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PLAZACORP ANNOUNCES CONTINUED PROFITABLE FIRST QUARTER RESULTS

^{Published on 2011-06-14 07:00:49 - Market Wire}
 

FREDERICTON, June 14, 2011 /CNW/ - Plazacorp Retail Properties Ltd. (TSXV: PLZ) today announced its results for the quarter ended March 31, 2011.  These are the first transitional statements issued in accordance with International Financial Reporting Standards ("IFRS").

Plazacorp reported funds from operations ("FFO") of $3.2 million for the quarter ended March 31, 2011, an increase of 3.8% over the same quarter for the prior year. FFO per share was $0.064 for the quarter ended March 31, 2011 ($0.064 per share diluted) compared to $0.063 per share for the quarter ended March 31, 2010 ($0.063 per share diluted).  The principal factors influencing FFO were:

• Incremental net property operating income ("NOI") growth of $284 thousand earned by properties which were transferred from properties under development to income producing status during 2010 and 2011.
• Same asset NOI growth of $149 thousand.
• An increase in share of profit of associates and investment income (net of fair value changes) of $172 thousand.
• An increase in financing costs of $209 thousand mainly affected by the replacement of floating-rate debt with long-term debt on new properties and new debenture interest.
• An increase in administrative expenses of $181 thousand mainly due to additional tax consulting and professional fees relating to the potential conversion to a REIT structure and IFRS-related work.

If IFRS implementation costs and costs incurred for the potential conversion to a REIT structure had not occurred, FFO would have increased by 7.8% over the same period in the prior year.

Profit for the period was $6.9 million compared to $1.8 million recorded for the same period in the prior year.  Profit was impacted by the same factors affecting FFO as indicated above as well as: a fair value gain of investment properties of $6.4 million compared to $0.9 million for the same period in the prior year, as a result of a 48 basis point drop in the weighted average capitalization rate; an increase in fair value gain of investments of $584 thousand also resulting from the drop in capitalization rates; and transaction costs incurred in the prior year for the issuance of convertible debentures of $541 thousand.  These were partly offset by an increase in deferred taxes of $1.7 million mainly due to the increase in fair value gain of investment properties mentioned above.

Michael Zakuta, Plazacorp's President and CEO said, "We are pleased with the results for the quarter ended March 31, 2011. Currently we have 7 projects under development and 4 land assemblies in progress, which upon completion will deliver stronger FFO going forward and strengthen the quality of our portfolio."

Plazacorp's summary of FFO for the three months ended March 31, 2011, compared to the three months ended March 31, 2010 is presented below:

A copy of Plazacorp's quarterly report can be found on the Corporation's web site at [ www.plaza.ca ] or on SEDAR at [ www.sedar.com ].

Plazacorp Retail Properties Ltd. is an owner of shopping malls and strip plazas throughout Atlantic Canada, Quebec and Ontario.  Plazacorp owns interests in 112 properties comprising 5.1 million square feet of retail real estate.

CAUTIONARY STATEMENTS REGARDING FORWARD LOOKING INFORMATION

This news release contains forward looking statements relating to our operations and the environment in which we operate, which are based on our expectations, estimates, forecasts and projections.  These statements are not future guarantees of future performance and involve risks and uncertainties that are difficult to control or predict.  Therefore, actual outcomes and results may differ materially from those expressed in these forward looking statements.  Readers, therefore, should not place undue reliance on any such forward looking statements.  Further, a forward looking statement speaks only as of the date on which such statement is made.  We undertake no obligation to publicly update any such statement, to reflect new information or the occurrence of future events or circumstances, except for forward-looking information disclosed in prior disclosures which, in light of intervening events, requires further explanation to avoid being misleading.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.