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 31 | 2016 | 2015 | Change | ||||
| Net income (loss) attributable to unitholders | 1,528,631 | 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 units | 13,443 | 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) - basic | 418,236 | 226,856 | 84 | % | |||
| FFO per unit - basic | 0.0090 | 0.0049 | 84 | % | |||
| Distributions paid on exchangeable units (if dilutive) | 11,967 | 11,427 | 540 | ||||
| FFO - diluted | 430,203 | 238,283 | 81 | % | |||
| FFO per unit - diluted | 0.0087 | 0.0048 | 80 | % | |||
| Distributions | 179,718 | 171,046 | 8,671 | ||||
| Distributions per unit | 0.0039 | 0.0037 | 5 | % | |||
| FFO - basic after distributions | 0.0051 | 0.0012 | 0.0039 | ||||
| Distributions as a % of | |||||||
| FFO - basic | 43 | % | 75 | % | (32 | %) | |
| Weighted avg. units o/s | |||||||
| Basic | 46,378,751 | 46,228,751 | 150,000 | ||||
| Diluted | 49,466,951 | 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:
(450) 536-5328