Malta Properties Company plc - Full-Year Results
On 20 March 2019, Malta Properties Company plc published its preliminary statement of annual results for 2018.
Performance Overview
During 2018, revenues increased by 6.4% to just under €3.3 million largely reflecting the rental income from the new office complex located in Floriana (‘The Bastions’) which outweighed the lost income from the old Sliema Exchange which was vacated during the year and subsequently sold.
Despite the increased business, administrative expenses contracted by nearly 21% to €1.04 million as the company continuously strives to carry out its operations in an efficient manner. As a result of this, and coupled with the growth in revenues, operating profits surged by 27% to €2.27 million compared to €1.79 million in the previous comparable period.
Net finance costs remained virtually unchanged at €0.63 million. On the other hand, MPC registered much higher positive movements in the fair valuation of its property as these amounted to €9 million compared to €4.97 million in 2017, largely reflecting the promise of sale agreement in respect of the St George’s exchange. In addition, the financial performance of MPC was positively impacted by the realised gains of €2.14 million from the sale of the Sliema old exchange.
Overall, MPC reported a pre-tax profit of €12.8 million compared to €6.13 million in 2017. After accounting for a tax charge of €2.2 million, the net profit figure for the year amounted to a new record of €10.6 million (2017: €4.67 million).
The Statement of Financial Position shows a 22.2% increase in total assets to €82.5 million (31 December 2017: €67.5 million), largely reflecting the higher value of investment property including works in progress (+€13.7 million), as well as cash balances (+€3.92 million).
Total liabilities increased by 16.5% to €30.9 million on the back of the increases in total borrowings (+€2.07 million), trade and other payables (+€1.39 million) and deferred tax liabilities (+€1.09 million). Despite the higher level of borrowings, the company’s net debt contracted by 11.5% to €14.2 million (31 December 2017: €16.1 million).
Shareholders’ funds grew by almost 26% to €51.6 million. This translates into a net asset value per share of €0.5094 compared to €0.4046 as at the end of 2017. The company’s gearing ratios also improved, with the net debt to equity multiple falling to 0.28 times compared to 0.39 times as at 31 December 2017. Moreover, the loan-to-value ratio stood at 0.25 times (31 December 2017: 0.26 times), meaning that the company’s total assets are four times the amount of its total debt.
Dividend
The Board of Directors of MPC is recommending the payment of a net dividend of €0.01 per share. Shareholders as at close of trading on 9 May 2019 will be entitled to receive this dividend on 13 June 2019 subject to shareholders’ approval during the upcoming Annual General Meeting scheduled to be held on 11 June 2019.
Outlook
In their commentary, the Directors of MPC noted the company’s positive performance during 2018 as well as the continuation of works at the former Zejtun exchange and the new Birkirkara exchange. The Zejtun exchange is being redeveloped into a state-of-the art technical and data centre for GO plc. Similarly, once the new Birkirkara exchange is completed in early 2019, GO plc is expected to vacate the much larger old Birkirkara exchange and move into the new Birkirkara exchange, paving the way for MPC to redevelop the old Birkirkara exchange.