Revenue Properties Company Limited Announces Second Quarter Results and Quarterly Dividend



    TORONTO, July 31 /CNW/ - Revenue Properties Company Limited (TSX: RPC)
announced financial results for the three months ended June 30, 2008.

    
    SECOND QUARTER HIGHLIGHTS

    -   Net operating income was $17.4 million (2007 - $17.0 million)

    -   Funds from operations were $7.2 million or $0.67 per share (2007 -
        $1.5 million, $0.14 per share).

    -   Income before non-recurring items and amortization was $7.8 million
        (2007 - $5.9 million).

    -   Net loss for the three months ended June 30, 2008 was $0.1 million
        (2007 - $11.1 million).


    FINANCIAL HIGHLIGHTS

    -------------------------------------------------------------------------
                                  Three months ended        Six months ended
                                             June 30                 June 30
                               ----------------------------------------------
    (In thousands of                2008        2007        2008        2007
     Canadian dollars, except
     per share amounts)
    -------------------------------------------------------------------------
    Property revenues            $30,020     $30,582     $59,244     $62,934
    Property operating expenses   12,633      13,624      25,055      27,736
    -------------------------------------------------------------------------
    Net operating income          17,387      16,958      34,189      35,198
    Interest expense              (8,097)     (9,589)    (16,112)    (19,920)
    General and administrative    (1,511)     (1,459)     (2,819)     (3,085)
    -------------------------------------------------------------------------
    Income before non-recurring
     items and amortization       $7,779      $5,910     $15,258     $12,193
    Other income (expense)           399           1         693        (185)
    Amortization                  (7,371)    (12,763)    (15,079)    (26,149)
    -------------------------------------------------------------------------
    Operating income (loss)         $807     ($6,852)        872    ($14,141)
    Costs associated new mortgages     -      (3,406)          -      (5,354)
    Income taxes                    (927)       (837)     (1,818)     (2,107)
    -------------------------------------------------------------------------
    Net loss                       ($120)   ($11,095)      ($946)   ($21,602)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net loss
    - per basic and diluted
      share                       ($0.01)     ($1.02)     ($0.09)     ($2.00)

    Funds from operations         $7,248      $1,538     $14,088      $4,400
    - per basic and diluted
      share                        $0.67       $0.14       $1.30       $0.41
    -------------------------------------------------------------------------
    

    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.

    OFFER BY MORGUARD CORPORATION FOR RPC COMMON SHARES

    On April 2, 2008, the Company was advised of the intention of Morguard
Corporation ("Morguard") to make an unsolicited take-over bid for all of the
issued and outstanding shares of RPC that it does not already own at an offer
price of CDN$12.00 cash per share or, at the option of each tendering RPC
shareholder, 0.33 common shares of Morguard for each 1 common share of RPC. At
the expiry of the Morguard offer on July 16, 2008, Morguard announced that
739,821 common shares of RPC had been validly tendered under the terms of the
offer and that Morguard had taken up and accepted for payment the same number
of common shares. Also on July 16, 2008, Morguard announced it had extended
the expiry time of its bid until July 29, 2008.
    At the expiry of the extension on July 29, 2008, Morguard announced that
an additional 253,589 common shares of RPC had been validly tendered under the
terms of the extension and that Morguard had taken up and accepted for payment
the same number of common shares. Morguard and its affiliates now own
8,849,906 common shares of the Company representing approximately 81.7% of the
outstanding common shares. Also, on July 29, 2008, Morguard announced that it
has further extended the expiry time of its bid until August 12, 2008.

    DIVIDEND

    The Company's board of directors has declared a dividend of 5 cents per
common share, payable on September 30, 2008, to shareholders of record at the
close of business on September 16, 2008.

    REVIEW OF FINANCIAL RESULTS

    The Company incurred a net loss of $0.1 million for the three months
ended June 30, 2008, compared to a net loss of $11.1 million for the same
period in 2007. The reduced loss is primarily due to lower amortization
expense of $5.4 million, reduced interest expense of $1.5 million,
$3.4 million of debt transaction costs expensed in 2007 and an increase in
reported net operating income of $0.4 million

    NET OPERATING INCOME

    Net operating income for the three months ended June 30, 2008, was
$17.4 million compared to $17.0 million for the same period in 2007.
    Net operating income from the Company's Canadian assets for the three
months ended June 30, 2008, increased 12.3% to $8.2 million from $7.3 million
in 2007. The increase is primarily due to strong leasing at one of the
Company's mixed-use properties located in Toronto, Ontario that resulted in
increased NOI of approximately $0.7 million.
    Reported NOI from the Company's U.S. properties for the three months
ended June 30, 2008, decreased 5.2% to $9.2 million from $9.7 million in 2007.
The decrease is primarily due to the change in foreign exchange rates. U.S.
denominated net operating income for the three months ended June 30, 2008, was
$0.3 million higher than for the same period in 2007. The increase was
primarily due to increases in minimum rents and reductions in operating costs.

    FUNDS FROM OPERATIONS

    Funds from operations for the three and six months ended June 30, 2008
and 2007 were calculated as follows:

    
    -------------------------------------------------------------------------
                                  Three months ended        Six months ended
                                             June 30                 June 30
                               ----------------------------------------------
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------
    Net income (loss)              ($120)   ($11,095)      ($946)   ($21,602)
    Add (deduct) non-cash items:
      Amortization -
       rental properties           3,630       3,641       7,132       7,334
      Amortization -
       intangible assets           2,439       7,774       4,355      16,059
      Amortization -
       tenant allowances           1,302       1,348       3,592       2,756
      Future income taxes             (3)       (136)        (45)       (153)
    Other                              -           6           -           6
    -------------------------------------------------------------------------
                                  $7,248      $1,538     $14,088      $4,400
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    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 for the six months ended June 30, 2008 were $14.1 million ($1.30 per
common share) compared to $4.4 million ($0.41 per common share) for the same
period in 2007. The increase is primarily due to benefits derived from the
2007 refinancing program and other items discussed above offset by the
negative impact of the change in foreign exchange rates.

    SECOND QUARTER FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND
    ANALYSIS

    The Company's unaudited financial statements for the three and six months
ended June 30, 2008, along with the Management's Discussion and Analysis 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) 281-5888; Paul Miatello, Chief Financial
Officer, (905) 281-5943

Organization Profile

REVENUE PROPERTIES COMPANY LIMITED

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