CALGARY, March 11, 2015 /CNW/ – Edgefront Real Estate Investment Trust (the “REIT”) (TSXV: ED.UN) announced today its results for the year ended December 31, 2014, engagement of an investor relations firm, and the March 2015 Distribution.
2014 Highlights
- REIT’s rental revenues derived from stable, industry leading tenants with strong earnings
- Conservative AFFO payout Ratio of 79.8% for the year; 77.0% for the fourth quarter
- Debt to total assets of 48.6%
- Completed plan of arrangement and conversion to a real estate investment trust
- Acquired 13 high quality industrial properties in two transactions for $104,744,000
- Issued 17,000,000 units from treasury as purchase consideration; Closed $17,500,000 prospectus offering
- AFFO per unit of $0.202 for the year; fourth quarter AFFO per unit of $0.052
- Distributions per unit of $0.161 for the year; $0.04 for the fourth quarter
Summary of Results
Included in the table that follows and elsewhere in this news release are non-IFRS measures that should not be construed as an alternative to net income / loss, cash from operating activities or other measures of financial performance calculated in accordance with IFRS, and may not be comparable to similar measures as reported by other issuers. Readers are encouraged to refer to the REIT’s MD&A for further discussion of the non-IFRS measures presented.
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Three months ended |
Year ended |
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|
December 31, |
December 31, |
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|
2014 |
2013 |
2014 |
2013 |
||
|
Financial Highlights |
$ |
$ |
$ |
$ |
|
|
Funds from operations (FFO) |
1,264,179 |
(231,435) |
3,945,827 |
(761,835) |
|
|
Adjusted funds from operations (AFFO) |
1,496,354 |
(231,252) |
4,716,637 |
(760,808) |
|
|
Distributions declared (1) |
1,151,876 |
– |
3,763,590 |
– |
|
|
Weighted average units outstanding â basic (2) |
28,756,188 |
2,750,000 |
23,331,925 |
2,750,000 |
|
|
Weighted average units outstanding â diluted (2) |
28,756,188 |
2,750,000 |
23,331,925 |
2,750,000 |
|
|
Distributions per unit (1) (2) |
0.040 |
N/A |
0.161 |
N/A |
|
|
FFO per unit (2) |
|||||
|
Basic |
0.044 |
0.084 |
0.169 |
(0.277) |
|
|
Diluted |
0.044 |
0.084 |
0.125 |
(0.277) |
|
|
AFFO per unit (2) |
|||||
|
Basic |
0.052 |
0.084 |
0.202 |
(0.277) |
|
|
Diluted |
0.052 |
0.084 |
0.202 |
(0.277) |
|
|
AFFO payout ratio (1) |
77.0% |
N/A |
79.8% |
N/A |
|
|
Debt to total assets ratio |
48.6% |
38.4% |
48.6% |
38.4% |
|
|
(1) |
Includes distributions payable to holders of Class B LP Units which are accounted for as interest expense in the audited consolidated financial statements. |
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(2) |
Weighted average number of units includes the Class B LP Units, and for December 31, 2013, has been adjusted to reflect the 20 for 1 exchange of shares of the Corporation for units of the REIT in connection with the plan of arrangement completed January 13, 2014. |
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Three months ended December 31, |
Year ended December 31, |
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|
2014 |
2013 |
2014 |
2013 |
|
|
Financial Results |
$ |
$ |
$ |
$ |
|
Rental revenue |
2,717,232 |
226,698 |
8,588,356 |
627,308 |
|
Net rental income |
2,204,509 |
126,677 |
7,028,996 |
341,583 |
|
Net income (loss) |
1,278,385 |
(231,435) |
4,256,037 |
(322,935) |
|
Net income for the three month and year ended December 31, 2014 was increased by a fair value adjustment of investment properties of $nil and $400,065, respectively. Excluding this item, net income for the three months and year ended December 31, 2014 would have been $1,278,385 and $3,855,972, respectively. |
“Our quarterly and 2014 full year results further reinforce our belief that Edgefront is currently being undervalued in the marketplace. Our board and management are confident in the credit worthiness of our tenants and that the real estate we own is mission critical to their operations” stated Kelly Hanczyk, the REIT’s President and Chief Executive Officer. “With a conservative debt level and prudent payout ratio, we look forward to completing a number of transactions and continuing to grow our free cash flow in 2015.”
