Annual General Meeting timing - Completion of a successful $50 million IPO - $2.68 million in rental revenues earned - Distributable cash estimated at $0.0708 per unit for 2006 TORONTO, March 9 /CNW/ - Scott's Real Estate Investment Trust (TSX: SRQ.UN) ("Scott's REIT" or the "REIT"), owner of 190 quick-service restaurant properties in seven provinces across Canada, announced today its financial results for its operations for the 87-day period from October 6, 2005 to December 31, 2005. In 2005, Scott's REIT reported distributable income of $1.45 million or $0.20 per unit and paid an initial cash distribution of $0.1302 per unit in December for November and part of October. There are no prior comparable periods. The REIT estimates monthly cash distributions of $0.0708 per unit in the next 12 months. During 2006, distributions of $0.0708 per unit have been paid for December 2005 and January, and declared for February and March. "Since we began operations in 2005, the REIT has met our expectations," said John I. Bitove, Chairman and Chief Executive Officer of Scott's REIT. "Our goal to become the premier small-box retail property owner in Canada is attainable and we are on target to achieve it." The REIT funds its operations primarily through rental income generated from its properties. All leases are "quadruple-net," with tenants required to pay all capital expenditures. The leases are also long term, lasting approximately 13 years with no costs for lease renewals and attractive annual rent-escalation clauses starting in 2006. Rental revenue for the period was $2.68 million and net income before non-controlling interest was $437,000. Net income was $0.06 per unit and the REIT incurred $2.24 million in expenses, which include depreciation and amortization, interest and operating expenses, and general and administrative expenses. "We are Canada's largest quadruple-net landlord, with a unique asset base," added Mr. Bitove. "Our growth strategy is to double our asset value in the next five years through purchasing small-box retail locations in attractive Canadian markets. The REIT also possesses contractual rights to purchase properties developed by Obelysk Inc." On October 6, 2005, Scott's REIT completed its $50 million initial public offering (IPO) and started trading on the Toronto Stock Exchange under the symbol SRQ.UN. "At the time of our IPO, the political climate was very uncertain and a shadow was cast over the future of income trusts," Bitove added. "But we persisted and were among the few IPOs of significant size to be funded at that time." The funds raised in the public market, when paired with a $65-million credit facility, allowed the REIT to acquire 190 retail properties from Obelysk Inc. (formerly Scott's Restaurants Inc.) and Yum! Brands Canada Management LP (Yum!) for approximately $137 million. Of these properties, 189 are currently leased to KIT LP, which operates a total of 479 KFC(TM) restaurants and KFC(TM) restaurants multi-branded with a Pizza Hut(TM), Taco Bell(TM) or Long John Silver's(TM). The other is leased by Yum!, which operates a Pizza Hut(TM) on the property. Annual General Meeting on April 25, 2006 Scott's REIT will hold its Annual General Meeting on April 25, 2006 at 10 a.m. (ET) at The Second City, 51 Mercer Street, Toronto, ON M5V 9G9. About Scott's Real Estate Investment Trust ------------------------------------------ Scott's REIT (TSX: SRQ.UN) has a 68.9 per cent interest in Scott's Real Estate LP, which owns more than 190 quadruple-net leased commercial properties in seven provinces across Canada. Our goal is to become Canada's premier small-box retail property owner. Scott's REIT's units are traded on the Toronto Stock Exchange under the symbol SRQ.UN. To find out more about Scott's REIT, visit our website at http://www.scottsreit.com. Forward-looking statements -------------------------- Any forward-looking statements in this document are based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from projections suggested in any forward-looking statements due to factors such as the competitive nature of the quick service restaurant, retail and real estate industries, concentration of tenants, the ability of Scott's REIT and Scott's LP to execute a growth and development strategy, the reliance of Scott's REIT and Scott's LP on key personnel, and risk associated with the structure of income trusts. Scott's REIT and Scott's LP assume no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements. The financial information contained in this news release is unaudited, unless otherwise noted. Additional information identifying risks and uncertainties are contained in Scott's filings with the Canadian securities regulators, available at www.sedar.com. %SEDAR: 00022537E For further information: Richard Rotman, Wilcox Group, (416) 203-6666, ext.2219, email@example.com CO: Scott's Real Estate Investment Trust ST: Ontario NI: ERN MED REL -0- Mar/09/2006 13:30 GMT
Scott's REIT announces 2005 stub period financial results and
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