Revenue Properties Company Limited Announces Fourth Quarter Results and Quarterly Dividend



    TORONTO, Feb. 22 /CNW/ - Revenue Properties Company Limited (TSX: RPC)
announced financial results for the year ended December 31, 2007.

    
                                                              Year ended
                                                             December 31,
    (In thousands of Canadian dollars,                  ---------------------
     except per share amounts)                              2007        2006
                                                        ---------------------
    Property revenues                                    124,820      68,596
    Property expenses                                    (54,569)    (32,517)
                                                        ---------   ---------
    Net operating income                                  70,251      36,079

    Interest expense                                     (36,285)    (15,938)
    General and administrative expenses                   (5,997)     (2,612)
    Other income                                             414       5,203
                                                        ---------   ---------
    Income before non-recurring items, amortization
     and income tax                                       28,383      22,732
    Real estate sales, net                                   ---       4,468
    Amortization                                         (49,659)    (15,236)
    Foreign exchange loss                                    ---        (573)
    Costs associated with new financings                  (5,941)        ---
    Income taxes                                          (2,147)     (5,551)
                                                        ---------   ---------
    Net income                                           (29,364)      5,840
                                                        ---------   ---------
                                                        ---------   ---------

    2007 HIGHLIGHTS

    -  Successful integration of the Company's acquisition of Sizeler
       Property Investors, Inc.

    -  Net operating income ("NOI") increased 95% to $70.3 million in 2007
       compared to $36.1 million in 2006.

    -  Same-store, Canadian net operating income increased to $30.3 million,
       representing a 4.5% increase over 2006.

    -  Funds from operations decreased 15% in 2007 to $18.8 million, from
       $22.1 million in 2006.

    -  Excluding non-recurring items, FFO would have been $24.7 million in
       2007 (2006 - $17.6 million, excluding non-recurring items),
       representing an increase of 40.3%.

    -  During 2007, 28 new mortgages were funded totaling $378.6 million of
       gross proceeds with a weighted average interest rate of 5.6%.

    -  Proceeds of the new mortgage financing, were used to extinguish the
       Company's acquisition loan and repay mortgage debt.


    NET OPERATING INCOME
    -------------------------------------------------------------------------
    (000's)                                                 2007        2006

    -------------------------------------------------------------------------
    Property revenues                                   $124,820     $68,596
    Property operating expenses                           54,569      32,517
    -------------------------------------------------------------------------
    Net operating income                                 $70,251     $36,079
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net operating income is used by industry analysts, investors and
    management to measure operating performance at the Company's properties.
    Net operating income represents total property revenues less property
    operating expenses and maintenance expenses. Accordingly, net operating
    income excludes certain expenses included in the determination of net
    income such as property management and other indirect operating expenses,
    interest expense and amortization. Net operating income is not a
    recognized measure under Canadian generally accepted accounting
    principles and accordingly the term does not necessarily have a
    standardized meaning and may not be comparable to similarly titled
    measures presented by other publicly traded entities.

    Net operating income increased 95% to $70.3 million in 2007 compared to
$36.1 million in 2006. The increase results primarily from the acquisition of
Sizeler Property Investors, Inc. ("Sizeler") in November 2006. The Sizeler
properties acquired contributed $40.0 million to net operating income in 2007.
Properties held throughout the year reported net operating income of $30.3
million compared to $29.0 million for the same period in 2006.

    FUNDS FROM OPERATIONS

    FFO was calculated as follows:
    -------------------------------------------------------------------------
    (000's, except per share amounts)                       2007        2006
    -------------------------------------------------------------------------
    Net (loss) income                                   ($29,364)     $5,840
    Add (deduct) non-cash items:
    Amortization - rental properties                      14,935       7,588
    Amortization - deferred leasing costs                  5,875       1,830
    Amortization - intangible assets                      28,849       5,818
    Future income taxes                                   (1,521)        977
    -------------------------------------------------------------------------
    Funds from operations                                $18,774     $22,053
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
      Per share - basic                                    $1.73       $2.03
      Per share - diluted                                  $1.73       $2.03
    -------------------------------------------------------------------------
    

    The Company uses Funds from Operations ("FFO") in addition to net income
    to report operating results. FFO is an industry standard for evaluating
    operating performance defined as net income plus amortization and future
    income taxes, excludes gains or losses from the sale of depreciable
    property and is not adjusted for gains realized on the disposition of
    portfolio investments. FFO is not indicative of funds available to meet
    the Company's cash requirements. The Company computes FFO in accordance
    with the recently amended definitions of the Real Property Association of
    Canada, formerly known as the Canadian Institute of Public and Private
    Real Estate Companies. However, FFO is not a recognized measure under
    Canadian generally accepted accounting principles and accordingly the
    term does not necessarily have a standardized meaning and may not be
    comparable to similarly titled measures presented by other publicly
    traded entities.

    FFO decreased 15% in 2007 to $18.8 million, from $22.1 million in 2006.
The decrease was primarily due to higher interest costs offset by higher NOI
from properties acquired in the Sizeler transaction plus other non-recurring
items. FFO for the year ended December 31, 2006 includes $4.5 million ($0.42
per share) of net profit from sales of lots and FFO for the year ended
December 2007 includes $5.9 million ($0.55 per share) of non-recurring costs
related to various refinancing initiatives. Excluding the impact of the lot
sales in 2006 and the non-recurring refinancing costs in 2007, FFO for the
year ended December 31, 2007 would have increased approximately $7.1 million
compared to 2006.

    NET INCOME

    Net loss for the year ended December 31, 2007, was $29.4 million compared
to net income of $5.8 million in 2006. The significant changes to the
Company's net income for the year ended December 31, 2007 relate primarily to
the acquisition of Sizeler. Revenues and expenses generated by the assets and
liabilities acquired have been included in the Company's consolidated results
commencing on November 10, 2006.
    During the 12 months ended December 31, 2007, the company funded
$378.6 million of new mortgage financing at a weighted average interest rate
of 5.6%. As a result of the favourable cost of borrowing associated with the
new debt and the increased NOI, income before non-recurring items,
amortization and income taxes was $28.4 million for the year ended December
31, 2007 (2006 - $22.7 million).
    Significant increases in amortization charges during 2007 contributed to
the Company's reduced net income. Amortization of the Company's real estate
and intangible assets in 2007 increased to $49.7 million compared to $15.2
million in 2006. Amortization of the real estate and intangible assets
acquired in the Sizeler transaction was $7.4 during 2006.

    DIVIDEND

    The Board of Directors has declared a quarterly dividend of 5 cents per
common share, payable on March 31, 2008 to shareholders of record at the close
of business on March 17, 2008.

    YEAR END FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS

    The Company's audited financial statements for the year ended December
31, 2007 are available on the Company's website at www.revprop.com and have
been filed with SEDAR at www.sedar.com.

    Revenue Properties Company Limited is a real estate company whose primary
focus is the acquisition, ownership and development of income producing
properties in Canada and the United States. The Company's diversified
portfolio includes approximately 4.5 million square feet of retail and office
space as well as 3,414 residential apartment suites.





For further information:

For further information: Revenue Properties Company Limited, K. (Rai)
Sahi, Chief Executive Officer, (905) 281-3800; Paul Miatello, Chief Financial
Officer, (905) 281-3800

Organization Profile

REVENUE PROPERTIES COMPANY LIMITED

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890