Malta Properties Company plc - Full-Year Results
On 25 February 2021, Malta Properties Company plc published its Annual Report and Financial Statements for 2020.
Performance Overview
During 2020, revenues increased marginally to €3.44 million (2019: €3.43 million) as the initial four-month contribution from the lease of the HSBC Contact Centre located in Swatar as well as the inflationary-induced adjustments to existing lease agreements slightly offset the loss in income from the St George’s Exchange (which has now been vacated prior to its sale scheduled for H2 2021) and the St Paul’s Bay Exchange (sold in November 2019).
Administrative expenses remained virtually unchanged at €1.3 million. As a result, operating profit increased by 0.6% to €2.14 million compared to €2.12 million in the 2019.
Net finance costs surged by 8.8% to €0.55 million reflecting the additional bank borrowings taken on for the acquisition of the HSBC Contact Centre. On the other hand, the financial performance of MPC was positively impacted by a fair value gain on investment property of €2.74 million compared to realised and unrealised gains amounting to €2 million in 2019.
Overall, MPC reported a pre-tax profit of €4.33 million, representing an uplift of almost 20% when compared to the previous comparable period. After accounting for a tax charge of €1.35 million, the net profit figure for the year amounted to €2.98 million (2019: €2.69 million).
The statement of financial position shows a near 12% increase in total assets to €94.1 million (2019: €84.2 million). Similarly, total liabilities grew by almost 26% to €38.8 million as total borrowings increased by 34.7% to €27.8 million compared to €20.6 million as at the end of 2019. Shareholders’ funds increased by 3.7% to €55.3 million which translates into a net asset value per share of €0.5457 compared to €0.5263 as at 31 December 2019.
Dividend
The Board of Directors of MPC is recommending the payment of a net dividend of €0.012 per share (2019: €0.01 per share). Shareholders as at close of trading on 11 June 2021 will be entitled to receive this dividend on 21 July 2021 subject to shareholders’ approval during the upcoming Annual General Meeting scheduled to be held remotely on 15 July 2021.
Outlook
In their commentaries, the Chairman and also the CEO of MPC explained that given the company’s sound financial position, MPC is evaluating a number of new acquisition opportunities which have the potential to add significant value to shareholders. Recent events are likely to bring permanent changes to the commercial real estate market as the office needs of tenants continue to evolve but MPC has already shown that it is more than able to stay the course and adapt to changing circumstances.
With respect to the pipeline of projects, MPC noted that the major investment in Zejtun is expected to be completed during 2021. Moreover, the company added that 2021 is also likely to see progress on the plan for the building located in Spencer Hill, Marsa. This property will soon be vacated by GO plc and with the planning application process already at an advanced stage, the full planning permit should be issued in 2021.