Retrocom Real Estate Investment Trust

TSX : RMM.UN


Retrocom Real Estate Investment Trust

August 12, 2014 17:34 ET

Retrocom REIT Announces Second Quarter 2014 Results

TORONTO, ONTARIO--(Marketwired - Aug. 12, 2014) -

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

Retrocom Real Estate Investment Trust (the "REIT") (TSX:RMM.UN) today announced results for the second quarter ended June 30, 2014, and subsequent activities to the period.

Subsequent to quarter end:

  • The REIT has entered into two separate conditional acquisition agreements to acquire nine investment properties for approximately $179 million.
  • On August 6, 2014 the REIT raised $51.9 million through a public offering of Trust units.

Highlights for the quarter:

  • Net operating income ("NOI") increased 23.7% and 26.3%, respectively for the three and six months ended June 30, 2014, compared with the comparative periods in 2013.
  • Funds from Operations, adjusted ("FFO, adjusted") increased by 21.2% to $8.2 million for the three months ended June 30, 2014, and by 13.0% to $15.8 million for the six months ending June 30, 2014, compared with the comparative periods in 2014.
  • FFO, adjusted per unit increased by 5.6% to $0.114 per unit for the three months ended June 30, 2014, compared with the comparative period in 2013.
  • Debt to gross book value ratio (excluding convertible debentures) as at June 30, 2014 was 45.5% compared to 45.4% at December 31, 2013 and debt to gross book value ratio (including convertible debentures) as at June 30, 2014 was 54.1% compared to 53.7% at December 31, 2013.
  • Weighted average cost of mortgage debt at June 30, 2014 was 4.97%, compared to 5.19% at June 30, 2013.

Richard Michaeloff, President and CEO of the REIT, said, "We are pleased with Retrocom's continuing progress in repositioning and growing our portfolio. Our recently announced agreements to acquire nine additional shopping centres will add high quality properties together with nationally recognized and strong credit quality tenants. We remain focused on our goal of enhancing the quality of our cash flow and improving the quality of our assets."

Financial Highlights
Three months ended June 30 Six months ended June 30
(all amounts in $000's, except per unit amounts and ratios) 2014 2013 2014 2013
Rental revenue and other income 27,303 22,750 55,310 44,628
Property operating expenses 11,246 9,683 24,039 19,768
Property operating income 16,057 13,067 31,271 24,860
Share of joint venture net operating income 469 294 932 632
Net operating income (1) 16,526 13,361 32,203 25,492
Trust expenses 1,372 1,306 2,455 2,408
Finance costs - joint venture operations 204 56 412 117
Finance costs - operations 6,804 5,280 13,637 10,118
Transaction costs on convertible debentures - 1,502 - 1,502
Finance costs - subscription receipts - 411 - 411
Finance costs - distributions on Class B Units 1,085 1,025 2,210 2,050
Income before fair value gains (losses) and other income 7,061 3,781 13,489 8,886
Fair value gains (losses) associated with financial instrument (76) 5,748 (6,262) 8,103
Fair value (losses) on investment property (2,323) (5,119) (3,034) (5,478)
Fair value gains on participant's rights under LTIP 10 44 10 76
Fair value gains on joint venture property 270 774 377 754
Other income - - - 1,048
Income (loss) for the period 4,942 5,228 4,580 13,389
FFO, adjusted (2) 8,174 6,744 15,756 13,948
FFO, adjusted per unit $ 0.114 $ 0.108 $ 0.220 $ 0.232
FFO, adjusted payout ratio 98.7% 104.2% 102.3% 97.0%
Distributions per unit $ 0.1125 $ 0.1125 $ 0.2250 $ 0.2250

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 property operating expenses.
  2. The reconciliations from net income 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 Wednesday, August 13, 2014 at 12:00 noon (ET). Participating on the call will be members of the REIT's senior management.

Investors are invited to access the call by dialling 416-849-1847 or 1-866-530-1554. A recording of this call will be made available Wednesday, August 13, 2014 beginning at 4:00 pm (ET) through to Tuesday, August 26, 2014. To access the recording, please call 647-436-0148 or 1-888-203-1112 and use the reservation number 2257887#.

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 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 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.

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