Leading real estate investment trust, Viva Energy REIT (ASX: VVR) has released its financial results for the year ended 31 December 2018. The company has also announced an Equity Raising which is comprised of a $100 million fully underwritten institutional placement and a non-underwritten Security Purchase Plan to eligible security holders.
For FY 2018, the company has reported a Statutory net profit of $167.1 million which is 1.9% lower than the previous corresponding period (pcp). The company has also reported distributable earnings per security (CPS) of 14.022 which is 4.5% higher than pcp.
While commenting on the financial results, the company’s Managing Director, Margaret Kennedy told that the company has delivered excellent FY2018 results, above guidance, demonstrating continued delivery on the company’s strategic objectives. She further informed that, throughout FY2018, the company acquired $129 million of properties at a WACR (Weighted average capitalization Rate) of 6.4%, increasing the total portfolio to $2,496 million with a WACR of 5.8%. These acquisitions highlight the continued growth in portfolio size while maintaining a focus on quality.
The company has also confirmed the final distribution of 7.03 cents per share and confirms the payment date of 28 February 2019.
The company has also announced an Equity Raising, comprising a $100 million fully underwritten Institutional Placement of new ordinary stapled securities in VVR at an issue price of $2.32 per security. Further the company has announced a non-underwritten SPP (Share Purchase Plan) to eligible securityholders to raise up to $10 million.
The funds from the Equity Raising will be used to partly finance 8 acquisitions totaling approximately $47 million completed in the second half of FY 2018, and the funds will also be used to provide headroom for future growth.
As at 31 December 2018, the company had Pro forma gearing of 32.3%, providing headroom for further acquisitions, consistent with the company’s investment criteria, as opportunities arise. In FY 2019, the company IS expecting growth in underlying distributable earnings per security of 3-3.75% relative to FY 2018. As per Ms. Margaret Kennedy, the company is well positioned for growth in FY 2019 with an approximately $130 million identified pipeline of potential acquisitions, of which $67 million are in advanced due diligence.
The company has announced that it will undertake a $100 million fully underwritten Institutional Placement at $2.32 per security by issuing around 43.1 million New Securities. The price of $2.32 per security represents a 4.1% discount to the closing price of $2.42 on 20 February 2019 and a discount of 3.5% to the 5-day volume weighted average price of $2.40 to 20 February 2019. The New Securities issued under the Institutional Placement are expected to be allotted and commence trading on 27 February 2019.
After the completion of the Institutional Placement, the company will offer eligible security holders an opportunity to participate in a non-underwritten SPP (Share purchase plan) to raise up to $10 million. VVR’s shares closed the trading session flat at $2.420 with a market capitalization of circa $1.76 billion as on 21 February 2019.
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