BTB REIT shows steady inprovement
On August16,2015 BTB REIT released it's second quarter report and almost all of it's operational statistics show some improvement.This was an important quarter for BTB because it raised it's dividend last quarter and the payout ratio was getting high.So the increases in operating income and funds from operations helped to stabilize their finances.
Operational Statistics
There was a 9% increase in rental income for the quarter and 10% for the first half.While operating income increased by 9% for the quarter and 11% for six months.Recurring distribuable income increased by 19% and recurring adjusted AFFO increased by 20%.The mortgage liability ratio moved down to 56% which is considered only a little above average and far from being a problem.
In addition,BTB released 106,000 square feet with an increase in the rental rate of 5%.This did result in a slightly higher occupancy rate -from 96% to 91%.On the other hand it refinanced two properties at a better interest rate and saved about $200,000 annually.The payout ratio went from around 85.8% to 76.3% and will likely gradually move down over 2015.The AFFO per share went from $.118 to $.12 per share.This puts AFFO per share on track to hit $.50 per share for the year and their price/earnings ratio will be around 8.5 times.This is quite low for a REIT and is well below many broker's estimates of their trailing P/E ratio (at 15 times).
The Second Half
BTB is going through a consolidation period.It has made a few acquisitions and it has raised it's dividend in the last quarter.It's mortgage liability ratio is a little high (above 50%) and will prevent them from raising much debt.They have re -leased properties and allowed their occupancy rate to rise 5%.The next two quarters will likely be dedicated to reduce the payout ratio and raise their AFFO per share.The 20%increase in AFFO this quarter helped to reduce their payout ratio.It is still a little high at 76% and will likely be closer to 65% by year end.The payout ratio (at 76%) is not alarming but is higher than usual for the fairly conservative BTB REIT.BTB does not like to sell their properties so will have to focus on increasing occupancy,renovating properties and raising their rents.
Operational Statistics
There was a 9% increase in rental income for the quarter and 10% for the first half.While operating income increased by 9% for the quarter and 11% for six months.Recurring distribuable income increased by 19% and recurring adjusted AFFO increased by 20%.The mortgage liability ratio moved down to 56% which is considered only a little above average and far from being a problem.
In addition,BTB released 106,000 square feet with an increase in the rental rate of 5%.This did result in a slightly higher occupancy rate -from 96% to 91%.On the other hand it refinanced two properties at a better interest rate and saved about $200,000 annually.The payout ratio went from around 85.8% to 76.3% and will likely gradually move down over 2015.The AFFO per share went from $.118 to $.12 per share.This puts AFFO per share on track to hit $.50 per share for the year and their price/earnings ratio will be around 8.5 times.This is quite low for a REIT and is well below many broker's estimates of their trailing P/E ratio (at 15 times).
The Second Half
BTB is going through a consolidation period.It has made a few acquisitions and it has raised it's dividend in the last quarter.It's mortgage liability ratio is a little high (above 50%) and will prevent them from raising much debt.They have re -leased properties and allowed their occupancy rate to rise 5%.The next two quarters will likely be dedicated to reduce the payout ratio and raise their AFFO per share.The 20%increase in AFFO this quarter helped to reduce their payout ratio.It is still a little high at 76% and will likely be closer to 65% by year end.The payout ratio (at 76%) is not alarming but is higher than usual for the fairly conservative BTB REIT.BTB does not like to sell their properties so will have to focus on increasing occupancy,renovating properties and raising their rents.
Comments
Post a Comment