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Tom Baker and John Baker
Jax Daily Record Thursday, Feb. 5, 201512:00 PM EST

Early success for both companies after Patriot split

by: Mark Basch Contributing Writer

It’s only been a few days but so far, the split up of FRP Holdings Inc. and Patriot Transportation Holding Inc. into separate public companies is working well for shareholders.

Commercial real estate company FRP spun off trucking company Patriot at the close of trading Friday. In the first two trading days after the spinoff, the combined market value of the companies rose from $352 million to $393 million, said John Milton, chief financial officer of both companies, at FRP’s annual shareholders meeting Wednesday.

“That’s better than a 10 percent return,” Milton said at the meeting at the Downtown River Club.

“We hope we can maintain that momentum and investor enthusiasm for both companies,” he said.

FRP also announced Wednesday the still-combined company increased earnings by 19 percent in the first quarter ended Dec. 31 to $2.8 million, or 29 cents a share, before the split.

“It’s been a good year and it’s been a good quarter,” said Milton.

The real estate and transportation companies had been operating under the combined name of Patriot Transportation but as part of a reorganization tied to the split, the holding company was renamed FRP. Patriot was then spun off from FRP.

The company, which ends its fiscal year Sept. 30, has always held its annual meeting during the first week of February, so Wednesday’s meeting was just the regularly scheduled shareholders meeting and not connected to the spinoff.

Since the “new” Patriot was just created by the spinoff from FRP, Patriot is not holding its own shareholders meeting.

Wednesday’s meeting focused solely on the outlook for FRP, which develops properties mainly in the Washington, D.C., Maryland and Virginia markets. Tom Baker, CEO of both FRP and Patriot, said the real estate company has been concentrating on converting undeveloped property it owns into income-producing properties.

The company added 195,230 square feet of rentable space in fiscal 2014, a 6 percent increase, and it still has land that could support up to 16 buildings totaling about 1.3 million square feet of space. “We still have plenty left to go and that’s what we will embark upon,” said Baker.

One of its high-profile projects is a four-phase development in Washington along the Anacostia River across the street from the Washington Nationals’ baseball stadium. FRP has recently begun building a 305-unit apartment complex there as part of Phase I.

Although the company reported combined earnings for the first quarter of fiscal 2015, the earnings report did give separate figures for FRP and Patriot.

Patriot, which hauls petroleum and other liquid and dry bulk commodities throughout the Southeast, is bigger in terms of revenue with $31.7 million in the first quarter, compared with $8.3 million for Patriot.

However, with its investment in property, FRP is actually the more valuable company with shareholders’ equity of $175.8 million as of Dec. 31, compared with $33.8 million for Patriot.

Both companies will remain headquartered in Jacksonville. Although most of Patriot’s development activity is in the Washington area and it does have offices there, Baker said after the meeting that the two companies save money on overhead expenses by sharing a corporate office in Jacksonville.

The transportation and real estate company was originally formed as a single company called Florida Rock & Tank Lines Inc. when it was spun off in 1986 from construction materials company Florida Rock Industries Inc.

The company had been considering a split of the transportation and real estate businesses into separate companies for more than 15 years, so company officials are glad to have it now completed.

“It’s an exciting moment for us to finally have this company split up,” said FRP Executive Chairman John Baker, who is Tom’s uncle.

FRP trades on the Nasdaq market under the ticker symbol “FRPH.” Patriot also trades on Nasdaq under the ticker “PATI.”

The company is currently listed under the name “New Patriot Transportation Holding Inc.” on several financial websites, which was a technical name as it went through the spinoff process. However, John Baker said it should be listed simply as “Patriot,” and he expects that to be fixed in the coming days.

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