Kingston Properties Limited (KPREIT)
For the nine Months ended September 30, 2017:
Kingston Properties Limited reported Rental Income of $147.67 million, 48% more than the $99.55 million reported for 2016. Property management fee of $6.96 million was reported for 2017 relative to none reported in 2016. There was no Other Income reported in 2017 compared to $12.19 million in 2016. according to the company “In the 2016 review period, one of our tenants opted to terminate their lease prematurely and was subjected to an early termination fee of approximately $12.2 million pursuant to the terms of the lease”.
This resulted in a 38% increase in total revenues year over year to $154.63 million relative to $111.74 million reported the prior year. For the quarter, the company reported total revenue of $47.57 million relative to (2016: $35.82 million).
Operating expenses grew by 28% to $91.92 million relative to the $71.64 million posted for the same period last year.
As such, Results of Operating activities before other gains amounted to $62.70 million, a 56% increase when compared to the $40.10 million posted last year.
Miscellaneous Income amounted to $463,000 (2016: $1.16 million).
Operating profit closed the period at $63.17 million, this compares with the $158.16 million booked a year ago. This was due to $116.89 million reported as Fair value Gain on Investment in the 2016 period.
Net finance costs closed at $30.71 million relative to Net finance income of $18.92 million for the 2016 period. This led to a Profit before taxation of $32.46 million, compared to the Profit of $177.07 million the corresponding 2016 period.
Taxes for the period amounted to $8.63 million (2016: $46.01 million) were recorded for the period, resulting in Net Profit of $23.83 million relative to Net Profit of $131.07 million in the comparable period last year an 81% decline. For the quarter the company recorded profit of $3.04 million relative to $14.02 million reported in 2016.
Earnings per share amounted to $0.07 for the period relative to earnings per share of $0.41 in 2016. While earnings per share for the quarter amounted to $0.0094 relative to earnings per share of $0.0435 in 2016. The twelve month trailing EPS amounted to $0.07. The number of shares used in our calculations is 321,992,668.
Balance Sheet at a glance:-
As September 30, 2017, assets totaled $2.61 billion, $419.88 million more than the $2.19 billion booked as at September 30, 2016. The company stated that “Investment Properties remain the largest component of Kingston Properties’ balance sheet assets. As at September 30, 2017, investment properties amounted to $2,519.3 million versus $1,932.1 million at the end of the first nine months of 2016. The increase is primarily as a result of additions to the portfolio during January 2017 and this represents a year over year increase of 30.4%. In 2017, the portfolio composition by geography is as follows: US (53%), Jamaica (34%) and Cayman (13%). This compares with US (70%) and Jamaica (30%) in 2016.”
Shareholder equity closed at $1.73 billion, down 1%, resulting in book value per share of $5.36 (2016: $5.41).
Total liabilities were $885.45 million as at September 30, 2017 compared to $452.30 million as at September 30, 2016. “Total loans payable were $728.4 million at September 30, 2017 compared with $274.8 million at September 30, 2016. The loans are part of the Group’s strategy to increase leverage within prudent limits secured by properties to bolster the expansion of the property portfolio. These are all bank financed loans in both United States Dollars and Jamaican dollars from financial institutions in the US, Jamaica and the Cayman Islands. Total loans payable represent 27.9% of total assets and 42.2% of total equity, which compares favourably with our peers.”
Disclaimer:
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.