Mercury Projects Finance plc - Updated Financial Analysis Summary

On 30 June 2021, Mercury Projects Finance plc published an updated Financial Analysis Summary (“FAS”) providing an overview of the issuer’s and the guarantor’s, (Mercury Towers Limited) financial results in 2020, a comparison of the 2020 actual results with the forecasts published in the previous FAS dated 31 August 2020, as well as the forecasts for the current financial year ending 31 December 2021.

The following are the main highlights of the expected financial performance and position of Mercury Towers Limited in 2021:

• The Group is anticipating the sale of 25 units in relation to ‘Phase 1’ of the Mercury project, and a further 92 apartments with respect to ‘Phase 2’ of the same project. In aggregate, total revenue is expected to amount to €26.9 million.
• As a result of the increase in business, cost of sales is expected to rise by €6.3 million to €19.2 million. Furthermore, operating costs are expected to amount to €2.5 million (2020: €1.1 million) with the majority of such costs related to agency fees expected to be incurred by the Group in selling the aforementioned units.
• Despite the improvement in turnover, EBITDA is forecasted to drop by 13.5% to €5.3 million from €6.1 million in 2020. Meanwhile, net finance costs are expected to remain unchanged at just under €0.9 million. As a result, the interest cover is expected to ease to 5.8 times compared to 6.8 times in 2020.
• After accounting for a tax charge of €2.2 million (2020: €4.8 million), the Group is projecting a profit after tax of €2.1 million compared to €24.9 million in 2020, which however mainly emanated from the fair value gains in relation to the revaluation of investment property which amounted to €24.6 million.
• Cash balances are anticipated to drop marginally by €0.1 million to €0.5 million. On the other hand, total borrowings are expected to more than double to €73.5 million from €32.9 million in 2020, reflecting an increase in bank financing (€35 million) in relation to the development of the second phase of the project, as well as an increase of €5.6 million in shareholders’ advances which relates to development works of the hotel.
• Despite the increase in total equity to €38.4 million (compared to €24.3 million as at the end of 2020), given the increase in borrowings, the gearing ratio (calculated as total debt divided by total debt plus equity) is anticipated to climb to 65.7% from 57.5% in 2020.

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Mercury Projects Finance plc – Financial Analysis Summary dated 30 June 2021.