On 12 April 2019, Plaza Centres plc published the Annual Report and Financial Statements for the year ended 31 December 2018.
During 2018, Group revenues (incorporating both the Plaza Commercial Centre and Tigné Place) eased by 0.2% to €3.27 million reflecting the disruptions incurred during the conversion of the food hall on Level 0 at the Plaza Commercial Centre. On the other hand, the company noted that revenues from Tigné Place increased year-on-year, boosted by the completion of an extensive refurbishment programme. Overall occupancy levels remained high as the Group’s average occupancy remained at 88% whilst the average occupancy at the Plaza Commercial Centre slipped to 91% compared to 94% in 2017.
On the expenditure side, operating costs surged by 16% to €0.69 million which, in turn, includes a number of one-time charges as well as higher investments in marketing and maintenance. As a result, EBITDA contracted by 3.7% to €2.58 million compared to €2.68 million in the previous comparable period whilst the EBITDA margin dropped below the 80% mark to 79%.
The financial performance of Plaza Centres plc was also dented by a higher depreciation charge (+9.2% to €0.55 million) and also a lower return from financial investments. Conversely, finance costs slipped by 2.3% to €0.46 million.
Plaza reported a 9.6% drop in pre-tax profits to €1.57 million. After accounting for a tax charge of €0.48 million (FY2017: €0.47 million), Plaza Centres plc posted a net profit of just under €1.1 million compared to the net profit of €1.27 million in 2017.
The Statement of Financial Position shows a 2.6% increase in total assets to €46 million, largely driven by a positive revaluation amounting to €0.98 million to Tigné Place. Total liabilities increased by 4.3% to €18 million, largely reflecting higher deferred tax liabilities. On the other hand, total borrowings decreased by 4.2% to just under €12 million (31 December 2017: €12.5 million) whilst the company’s net debt also dropped to €11.7 million compared to €12 million as at the end of 2017. Despite the drop in profitability, the company’s net debt to EBITDA multiple remained virtually unchanged at 4.5 times. Meanwhile, shareholders’ funds expanded by 1.5% to €28 million which, in turn, translates into a net asset value per share of €0.9927 (31 December 2017: €0.9781).
The Directors are recommending an unchanged final net dividend of €0.0294 per share. Shareholders as at the close of trading on Thursday 2 May 2019 will be eligible to receive this dividend on Wednesday 12 June 2019, subject to shareholders’ approval at the upcoming Annual General Meeting scheduled to be held on Wednesday 5 June 2019.
In the Annual Report, the Directors explained that notwithstanding the new commercial and retail property developments coming onto the market, the strong local economic activity is expected to continue driving demand for quality retail and commercial space. In this context, the Board of Directors expressed their confidence that the investments being made in upgrading the company’s properties are essential to support the continued demand for its properties. Moreover, subject to any unforeseen circumstances, the Group is envisaging an improvement in occupancy levels in 2019 when compared to those achieved in 2018.