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.