WINNIPEG, Jan. 13, 2015 /CNW/ - Temple Hotels Inc. ("Temple") (TSX: TPH) announced today that it has reduced its monthly dividend to $0.025 ($0.30 annualized) from the previous level of $0.045 ($0.54 annualized). Accordingly, a dividend in the amount of $0.025 per share has been declared for the month ended January 31, 2015. Payment will be made on February 15, 2015 to the shareholders of record at the close of business on January 31, 2015.
Temple believes that it is prudent at this time to reduce the dividend "payout" ratio to maintain strong levels of financial flexibility as management executes the 2015 business plan. The reduction in the dividend is consistent with Temple's strategy of ensuring long-term value through accretive acquisitions and capital improvements. The annualized dividend of $0.30 per share represents a dividend yield of approximately 9.4% based on the closing price of Temple's common shares on the Toronto Stock Exchange on January 12, 2015 of $3.19.
Temple has historically had significant hotel ownership in the Fort McMurray market where it currently owns nine hotel properties representing 891 guestrooms and where potentially lower oil prices could impact on financial results. Over the last three years Temple has been strategically diversifying its hotel portfolio into other regions of Canada, thereby reducing its overall exposure to Fort McMurray. As a result, Fort McMurray currently represents 22% of Temple's total guestrooms, compared to 47% as at December 2011. The diversification has also resulted in a reduction in the Fort McMurray contribution to Temple's overall net operating income from 52% in 2012 to an estimated 37% in 2014 and a further reduction to a projected 34% based on the 2015 operating budget.
Eligible shareholders have the opportunity to reinvest their dividends in accordance with Temple's Dividend Reinvestment and Share Purchase Plan. Additional details can be found in the investor information section of Temple's website, www.templehotels.ca/drip.asp.
The dividend is designated as an "eligible" dividend under the Income Tax Act (Canada) and any corresponding provincial legislation. Under this legislation, individuals resident in Canada may be entitled to enhanced dividend tax credits which reduce income tax otherwise payable.
Temple is a real estate investment company listed on the Toronto Stock Exchange under the symbols TPH (common shares), TPH.DB.C, TPH.DB.D, TPH.DB.E and TPH.DB.F (convertible debentures). The objective of Temple is to provide shareholders with stable cash dividends from investment in a diversified portfolio of hotel properties and related assets. For further information on Temple, please visit our website at www.templehotels.ca.
This press release contains forward-looking statements. Temple is subject to significant risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied in these forward-looking statements. Such risk factors include, but are not limited to, risks associated with real property ownership, the impact of general economic conditions, industry conditions, interest rate fluctuations, tax-related risk factors, governmental regulation, environmental risks, competition from other industry participants, stock market volatility, the ability to access sufficient capital from internal and external sources and the risk of fluctuation and variation in actual operating results, which variation may be material. Temple cannot assure investors that actual results will be consistent with any forward-looking statement and does not assume any obligation to update or revise such forward-looking statements to reflect actual events or new circumstances, except as expressly required by applicable securities laws.
The Toronto Stock Exchange has not reviewed or approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release.
SOURCE Temple Hotels Inc.
For further information: Arni Thorsteinson, Chief Executive Officer; or Gino Romagnoli, Executive Vice President, Tel: (204) 475-9090, Fax: (204) 452-5505, Email: [email protected]