Huntingdon Capital Corp. announces Q3 2013 results

RICHMOND, BC, Nov. 11, 2013 /CNW/ - Huntingdon Capital Corp. (the "Corporation" or "Huntingdon") (TSX: HNT) (TSX: HNT.DB) (TSX: HNT.WT) announced its third quarter 2013 results.

KEY HIGHLIGHTS:

  • Quarterly management fees increased to $1.3 million; recurring annual fees now $3.6 million.
  • Management restructuring will yield annualized savings of $1.6 million in general and administrative expenses
  • Invested $4.0 million in FAM REIT's August equity financing and began participation in FAM REIT's distribution reinvestment program (DRIP).
  • Same-property net operating income increased to $3.7 million from $3.5 million driven by lower non-recoverable operating expenses.
  • Completed $10.0 million substantial issuer bid in August 2013, which resulted in the purchase and cancellation of 800,000 common shares at $12.50 per common share.
  • Credit risk profile strong with a leverage at 39.2% and approximately $43 million of available cash.
       
SELECTED FINANCIAL INFORMATION For the three months ended
(stated in $000s unless otherwise noted)   Sept 30, 2013  Jun 30, 2013 Sept 30, 20121
Same-property metrics      
Occupancy rate (period end) 75.8% 75.5% 76.6%
Revenue from investment properties $8,490 $8,493 $8,506
Net operating income ("NOI") 3,681 3,530 4,267
Consolidated operating metrics      
Management fee revenue 1,277 1,105 186
Funds from operations ("FFO") 1,179 2,531 3,055
Adjusted funds from operations ("AFFO") 1,282 2,604 2,172
Dividend/AFFO payout ratio 49.0% 25.3% 34.9%
Financing      
Weighted average mortgage interest rate (period end) 5.32% 5.34% 5.37%
Weighted average term to maturity (years) (period end) 6.19 5.93 7.77
Interest coverage ratio2  1.9x  2.5x  2.3x
Debt to total assets ratio3  39.2%  38.3%  49.9%
Debt to EBITDA ratio4  5.97x  5.11x  6.92x
Net debt to EBITDA ratio5  3.50x  2.19x  6.22x
Per share amounts      
  FFO      
      Basic $0.11 $0.23 $0.24
      Diluted $0.11 $0.22 $0.23
  AFFO      
      Basic $0.12 $0.23 $0.17
      Diluted $0.12 $0.22 $0.16

OPERATIONS:

  • Same-property improvements: On a same-property basis, NOI increased to $3.7 million in the third quarter from $3.5 million due to lower non-recoverable operating expenses.
  • FFO: Excluding non-recurring items, FFO increased to $3.1 million in the third quarter from $2.5 million in the prior quarter as a result of lower general and administrative costs. Non-recurring items included $1.1 million of share-based compensation expenses associated with the early settlement of previously granted deferred shares and non-recurring transactional items of $0.8 million.
  • AFFO: Excluding non-recurring transactional expenses of $0.8 million, AFFO decreased to $2.1 million from $2.6 million on a sequential basis due to higher capital expenditures and leasing costs.
  • Investment property stabilization: capital investment and re-positioning strategies on various investment properties are being developed and executed upon. Management expects the value realization of some of these stabilized assets to occur in the coming months ahead.
  • General and administrative cost savings: Recent changes in management structure are expected to yield annual savings in general and administration expenses of about $1.6 million from lower compensation costs.

CAPITAL STRUCTURE:

  • Strong credit risk profile with a leverage ratio of 39.2%.
  • Significant liquidity with approximately $43 million of available cash.

STRATEGIC UPDATE:

  • Participated in FAM REIT's equity financing to fund FAM REIT's acquisition of a Class A office complex in the Greater Toronto Area. The acquisition generated $0.3 million in annual recurring management fees and a one-time acquisition fee of $0.4 million.
  • Completed a $10.0 million issuer bid in August 2013, which resulted in the purchase and cancellation of 800,000 common shares at $12.50 per common share. The transaction was accretive to shareholders on a net book value basis of $0.29 per share and AFFO basis by $0.02 per share or 7.8%, based on second quarter results.

OUTLOOK:

Management is focussed on strategies to stabilize Huntingdon's property portfolio. These strategies include but are not limited to aggressive leasing incentives, capital investment into the portfolio as well as joint initiatives with local authorities to promote economic investment in the areas surrounding our properties. These strategies take time to bear results and management continues to prudently allocate capital to maximize return.

Huntingdon's strategic investment in FAM REIT is also expected to generate strong returns as FAM REIT continues to grow its property portfolio.

Information appearing in this press release is a select summary of results.  The financial statements and management's discussion and analysis for the Corporation are available at www.huntingdoncapital.com and on www.sedar.com

Footnotes

1      The results for the three months ended September 30, 2012 were retrospectively restated as a result of the adoption of IFRS 11, Joint Arrangements.
2     Interest coverage ratio does not have a standard meaning prescribed under IFRS and as such may not be comparable to similarly titled measures presented by other publicly traded entities.
3      Computed as total mortgages including mortgages related to assets held for sale adjusted for transaction costs plus secured debentures divided by total assets.
4      Earnings before interest, taxes, depreciation and amortization ("EBITDA") is defined as net income adjusted for income taxes, fair value adjustments to investments and investment properties, realized gains or losses on disposal of investment properties, dilution loss from investment in FAM REIT, adjustments to equity investees, and finance costs. The amount is calculated on a trailing twelve-month basis. EBITDA is a supplemental non-IFRS financial measure of operating performance and is not defined under IFRS.  EBITDA as computed by the Corporation may differ from computations reported by other similar organizations and, accordingly, the ratio calculated above may not be comparable.
5      Net debt to EBITDA is computed as total mortgages and secured debentures as per footnote #3 less cash and cash equivalents divided by EBITDA as per footnote #4.

NOI, FFO and AFFO are not recognized as appropriate earning measures under IFRS, and are not construed as an alternative to earnings determined in accordance with IFRS, but are considered a useful supplemental indicator of the Corporation's performance.

Huntingdon is a real estate operating company listed on the TSX (Common Shares: HNT; Debentures: HNT.DB; Warrants). Huntingdon owns and manages a portfolio of 36 industrial, office, retail and aviation-related properties throughout Canada that have a total gross leasable area of 2.7 million square feet. In addition, Huntingdon owns a 25.9% interest in FAM REIT (TSX: F.UN, F.WT) and manages, on behalf of FAM REIT, a portfolio of 28 industrial, office, and retail properties throughout Canada that have a gross leasable area of 1.9 million square feet.

Forward-Looking Information:

Certain statements contained in this press release may constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "plan", "expect", "may", "will", "intend", "should", and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. These risks and uncertainties include, but are not limited to, general and local economic and business conditions; the financial condition of our tenants; our ability to refinance maturing debt; leasing risks, including those associated with the ability to lease vacant space; and interest rate fluctuations. Forward-looking statements may also include, without limitation, any statement relating to future events, conditions or circumstances. The forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results or events to differ materially from current expectations including, but not limited to, the risks detailed from time to time in Huntingdon's filings with Canadian provincial securities regulators, including its most recent annual information form and management's discussion and analysis. Huntingdon cautions you not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions, and Huntingdon does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change, except as required by applicable law.

The Toronto Stock Exchange has not reviewed nor approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release.

SOURCE: Huntingdon Capital Corp.

For further information:

Sandeep Manak, Director, President and Chief Executive Officer
Tel: (604) 249-5113
Fax: (604) 249-5101
Email: smanak@huntingdoncapital.com

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Huntingdon Capital Corp.

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