures. For the quarter ended September 30, 2011, Plazacorp reported profit of $5.8 million compared to $8.2 million for the same period in the prior year.
Plazacorp's summary of FFO is presented below:
(000's - except per share amounts and
debt coverage ratios) (unaudited)
|Profit for the period attributable to shareholders||$ 5,653||$ 7,952||$ 20,203||$ 22,756|
|Loss on disposal of investment properties||-||-||-||125|
|Deferred income tax expense||1,000||2,173||7,520||6,686|
|Fair value adjustment to investment properties||89||(6,252)||(15,479)||(21,039)|
|Fair value adjustment to investments||330||(657)||(1,997)||(2,403)|
|Fair value adjustment to convertible debentures||(3,556)||248||(344)||2,204|
|Net revaluation of interest rate swaps||189||223||198||223|
|Non-controlling interest adjustment||4||15||301||969|
|Adjustment for debenture issuance costs||-||-||-||565|
|Basic FFO - adjusted||$ 3,709||$ 3,702||$ 10,402||$ 10,086|
|Interest on dilutive convertible debentures||229||718||-||-|
|Diluted FFO||$ 3,938||$ 4,420||$ 10,402||$ 10,086|
|Basic Weighted Average Shares Outstanding||52,341||49,611||51,253||49,440|
|Diluted Weighted Average Shares Outstanding||55,718||59,882||51,253||49,444|
|Basic FFO - adjusted per share||$ 0.071||$ 0.075||$ 0.203||$ 0.204|
|Diluted FFO - adjusted per share||$ 0.071||$ 0.074||$ 0.203||$ 0.204|
|Debt coverage ratios|
|Interest coverage ratio(1)||1.8 times||1.9 times||1.8 times||1.8 times|
|Debt service coverage ratio(2)||1.5 times||1.6 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.
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.
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Floriana Cipollone, Chief Financial Officer (416) 848-4583 or Kim Sharpe, Director of Business Development at (506) 451-1826