For 2018 Ethical Property Company (EPC) is reporting a small reduction in profit from ordinary activities in the year. This represents the first step towards the increased profitability that will be achieved once The Green House and Streamline are both completed and fully let.
Earnings before Interest and Taxation (EBIT)
EPC continues to report EBIT as the most appropriate measure of underlying operating performance as it gives a clear illustration of year-on-year trends, is unaffected by changes to interest costs and excludes any changes in property values.
Results for 2017 have been restated from £852,651 to £818,278 due to the inclusion of foreign currency translation movements in administrative expenses rather than after profit for the year. The company has also aligned the division of costs between cost of sales and administrative expenses to be consistent with the current year.
EBIT of £765,496 for 2018 is £52,782 lower than for 2017 as restated. Even though results from EPC's existing and ongoing operational portfolio have increased year-on-year, as shown by the higher Return on Book Cost, the short-term impact of the closure of Development House and the opening of The Green House led to reduced income.