Eppley Caribbean Property Fund Limited SCC's Value Fund (CPFV) expanded its property portfolio to 875,000 square feet with the acquisition of the Chalmers Avenue property which contributed to the 65 per cent increase in net profit to Barbadian dollars (BDS) $9.51 million ($718.24 million) for its 2022 financial year (FY) ending September 30.
CPFV cross-listed on the Jamaica Stock Exchange (JSE) in August 2019 when it had funds from operations (FFO) of BDS$1.75 million and had net losses attributable to shareholders of BDS$800,863 with six properties for its 2018 FY. Since then, the FFO has increased to BDS$4.06 million and expanded to 17 properties across Jamaica, Barbados and Trinidad and Tobago.
For its 2022 FY, total investment income rose 45 per cent to BDS$13.33 million ($1.01 billion), which was driven by net rental income of BDS$4.61 million and increased share of profit from its joint ventures and associates of BDS$5.78 million. Its 105-107 Marcus Garvey Drive property contributed BDS$1 million in fair value gains relative to the BDS$2.17 million in fair value gains for 2022.
"The fund is actively engaging with investors to fund a pipeline of regional opportunities with the aim of expanding the portfolio and further improving the performance of the fund. We anticipate the value fund will maintain its performance in the upcoming year as the fund realises the full year's income from the Chalmers BPO, contractual increases from its current leases and its pipeline of planned acquisitions. We look forward to sharing these developments with you should they materialise," said chairman of the fund Nicholas Scott in his letter to shareholders.
The value fund's expenses increased nine per cent to BDS$3.45 million which included higher fund management and investment advisor fees of BDS$1.52 million to Eppley Fund Managers Limited, a wholly owned subsidiary of Eppley Limited, and increased interest expense of BDS$1.28 million related to increased debt financing to acquire the 22 Chalmers Avenue property which houses business process outsourcing company itel. Earnings per share increased from BDS$0.04 to BDS$0.07 with the net asset value (NAV) rising from BDS$0.74 to BDS$0.78.
The value fund acquired the remaining 50 per cent interest in its 693 Spanish Town Road industrial property held in 693STR Limited from Norbrook Equity Partners Limited on December 12 which now makes it a wholly owned subsidiary. The 693STR was valued at BDS$6.74 million with net assets of BDS$2.94 million with CPFV's carrying value at BDS$1.45 million.
"Deepening our investment in 693 Spanish Town Road is part of our continued strategy to diversify and expand our portfolio of industrial assets across the region. Our record-breaking performance for the 2022 financial year continues to validate our strategy to further diversify and expand our portfolio of high-quality commercial assets in the region. We look forward to working with our tenants to take this asset to the next level," said vice-president of real estate and Infrastructure at Eppley Limited Denise Gallimore.
CPFV's total assets increased by four per cent to BDS$132.66 million (J$10.02 billion) with its investment properties valued at BDS$75.97 million and cash and cash equivalents BDS$8.17 million. Total liabilities decreased to BDS$26.01 million and shareholders equity increased to BDS$106.65 million. The stock price increased seven per cent to $47.01 in 2022 with the price hitting $50 on Thursday. The value fund repurchased 17,090 shares between December 21 to 23 with 1,645,633 shares purchased so far for its share buy-back programme.
The development fund recorded a net loss of BDS$674,855 for the 2022 FY with total assets of BDS$18.94 million ($1.43 billion) spread across nine properties. The fund's NAV decreased from BDS$0.35 to BDS$0.34 with shareholders equity of BDS$18.61 million. The fund is spread across Barbados, St Lucia and St Vincent and the Grenadines and sold an additional lot in Lower Estate in St Michael, Barbados, for 2022.
"At the development fund, we continue to assess our options to reposition the fund's investment focus while we pursue opportunities to divest underperforming assets at or above carrying value. We continue to pursue a two-pronged approach for the development fund: eliminate the difference between the market value of its shares and its NAV per share and reposition our investment mandate. We do not intend to pay dividends from the development fund until we reposition its investment focus," Scott closed.