MIDI plc - Full-Year Results

On 30 April, MIDI plc published its financial statements for the year ended 31 December 2011.

During the year, total apartment sales in the form of final contracts amounted to €32.0 million (2010: €22.8 million) composed of the final apartment sales in the Tigne South phase together with apartments in the T10 block. The financial statements also reveal that as at the year-end, the company had entered into promise of sale agreements of a further 7 apartments in Tigné Point. These agreements are expected to generate sales amounting to around €3.7 million.

2011 was the first full year of operation of ‘The Point’ Shopping mall and the underlying public car park with significant increases in occupancy within the car park and visitor traffic to the shopping complex. Revenue from these commercial properties including the other retail and catering establishments totaled €5.1 million compared to €3.7 million during 2010.

Costs of sales increased by 38.9% to €27.9 million in line with the higher revenue from apartment sales concluded during 2011. In fact, gross profit grew by 42.2% to €9.1 million and the gross profit margin improved slightly to 24.7% from 24.2% in 2011.

After accounting for €1.6 million in other net operating expenses, finance costs of €4.5 million and losses of €179,373 from the company’s joint venture with Siemens, SIS Ltd, MIDI’s pre-tax profit jumped to €3.0 million (2010: €1.5 million).

Profits after tax of €1.8 million translate into earnings per share of €0.008. Despite the profits generated during the year, the Directors did not recommend a dividend.

The balance sheet as at 31 December 2011 reveals total assets of €232.5 million, 8.1% lower than the level as at December 2010 primarily as a result of the apartments sold during the year and the subsequent decline in inventories.  Total borrowings dropped by 3.5% to €95.7 million with shareholders’ funds of €64.9 million giving a net asset value per share of €0.303. MIDI’s gearing ratio improved to 59.6% from 61.2% in 2010 and the return on equity also improved to 5.4% in line with the higher profitability during the year.

In the Directors’ report, it was noted that constructions works during 2011 centred around the completion of the 22 new apartments overlooking Pjazza Tigne which were launched towards the end of the 2011 with almost half already subject to promise of sale agreements. During the year MIDI also completed the construction of the underground parking, distribution roads and plant rooms in the North section.

MIDI’s Directors also reported that in January 2012, the Malta Environment and Planning Authority issued the full development permits for the construction of the T14 office block and two 14-storey residential blocks known as T17. The T14 business center will consist of a 9-storey office block providing a total of 12,000 sqm of rentable office space including an underlying car park. The residential developments will consist of two 14-storey blocks comprising 102 apartments and catering outlets at ground floor. Both the T14 and T17 developments are located adjacent to the Garden Battery, in the north-west of the Tigné Point Development Site.

The Directors’ also revealed that the company is reviewing its funding strategy in the context of the timing of the different development stages of Tigne Point and Manoel Island and in view of the general uncertain financial and economic conditions. In line with this, MIDI is currently: (i) monitoring the feasibility of the different project phases based on net cash inflows and income streams; (ii) reviewing the sustainability of the carrying amount of assets allocated to the respective phases; and (iii) assessing the appropriate funding mix to be applied to each phase of the development project. The Directors also indicated that the funding requirements in the long-term could result in changes to the existing or projected use of the asset base in relation to the different phases of the Tigne Point and Manoel Island projects.

In the 2011 Annual Report the Directors also indicated that after the end of the reporting period on 31 December 2011, the Group’s bankers and a number of Restricted Shareholders have confirmed their willingness to support the Group’s financial requirements.