TORONTO, ONTARIO–(Marketwired – March 26, 2015) –
NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN SOURCE
Retrocom Real Estate Investment Trust (TSX:RMM.UN) (the “REIT”) today announced results for the fourth quarter and year ended December 31, 2014.
Highlights:
- The REIT’s asset base increased by 16.9% to $1.2 billion, with 59 investment properties comprising over 7.4 million square feet.
- $30 million redevelopment of the Golden Mile Shopping Centre in Regina, Saskatchewan commenced. Includes the construction of a new 92,000 square foot Real Canadian Superstore® leased to Loblaws, and renovation of the balance of the shopping centre.
- Revitalization of Orangeville Mall substantially complete, HomeSense and SportChek opened their stores in the Fall, increasing annual revenue by 20% or $115,000 over the former Zellers rental income.
- 38,200 square feet of free-standing buildings are currently under development, in addition to the Real Canadian Superstore® in Regina
- Funds from Operations, adjusted (“FFO, adjusted”) was $10.0 million and $34.1 million for the three months and year ended December 31, 2014, respectively, compared to $8.7 million and $27.9 million for same periods in 2013, after adjusting for 2013 non-recurring transactions, a 22.2% increase for the full year.
- FFO, adjusted per unit was $0.118 and $0.443 for the three months and year ended December 31, 2014, respectively
- Net operating income (“NOI”) for the three months and year ended December 31, 2014 was $19.1 million and $67.6 million, respectively, compared to $16.8 million and $56.4 million for same periods in 2013, after adjusting for 2013 non-recurring transactions, a 19.9% increase for the full year.
- Weighted average cost of mortgage debt at December 31, 2014 was 4.83%, compared to 5.06% at December 31, 2013.
Richard Michaeloff, President and CEO of the REIT, said “In 2014, we acquired two portfolios for $180 million totalling nine investment properties and one million square feet of Gross Leasable Area. These transactions increased Retrocom’s asset base to 59 investment properties and $1.2 billion in value. Our top five tenants are now Walmart, Loblaw Companies, Canadian Tire, Sobeys, and Metro, all leading retailers with strong covenants.
We believe we have made considerable progress in improving the size and quality of our portfolio, progress which we believe is not reflected in the performance of our unit price. We will continue to pursue opportunities for further growth in our portfolio through strategic and accretive acquisitions, and by surfacing value in our existing assets through focused leasing, redevelopment, and marketing.”
Financial Highlights
| Three months ended | Year ended | |||||||||||
| December 31 | December 31 | |||||||||||
| (all amounts in $000’s, except per unit amounts and ratios) | 2014 | 2013 | 2014 | 2013 | ||||||||
| Rental revenue and other income | 31,472 | 32,993 | 113,933 | 104,083 | ||||||||
| Property operating expenses | 12,821 | 10,497 | 48,149 | 41,445 | ||||||||
| Property operating income | 18,651 | 22,496 | 65,784 | 62,638 | ||||||||
| Share of joint venture net operating income | 456 | 425 | 1,850 | 1,374 | ||||||||
| Net operating income (1) | 19,107 | 22,921 | 67,634 | 64,012 | ||||||||
| Trust expenses | 964 | 972 | 4,556 | 4,480 | ||||||||
| Finance costs – joint venture operations | 201 | 140 | 816 | 319 | ||||||||
| Finance costs – operations | 7,937 | 7,027 | 28,288 | 23,773 | ||||||||
| Transaction costs on convertible debentures | – | – | – | 1,502 | ||||||||
| Finance costs – subscription receipts | – | – | – | 411 | ||||||||
| Finance costs – distributions on Class B Units | 1,240 | 1,098 | 4,611 | 4,221 | ||||||||
| Income before fair value gains (losses) and other income | 8,765 | 13,684 | 29,363 | 29,306 | ||||||||
| Fair value gains associated with financial instrument | 4,539 | 6,281 | 2,077 | 19,018 | ||||||||
| Fair value losses on investment property | (13,936 | ) | (7,642 | ) | (22,071 | ) | (16,311 | ) | ||||
| Fair value gains on participant’s rights under LTIP | 10 | 15 | 33 | 144 | ||||||||
| Fair value gains (losses) on joint venture property | (1,504 | ) | 646 | (805 | ) | 1,865 | ||||||
| Loss from sale of investment property | – | – | – | (293 | ) | |||||||
| Other income | – | – | – | 1,048 | ||||||||
| Net Income (loss) for the period | (2,126 | ) | 12,984 | 8,597 | 34,777 | |||||||
| FFO, adjusted (2) | 10,039 | 14,809 | 34,087 | 36,603 | ||||||||
