August 9, 2021
Kingston Properties Limited reported Rental Income of US$1.44 million, 59% more than the US$903,470 reported for 2020. However, for the quarter, there was a 62% rise from US$448,890 in 2020 to US$727,420 for the period under review. KPREIT noted, “the higher year on year figure was mainly due to the acquisition of two properties in the second half of 2020 and one in the first quarter of 2021, as well as the recovery in occupancy at some of our properties in the US and Cayman Islands that were affected in 2020 by early lockdown measures in those jurisdictions.”
Operating expenses rose 4% to US$571,820 relative to the US$549,133 posted for the same period last year. “The increase is mainly due to higher broker fees and staff costs in 2021, however this was offset by lower homeowners association dues and property taxes in the US consequent on the disposal of six (6) condo units in Florida in 2020,” as per KPREIT.
As such, Results of Operating activities before other gains amounted to US$865,295 relative to US$354,337 posted last year. While, for the quarter, results of operating activities before other gains closed at US$427,635 (2020: US$153,542).
Loss on disposal of investment property totalled US$19,257 for the period relative to the previous year’s loss of US$3,320. Fair value of investment increased to US$201,038 (2021: nil). The company stated this is earned, “from the Group’s investment in a real estate fund as well as higher fee income earned year to date.” Also, “the figure in 2020 was primarily comprised of realized and unrealized foreign exchange losses arising from the translation of local currency balances as the Group held higher than normal local cash balances.”
Miscellaneous Income amounted to US$77,799 (2020: US$2,463). There is no impairment gain on financial assets for the period under review versus US$5,802 reported in the previous year. Management fees amounted to US$36,136, 2% above 2020’s US$30,111.
Operating profit closed the six months period at US$1.16 million, this compares with the US$389,393 booked a year ago. For the quarter, operating profit amounted to US$487,578 (2020: US$168,855).
Net finance costs closed at US$207,987 relative to net finance cost of US$679,481 for the six months ended June 2020. Of this, finance cost and finance income amounted to US$244,901 (2020: US$850,945) and US$36,913 (2020: US$171,464), respectively.
This resulted in a profit before taxation of US$953,023, compared to the loss before taxation of US$290,088 for 2020. Profit before tax for the quarter amounted to US$326,127, relative to a loss before tax of US$108,816 booked in 2020.
Tax charge for the six months amounted to US$25,822 (2020: US$53,309). This resulted in a net profit of US$927,202 relative to a net loss of US$343,397 in the comparable period last year. Net profit for the quarter amounted to US$302,703 (2020 loss: US$132,143).
Moreover, total comprehensive income for the six months was US$927,202 whereas total comprehensive loss was US$343,397 for the similar period in 2020.
Earnings per share for the six months ended June 30, 2021 amounted to US0.137s cent for the period relative to a loss per share of US0.051 cents in 2020. For the quarter, earning per share amounted to US0.045 cent for the period relative to loss per share of US0.019 cent in 2020. The trailing twelve months EPS amounted to US0.28 cents. The number of shares used in our calculations is 677,712,399. Notably, KPREIT stock price close the trading period on August 5, 2021 at J$9.50 with a corresponding P/E of 23.02 times.
KPREIT stated, “the diverse nature of our tenant base and geographic dispersion continues to offer a level of resilience to our operating income. Further, the deployment of funds raised over the last two years continue to ensure solid results through acquisition of higher yielding assets and improved efficiency in our operations.” Furthermore, “our divestment of the Florida condo portfolio will continue and this will result in a shift into multi-family properties to reduce valuation volatility and generate higher yields. We recently acquired an approximately 40% interest in a 155-unit multi-family property in Atlanta, Georgia and we are in various stages of completion on three value-add and greenfield transactions in the Cayman Islands and Jamaica. The acquisitions to date have adjusted our entire portfolio exposure (including investments in a real estate fund) in the US to 15%, while Jamaica and the Cayman Islands account for 48% and 38% respectively.”
Balance Sheet at a glance:-
As June 30, 2021, assets totalled US$45.01 million, 14% more than the US$39.35 million booked as at June 30, 2020. The growth was mainly due to 67% increase in ‘Investment Properties’ which amounted to US$40.06 million versus US$23.94 million at the end of the 2020. The movement was offset by a decline in ‘Cash and cash equivalents” to US$2.19 million (2020: US$13.65 million).
KPREIT indicated the increase in investment property is as a result of, “the acquisition of a warehouse property and an office building in Jamaica as well as a multi-story office building in the Cayman Islands over the last twelve months, and higher fair value on a property in Jamaica.”
Shareholders’ equity closed at US$30.99 million, up from US$1.03 million from last year’s US$29.96 million, resulting in book value per share of US$0.05(2020: US$0.04).
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