Plaza Centres plc - Full-Year Results Review

On 10 March 2009 Plaza Centres plc published its 2008 full-year results. The Directors recommended a final gross dividend of €0.1217 per share (net: €0.0791), 8.2% higher than the dividend declared in 2007. Those shareholders as at close of trading on 26 March will be entitled to this dividend which will be paid following approval at the Company’s Annual General Meeting scheduled to be held on 22 April.

Plaza Centres generated total revenue of €1.8 million during the year under review, 14% higher than the level of turnover recorded in 2007. This rise is mainly attributable to the new income generated from the lease of the new shops and offices following the extension on Tower Road. This new wing was finalised at the end of the first quarter and the new leases commenced in April 2008. Moreover the Company maintained a high level of occupancy during 2008 with an average rate of 96.8% compared to 98.3% in the previous year. On the cost side, the Company incurred a total of €0.25 million in operating expenses (including marketing, maintenance and administrative costs), representing a 12.9% increase over the previous year. Despite the increased cost base, Plaza’s cost to income ratio improved to 30.3% as the rise in revenue offset the higher expenses.

As a result, the Company recorded a 14.2% increase in earnings before interest, tax, depreciation and amortisation (EBIDTA) to €1.6 million. After accounting for a depreciation charge of €0.3 million (2007: €0.28 million), Plaza’s operating profit of €1.3 million represents a 15.1% rise over the previous year.

For the first time in five years the Company incurred net interest payable of €0.05 million as Plaza increased its borrowings to finance the new extension and the acquisition of 2 properties on Bisazza Lane. In fact, the condensed cash flow statement shows a negative cash balance of €0.25 million compared to a positive figure of €0.6 million at the end of 2007.

Pre-tax profits rose to €1.23 million, a 5.5% increase over the level recorded in 2007. Taxation increased by 2.6% to €0.45 million with a profit after tax of €0.78 million, 7.2% higher when compared to the profitability of 2007. This profit translates into earnings per share of €0.0832 (2007: €0.0776).

The condensed balance sheet included in the Preliminary Profits Statement shows non-current assets (comprising land and buildings) of €25.5 million, up from €23.2 million as at 31 December 2007. The Directors stated that the Company’s land and buildings were revalued as at 31 December 2008 on the basis of independent professional advice which considered the Company’s projected future earnings from the complex based on current rental contracts which carry a yearly increment of 4%. This revaluation, which is carried out every three years, also impacted shareholders’ funds, which increased by 5.8% to €20.1 million. Based on the total issued share capital of the company, the net asset value is of €2.135. The higher profitability achieved during 2008 led to an improved return on equity (ROE) to 4% (2007: 3.9%) and a higher return on assets of 4.9% compared to the 2007 level of 4.8%.

Comments are closed.