Fronsac Real Estate Investment Trust
TSX VENTURE : GAZ.UN

Fronsac Real Estate Investment Trust

November 10, 2016 18:28 ET

Fronsac REIT Announces Very Strong Results for Q3 2016, the December 30th, 2016 Regular Quarterly Distribution and a 10% Increase to the 2017 Annual Distribution

MONTREAL, QUEBEC--(Marketwired - Nov. 10, 2016) - (TSX VENTURE:GAZ.UN) Fronsac Real Estate Investment Trust ("Fronsac REIT" or "Fronsac") today announced its results for Q3 2016 and a distribution of 0.4075¢ per unit to unitholders of record on December 16th, 2016 and payable on December 30th, 2016.

In addition we are also pleased to announce an increase to the annual distribution rate for 2017 to 1.80¢ per unit from 1.63¢, an increase of 10%. This increase will be effective for the March 31st, 2017 distribution. This increase marks the sixth consecutive annual distribution increase.

For the quarter ended September 30th, 2016, Fronsac reported recurring funds from operations ("Recurring FFO") of $369,586, an increase of 25% ($295,023 in Q3 2015). For Q3 2016, Recurring FFO per unit was 0.643¢ compared to 0.637¢ per unit for the quarter ended September 30th, 2015, an increase of 1%. During Q3 2016 the Trust's property rental income was $713,597 compared to $596,269 in Q3 2015, an increase of 20%. NOI (Net operating Income) was $623,255 compared to $515,450 in Q3 2015, an increase of 21%. Fronsac recorded a net income attributable to unitholders of $1,474,531, or 2.45¢ per unit, compared to net income of $478,243 or 0.99¢ per unit, for Q3 2015.

For the nine months ended September 30th, 2016, Fronsac reported recurring funds from operations ("Recurring FFO") of $902,450, an increase of 18% ($767,537 in Q3 2015). For Q3 2016, Recurring FFO per unit was 1.80¢ compared to 1.66¢ per unit for the period ended September 30th, 2015, an increase of 9%. During the period the Trust's property rental income was $1,962,143 compared to $1,583,469 in Q3 2015, an increase of 24%. NOI (Net operating Income) was $1,843,029 compared to $1,478,696 in Q3 2015, an increase of 25%. Fronsac recorded a net income attributable to unitholders of $2,517,907, or 5.03¢ per unit, compared to net income of $1,216,415 or 2.63¢ per unit, for Q3 2015.

Michel Lassonde President and CEO said: "Q3 proved to be quite the busy quarter for Fronsac. Since our last equity issuance, we have managed to deploy just under $12M of capital for new acquisitions that we believe stick true to our mission of increasing value for our unitholders."

The tables below represent other financial highlights as well as the reconciliation from net income to FFO for the periods ended September 30th, 2016 and its comparative period. This information should be read in conjunction with the Consolidated Financials Statements and MD&A for the quarters ended September 30th, 2016 and September 30th, 2015.

SUMMARY OF SELECTED QUARTERLY INFORMATION
9 months
Periods ended September 30 2016 2015 Change %
Financial info
Property rental income 1,962,143 1,583,469 378,674 24 %
Total revenue 2,117,493 1,673,469 444,024 27 %
NOI (1) 1,843,029 1,478,696 364,333 25 %
FFO (1) 817,808 857,537 (39,729 ) (5 %)
Recurring FFO (1) 902,450 767,537 134,913 18 %
AFFO (1) 1,023,961 848,612 175,349 21 %
EBITDA (1) 1,328,397 1,268,682 59,715 5 %
Investment properties (2) 43,419,703 31,823,651 11,596,052 36 %
Total assets 43,883,680 32,143,057 11,740,623 37 %
Total mortgage/loans/long term debt (3) 20,896,070 15,974,631 4,921,439 31 %
Total exchangeable preferred units 935,817 897,956 37,861 4 %
Total convertible debentures 252,566 251,246 1,320 1 %
Total equity 20,981,836 14,275,894 6,705,942 47 %
Weighted average units o/s - basic 50,105,285 46,260,619 3,844,666 8 %
(1) Non-IFRS financial measures
(2) Includes value of investment properties owned through joint ventures (530 Barkoff)
(3) Excludes exchangeable debentures and exchangeable preferred units
RECONCILIATION OF NET INCOME TO FFO
3 months 9 months
Periods ended September 30 2016 2015 Change 2016 2015 Change
Net income (loss) attributable to unitholders
1,474,531

478,243

996,288

2,517,907

1,216,415

1,301,492
Change in value of investment properties (1,327,506) (170,660) (1,156,846) (1,804,671) (368,735) (1,435,936)
Change in value of investment properties in joint ventures
(27,984)

-

(27,984)

(27,984)

-

(27,984)
Unit based compensation - (18,699) 18,699 41,075 (18,699) 59,774
Change in liability component of exchangeable preferred units
13,888

13,017

871

33,474

30,922

2,552
Change in fair value of derivative financial instruments
(3,100)

(6,150)

3,050

53,135

(3,070)

56,205
Change in fair value of other financial components
(235)

(1,165)

930

4,650

(60)

4,710
Income taxes - 437 (437) 222 764 (542)
FFO(1) - basic 129,594 295,023 (56%) 817,808 857,537 (5%)
FFO per unit - basic 0.0023 0.0064 (65%) 0.0163 0.0185 (12%)
Distributions paid on exchangeable units (if dilutive)
-

9,982

(9,982)

44,635

40,877

3,758
FFO - diluted 129,594 305,005 (58%) 862,443 898,414 (4%)
FFO per unit - diluted 0.0023 0.0062 (63%) 0.0162 0.0182 (11%)
Recurring FFO - basic 369,586 295,023 25% 902,450 767,537 18%
Recurring FFO per unit - basic 0.00643 0.00637 1% 0.0180 0.0166 9%
Distributions 241,441 179,718 61,723 610,356 529,900 80,455
Distributions per unit 0.0041 0.0039 5% 0.0120 0.0115 5%
FFO - basic after distributions (0.0018) 0.0025 (0.0043) 0.0043 0.0071 (0.0028)
Recurring FFO - basic after distributions 0.0024 0.0025 (0.0001) 0.0060 0.0051 0.0008
Distributions as a % of FFO - basic
181%

61%

120%

74%

62%

12%
Distributions as a % of Recurring FFO - basic
63%

61%

2%

67%

69%

(2%)
Weighted avg. units o/s
Basic 57,437,669 46,323,316 11,114,353 50,105,285 46,260,619 3,844,666
Diluted 57,437,669 49,411,516 8,026,153 53,193,485 49,348,819 3,844,666
(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 September 30th, 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