Plaza Centres plc - Interim Results

On 29 July 2020, Plaza Centres plc published its interim financial results covering the six-month period ended 30 June 2020. In this respect, it is important to highlight that the performance recorded in the first half of 2020 is not comparable to the corresponding period in 2019 due to the temporary closure of the Plaza Shopping Complex for approximately six weeks in March and April 2020, in accordance with the restrictions imposed by public health authorities due to the ‘COVID-19’ pandemic.

Performance Overview

Revenues dropped by almost 16% to €1.44 million (H1 2019: €1.72 million) as the impact from ‘COVID-19’ outweighed the increase in the occupancy rate to 93% as at the end of June 2020 compared to 87% on 30 June 2019. The reduction in revenue came about solely from the Plaza Shopping Complex as the financial statements indicate a drop in revenue at ‘company level’ of €0.31 million.

Despite the reduction in business, operating costs increased by 6.1% to €0.61 million as the company took a number of actions to support its tenants including reductions in the lease rates as well as the absorption of a larger portion of the common area costs. Furthermore, Plaza accounted for an increase of €0.07 million in the general provision for doubtful debts.

As a result of the drop in revenues and the increase in costs, the operating profit contracted by 27% to a six-year low (at interim stage) of €0.83 million. Excluding depreciation charges, EBITDA contracted by 24.6% to €1.06 million compared to €1.4 million generated in the first six months of 2019. The EBITDA and operating profit margins also deteriorated to 73.3% (H1 2019: 81.8%) and 57.5% (H1 2019: 66.3%) respectively.

Meanwhile, net finance costs increased by 14.4% (or +€0.03 million) to €0.22 million largely reflecting much lower income from investments.

Overall, Plaza posted a pre-tax profit of €0.61 million compared to €0.94 million in H1 2019. After accounting for a tax charge of €0.21 million, Plaza’s net profit for the period under review amounted to €0.4 million (-42.6%) compared to the €0.7 million generated in the first six months of 2019.

The condensed Statement of Financial Position as at 30 June 2020 shows that total assets increased 3.8% to €50.7 million when compared to the amount of €48.8 million as at 31 December 2019. Total liabilities increase by 8.5% to €18.8 million whilst total equity edged 1.3% higher to €31.9 million translating into a net asset value per share of €1.129 (31 December 2019: €1.115).

Outlook

In their commentary, the Directors noted that despite the positive, albeit gradual, impact resulting from the lifting of the ‘COVID-19’ restrictions, the general subdued economic outlook is expected to persist for a longer period of time as uncertainty will continue to prevail until a cure or vaccine is found. In this respect, Plaza prepared different ‘COVID-19’ stress scenarios to assess the potential impact on its financial results and cash flows and, to date, the actual financial performance falls within projected assessments. Although the Board of Directors is cautious on the outlook of the company, it is nonetheless confident that Plaza’s financial situation and balance sheet strength are sufficiently resilient to navigate through the prevailing challenging times.

The Directors also made reference to the offer for the sale of Tigné Place as previously announced on 18 December 2019. In this respect, although the final deed was scheduled to take place by the end of June 2020 and a deposit was affected in line with the promise of sale agreement, the execution of the final deed of sale was extended following changes in law due to ‘COVID-19’.

Download

Plaza Centres plc – Half-Yearly Report for the period ended 30 June 2020.