MIDI plc - Interim Results

On 31 August, MIDI plc published its interim results covering the six months ended 30 June 2015.

Performance Overview

During the period under review, the Group registered €6.6 million in revenue (H1 2014: €0.78 million) largely reflecting the delivery of the first few apartments at the Q1 residential block valued at €5.9 million. In the first half of last year, the Company did not recognise any sale of property. Furthermore, the Group reported a 6.8% increase in income from property and rental management to €0.75 million.

Likewise, cost of sales increased considerably to just over €5 million compared to €0.3 million in the previous corresponding period again reflecting the inclusion of the delivery of the aforementioned apartments.

As a result, the Group’s gross profit increased to €1.6 million compared to €0.48 million in the first half of 2014.

Meanwhile, administrative expenses dropped by 2.8% to €0.65 million leading to an operating profit of €0.96 million compared to an operating loss of €0.22 million during the first half of 2014.

Net finance costs increased by 5.7% to €1.6 million mainly reflecting the additional bank borrowings.

Overall, the Group registered a pre-tax loss of €0.64 million representing a 63.3% drop from the pre-tax loss incurred in the first half of 2014. The Group registered a tax credit of €3.6 million largely reflecting an additional €0.4 million deferred tax asset in connection with the loss for the period as well as a net favourable adjustment of €3.6 million to the Group’s deferred tax liability (triggered by the new taxation rules in connection with transfers of immovable property). As a result, the Group’s profit for the period under review amounted to €2.95 million compared to the net loss of €0.99 million incurred in the first half of 2014. This translate into an earnings per share of €0.0138 [H1 2014: €(0.0046)].

The Statement of Financial Position as at 30 June 2015 shows a 5.5% increase in total assets to €202.1 million compared to the corresponding figure as at 31 December 2014 largely reflecting the value of the additional development undertaken during the year. Similarly, total liabilities grew by 5.4% to €138.35 million on the back of a 9.8% increase in borrowings to €57.8 million as well as a 6.6% increase in trade payables to €57.9 million. Overall, shareholders’ funds also increased by 5.5% to €63.77 million mainly reflecting the profit registered during the period under review. This translates into a net asset value per share of €0.298 (Dec 2014: €0.28).

Dividend

The Directors did not declare an interim dividend.

Outlook

The half-year report explains that the Q1 apartments have been practically completed and the delivery of apartments commenced during the first half of the year and is expected to be concluded by the end of 2015. Therefore profits from the sale of Q1 apartments are expected to be accounted for in the 2015 financials.

Development works of the Q2 residential block is also progressing according to the projected timeline and expected be completed by the end of 2017. The Company is aiming to launch these apartments on the market in the last quarter of 2015. However profits will only be recognised once the apartments are delivered after completion.

The Group’s joint-venture company, Mid Knight Holdings Limited, is currently developing the business centre at Tigné Point. In the meantime, the joint-venture entered into a promise of sale agreement for one of the eight floors. The proceeds from this sale will be used to finance the development of the office thereby reducing the amount of bank borrowings required.

In respect of Manoel Island, the Group is still in discussions with third parties that have expressed an interest in the said project.

The Directors also noted that SIS is now a fully owned subsidiary after MIDI acquired the remaining 50% shareholding held by third parties.

Looking ahead, the Directors explained that notwithstanding the pre-tax loss incurred during the period under review, the Group is expected to register a pre-tax profit for the full financial year ending 31 December 2015 given the remaining deliveries of the Q1 apartments during the remaining months of this year.

Download

MIDI plc – Interim Financial Statements for the six months ended 30 June 2015.