Main Street Complex plc - Full-Year Results

Tuesday, April 9th, 2019

On 8 April 2019, Main Street Complex plc published its maiden preliminary statement of annual results for the year ended 31 December 2018 following the company’s IPO in April 2018.

Performance Overview

During 2018, revenues increased by 1.1% to €0.74 million as the company’s commercial property located in central Paola – namely Main Street Complex – maintained a high occupancy level of 94% throughout the year. Furthermore, the completion of civil works to Pjazza Antoine de Paule, coupled with ongoing management and marketing initiatives, contributed to a record footfall. On the other hand, the amount of revenues generated was 1.3% lower than previously estimated at the time of the IPO which, in turn, was projected at €0.75 million.

On the expenditure side, operating costs surged by 32.6% to €0.16 million (2017: €0.12 million), reflecting the additional charges related to the company’s listing on the Regulated Main Market of the MSE. As a result, EBITDA dropped by 5% to €0.58 million which, in turn, is in line with the IPO forecasted figure of €0.59 million. Similarly, depreciation charges rose by 11.7% to €0.1 million reflecting the capital expenditure that the company undertook during the year including the installation of solar panels. Accordingly, the operating profit of the company decreased by 7.8% to €0.49 million which is in line with previous estimates.

The financial performance of Main Street Complex was boosted by the much lower amount of net finance costs as these contracted by 59% to just €0.05 million compared to €0.11 million in the previous year. The drop was due to the repayment of all outstanding banking credit facilities from the IPO proceeds which amounted to €3.04 million as at 31 December 2017.

Overall, Main Street Complex reported a pre-tax profit of €0.44 million, representing a growth of 5.5% over the corresponding figure of €0.42 million in 2017 and in line with the previous forecast. After accounting for a tax charge of €0.13 million, the company’s net profit for the year amounted to €0.31 million, representing a drop of 5.5% over the corresponding figure of €0.33 million for 2017. This translates into a return on average equity of 3.2% (FY2017: 4.5%) and a return on average assets of 2.3% (FY2017: 2.6%).

The Statement of Financial Position as at 31 December 2018 shows that total assets eased by 1% to €13.3 million, reflecting the considerable drop in trade and other receivables which was only partially offset by the sharp increase in cash balances to €0.1 million compared to €0.02 million as at the end of 2017. Total liabilities contracted markedly to €1.67 million from €5.4 million as at 31 December 2017 as the company paid-off all its bank loans as well as other payables due to Embassy Management Ltd amounting to €0.78 million in respect of management fees as previously indicated in the IPO Prospectus dated 23 April 2018. Overall, the company’s equity base expanded by nearly 45% to €11.6 million which, in turn, translates into a net asset value per share of €0.60 (31 December 2017: €0.568).

Dividend

The Directors of Main Street Complex are recommending the payment of a final net dividend of €0.00981 per share. Coupled with the net interim dividend per share of €0.00628 which was paid out in September 2018, the total net dividend for the year amounts to €0.01609 per share (or €0.31 million), virtually representing the company’s entire earnings generated throughout the year. The total net dividend for the year is 2.8% lower than previously estimated due to the higher actual tax charge incurred by Main Street Complex during the year.

Shareholders of Main Street Complex as at close of trading on 15 April 2019 will be entitled to receive the dividend on 22 May 2019 subject to shareholders’ approval during the upcoming Annual General Meeting scheduled to be held on 17 May 2019.

Outlook

Commenting on the results, the Directors of Main Street Complex noted that 2018 was marked by high and sustained tenant occupancy levels, increases in footfall as well as new initiatives aimed at improving overall customer shopping experience and satisfaction. Furthermore, the company’s strong balance sheet including no debt allows it to pay out all its net distributable profits.

Looking ahead, the Directors expressed their optimism that the company will register another positive year in 2019 on the back of the robust economic environment, strong footfall levels, full occupancy and further reductions in net finance costs. In fact on 11 March, the company reported that the international fashion brand “George” has taken up the final available retail space in Main Street and the complex is now 100% occupied.

Downloads

Main Street Complex plc – Preliminary Statement of Annual Results for the financial year ended 31 December 2018.

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