Trident Estates plc is a property investment company that owns, manages, acquires, develops and re-develops property for rental and investment purposes in Malta.
Following the permit approval to develop the Trident Park Project in Mrieħel, the group was spun-off from the Farsons Group in December 2017 through the distribution of a dividend in kind to Farsons’ shareholders.
The group has two major real estate projects to implement in the near and medium term; Trident Park Project and Trident House.
The Trident Park project has been identified as Trident Group’s initial development and principal focus.
This project will convert Farsons Group’s old bottling factory and stores into a modern office complex (spread over 15,000 sq.m.) establishing the identity of the new Central Business District. This project is budgeted to cost in the region of €50 million, and is to be financed partly through: (i) a cash injection of €6.5 million transferred to the group prior the spin-off from Farsons Group, (ii) bank funding amounting to €28.5 million and (iii) a two-stage rights issue of €15 million planned for 2019/2020.
The demolition and excavation processes relating to Trident Park commenced in May 2018, whereby preparation for the foundations started towards the end of August 2018. Throughout the demolition and excavation works a new 550 sq.m. basement space was created after the rock levels were found to extend below that anticipated.
Part of this area will be leased out and partly retained by Trident Park for storage purposes. To date works are progressing in line with the group’s construction schedule and it is envisaged that Trident Park will welcome its first tenants in Q1 2021.
Trident House in Marsa is another property that the group believes offers significant development potential. This property comprises circa 13,215 sq.m. and is currently divided into three segments consisting of a warehouse facility with ancillary storage, offices and parking facilities and an undeveloped tract of land.
Given that the group’s current principal focus is the development of Trident Park, a detailed study on the potential development of this site is yet to be undertaken.
The group’s revenue stream currently consists of rental income generated by the outlets rented out to Farsons Group and to other related third parties. The lease of one of these outlets, Scotsman Pub, expired in April 2018, following which the group refurbished the premises and entered into an improved lease agreement for a 10-year period. The new tenant opened its doors in July 2018.
Following the renegotiation of the lease agreement relating to Scotsman Pub and subsequent to the acquisition of the remaining 50% share capital of Sliema Fort Company Ltd which was effective as of October 2017, revenue generated from rental income in 2019 increased by 35.2% to €1.1 million (2018: €0.8 million).
Net profit increased from €0.5 million in 2018 to €0.8 million in 2019. This translates to an EPS of €0.017 in 2018 compared to €0.026 in 2019. It is key to note that the net profit and EPS in 2019 have benefited from the inclusion of a one-time far value gain on investment property following the refurbishment of Scotsman Pub, amounting to €0.8 million.
In 2019, the board declared the first payment of a final net dividend of €200,000 or €0.0067 per share. Trident’s share price currently stands at €1.95 per share representing an increase of 46.6% from where the group’s share price stood as at April 2019.
This article was issued by Andrew Fenech, research analyst at Calamatta Cuschieri. For more information visit, https://cc.com.mt/. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice.