Retrocom Real Estate Investment Trust
TSX : RMM.UN

Retrocom Real Estate Investment Trust

March 08, 2012 16:14 ET

Retrocom REIT Announces Fourth Quarter and Annual 2011 Results

TORONTO, ONTARIO--(Marketwire - March 8, 2012) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR TO ANY NON-CANADIAN SOURCE

Retrocom Mid-Market Real Estate Investment Trust (the "REIT") (TSX:RMM.UN) today announced results for the fourth quarter and the year ended December 31, 2011.

Highlights

  • Net Operating Income ("NOI") increased 34% and 30%, respectively for the three months and year ended December 31, 2011 compared with the same periods last year.

  • Funds from Operations, adjusted ("FFO, adjusted") increased by 56% to $4.9 million and by 40% to $17.2 million for the three months and year ended December 31, 2011 compared with same periods in 2010.

  • Improved Debt to Gross Book Value ratio as at December 31, 2011 to 56.2%.

  • During the year, Walmart became the REIT's largest tenant.

  • Acquired a 30% interest on July 11, 2011, in Creekside Crossing a new 430,000 square foot retail centre being developed in Mississauga, Ontario anchored by Walmart.

  • Substantially completed the redevelopment of Chilliwack Mall and Wheatland Mall.

  • Acquired four investment properties for $42.8 million.

  • Raised $40 million from issuance of 5.45% convertible debentures.

  • Completed approximately $52 million of mortgage re-financing at a 161 basis point lower interest rate.

  • Raised $57.5 million on March 15, 2011 and $29 million on February 3, 2012 through public offerings of trust units.

The growth in NOI and FFO, adjusted for the three months and year ended December 31, 2011 is largely attributable to the fully integrated operating results of investment properties that the REIT acquired in December 2010 and May 2011.

Richard Michaeloff, President and CEO of the REIT, said, "Throughout 2011, we executed on our plans to redevelop properties, improve our financial position and complete acquisitions. With the redevelopment of Chilliwack Mall and Wheatland Mall nearing completion and the ongoing development of Creekside Crossing we expect our occupancy and performance will improve. We were able to utilize favourable capital markets conditions to improve our financial position and liquidity. We remained focussed on providing our Unitholders with a diversified portfolio and growing our cash flow."

Financial Highlights
Three months ended
Dec 31

Three months ended
Dec 31

Year ended
Dec 31

Year ended
Dec 31
(all amounts in $000's, except per unit amounts and ratios) 2011 (1) 2010 (1) 2011 (1) 2010 (1)
Rental revenue and other income 20,281 15,562 77,923 60,192
Property operating expenses 9,377 7,380 36,477 28,186
Net operating income (2) 10,904 8,182 41,446 32,006
Share of joint venture net operating income 45 - 45 -
Total net operating income 10,949 8,182 41,491 32,006
Trust expenses 1,109 1,078 4,528 4,284
Transaction costs - 3 1,973 1,360
Finance costs-operations 4,960 3,970 20,076 15,175
Finance costs-distributions on Class B Units 1,025 1,025 4,100 4,100
Income before income taxes and fair value gains (losses) 3,855 2,106 10,814 7,087
Fair value losses associated with finance costs (11,156 ) (2,531 ) (1,986 ) (22,059 )
Fair value gains (losses) on investment property 8,967 (7,814 ) 5,529 (6,267 )
Fair value losses on participant's rights under LTIP (61 ) (39 ) 168 (284 )
Fair value gains on joint venture property 5,051 - 4,916 -
Deferred income tax recovery - 24,156 - 19,640
Income (loss) for the period 6,656 15,878 19,441 (1,883 )
FFO, adjusted (3) 4,866 3,108 17,209 12,303
FFO, adjusted per unit
Basic and Diluted 0.110 0.099 0.414 0.431
FFO, adjusted payout ratio 102.4 % 116.7 % 110.0 % 105.3 %
Distributions (4) 4,985 3,626 18,928 12,952
Full Financial Results and MD&A will be available on SEDAR (http://www.sedar.com/) as well as the Investors Relations section of the REIT's website (http://www.rmmreit.com/).
(1) Based on financial statements prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standard Board ("IASB"). Results of 2010 have been restated to conform to IFRS.
(2) 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 from properties.
(3) The reconciliations from net income (loss) to Funds from Operations, adjusted are included in the REIT's MD&A.
(4) Distributions include distributions on Class B Units of Retrocom LP.

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 9, 2012 at 11:00 am (ET). Participating on the call will be members of the REIT's senior management.

Investors are invited to access the call by dialling 416-644-3417 or 1-877-974-0446. You will be required to identify yourself and the organization on whose behalf you are participating. A recording of this call will be made available Friday, March 9, 2012 beginning around 1 pm (ET) through to Friday, March 23, 2012. To access the recording, please call 416-640-1917 or 1-877-289-8525 and use the reservation number 4522734.

About Retrocom REIT

Retrocom REIT is an Ontario unincorporated, open-end real estate investment trust which focuses on owning and acquiring retail properties across Canada with the objective of producing a geographically diversified portfolio of properties with growing cash flows.

Forward-Looking Information

This press release may contain forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential", "continue", and by discussions of strategies that involve risks and uncertainties. The forward-looking statements are based on certain key expectations and assumptions made by the REIT. 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 Mid-Market 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 application for exemption from the registration requirements of U.S. securities laws.

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