Malta Properties Company plc - Full-Year Results
On 21 March 2017, Malta Properties Company plc (MPC) published its preliminary results for the financial year ended 31 December 2016.
Performance Overview
During the year under review, the Group registered a 1.9% increase in revenue to €3.23 million reflecting the annual increments in the rental rates.
Administrative expenses increased by 31.3% to €0.71 million reflecting the first full year of operations as an independent company as well as costs related to the Group’s redevelopment projects which it is currently undertaking.
Other income only amounted to €5,000 as opposed to €251,731 in 2015 although this figure included a one-time fee received by MPC for administering the spin-off process from GO plc.
As a result, MPC registered a 12.3% drop in operating profit to €2.53 million.
Net finance costs amounted to €0.78 million, down from €1.6 million in 2015, after the Company refinanced the loan due to GO plc with a new bank loan.
MPC’s results were also boosted by a €1.7 million uplift in the fair value of its properties as opposed to a €0.9 million increase registered in 2015.
Overall, the Group registered a profit before tax of €3.4 million compared to €1.4 million in 2015 as the interest cost savings and fair value uplift outweighed the drop in operating profits.
The tax charge for the year amounted to €0.89 million compared to a tax credit of €0.45 million in 2015 reflecting the adjustment with respect to the new lower capital gains tax on immovable property.
Overall, the Group’s 2016 net profit amounted to €2.56 million compared to €1.86 million in 2015. Based on the actual number of shares in issue, the profit figure translates into an earnings per share of €0.0252 compared to €0.0184 the previous year.
The Statement of Financial Position shows a 5.3% increase in total assets to €58.73 million largely reflecting the 4.5% increase in the value of total properties held (including both investment property and inventories) and the significant increase in trade receivables to €0.33 million (2015: €0.09 million) which offset the 14.1% reduction in cash balances to €1.38 million as MPC effected advanced payments to its contractors. Total liabilities also increased by 2.1% reflecting increases across current and deferred tax liabilities as well as trade and other payables. Overall, shareholders’ funds expanded by 7.5% to €36.09 million which translates into a net asset value per share of €0.356 (2015: €0.332).
Dividend
The Directors did not recommend the payment of a dividend.
The Annual General Meeting is scheduled to be held on Thursday 25 May 2017.
Outlook
The preliminary results announcement noted that works on the redevelopment of the former Zejtun Exchange into a state-of-the-art technical and data centre for GO plc has already commenced. In the meantime, the Group is also developing new exchanges in Birkirkara and Marsa to be used by GO plc and to release the remaining part of the respective properties for redevelopment. The Floriana offices are also being refurbished into modern offices and works are expected to be completed by the end of this year.
The Directors also noted that the old Sliema exchange is subject to a promise of sale agreement with a third party for a consideration of €5 million.
Looking ahead, the Directors reiterated that the revenue figure is expected to remain stable and only increase gradually in line with inflationary adjustments in line with the conditions of the long-term lease agreements it has in place.