On 6 May 2022, Gap Group plc published an updated Financial Analysis Summary (“FAS”) providing an overview of the company’s financial results in 2021, a comparison of the 2021 actual results with the forecasts published in the previous FAS dated 9 December 2021, as well as the forecasts for 2022.
The following are the main highlights of the expected financial performance and financial position of Gap Group plc in 2022:
- Revenues are expected to drop to €35.2 million compared to €50.1 million in 2021 reflecting the lower level of units available for sale. Nonetheless, Gap Group noted that it is expecting to complete the sale of most remaining units forming part of the developments located in Mellieħa, Luqa, Marsascala, San Pawl tat-Targa, and Birkirkara. Furthermore, Gap Group will also start placing on the market a number of residential units forming part of ongoing projects located in Qawra and Mosta.
- Total operating costs are expected to decrease by €11.3 million to €26.6 million reflecting the lower level of property sales. As a result, operating profit is expected to drop to €8.6 million (2021: €12.2 million) whilst the EBIT margin is projected to remain at 24.4%.
- Overall, Gap Group is forecasting a net profit of €5.5 million compared to €8.9 million recorded in 2021.
- The forecasted Statement of Financial Position as at 31 December 2022 shows that total borrowings are expected to contract sharply to €53.8 million (31 December 2021: €79.0 million) largely reflecting the redemption of the €29.1 million 3.65% secured bonds in April 2022. Moreover, net debt is anticipated to decline by 13.1% to €28.5 million.
- Coupled with the increase in the equity base to €27.1 million, the net debt to equity multiple is expected to improve to 1.0 times compared to 1.5 times as at the end of 2021. Likewise, the gearing ratio is anticipated to drop to 66.5% from 78.5% in 2021 whilst the debt to asset ratio is forecasted to ease to 0.62 times from 0.70 times in 2021.