On 20 April 2020, Tigné Mall plc published its annual report and financial statements for the year ended 31 December 2019.
During 2019, Tigné Mall increased its revenues by 7.5% to a new record of just under €7 million as The Point Shopping Mall remained fully occupied despite increased competition in the market. Sales at the individual shops increased again on the back of robust incoming tourism figures as well as increased investment in promotional campaigns. Moreover, the company’s revenues were positively impacted by the higher contribution from the operation of the car park following the acquisition of the temporary utile dominium of a further 132 car spaces in mid-December 2018.
The busier environment within The Point Shopping Mall and the investments in promotional activities led to higher costs in 2019. Excluding the impact of ‘IFRS 16 – ‘Leases’, costs rose by 10% to €2.74 million compared to €2.37 million in the 2018 financial year. Nonetheless, Tigné Mall still reported a 3.1% growth in adjusted operating profits to €4.25 million compared to €4.12 million in 2018. Meanwhile, net finance costs only increased marginally during the year to €0.67 million when adjusted for the impact of ‘IFRS 16 – Leases’.
Overall, Tigné Mall recorded a 2.6% increase in pre-tax profits to €3.58 million (FY2018: €3.49 million). After accounting for a tax charge of €1.04 million, the company’s net profit for the year amounted to €2.54 million representing an increase of 3.4% over the corresponding figure of €2.46 million for the 2018 financial year. This translated into a return on average equity of 5.4%.
The Statement of Financial Position as at 31 December 2019 shows that total assets expanded by 3.7% to €84.4 million largely reflecting the recognition of ‘right-of-use assets’ amounting to €4.04 million. Similarly, total liabilities increased by 5.5% to €36.8 million as the recognition of lease liabilities amounting to €4.15 million outweighed the €2.48 million reduction in bank borrowings which dropped to €17 million as at the end of 2019. Accordingly, net assets increased by 2.3% to €47.6 million which, in turn, translates into a net asset value per share of €0.845 (31 December 2018: €0.826).
In view of the exceptional circumstances related to the ‘COIVID-19’, and in order to preserve its cash resources, Tigné Mall decided not to pay a further dividend for the 2019 financial year.
As previously announced on 23 March 2020, in the light of the ‘COVID-19’ pandemic, the Point Shopping Mall is closed for business and its operations are suspended. These developments are expected to have a significant impact on the company’s operations during 2020 and on the financial results expected to be registered during the year with material adverse impacts on profitability, cash flows and financial position.
Tigné Mall reiterated that it is monitoring the situation on an ongoing basis with a view to safeguard the well-being and interests of its stakeholders. The company’s senior management team compiled financial projections for the year ending 31 December 2020, comprising historical financial information up to the date of authorisation for issuance of these financial statements and forecast financial information for the residual period, incorporating the impact of the events referred to above on the projected financial results, cash flows and financial position of the company. Under such cash flow projections, the company is expected to have sufficient liquidity and financial resources to meet its obligations and expected cash outflows also taking into account unutilised banking facilities available to the company and the company’s arrangements with bankers in respect of utilised bank facilities.
The impact of the expected reduction in revenues and profitability during the year ending 31 December 2020, under scenarios considered by management, on the fair valuation of The Point Shopping Mall is not material on the basis of an analysis carried out by management, reflecting discounted cash flows for the entire term of the emphyteutical grant. Accordingly, based on the outcome of the cash flow projections, the Directors and senior management consider the going concern assumption in the preparation of the company’s financial statements as appropriate and that there exists no material uncertainty that may cast significant doubt about the company’s ability to continue as a going concern.
Tigné Mall concluded by saying that although the situation is deemed unprecedented, the Board of Directors and the management team remain committed to take all necessary actions to mitigate the negative impact that the ‘COVID-19’ outbreak is having on the company and its stakeholders.