On 27 April 2020, Plaza Centres plc published the Annual Report and Financial Statements for the year ended 31 December 2019.
During 2019, revenues increased by 8.6% to a new record of €3.55 million largely on the back of higher occupancies at both the Plaza Commercial Centre as well as Tigné Place. In fact, the average occupancy level for the two properties improved to 91% from 88% in 2018. The occupancy of Plaza Commercial Centre climbed to 93% (from 91%) whilst Tigné Place reached full occupancy.
On the expenditure side, although operating costs increased by 2.1% to €1.26 million, the increase was due to higher depreciation charges following the investments in the upgrading of the two properties done by Plaza in recent years. Excluding depreciation, EBITDA surged by 10.8% to €2.86 million whilst the EBITDA margin improved by almost 2 percentage points to 80.7%.
The operating profit for the year grew by 12.5% to €2.29 million. After taking into account net finance costs of €0.42 million, Plaza reported an increase in pre-tax profits of just over 19% to €1.87 million compared to €1.57 million in the previous corresponding period. The tax charge amounted to €0.51 million, thus leading to a net profit of €1.36 million (+24%).
The Statement of Financial Position shows a 6.1% increase in total assets to €48.8 million largely driven by the positive adjustment to the valuation of Tigné Place to €13.5 million (+€2.76 million) which, in turn, is based on the agreed consideration for the sale of the property (net of selling expenses) as previously announced by Plaza on 18 December 2019. In terms of the promise of sale agreement, the final deed for the sale of Tigné Place is scheduled to take place by the end of June 2020.
Total liabilities dropped by 3.6% to €17.4 million mostly reflecting a reduction in bank borrowings (-€0.4 million). As a result, net assets surged by 12.3% to €31.5 million which, in turn, translates into a net asset value per share of €1.1147 (31 December 2018: €0.9927).
In view of the extraordinary circumstances related to the ‘COVID-19’, the Directors are recommending a substantial drop in the net dividend to €0.0113 per share (2018: €0.0294 per share). Shareholders as at the close of trading on Wednesday 24 June 2020 will be eligible to receive the dividend subject to shareholders’ approval at the upcoming Annual General Meeting scheduled to be held on Tuesday 28 July 2020.
In the 2019 Annual Report, the Directors explained that whilst at the beginning of 2020 they were confident that Plaza would at least achieve an unchanged level of operating income in 2020, the ‘COVID-19’ pandemic has completely changed the company’s operating landscape. Although the shift in recent years in the mix of revenue streams towards a larger exposure to commercial leases will partially absorb the impact of the ‘COVID-19’, Plaza noted that its performance will still be materially negatively impacted. Nonetheless, Plaza reiterated that it is adequately capitalised and sufficiently liquid to meet its financial obligations, and that the likely impact on the property valuation is not considered to be significant.
The Directors concluded by saying that they will continue monitoring the current situation very closely and that the company will take any actions deemed appropriate to safeguard its interests. They also expressed their confidence that with the company’s strong fundamentals, coupled with prudent and timely mitigating measures, Plaza Centres plc can withstand these unprecedented headwinds and be in a position to continue to create value for its stakeholders.