Cominar REIT chugs along
Cominar is the third largest reit in Canada and the largest commercial property owner in Quebec.It owns property in Ontario,Quebec,Atlantic provinces and a little in western Canada.It reported it's third quarter results on November 5.It's overall financial figures are impressive but their per share figures remain unchanged.
Operational Statistics
Their operating revenues increased form $171 million in Q3 2014 to $ 219 million in 2015.And net operating income
increased 26% to $123 million.Cash flow reached $101 million compared to $39 million in 2014-a whopping 150% increase.While recurring adjusted funds from operations(FFO) were up 25% to $65 million over 2014.However adjusted funds from operations per share decreased from $.40 to $.39 in Q3 2015.Lastly distribuable income went from $54 million in 2014 to $67 million but the per share figures were constant.
Growth Strategy
(a) Short term
Cominar has exercised a short term growth strategy.It has increased all of it's financial statistics considerably ,especially cash flow, but it has also increased it's equity.An earlier blog on Blogdaleupsome calculated that it must have had new equity issues.But it is clear that it had convertible debenture issues that converted into Cominar equity.The significant growth in earnings and revenues have been matched by growth in equity.So it's financial performance has been strong but investors have seen little change in their share performance.
(b) Long term
Cominar reported it's third quarter results on November 5;the stock price went from $15.70 to $14.70 since.Clearly investors do not like their growth strategy.On the positive side their debt ratio has gone from 56% to 53.8%It is quite respectable now and allows them to take on a little more debt if required.Secondly Cominar announced that they have redeemed $186 million of convertible debentures as they realize that this is diluting their earnings.Also it is expensive financing.Cominar disposed of two office buildings for $98 million this quarter and recorded a capital gain.This blog calls for Cominar to cull some of their older properties and use the proceeds to pay down debt or buy better properties with higher capitalization rates.In the short term growth must be gained not by converting equity that has been issued at a low conversion price.Shareholders and new investors don't like their earnings diluted.They have shown Cominar that!
see Blogdaleupsome for financial advice;use Blogdaleupsome for advice on Reits
Operational Statistics
Their operating revenues increased form $171 million in Q3 2014 to $ 219 million in 2015.And net operating income
increased 26% to $123 million.Cash flow reached $101 million compared to $39 million in 2014-a whopping 150% increase.While recurring adjusted funds from operations(FFO) were up 25% to $65 million over 2014.However adjusted funds from operations per share decreased from $.40 to $.39 in Q3 2015.Lastly distribuable income went from $54 million in 2014 to $67 million but the per share figures were constant.
Growth Strategy
(a) Short term
Cominar has exercised a short term growth strategy.It has increased all of it's financial statistics considerably ,especially cash flow, but it has also increased it's equity.An earlier blog on Blogdaleupsome calculated that it must have had new equity issues.But it is clear that it had convertible debenture issues that converted into Cominar equity.The significant growth in earnings and revenues have been matched by growth in equity.So it's financial performance has been strong but investors have seen little change in their share performance.
(b) Long term
Cominar reported it's third quarter results on November 5;the stock price went from $15.70 to $14.70 since.Clearly investors do not like their growth strategy.On the positive side their debt ratio has gone from 56% to 53.8%It is quite respectable now and allows them to take on a little more debt if required.Secondly Cominar announced that they have redeemed $186 million of convertible debentures as they realize that this is diluting their earnings.Also it is expensive financing.Cominar disposed of two office buildings for $98 million this quarter and recorded a capital gain.This blog calls for Cominar to cull some of their older properties and use the proceeds to pay down debt or buy better properties with higher capitalization rates.In the short term growth must be gained not by converting equity that has been issued at a low conversion price.Shareholders and new investors don't like their earnings diluted.They have shown Cominar that!
see Blogdaleupsome for financial advice;use Blogdaleupsome for advice on Reits
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