MIDI plc - Interim Results

On 26 August, MIDI plc published its interim financial statements covering the six months ended 30 June 2013. The Group’s shareholding in Tigné Mall plc was disposed of from 2 May 2013 and as such, this entity was accounted for as a discontinued operation for the first four months of 2013 and similarly reclassified in the comparable figures covering the first six months of 2012.

Performance Overview

During the period under review, the MIDI Group generated €4.1 million in revenue representing a 48.7% increase over the comparable figure during the first six months of 2012. The revenue figure for the period under review comprises €3.5 million (June 2012: €2.2 million) in income related to the delivery of five apartments and a promise of sale on another as well as €0.65 million (June 2012: €0.55 million) mainly relating to the rental income from the Piazza retail outlets and the clubhouse.

Cost of sales also increased to €3.7 million compared to €2.1 million during the first six months of 2012 reflecting the higher costs associated with the sale of apartments. This resulted in a gross profit of €0.43 million representing a 40% decline from the previous comparable figure.

Administrative expenses also increased by 10.2% to €0.87 million leading to an operating loss of €0.4 million compared to the marginal operating loss of €0.08 million registered in the first half of 2012. The operating profit generated by Tigné Mall plc during the first four months of 2013 of €0.9 million (January – June 2012: €1.2 million) is not included in this figure.

The MIDI Group incurred €1.5 million in net finance costs which is largely in line with the figure for the previous comparable figure. However, this figure no longer includes the interest expenses on the borrowings of Tigné Mall plc which for the first four months of 2013 amounted to almost €0.6 million.

During the period under review, the MIDI Group did not account for any share of losses from its joint-venture, SIS Ltd, as the value of this investment as completely written off during the financial year ended 31 December 2012.

Overall, the MIDI Group registered a loss before tax of €1.9 million representing a 14.7% increase over the pre-tax loss registered during the first six months of 2012. After accounting for tax income of €0.37 million, the Group’s loss from continued operations amounted to €1.5 million compared to a loss from continued operations of €1.1 million registered during the first half of 2012.

The 2013 half-year financial statements also account for the contribution from Tigné Mall plc during the first four months of 2013. This entity registered a net profit of €0.12 million between January and April but this was offset by €0.29 million in selling costs of the IPO leading to a €0.17 million loss attributable to this discontinued operation. Nonetheless, the Directors explained that the disposal of the entire shareholding in Tigné Mall plc released substantial capital back into the Group and also led to a substantial reduction in the Group’s borrowings (as detailed below). The additional capital will enable the Group to move ahead with the remaining development at Tigné Point and eventually at Manoel Island. Furthermore, the reduced leverage will also result in significant interest savings.

After accounting for this loss from continued operations, the Group’s loss for the period amounted to €1.7 million (June 2012: €1 million).

The balance sheet shows total assets of €175.7 million compared to €232.1 million as at 31 December 2012. The decline in assets reflects the disposal of the entire shareholding in Tigné Mall plc. This sale also led to a 32.5% decrease in total liabilities to €113.5 million reflecting the debt repayments made from the proceeds of the sale as well as the exclusion of the debt of the disposed entity. Compared to the December 2012 year-end figure, shareholders funds’ dropped by 2.9% to €62.2 million largely reflecting the loss incurred during the period under review. This translates into a net asset value per share of €0.291 (Dec 2012: €0.299).

Outlook 

Looking ahead, the Directors explained that works on the block of apartments referred to as T17 East which commenced in February 2013 are progressing according to plans. This development is set to be launched in the fourth quarter of 2013 with delivery of apartments targeted to commence in the first quarter of 2015.

Furthermore, in the coming months, MIDI will continue with its efforts of optimising its assets as well as rationalising and rendering more efficient its level of operations. In this regard, the Board indicated that they will consider all sensible proposals including the creation of joint-ventures as well as the setting up of partnerships. The involvement of new investors or partners will also be considered for the development of Manoel Island in view of today’s market sentiment, needs, expectations and standards.

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MIDI plc – Interim Financial Statements for the six months ended 30 June 2013.