| FFO, adjusted per unit | $ | 0.118 | $ | 0.208 | $ | 0.443 | $ | 0.557 | ||||
| FFO, adjusted payout ratio | 95.3 | % | 54.1 | % | 101.6 | % | 80.8 | % | ||||
| Distributions per unit | $ | 0.1125 | $ | 0.1125 | $ | 0.4500 | $ | 0.4500 | ||||
| Full Financial Results and MD&A will be available on SEDAR (www.sedar.com) as well as the Investors Relations section of the REIT’s website (www.rmmreit.com). | |
| (1) | A non-IFRS measurement, calculated by the REIT as rental revenue (net rents, property tax and operating cost recoveries, as well as other miscellaneous income from tenants) less operating expenses for properties. |
| (2) | The reconciliations from net income (loss) to Funds from Operations, adjusted are included in the REIT’s MD&A. |
| The REIT’s management considers Net Operating Income, Funds from Operations, Funds from Operations, adjusted, and Debt to Gross Book Value ratio to be indicative measures in evaluating the REIT’s performance. The table above includes non-IFRS information that should not be construed as an alternative to net income or cash flows from operations and may not be comparable to similar measures presented by other issuers as there is no standardized meaning prescribed by IFRS. | |
Conference Call
Retrocom REIT will hold a conference call on Friday, March 27, 2015 at 9:00 am (ET). Participating on the call will be members of the REIT’s senior management.
Investors are invited to access the call by dialling 416-204-9702 or 1-800-524-8850. A recording of this call will be made available Friday, March 27, 2015 beginning at 12:00 pm (ET) through to Friday, April 10, 2015 ending at 12:00pm (ET). To access the recording, please call 647-438-0148 or 1-888-203-1112 and use the reservation number 8956676.
About Retrocom REIT
Retrocom REIT is an unincorporated, open-end real estate investment trust which focuses on owning and acquiring retail properties across Canada with the goal of enhancing long-term Unitholder value.
Forward-Looking Information
This press release contains forward-looking statements, which reflect management’s expectations regarding the REIT’s future growth, results of operations, performance, and business prospects and opportunities. These statements relate to, but are not limited to, the REIT’s expectations, intentions, plans and beliefs. In some cases, forward-looking statements can be identified by the use of words such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue” or the negative or grammatical variations of these terms or other comparable terminology. Readers should be aware that these statements are subject to known and unknown risks, uncertainties and other factors, including, but not limited to: those discussed or referenced under the heading “Risk Factors” in the REIT’s Management’s Discussion and Analysis for the three months and year ended December 31,2014, as well as competition within the commercial real estate sector, the effective international, national and regional economic conditions and the availability of capital to fund further investments in the REIT’s business. Actual events or results may differ materially from those suggested by any forward-looking statements. Readers should not place undue reliance on any forward-looking statements contained in this press release. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. Although management of the REIT believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that future results, levels of activity, performance or achievements will occur as anticipated. Neither the REIT nor any other person assumes responsibility for the accuracy and completeness of any forward-looking statements, and no one has any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or such other factors which affect this information, except as required by law.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, which may be made only by means of a prospectus, nor shall there be any sale of the Units in any state, province or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under securities laws of any such state, province or other jurisdiction. The Units of the Retrocom REIT have not been, and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered, sold or delivered in the United States absent registration or an exemption from the registration requirements of U.S. securities laws.
Richard Michaeloff
Chief Executive Officer
(416) 741-7999
(416) 741-7993 (FAX)
rmichaeloff@rmmreit.com