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West Hamilton Holdings Ltd. Announces Unaudited Financial Results for the Period Ending June 30, 2013
Hamilton, Bermuda: 29 July 2013- Letter to Shareholders - The Company is pleased to present its unaudited financial results for the six month period ended 30 June 2013:
Income Statement
The Company earned net income in the period under review of $386,808 (2012:$396,682.)
Total revenue for the period was $1,053,053 representing a marginal increase in comparison to 2012, $1,049,431. Rental income for the first half of 2013 continues to be under pressure due to the protracted softness of the commercial real estate market in Bermuda. Towards the end of the period, a new tenant agreed a long term lease in the Belvedere Building which will have a positive impact on rental income for the second half of 2013. The decrease in rental income was partially offset by increased occupancy of the Company’s parking facility on Pitts Bay Road. The demand for parking spaces is increasing and the facility will be operating at full capacity later in the year.
Operating income for the first half of 2013 decreased by 2.5% compared to 2012 to $386,808 (2012: $396,682). The decrease is attributed primarily to an increased depreciation charge of $78,397 which was partially offset by a decrease in interest expense.
Earnings per share were $0.13 for the period as compared to $0.14 per share in 2012.
Balance Sheet
The Company reported total shareholders’ equity as at 30 June 2013 of $19,641,097 (2012: $19,199,056).
Current assets, which include cash and other assets that could readily be converted into cash, totaled $5,715,527 as at 30 June 2013 compared with $5,300,117 as at 31 December 2012. The Company generated free cash flow of $195,818 after using $205,539 for upgrades to the Belvedere Building, $268,458 for the repayment of a loan, $145,889 for interest on the loan and payment of all operating expenses.
Total assets amounted to $30.1 million compared with $29.7 million at the end of 2012 an increase of $0.40 million with the property measured on a cost basis. The property was appraised by Rego Realtors (Bermuda) Limited in 2011 and they valued the property at between $61.0 million and $64.0 million. Management has taken a prudent view considering the state of the Bermuda economy and is of the opinion that a value of approximately $49.0 million represents a reasonable estimate of the fair value of the property. Using this fair value estimate, the total assets of the company on a market value basis would be approximately $54.70 million.
Property operations
The Belvedere Building enjoys 90% occupancy and the Company’s parking facility on Pitts Bay Road is 97% occupied. However, Belvedere’s largest tenant will not be renewing its lease upon expiration at the end of December 2013 which will negatively impact rental revenue in the future. Rego Realtors (Bermuda) Limited is assisting the Company in securing a tenant for the space that will become vacant in January 2014.
Dividends
The Company was pleased to declare a dividend of 10 cents per common share on the 25th June, 2013 to shareholders of record on 5th July, 2013. This is the first dividend declared by the Company since 2007. The Directors will continue to monitor the Company’s results and cash flow before declaring future dividends.
The Company announced on 3rd June, 2013 the adoption of a dividend reinvestment plan. As at the date of this announcement, shareholders representing 1,277,445 shares had elected to receive their dividends in shares rather than cash.
Share Buyback
The Company’s Board approved the adoption of a Share Buy-Back Programme on 3rd June, 2013. Under this Programme shareholders can sell their shares to the company at a price to be determined from time to time but in accordance with the regulations of the BSX. As at the date of this announcement the price was set at $6.50 per share and the Company will buy back a maximum of 25,000 shares.
Finally I wish to thank the Directors, management and staff for their continued participation, dedication and support throughout the first half of the year.
J Michael Collier
President
July 26th 2013