Revenues and Results from Operations In Line with Expectations
Rental revenue increased to $2,717,232 in the quarter as compared to $226,698 in the same quarter of 2013 and $2,571,558 in the third quarter.
Net rental income grew to $2,204,509 in the quarter as compared to $126,677 in same quarter of 2013 and $2,099,324 in the third quarter.
The REIT generated FFO and AFFO of $1,264,679 and $1,497,122, respectively, in the quarter ended December 31, 2014, with FFO and AFFO per unit of $0.044 and $0.052 respectively.
Distributions of $0.04 per unit were declared for the quarter, and $0.161 per unit for the year. The AFFO payout ratio for the quarter and the year was 76.9%, and 79.8%, respectively.
The REIT’s current distribution per unit continues to be $0.01333 per month. The REIT’s distribution reinvestment program (“DRIP”) entitles eligible unitholders to elect to receive all, or a portion of the cash distributions of the REIT reinvested in units of the REIT. Eligible unitholders who so elect will receive a bonus distribution of units equal to 3% of each distribution that was reinvested by them under the DRIP.
Balance Sheet and Liquidity
The REIT’s debt to total assets ratio was 48.6% at December 31, 2014. The REIT intends to maintain a debt to total assets ratio of less than 55%.
Engagement of Investor Relations Firm Investor Cubed Inc.
The REIT is pleased to announce that it has engaged Investor Cubed Inc. to provide investor relations and shareholder communications services effective February 5, 2015. Investor Cubed will be focused on increasing investor awareness while introducing Edgefront to its network of investment advisors, investment dealers, institutions and other financial professionals. “We have entered into a new relationship with Investor Cubed to broaden our current investor base and provide greater liquidity to our unitholders. By increasing our exposure, we are certain our strong fundamentals, operating performance and highly attractive yield will resonate with the investment community” stated Kelly Hanczyk.
In connection with the engagement, Investor Cubed has been awarded a consulting contract paying $5,000 per month for a term of twelve months. In addition, Investor Cubed has been granted options to purchase 40,000 shares of the REIT at a price of $2.00 per unit. The options will vest on a quarterly basis and will be governed by the provisions of Edgefront’s option plan and policies of the TSX Venture Exchange.
March 2015 Distribution
The REIT will make a cash distribution in the amount of $0.01333 per unit, representing $0.16 on an annualized basis, payable April 15, 2015 to unitholders of record as of March 31, 2015.
About the REIT
Edgefront REIT is a growth oriented real estate investment trust focused on increasing unitholder value through the acquisition, ownership and management of industrial properties located in primary and secondary markets in North America. Edgefront REIT currently owns a portfolio of 15 properties comprising approximately 748,000 square feet of rentable area.
The REIT has approximately 28,593,625 units issued and outstanding. Additionally, there are 360,000 Class B LP units of Edgefront Limited Partnership issued and outstanding.
FORWARD LOOKING STATEMENTS
Certain statements contained in this new release constitute forward-looking statements which reflect the REIT’s current expectations and projections about future results. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the REIT to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Actual results and developments are likely to differ, and may differ materially, from those expressed or implied by the forward-looking statements contained in this news release. Such forward-looking statements are based on a number of assumptions that may prove to be incorrect.
While the REIT anticipates that subsequent events and developments may cause its views to change, the REIT specifically disclaims any obligation to update these forward-looking statements except as required by applicable law. These forward-looking statements should not be relied upon as representing the REIT’s views as of any date subsequent to the date of this news release. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above are not intended to represent a complete list of the factors that could affect the REIT.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Edgefront Real Estate Investment Trust
