MIDI plc - Interim Results

On 25 August 2020, MIDI plc published its condensed interim financial statements covering the six-month period ended 30 June 2020.

Performance Overview

During the period under review, MIDI generated €1.07 million in revenues compared to €9.62 million in H1 2019 as no income was generated from property sales (H1 2019: €8 million) reflecting the very limited number of properties that MIDI has available for sale following the successful delivery of most of the ‘Q2’ apartments in 2018 and 2019.

Given the drop in business activity, operating costs declined sharply to €1.79 million (H1 2019: €5.31 million). Nonetheless, the company still reported an operating loss of €0.72 million compared to an operating profit of €4.31 million in the first half of 2019.

Meanwhile, the increase in net finance costs to €1.15 million was mostly outweighed by the additional contribution that MIDI received from its joint-venture investment in ‘The Centre’ amounting to €0.99 million (H1 2019: €0.8 million).

Overall, MIDI reported a pre-tax loss of €0.88 million compared to a pre-tax profit of €4.22 million in the previous corresponding period. After accounting for a tax charge of €0.17 million, the net loss for the period under review amounted to €1.05 million.

The condensed Statement of Financial Position as at 30 June 2020, when compared to the corresponding figures as at the end of 2019, shows that the amount of net assets eased by 1%to €102.9 million which, in turn, translates into a net asset value per share of €0.4805 compared to €0.4855 as at 31 December 2019. Total borrowings increased by a marginal 0.8% to €73.6 million (when including lease liabilities amounting to €14.1 million) whilst the company’s gearing ratio (calculated as total debt divided by total debt plus equity) climbed to 41.7% compared to 41.3% million as at the end of 2019.

Outlook

In their commentary, the Directors of MIDI explained that ‘COVID-19’ had an adverse impact on the demand for property, including the last few remaining apartments that MIDI has available for sale. Moreover, revenues generated from the ‘Property & Rental Management’ operations dropped by nearly 32% as MIDI granted rent concessions to its tenants of its commercial properties and to its car park operator.

Looking ahead, MIDI noted that the outlook for the second half of 2020 remains challenging given the various significant uncertainties related to ‘COVID-19’. In fact, for H2 2020, MIDI is envisaging a similar financial performance to the one registered in the first six months of the year given that demand for its limited number of properties is expected to remain subdued. It also expects to continue supporting the tenants of its commercial properties in the form of rent concessions for the short term.

Despite the adverse circumstances, MIDI noted that it recently entered into a promise of sale agreement for the sale of one the remaining ‘Q2’ units for €3.9 million. This sale will however be recorded and accounted for in the 2021 financial year in line with the timing of the conclusion of the sale. Moreover, MIDI reiterated its confidence that it has the necessary financial resources to continue weathering this challenging period and meeting all its obligations as they fall due.

Update on the Manoel Island Project

The company’s primary focus during 2020 continued to be the development of Manoel Island. The revised Outline Development Permit for Manoel Island was approved by the Planning Authority on 7 March 2019, however this permit was appealed by a NGO. As previously announced by MIDI on 18 June 2020, the appeal lodged by the NGO was partially upheld by the Environment & Planning Review Tribunal (“EPRT”) on 17 June 2020. The EPRT concluded that MIDI must submit a fresh Environment Impact Assessment (“EIA”) to the Environment Resources Authority (“ERA”) in order for the Planning Authority to reconsider the Outline Development Application. The decision of the EPRT will delay the commencement of the development, however MIDI remains committed to the project and is working to ensure that the updated EIA is concluded, with a view to resubmitting the Outline Development Application to the Planning Authority during the last quarter of 2020.

Update on the ‘Q3’ Project

On 16 April 2020, a full development permit was granted by the Planning Authority for the development of the ‘Q3’ residential block at Tigné Point, consisting of 63 apartments, 4 levels of car parking and the landscaping, paving and embellishment of the Garden Battery and adjoining areas. This permit is now subject to an appeal which was lodged by the Fort Cambridge Residents Association. Notwithstanding this, MIDI is continuing with both the design and procurement processes of the development, in order to be in a position to commence works immediately, should the appeal be decided in the company’s favour.

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MIDI plc – Condensed Interim Financial Statements for the six-month period ended 30 June 2020.