Tigné Mall plc - Interim Results
On 28 August 2020, Tigné Mall plc published its interim results covering the six-month period ended 30 June 2020.
Performance Overview
During the first half of 2020, revenues dropped by almost 37% to €2.09 million (H1 2019: €3.32 million) reflecting the significant adverse impact of ‘COVID-19’ including the temporary closure of ‘The Point Shopping Mall’ between 23 March and 3 May 2020 (as imposed by health authorities) as well as the various tenant support initiatives implemented by the company.
Despite the sharp contraction in business activity, operating costs only dropped by 1.6% to €1.27 million (H1 2019: €1.29 million) as the lower expenses in administrative related costs (-13.5%) were partly offset by an increase in depreciation charges (+3.9%). Indeed, while the operating profit dropped by 59.5% to €0.82 million (H1 2019: €2.03 million), the reduction in EBITDA to €1.74 million (H1 2019: €2.91 million) translated into a decline of 40.3%.
Meanwhile, net finance costs increased by 10.3% to €0.37 million reflecting the impact of accounting rule ‘IFRS 16 – Leases’.
Overall, Tigné Mall recorded a 73.6% drop in pre-tax profits to €0.45 million and after accounting for a tax charge of €0.25 million, the net profit for the period amounted to €0.2 million compared to €1.19 million in H1 2019.
The Statement of Financial Position as at 30 June 2020, compared to the corresponding figures as at 31 December 2019, shows that total assets eased by 0.8% to €83.8 million whilst total liabilities contracted by 2.4% to €35.9 million largely reflecting the reduction of a further 3.3% in bank borrowings to €16.4 million. The company’s equity base grew marginally to €47.8 million which, in turn, translates into a net asset value per share of €0.848 (31 December 2019: €0.845).
Outlook
Tigné Mall explained that the lifting of the main ‘COVID-19’ health restrictions with respect to retail and catering outlets has led to a positive impact on business. Nevertheless, economic activity in general and consumer confidence remain somewhat muted. This trend is expected to persist to some extent until a cure and/or a vaccine for the virus is made available.
In the prevailing volatility, the Board of Directors continues to monitor the situation on an on-going basis and is actively working to ensure that the company retains as robust a financial position as possible in these unprecedented times. Consequently, the Directors did not recommend the payment of an interim dividend in order to preserve the company’s liquid resources and enable it to manage the liquidity demands over the coming months in an agile and decisive manner as events unfold.
Meanwhile, the company revised and updated the financial projections for the year ending 31 December 2020. These projections reflect the estimated impact of the prevailing stressed conditions as well as a pessimistic scenario reflecting a more drastic set of assumptions. Under the cash flow projections utilising the pessimistic scenario, Tigné Mall 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 arrangements with bankers in respect of utilised bank facilities. Moreover, the impact of the expected reduction in revenues and profitability up until the financial period ending 30 June 2021, under the pessimistic scenario, on the fair valuation of ‘The Point Shopping Mall’ is not material on the basis of an analysis carried out by the company reflecting discounted cash flows for the entire term of the emphyteutical grant.