BTB Realty chugs ahead
BTB Realty is a REIT, largely(but not totally) based in the Montreal area.It had another pretty good quarter this time which by itself was not that spectacular.But this is about the 7th or 8th positive quarter in a row.BTB is on a streak.It now owns more than 5 million square feet and more than $620 million assets.It's rental income is ahead 11% and net operating income ahead 13%;this figure is roughly equal to adjusted EBITDA.Lastly AFFO(adjusted funds flow) went from $3.1 to $3.9 million and from $.11 per share to $.113 per share. AFFO per share is most commonly used to estimate earnings per share for a REIT but net operating income per share is used also.With BTB'S track record it is on the path to make $.45 to $.50 per share for 2015.
Operating statistics
In order to get better earnings per share BTB has had to improve a number of different operating statistics.All of them have improved but each only marginally.It's mortgage debt ratio fell a few points and the weighted average interest rate fell 25 basis points.Also the occupancy rate was good before but rose slightly and the rent on renewed leases was slightly higher also.It closed on two properties in the quarter;one was in Ottawa and one in Delson(a suburb of Montreal).BTB continues to put more cash into each deal and get a better mortgage rate than in the past.This is a trend that BTB must continue in the future.
What's ahead ?
BTB put little information in it's report about its' series C debentures maturing.However they did mature on March 31,2015.Some of these units have been converted to common shares at $5.00.This will be a drag on the share price until they have all been converted that are going to be converted.Once this drag has been removed the share price will start to move into the $5.10 to $5.25 price area.Especially if the earnings per share stay on track to hit $.50 to$.55 per share.
BTB also needs to bring it's mortgage debt ratio down;it is now about 55% and should be closer to 50% to bring the share price up and the effective interest rate down.This could be done by selling one of their older properties and making a gain in cash.On the other hand, BTB continues to buy good properties and is able to raise lease rates.It is also putting more cash into each deal and this increases their capitalization rate.All these moves help to increase it's shareholder equity in the near term and the share price later.
Conclusion
Qtrade,a broker, shows annual earnings per share of $.37 and it's dividend is $.42.The dividend is not sustainable at this level of earnings.But BTB has had increases in revenue and earnings each quarter for the last eight quarters and good increases for the last four quarters.It is on track to make $.45 to $.50 per share with only average performance.But BTB is gradually making improvements to it's business model and is a well managed REIT. It may make earnings of $.50 to $.55 per share for the year with a few changes.All of their operating statistics are improving and if this trend continues they are in line to make $.50 to $.55 per share.If so then BTB may be looking at a small dividend increase in 2016.
Operating statistics
In order to get better earnings per share BTB has had to improve a number of different operating statistics.All of them have improved but each only marginally.It's mortgage debt ratio fell a few points and the weighted average interest rate fell 25 basis points.Also the occupancy rate was good before but rose slightly and the rent on renewed leases was slightly higher also.It closed on two properties in the quarter;one was in Ottawa and one in Delson(a suburb of Montreal).BTB continues to put more cash into each deal and get a better mortgage rate than in the past.This is a trend that BTB must continue in the future.
What's ahead ?
BTB put little information in it's report about its' series C debentures maturing.However they did mature on March 31,2015.Some of these units have been converted to common shares at $5.00.This will be a drag on the share price until they have all been converted that are going to be converted.Once this drag has been removed the share price will start to move into the $5.10 to $5.25 price area.Especially if the earnings per share stay on track to hit $.50 to$.55 per share.
BTB also needs to bring it's mortgage debt ratio down;it is now about 55% and should be closer to 50% to bring the share price up and the effective interest rate down.This could be done by selling one of their older properties and making a gain in cash.On the other hand, BTB continues to buy good properties and is able to raise lease rates.It is also putting more cash into each deal and this increases their capitalization rate.All these moves help to increase it's shareholder equity in the near term and the share price later.
Conclusion
Qtrade,a broker, shows annual earnings per share of $.37 and it's dividend is $.42.The dividend is not sustainable at this level of earnings.But BTB has had increases in revenue and earnings each quarter for the last eight quarters and good increases for the last four quarters.It is on track to make $.45 to $.50 per share with only average performance.But BTB is gradually making improvements to it's business model and is a well managed REIT. It may make earnings of $.50 to $.55 per share for the year with a few changes.All of their operating statistics are improving and if this trend continues they are in line to make $.50 to $.55 per share.If so then BTB may be looking at a small dividend increase in 2016.
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