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The board of directors of Plaza plc, yesterday approved and issued their preliminary profit statement for the financial year 2005 showing a marginal increase of just Lm9,000 in profits before tax over the previous years.
Turnover at Lm637,000 is around Lm20,000 higher than that of the previous year. The company’s costs increased by Lm7,000, keeping the cost to income ratio at 35 per cent in the same level as the previous financial year. Net interest income decreased slightly by Lm5,000 delivering a profit before tax of Lm427,000 which is just Lm9,000 more than the previous year.
The earnings per share at 2c87 mils is slightly better than the previous year. 1Analysing the results shows that the occupancy level at 97 per cent is marginally less than the 98 per cent registered the previous year.
The balance sheet of the company is stronger following the revaluation of the property – The Plaza Mall. The Company’s cash position has deteriorated slightly as more funds were used in investing and financing activities. The Board of Directors are recommending a net dividend of 2c71 mils per share which is just slightly more than that of the previous year (2c66 mils).
The company is currently trading at a price earnings ratio of 24, with a gross dividend yield of 6% circa and with a market capitalisation of Lm6,414,000.
With the high occupancy level which the Plaza has, the turnover is nearing saturation and as long as the expenses continue to be controlled, the profit stream will remain at the same level. In the June 2005 accounts, there was an indication that the company was reviewing its capital commitments relating to extension projects for which the necessary planning permits were still pending. Once these extensions materialise than the new revenue opportunities will open up.
Investors in this Company know what to expect in Earnings per share and as dividends. Practically no surprises were registered in this year’s results since the trend of revenue and expenses for the full financial year followed that registered in the published interim results. |
