Plaza Centres plc - Interim Results Review

On 11 August 2008 Plaza Centres plc published its interim results for the six-months ending 30 June 2008. Similarly to previous years, the Directors did not declare the payment of an interim dividend.

The key highlights are:
• Turnover rises by 10.6% to €0.87 million;
• EBITDA of €0.75 million (+11.7%);
• Pre-tax profit up 7.2% to €0.6 million;
• Shareholders’ funds of €18.6 million giving a net asset value per share of €1.985.

Plaza Centres plc generated a turnover of €874,849 representing a 10.6% increase when compared to the same period last year. This was mainly attributable to the additional income streams arising from the leasing of the new extension on Tower Road. The new tenants only began contributing from 1 April 2008 and therefore the increase in the Company’s revenue only covers the second quarter of the year. During the first half of the year a high occupancy level was maintained with the company reporting an average rate of 97.5%. Marketing, maintenance and administrative costs also rose by 4.2% to €124,393 whilst depreciation increased by 4.5% to €145,803. The cost to income ratio improved to 30.9% (June 2007: 32.7%).  The Company registered earnings before interest, tax, depreciation and amortisation (EBITDA) of €750,456, 11.7% higher than the figure for the first six months of 2007.

While in the past four interim periods, the Company recognised net interest receivable, during the first half of 2008, Plaza recorded a marginal net interest payable of €8,194. The drop in interest receivable was as a result of the decline in the level of cash (which amounted to just under €1 million at 31 December 2007). The high cash balance at the end of last year was utilised to finance the Tower Road extension during the first quarter of 2008 and to acquire further property in Bisazza Lane. In this regard, the Directors reported that the Company submitted an application to the Malta Environment and Planning Authority for a building permit but are still awaiting the necessary permits.

Plaza Centres registered a 7.2% increase in its pre-tax profits to €596,459. Taxation increased by 16.5% to €216,720 representing a marginal tax rate of 36.3% (June 2007: 33.4%). As a result, profit after tax for the period under review of €379,739 is 2.5% higher when compared to the first half of 2007.

From a balance sheet perspective, total assets increased marginally by 0.7% to €24.1 million. Moreover shareholders’ funds remained relatively stable at €18.6 million reflecting a net asset value per share of €1.985. The Company registered a slightly improved annualised return on equity at 4.1% and a higher annualised return on assets of 5%.

Plaza’s equity is currently trading at €1.70 per share giving a historic dividend yield of 6.62% per annum.

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