PLAZACORP ANNOUNCES YEAR END RESULTS AND $120 MILLION INCREASE IN VALUE OF ASSETS RESULTING FROM ADOPTION OF IFRS
April 04 2011 - 2:28PM
PR Newswire (Canada)
FREDERICTON, April 4 /CNW/ -- FREDERICTON, April 4 /CNW/ -
Plazacorp Retail Properties Ltd. (TSXV:PLZ) today announced its
results for the year ended December 31, 2010 along with a $120
million increase in the valuation of its income producing
properties, properties under development and surplus lands
(collectively "investment properties") and equity-accounted
investments at January 1, 2010, in accordance with its transition
to International Financial Reporting Standards ("IFRS"). Plazacorp
reported funds from operations ("FFO") of $13.1 million for the
year ended December 31, 2010, compared to $13.4 million for the
year ended December 31, 2009. FFO per share was $0.264 for the year
ended December 31, 2010 ($0.264 per share diluted) compared to
$0.279 per share for the year ended December 31, 2009 ($0.263 per
share diluted). Although Plazacorp experienced an increase in net
property operating income for the year, the increase was offset by
an increase in administrative expenses, a decrease in investment
income and increased interest expense. Michael Zakuta, Plazacorp's
President and CEO said, "We are pleased with the results for the
year ended December 31, 2010. Upon transition to IFRS and the
resulting fair value increase of Plazacorp's assets, our gross book
value will better recognize the significant value creation that has
been realized on behalf of Plazacorp's shareholders. Plazacorp's
summary of FFO for the three and twelve months ended December 31,
2010, compared to the three and twelve months ended December 31,
2009 is presented below:
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3 Months 3 Months 12 Months 12 Months Ended Ended Ended Ended
December December December December 31, 31, 31, 31, (000's - except
per share 2010 2009 2010 2009 amounts and debt coverage (un- (un-
ratios) audited) audited)
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Total revenues $ 13,220 $ 13,233 $ 52,643 $ 49,784
--------------------------------------------
-------------------------------------------- Income before other
comprehensive loss $ 1,325 $ 1,304 $ 2,561 $ 3,840 Add (deduct):
(Gain) loss on disposal of income producing properties and surplus
lands (117) 8 (133) (665) Gain on disposal of discontinued
operation (777) - (777) - Income tax expense (97) (754) 653 89
Income tax expense - discontinued operation 2 8 25 23 Amortization
2,670 2,834 10,549 10,274 Amortization - discontinued operation 1 4
11 14 Non-controlling interests 114 202 476 651 Interest costs
4,362 4,174 17,187 14,566 Interest costs - discontinued operation 7
8 32 34 -------------------------------------------- Earnings
before interest, taxes, depreciation and amortization (EBITDA)
7,490 7,788 30,584 28,826 Add (deduct): Interest costs (4,369)
(4,182) (17,219) (14,600) Current income tax expense (10) - (42)
(44) Non-cash debenture interest 60 48 238 72 Non-controlling
interest adjustment to FFO (217) (459) (999) (1,319) Equity
accounting adjustment to FFO 142 139 533 515 Corporate amortization
(4) (4) (17) (18) --------------------------------------------
Basic FFO 3,092 3,330 13,078 13,432 Interest on dilutive
convertible debentures before income tax - 211 - 211
-------------------------------------------- Diluted FFO $ 3,092 $
3,541 $ 13,078 $ 13,643
--------------------------------------------
-------------------------------------------- Basic Weighted Average
Shares Outstanding 49,835 48,651 49,540 48,132
--------------------------------------------
-------------------------------------------- Diluted Shares
Outstanding 49,841 52,488 49,544 51,935
--------------------------------------------
-------------------------------------------- Basic FFO per share $
0.062 $ 0.068 $ 0.264 $ 0.279
--------------------------------------------
-------------------------------------------- Diluted FFO per share
$ 0.062 $ 0.067 $ 0.264 $ 0.263
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Earnings before interest, taxes, depreciation and amortization $
7,490 $ 7,788 $ 30,584 $ 28,826
--------------------------------------------
-------------------------------------------- Interest costs $ 4,369
$ 4,182 $ 17,219 $ 14,600 Periodic mortgage principal repayments
856 816 3,322 3,018 --------------------------------------------
Total debt service $ 5,225 $ 4,998 $ 20,541 $ 17,618
--------------------------------------------
-------------------------------------------- Debt coverage ratios
Interest coverage ratio 1.7 times 1.9 times 1.8 times 2.0 times
Debt service coverage ratio 1.4 times 1.6 times 1.5 times 1.6 times
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As required by the Canadian Accounting Standards Board (AcSB),
Plazacorp will adopt IFRS in place of current Canadian generally
accepted accounting principles ("GAAP") for interim and annual
periods beginning on and after January 1, 2011, with comparative
information for the previous fiscal years. Plazacorp's first
reporting period under IFRS will commence with its interim
financial statements for the three months ended March 31, 2011.
Plazacorp has adopted the fair value model under IFRS to value its
investment properties (including those investment properties
included within equity-accounted investments), with the initial
increase in fair value on the transition date (January 1, 2010)
being recorded in shareholders' equity and subsequent changes in
fair value being recorded in the consolidated statements of
comprehensive income. The fair value of Plazacorp's investment
properties and equity-accounted investments for its opening balance
sheet at January 1, 2010 will increase by approximately $120
million over the historical cost amounts as currently reported
under Canadian GAAP. Approximately $103 million of the increase
relates to investment properties and approximately $17 million of
the increase relates to equity-accounted investments. At January 1,
2010, the fair value of investment properties will be approximately
$375 million, while the fair value of equity-accounted investments
will be approximately $24 million. These amounts do not include any
portfolio premium. The fair value of investment properties was
determined using a weighted average capitalization rate of 8.2%.
Further details of Plazacorp's results and its transition to IFRS
can be found in its Management's Discussion and Analysis included
in its annual report for the year ended December 31, 2010. A copy
of Plazacorp's annual report can be found on the Corporation'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 108 properties comprising 4.9 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. visit our website at www.plaza.ca; Or contact:
Floriana Cipollone, Chief Financial Officer, (416) 848-4583; Kim
Sharpe, Director of Business Development, (506) 451-1826
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