Tigné Mall plc - Full-Year Results
On 4 April 2019, Tigné Mall plc published its annual report and financial statements for the year ended 31 December 2018.
Performance Overview
During 2018, Tigné Mall increased its revenues by 5.7% to just under €6.5 million as tenant sales at The Point Shopping Mall continued to grow on the back of higher footfall whilst The Point also remained fully occupied.
Operating costs surged by 16% to €2.37 million reflecting additional investments in HR and marketing as well as increases in depreciation and other expenses. Excluding depreciation, EBITDA improved by 4.9% to €5.82 million compared to €5.55 million in the previous financial year whilst the EBITDA margin eased to 89.6% from 90.3% in the 2017 financial year. On the other hand, the company’s operating profit remained virtually unchanged at €4.12 million.
The financial performance of Tigné Mall was boosted by an 11.8% decrease in net finance costs to €0.63 million (FY2017: €0.72 million). Despite the overall increase in the total amount of borrowings, Tigné Mall benefited from the more advantageous terms on its bank facilities which were renegotiated during 2017. This led the pre-tax profit figure to increase by 3.2% to €3.49 million compared to €3.38 million in the 2017 financial year. After accounting for a tax charge of €1.03 million, the company’s net profit for the year amounted to €2.46 million representing a 6.1% increase over the corresponding figure for 2017 of €2.32 million. This translates into a return on average equity of 5.3% (FY2017: 5.7%) and a return on average assets of 3.1% (FY2017: 3.2%).
The Statement of Financial Position as at 31 December 2018 shows that total assets expanded by 4% to €81.5 million reflecting an increase of 4.8% in property, plant and equipment following the acquisition of an additional 132 car parking spaces to a total of 380 car parking spaces. Similarly, total liabilities increased by 6.6% to €34.9 million as Tigné Mall took on further borrowings to part-finance the acquisition of the additional car parking spaces. In fact, total borrowings increased by 10.5% to €19.5 million compared to €17.6 million as at the end of 2017. In view of this, the company’s net debt to EBITDA multiple deteriorated marginally to 3.1 times compared to 2.9 times in 2017. Meanwhile, total equity expanded by 2.2% to €46.6 million which, in turn, translates into a net asset value per share of €0.826 (31 December 2017: €0.808).
Dividend
The Directors of Tigné Mall are recommending a 2% increase in the final net dividend distribution to €0.0131 per share. The final dividend is payable on 5 July 2019 to all shareholders as at close of trading on 18 June 2019 subject to shareholders’ approval during the upcoming Annual General Meeting scheduled to be held on 20 June 2019.
Coupled with the net interim dividend of €0.012875 per share paid on 31 August 2018, the total net dividend distribution with respect to the 2018 financial year amounts to €0.026 per share, representing an increase of just under 1% from the previous year’s total net dividend of €0.02575 per share. Given that the growth in the dividend was below the increase in profitability, the payout ratio of Tigné Mall slipped below the 60% for the first time since the company’s IPO. The payout ratio for the 2018 financial year is of 59.6% (2017: 62.6%).
Outlook
In their commentary on the 2018 financial results, the Directors of Tigné Mall explained that the company continues to embrace a business strategy based on providing a compelling retail destination, developing and maintaining strong relationships with its tenants, housing an iconic mix of brands, delivering long term, sustainable growth in net rental income as well as generating returns for its shareholders. Furthermore, the Directors noted that they expect that the level of activity in 2019 will continue at current levels.