Stock Name: SRQ.UN
Amount: CAD 0.05
Announcement Date: 06/06/2012
Record Date: 27/06/2012
Dividend Detail:
�������������97% committed occupancy rate expected as at August 2012
TORONTO, June 6, 2012 /CNW/ - Scott's Real Estate Investment Trust (TSX:
SRQ.UN) ("Scott's REIT" or the "REIT") today announced that it has
adopted a new distribution policy which would provide for a monthly
cash distribution of $0.05 per unit ($0.60 per unit on an annual basis)
commencing with the distribution for the month of June 2012.�� The June
distribution will be payable on July 16, 2012 to Unitholders of record
on June 29, 2012.
The REIT was committed to reviewing its distribution policy once its
former major tenant, Priszm, which formerly was the operator of 428
KFC, Taco Bell and Pizza Hut restaurants across Canada, filed for CCAA
last year.�� This filing created uncertainty, cost and additional effort
on the part of the REIT to stabilize the REIT's business. With 72% of
the REIT's Priszm-leased locations sold, the re-leasing of 34 of 44
Priszm disclaimed sites, and Priszm now only representing 12% of the
REIT's GLA, the Trustees have determined that this new distribution
policy can now take effect.�� The REIT currently estimates that
committed tenancies will result in an occupancy rate of approximately
97% by the end of August 2012.�� For the balance of the 2012 calendar
year, the REIT expects that the monthly distribution of $0.05 per unit will result in a 97% Adjusted Funds From Operations ("AFFO")
payout ratio before certain costs (financing costs, tenant allowances
and maintenance capital) are taken into account.
The REIT expects that a monthly distribution of $0.05 per unit, combined
with management's estimates of AFFO for next year, results in the AFFO
payout ratio (excluding financing costs, tenant allowances and
maintenance capital) being forecasted under 80% for the 2013 fiscal
year. The REIT believes that this new distribution policy will assist
the REIT in maintaining stable and reliable distributions while
continuing to allow the REIT to grow.
"Priszm previously announced the sale of their Ontario, BC, Nova Scotia,
and New Brunswick operations of which the REIT had 105 tenanted
restaurants.�� Now with the sale of Priszm's operations in Alberta and
Manitoba addressing a further 14 of the REIT's properties, and our
belief that Priszm's sale of its Quebec assets is forthcoming, the
uncertainty surrounding Priszm has been minimized," said Teresa Neto,
Chief Financial Officer of the REIT. "With a greater understanding of
the REIT's stabilized net operating income moving forward, and a more
diversified tenant base, we are now in a position to address our
distribution policy with a long-term view. By conserving liquidity and
correcting our yield to a sustainable level, the REIT is poised for
growth in the coming years."
The new distribution policy represents an annual yield of approximately
8.76% based on the June 6, 2012 unit closing price of $6.85 on the Toronto Stock Exchange ("TSX").
Conference Call
Scott's REIT will hold a conference call on Thursday, June 7, 2012 at
10:00 a.m. (ET). Participating on the call will be members of the
REIT's senior management team.
Investors are invited to access the call by dialing 647-427-7450 or
1-888-231-8191. You will be required to identify yourself and the
organization on whose behalf you are participating. A recording of this
call will be made available June 7, 2012 beginning at 1:00 p.m. (ET)
through to Thursday, June 21, 2012. To access the recording, please
call 1-855-859-2056 or 416-849-0833 and use the reservation number
86159166.
A presentation accompanying the conference call shall be available on
Scott's REIT's website at www.scottsreit.com.
Forward-Looking Statements
This press release contains certain information or statements that may
constitute forward-looking information within the meaning of securities
laws, which reflect the current view of Scott's REIT with respect to
the REIT's objectives, plans, goals, strategies, future growth, results
of financial performance, financial and operating performance and
business prospectus and opportunities. In some cases, forward-looking
information can be identified by the use of terms such as "may",
"will", "should", "expect", "plan", "anticipate", "believe", "intend",
"estimate", "predict", "potential", "continue" "project" or other
similar expressions concerning matters that are not historical facts.
