- Agreements signed for first two acquisitions, subject to due diligence - Distributable income of $1.57 million - $2.87 million revenues earned - Distributable cash estimated at $0.0708 per unit for 2006 TORONTO, May 10 /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 the first quarter ended March 31, 2006. There are no prior comparable periods as the REIT's inception occurred on October 6, 2005. Scott's reported distributable income of $1.57 million or $0.216 per unit during the quarter. The REIT estimates monthly cash distributions of $0.0708 per unit for the balance of the year. During the first quarter 2006, distributions of $0.0708 per unit have been paid for January through April and have been declared for May. Revenue for the period was $2.87 million and net income before non-controlling interest was $501,000. Net income was $0.07 per unit and the REIT incurred $2.37 million in expenses, which include depreciation and amortization, interest and operating expenses, and general and administrative expenses. "In the first quarter, many of Scott's REIT's financial performance measures have met our initial projections," said John I. Bitove, Chairman and Chief Executive Officer of Scott's REIT. "Revenue, net earnings, distributable income and earnings per unit are all higher than initial pro-rated forecasts in our prospectus." During the quarter, the REIT began its small-box retail and restaurant property acquisition program by signing two agreements, subject to due diligence and other customary closing conditions, for its first acquisitions since inception. The target properties are located in the Toronto and Montreal regions. "The two acquisition agreements are an important first step in what promises to be an exciting element of our growth and development," said Bitove. "They were brought to the REIT's attention by a third party and neither is exclusively leased to Scott's current brands or tenants. The potential acquisitions demonstrate our dedication to becoming Canada's premier restaurant and small-box retail property owner." Both acquisitions are expected to be completed in the third quarter and are subject to management review, due diligence and Board of Directors' approval and other customary conditions for closing being satisfied. 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 expenses. 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. "We are pleased to commence our growth strategy with two attractive acquisition opportunities," added Bitove. "We hope to double our asset value over the next five years, with a disciplined approach, targeting only properties that meet our investment acquisition criteria." About Scott's Real Estate Investment Trust Scott's REIT's (TSX: SRQ.UN) goal is to become Canada's premier small-box retail property owner. The REIT 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. The REIT also possesses contractual rights to purchase properties developed by Obelysk Inc. 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, firstname.lastname@example.org CO: Scott's Real Estate Investment Trust ST: Ontario NI: ERN REL -0- May/10/2006 12:16 GMT
Scott's REIT announces First Quarter 2006 financial results
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