RMR Group Inc (NASDAQ: RMR) stock fell over 7.1% on 4th December 2018 (Source: Google finance).
For the fourth quarter of fiscal 2018, which ended on September 30th, RMR has reported adjusted net income of $9.9 million, which represents an increase of 39%, compared to the same period last year. This year-over-year growth in adjusted net income is largely attributable to increases in revenues and lower operating costs. In addition, adjusted EBITDA of $31.2 million and adjusted EBITDA margin of 59.7% are both at their highest levels since we became a public company in 2015.
From an operations perspective this quarter, the company has arranged over 1 million square feet of leasing activity on behalf of the client companies with a weighted average lease term of eight and a half years and weighted average roll-up in rent of 6.3%. The company also supervised approximately $22 million in capital improvements at the client companies during the quarter.
Meanwhile, as part of the merger announcement, the management has stated that OPI will be both selling up to an additional $750 million in assets by mid-year 2019 and reducing its dividend to ensure leverage and operating metrics are more in line with its peer group. The asset sales and dividend cut will have short-term adverse implications to RMR’s fee revenues. However, the company believe the merger provides for a stronger combined entity with significant long-term growth potential. In the meantime, SIR continued to execute on its operating business plan, which included 72,000 square feet of early lease renewals resulting in an increase rental rate of approximately 40% and same-property cash basis NOI growth of 4.8% on a year-over-year basis.
GOV saw same property cash basis NOI growth of 2% and executed over 182,000 square feet of new and renewal leases. GOV also entered agreements during the quarter to sell properties totaling 3.3 million square feet located in the Mid-Atlantic Region for approximately $439 million. ILPT acquired two properties during the quarter for $49.3 million and entered into an agreement to acquire an additional property for $27.7 million.
RMR in the fourth quarter of FY 18 has reported the adjusted earnings per share of 61 cents, while adjusted revenue growth of 15 percent to $65.1 million in the fourth quarter of FY 18.