Fronsac Real Estate Investment Trust
TSX VENTURE : GAZ.UN

Fronsac Real Estate Investment Trust

May 24, 2016 16:00 ET

Fronsac REIT Announces an Increase to Its Annual Distribution and Results for Q1 2016

MONTREAL, QUEBEC--(Marketwired - May 24, 2016) - Fronsac Real Estate Investment Trust (TSX VENTURE:GAZ.UN) ("Fronsac REIT" or "Fronsac") today announced an increase to its annual distribution from 1.55¢ per unit to 1.63¢ per unit, an increase of 5.2%. The increase equates to a quarterly distribution rate of 0.4075¢ per unit. This marks the fifth consecutive annual distribution increase since the REIT's inception in July 2011.

For the quarter ended March 31st, 2016, Fronsac reported funds from operations ("FFO") of $418,236, an increase of 84% ($226,856 in Q1 2015). A great deal of the increase is attributable to the increase in the Trust's portfolio by 6 properties since May 2015. Included in our results was a one-time payment received from a national tenant in the amount of $150,000 for the renewal of a lease. For Q1 2016, FFO per unit was 0.90¢ compared to 0.49¢ per unit for the quarter ended March 31st, 2015, an increase of 84%. Excluding one-time payments received, per unit FFO increased by 18% to 0.58¢. During Q1 2016 the Trust's property rental income was $601,740 compared to $447,770 in Q1 2015, an increase of 34%. NOI (Net operating Income) was $662,469 compared to $400,770 in Q1 2015, an increase of 65%. Fronsac recorded a net income attributable to unitholders of $1,528,631, or 3.3¢ per unit, compared to $148,275, or 0.32¢ per unit, for Q1 2015.

Michel Lassonde President and CEO said: "We believe we started off 2016 on the right track. We successfully completed the development of our property in Saint-Hyacinthe and once again proved the success of our business model by yet again increasing our per unit FFO. In addition we are proud to once again announce a raise to our annual distribution rate for the fifth consecutive year."

The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended March 31st, 2016 and its comparative period. This information should be read in conjunction with the Consolidated Financials Statements and MD&A for the quarters ended March 31st, 2016 and March 31st, 2015.

SUMMARY OF SELECTED QUARTERLY INFORMATION
3 months
Periods ended March 31 2016 2015 Change %
Financial info
Property rental income 601,740 447,770 153,970 34 %
Total revenue 751,740 447,770 303,970 68 %
NOI (1) 662,469 400,770 261,699 65 %
FFO (1) 418,236 226,856 191,380 84 %
AFFO (1) 384,397 217,931 166,466 76 %
EBITDA (1) 591,702 330,362 261,340 79 %
Investment properties (2) 34,808,863 23,261,884 11,546,979 50 %
Total assets 35,319,808 24,938,785 10,381,023 42 %
Total mortgage/loans/long term debt (3) 17,878,692 9,672,371 8,206,321 85 %
Total exchangeable preferred units 916,457 880,274 36,183 4 %
Total convertible debentures 251,895 250,618 1,277 1 %
Total equity 15,490,110 13,529,108 1,961,002 14 %
Weighted average units o/s - basic 46,378,751 46,228,751 150,000 0.3 %
Amounts on a per unit basis
FFO/unit 0.0090 0.0049 0.0041 84 %
AFFO/unit 0.0083 0.0047 0.0036 76 %
Distributions 0.0039 0.0037 0.0002 5 %
(1) Non-IFRS financial measures
(2) Includes value of investment properties owned through joint ventures
(3) Excludes convertible debentures and exchangeable preferred units
RECONCILIATION OF NET INCOME TO FFO
3 months
Periods ended March 312016 2015 Change
Net income (loss) attributable to unitholders1,528,631 148,275 1,380,356
Change in value of investment properties(1,090,184)56,749 (1,146,933)
Change in value of investment properties in joint ventures(27,984)- (27,984)
Unit based compensation- - -
Change in liability component of exchangeable preferred units13,443 12,612 831
Change in fair value of derivative financial instruments(4,915)7,415 (12,330)
Realized/unrealized gain on interest swaps- - -
Change in fair value of other financial components(755)1,805 (2,560)
Income taxes- - -
FFO(1) - basic418,236 226,856 84%
FFO per unit - basic0.0090 0.0049 84%
Distributions paid on exchangeable units (if dilutive)11,967 11,427 540
FFO - diluted430,203 238,283 81%
FFO per unit - diluted0.0087 0.0048 80%
Distributions179,718 171,046 8,671
Distributions per unit0.0039 0.0037 5%
FFO - basic after distributions0.0051 0.0012 0.0039
Distributions as a % of
FFO - basic43%75%(32%)
Weighted avg. units o/s
Basic46,378,751 46,228,751 150,000
Diluted49,466,951 49,316,951 150,000
(1) FFO is a Non-IFRS financial measure

About Fronsac - Fronsac Real Estate Investment Trust is an open-ended trust that acquires and owns high quality commercial real estate properties situated along highways or frequently travelled routes, rented to strong tenants under long term, management free and net leases. These properties are occupied by tenants within the following sectors; (1) Fast food chains, (2) Major oil/gas companies and (3) Convenience store chains.

Forward-Looking Statements - This press release contains forward-looking statements and information as defined by applicable securities laws. Fronsac warns the reader that actual events may differ materially from current expectations due to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such statements. Among these include the risks related to economic conditions, the risks associated with the local real estate market, the dependence to the financial condition of tenants, the uncertainties related to real estate activities, the changes in interest rates, the availability of financing in the form of debt or equity, the effects related to the adoption of new standards, as well as other risks and factors described from time to time in the documents filed by Fronsac with securities regulators, including the management report. Fronsac does not update or modify its forward-looking statements even if future events occur or for any other reason, unless required by law or any regulatory authority.

Neither the TSX Venture Exchange Inc., nor its Regulatory Services Provider (as that term is defined in the Policy of the TSX Venture Exchange and its Regulatory Services Provide) accepts any responsibility for the adequacy or accuracy of this release.

The March 31st, 2016 financial statements and management discussion & analysis of Fronsac REIT may be viewed on SEDAR at www.sedar.com

Contact Information

  • Jason Parravano
    (450) 536-5328