In particular, forward-looking information included in this press
release includes, but is not limited to, statements with respect to the
REIT's ability to lease vacant property units, achieve certain AFFO
targets and AFFO payout ratios, and maintain or grow monthly cash
distribution levels, and also with respect to the timing of such
events. Forward-looking information should not be read as guarantees of
future events, performance or results, and will not necessarily be
accurate indications of whether, or the times at which, such events,
performance or results will be achieved. All of the statements and
information in this press release containing forward-looking
information are qualified by these cautionary statements.
Forward-looking statements are based on information available at the
time they are made, underlying estimates and assumptions made by
management and management's good faith belief with respect to future
events, performance and results, and are subject to inherent risks and
uncertainties surrounding future expectations generally which could
cause actual results to differ materially from what is currently
expected. Such risks and uncertainties include, but are not limited to
the REIT's reliance on Priszm Limited Partnership "Priszm", risks
associated with investment in real property, competition, reliance on
key personnel, financing and refinancing risks, distributions,
environmental matters, tenant risks, risks related to current economic
conditions and other risk factors more particularly described in the
REIT's most recent Annual Information Form available on SEDAR at www.sedar.com. Additional risks and uncertainties not presently known to the REIT or
that the REIT currently believes to be less significant may also
adversely affect the REIT.
Scott's REIT cautions readers that the list of factors is not exhaustive
and that should certain risks or uncertainties materialize, or should
underlying estimates or assumptions prove incorrect, actual events,
performance and results may vary significantly from those expected.
There can be no assurance that the actual results, performance, events
or activities anticipated by the REIT will be realized or, even if
substantially realized, that they will have the expected consequences
to, or effect on, the REIT. The reader should not place undue
importance on forward-looking information and should not rely upon this
information as of any other date. The REIT disclaims any intention or
obligation to update or revise any forward-looking information, whether
as a result of new information, future events or otherwise, except as
required under applicable securities laws.
Non-IFRS Measures
Adjusted Funds From Operations
Adjusted Funds From Operations ("AFFO") is not a measure recognized
under IFRS and does not have a standardized meaning prescribed by IFRS.
AFFO is presented because management of Scott's REIT believes this
non-IFRS measure is a relevant measure of the ability of Scott's REIT
to earn and distribute cash returns to Unitholders. AFFO as computed by
Scott's REIT may differ from similar computations as reported by other
similar organizations and, accordingly, may not be comparable. AFFO,
defined by Scott's REIT, represents net income of Scott's REIT, plus
depreciation, amortization of intangible assets, amortization expense
relating to tenant allowances, amortization of deferred financing fees,
stock based compensation, interest expense on the Class B Exchangeable
Units, and acquisition write-offs, less, the straight-line rent revenue
accrual, and fair value adjustments on investment properties,
convertible debentures and the Class B Exchangeable Units. The amount
of distributions paid in a period relative to the AFFO generated in the
same period is referred to as the "payout ratio".
Net Operating Income ("NOI")
NOI is not a measure recognized under IFRS and does not have a
standardized meaning prescribed by IFRS. NOI is presented because
management of Scott's REIT believes that this non-IFRS measure is a
relevant measure of the ability of Scott's REIT to earn and distribute
cash to Unitholders. NOI as computed by Scott's REIT may differ from
similar computations as reported by other similar organizations and,
accordingly, may not be comparable. NOI computed by Scott's REIT
represents total rental revenue less property operating expenses.
About Scott's Real Estate Investment Trust
Scott's REIT (TSX: SRQ.UN) is Canada's premier small-box retail property
owner with 229 properties in eight provinces across Canada. Scott's
REIT's properties are well-located and geographically diverse across
Canada with the majority of all properties containing long-term
quadruple net leases. To find out more about Scott's Real Estate
Investment Trust (TSX: SRQ.UN), visit our website at www.scottsreit.com.
For further information:
For investor information, please contact:
Teresa Neto
Chief Financial Officer
416-361-9953
teresa.neto@scottsreit.com
For media information, please contact:
Trevor Boudreau
604-564-8209
trevor.boudreau@scottsreit.com
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