West Hamilton Holdings Interim Financials
In a filing with the Bermuda Stock Exchange [BSX], West Hamilton Holdings Limited released its unaudited financial results for the six month period ended 31 March 2016.
The company said, “Total revenue for the period was $1,066,543 representing a marginal increase in comparison to 2015. Rental income for the first half of 2016 improved primarily because of full occupancy from office spaces and the parking garage although rental rates continue to be under pressure due to the protracted softness of the commercial real estate market in Bermuda.”
The filing stated:
Letter to Shareholders.
The Company is pleased to present its unaudited financial results for the six month period ended 31 March 2016.
Income Statement
The Company earned net income in the period under review of $346,381 [2015:$280,330.]
Total revenue for the period was $1,066,543 representing a marginal increase in comparison to 2015. Rental income for the first half of 2016 improved primarily because of full occupancy from office spaces and the parking garage although rental rates continue 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 occupied the only available space on a short term lease in the Belvedere Building which will have a positive impact on rental income for the second half of 2016. The expected increase in rental revenue will be negatively impacted by the termination of a lease for 4,400 square feet of space previously occupied by a reinsurance company.
The demand for parking spaces is increasing and the facility is operating at full capacity. The waiting list of customers is increasing with demand for 70 parking bays that could not be filled. Planning permission to increase the number of parking bays is in the final stage and construction to expand the parking facility is expected to start in 2016.
Operating income for the first half of 2016 increased by 23.56% compared to 2015: $346,381 [2015: $280,330]. The increase is attributed primarily to full occupancy from both streams of revenue. Operating expenses reduced slightly while interest expense increased commensurate with the increase in borrowing to finance the construction of Belvedere residences.
Earnings per share were $0.12 for the period as compared to $0.10 per share in 2015.
Balance Sheet
The Company reported total shareholders’ equity as at 31 March 2016 of $21,149,543 [2015: $20,315,015] an increase of 1.70 percent Current assets, which include cash and other assets that could readily be converted into cash, totaled $504,900 as at 31 March 2016 compared with $2,934,565 as at 30 September 2015. The Company generated free cash flow during the period, meeting current obligations on a timely basis. The free cash generated during the period and the cash balance available at the end of the previous period was primarily used to fund the construction of Belvedere Residences.
Total assets amounted to $34.5 million compared with $30.3 million at the end of fiscal 2015 an increase of 13.86 percent. Shareholders’ equity increased by $339,064 or 1.1 percent.
Book value per share at 31 March 2016 was $7.27 [30 September, 2015: $6.94]. This represents an increase of $0.33 cents per share or 4.75 percent.
Property operations
The property was appraised by Rego Realtors [Bermuda] Limited in 2015 and they valued the property at between $44.9 million and $45.3 million. Management has taken a prudent view considering the state of the Bermuda property market and is of the opinion that a value of approximately $44.9 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 $45.8 million.
The construction of Belvedere Residences is progressing according to schedule with revisions to include the change of use of the penthouse to office accommodation. The expected completion date is August 2016.
The Belvedere Building and the parking facility are maintained to a high standard and the preventative maintenance program restricts any building system failures to a minimum. Tenants and other users are satisfied with the quality of the building which has contributed to the high retention rate.
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
