Date: December 30, 2019
Eppley Caribbean Property Fund Limited (CPFV), for the year ended September 30, 2019 reported net rental income of $1.80 million (2018: $1.52 million), an 18% increase. In addition, share of profit of investments accounted for using the equity method grossly increased, moving from $1.56 million in 2018 to $2.95 million for 2019. The Company stated, “These increases are largely attributable to the Fund’s increased stake in the Cave Shepherd Building, realizing a full year’s income from the acquisition of Emerald City Mall in 2018 and the recent acquisition of assets in Jamaica and Barbados.”
Fair value gain on investment property closed the year at $2.02 million versus losses of $2.38 million in 2018. Management noted, “this was largely attributable the Fund’s acquisition of properties at favourable prices relative to market value and the extension of key long-term leases. These gains were compensated by a onetime foreign exchange loss of $1.5 million.”
Interest income amounted to $149,714 versus $21,833 booked for the previous year. Other income fell 72% to close at $1,869 versus $6,652 last year. Gain on bargain purchase closed at $74,325 (2018: nil).
As such, total investment income surged to total $6.99 million (2018: $612,524).
Total operating expenses amounted to $3.11 million (2018: $1.35 million). Total operating expenses can be broken down as follows:
o Interest expenses totalled to $634,125 (2018: $480,000).
o Fund management fees was $298,137 compared to $313,735 booked for 2018.
o Professional fees totalled $187,339 (2018: $193,058).
o Directors and subcommittee fees closed at $2,560 (2018: $18,527).
o Office and administrative fees went up to $45,562 (2018: $11,905).
o Impairment charge for receivables surged to $76,317 (2018: $20,892).
o Investment advisor fees closed the year at $298,137 (2018: $313,735).
The Company highlighted, “The Fund’s improved performance is attributable to enhanced operational efficiency, receiving a full year’s benefit of acquisitions in 2018 and the acquisition of prime commercial real estate in Jamaica and Barbados in 2019. In addition, The Fund’s capital raise facilitated the immediate acquisition of commercial real estate assets with attractive capitalisation rates which instantly diversified the portfolio geographically and by type. The acquisitions consisted of two industrial assets and a retail building in Jamaica, along with an industrial property in Barbados.”
Consequently, this resulted in profit before taxation of $3.89 million compared to profit before loss of $739,328 documented in the prior corresponding period. After incurring taxation of $2,442 (2018: nil), CPFV booked net profit for the year of $3.88 million versus a net loss of $739,328 booked in the previous year.
Profits attributable to cellular property fund shareholders amounted to $3.85 million compared to a loss of $800,863 booked last year. Total comprehensive income for the year closed at $3.88 million compared to a loss of $738,328 twelve months earlier.
Earnings per share for the year ended September 30, 2019 totalled $0.03 compared to a Loss per share (LPS) of $0.01 for the corresponding period in 2018. The total amount of shares outstanding used for this calculation was 122,181,628 units. CPFV closed the trading period at $32.00 on December 27, 2019.
CPFV mentioned, “We are pleased to announce that subsequent to the end of the quarter, the Fund reached an agreement to acquire the Hastings Office Centre, a multi-storey commercial office building consisting of 20,167 square feet in Hastings, Barbados with KPMG, a global professional services firm as the anchor tenant. We expect that the building will generate an NOI yield in excess of 8% and add to the Fund’s portfolio of office properties.”
Balance Sheet Highlights:
As at September 30, 2019, total assets amounted to $99.73 million, 79% more than last year’s $55.63 million in 2018. This was attributed to a rise in Investment properties which closed the period at $39.33 million (2018: $17.77 million). Additionally, the growth in ‘Cash and Cash Equivalents’ and ‘Investments in associated companies and joint arrangements’ contributed to the overall increase in the company’s assets, closing at $34.25 million (2018: $10.24 million) and $21.23 million (2018: $20 million), respectively.
CPFV, as at September 2019, booked total shareholders’ funds of $88.09 million (2018: $39.73 million), which translated into a net asset value per share of $0.72 (2018: $0.33).
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