Malta Properties Company plc - Full-Year Results

On 19 February 19, 2020, Malta Properties Company plc published its financial statements for 2019.

Performance Overview

During 2019, revenues increased by 3.5% to €3.43 million, largely reflecting the new Birkirkara exchange which was completed and handed over to GO plc in early 2019 and the gradual increases in rental income in line with inflation.

Meanwhile, administrative expenses surged by 25.5% to €1.3 million as the company continued to seek opportunities for business development. As a result, operating profits fell by 6.6% to €2.12 million compared to €2.27 million in the 2018.

Net finance costs fell by 20.1% to €0.5 million. On the other hand, MPC registered far lower positive movements in the fair valuation of its property during 2019 as these amounted to €1.7 million compared to €9 million in 2018. Furthermore, gains on the disposal of property decreased from €2.1 million in 2018 to just €0.25 million in 2019 which arose from the sale of the St. Paul’s Bay property.

Overall, MPC reported a pre-tax profit of €3.6 million, which represents a €9.16 million decrease when compared to the previous comparable period. The decline in profitability mainly arose due to the fact that the 2018 results were positively impacted by one-off events, notably the promise of sale agreement for the St George’s Exchange and the sale of the old Sliema Exchange. After accounting for a tax charge of €0.9 million, the net profit figure for the year amounted to €2.7 million (2018: €10.6 million).

The statement of financial position shows a 2% increase in total assets to €84.2 million (2018: €82.5 million), as planning and development works continued on a number of properties throughout the year which contributed to additional property value. The main increase resulted from the group’s continued development of the Zejtun site and the fair value increases across the Group’s property portfolio, in particular from the site in St. George’s.

Total liabilities remained virtually unchanged at €30.9 million as the rise in total borrowings (+€1.5 million) was offset by a decrease in total trade and other payables (-€1.5 million). Despite the higher level of borrowings, the company’s net debt contracted by 2.2% to €13.9 million (31 December 2018: €14.2 million).

Shareholders’ funds grew by 3.3% to €53.3 million. This translates into a net asset value per share of €0.5263 compared to €0.5094 as at the end of 2018. Moreover, the company’s net debt to equity multiple improved to 0.26 times compared to 0.28 times as at 31 December 2018. Meanwhile, the loan-to-value ratio stood at 0.27 times, marginally higher than the 0.25 times recorded on 31 December 2018.

Dividend

The Board of Directors of MPC is recommending the payment of a net dividend of €0.01 per share (2018: €0.01 per share). Shareholders as at close of trading on 24 April 2020 will be entitled to receive this dividend on 1 June 2020 subject to shareholders’ approval during the upcoming Annual General Meeting scheduled to be held on 27 May 2020.

Outlook

In the commentary made by Chairman and CEO, Mr Deepak S. Padmanabhan, it was noted that through a cautious approach towards managing its property portfolio, the company has positioned itself well to invest in properties that have the genuine potential to deliver the returns MPC is seeking. Mr Padmanabhan cited that with a gearing ratio of 0.39 and a loan-to-value rate of 0.27, MPC is still relatively unleveraged and thus remains in a strong position to invest further in its property portfolio. In fact, one such investment was concluded in January 2020, when MPC reached an agreement to purchase the site being leased by HSBC Call Centre in Swatar for a total consideration of €8.1 million.

Download

Malta Properties Company plc – Financial Statements for the year ended 31 December 2019.

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