Dream Unlimited Corp. (TSX:DRM)(TSX:DRM.PR.A) -
This news release contains forward-looking information that is based upon
assumptions and is subject to risks and uncertainties as indicated in the
cautionary note contained within this press release.
Dream Unlimited Corp. ("Dream") today announced its financial results for the
three and six months ended June 30, 2014. Basic earnings per share (EPS) for the
three and six months ended June 30, 2014 were $0.16 and $0.28, respectively.
During and subsequent to the quarter we:
-- successfully completed the previously announced reorganization of the
ROI Canadian High Income Mortgage Fund; ROI Canadian Mortgage Income
Fund; ROI Canadian Real Estate Fund and ROI Institutional Private
Placement Fund (collectively the "ROI Funds"). As part of the
reorganization, all of the assets within the ROI Funds were indirectly
transferred to the newly formed Dream Hard Asset Alternatives Trust
("Dream Alternatives") (TSX:DRA.UN). Dream Alternatives has
approximately $1.0 billion of gross assets and is the fourth TSX-listed
entity managed by a subsidiary of Dream;
-- extended the maturity to November 30, 2016 and increased the capacity of
our existing secured revolving term credit facility through a syndicate
of chartered banks from $230 million to $290 million, while maintaining
existing pricing terms;
-- completed the sale of a 12 acre land parcel to Walmart for a future
130,000 square foot store in Edmonton, and subsequently broke ground on
the first phase of a multi-parcel retail site consisting of 180,000
square feet. The first phase of the development is expected to be
completed by the spring/summer of 2015.
"The first six months of 2014 have been an exciting time for our company," said
Michael Cooper, CEO. "We continue to grow, diversify and leverage our asset
management business and increase our recurring sources of income, we have
increased our liquidity through expansion of our credit facility to provide us
with improved flexibility in running our day-to-day operations and we
successfully broke ground on our first ever retail development at our site in
Edmonton. As the cities move to intensify, it will be increasingly more valuable
to build more residential, retail and multi-family projects on our own lands."
A summary of our 2014 second quarter results is included in the table below.
Three months ended Six months ended June
June 30, 30,
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(in thousands of Canadian dollars,
except per share amounts) 2014 2013 2014 2013
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Revenue $ 99,619 $ 119,715 $ 183,542 $ 241,622
Net margin (1) $ 27,427 $ 30,128 $ 51,195 $ 61,499
Net margin (1) 27.5% 25.2% 27.9% 25.5%
Earnings for the period before
tax $ 25,586 $ 28,848 $ 46,315 $ 59,398
Earnings for the period $ 17,621 $ 44,893 $ 31,247 $ 66,947
Basic earnings per share(2) $ 0.16 $ 0.41 $ 0.28 $ 0.62
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(1) "Net margin" represents revenue less direct operating costs and asset
management and advisory services expenses; including selling, marketing and
other operating costs.
(2) Note: Basic EPS is computed by dividing Dream's earnings attributable to
owners of the parent by the weighted average number of Dream Subordinate
Voting Shares and Dream Class B shares outstanding during the year.
Other Key Highlights:
-- In the six months ended June 30, 2014, we completed 173 lot sales, 33
acre sales, 93 housing unit occupancies and 310 condominium unit
occupancies (157 condominium unit occupancies at Dream's share).
-- We received approval for our first new community in east Saskatoon
called Brighton - an 870 acre neighbourhood of which Dream owns 510
acres. We have commenced our construction efforts, with initial lot
sales anticipated to be finalized later in 2014. We continue to advance
approvals for an additional 151 acres in Saskatoon.
-- The City of Regina has given direction in their interim plan concerning
the immediate approval of approximately 260 acres of new development in
the Towns and Harbour Landing West. We continue to work with the city
and pursue approvals for the majority of our lands over the next two
years.
-- Commitments of $5.6 million were made for an additional 148 acres of
lands, thereby enhancing our existing inventory position in Saskatoon.
Including these lands, there are an additional 941 acres of land under
commitments of which $31.6 million is left to fund.
-- Development of the Toronto 2015 Pan/Parapan American Games Athletes'
Village ("Pan Am") project that will evolve after the Games into a mixed
use neighbourhood known as the Canary District, is now approximately 83%
complete and is on time and on budget.
Selected financial operating metrics for the three and six months ended June 30,
2014 are summarized below.
Traditionally, our highest sales volume quarter for our land and housing
divisions has been the fourth quarter, while our lowest has been the first
quarter. In the first quarter of 2013, we experienced higher lot sales than
would be typical within our business, due to a significant amount of delayed lot
sales recorded in the previous period. Therefore we note that there is limited
direct comparability in the year over year results within the land development
business segment.
Selected Operating Metrics
Three months ended June Six months ended June
30, 30,
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(in thousands of Canadian
dollars) 2014 2013 2014 2013
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LAND DEVELOPMENT
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Lot revenue $ 8,086 $ 26,928 $ 19,720 $ 71,540
Acre revenue $ 15,374 $ 13,038 $ 24,290 $ 22,828
Revenue (1) $ 23,460 $ 39,966 $ 44,010 $ 94,368
Gross margin (1) $ 12,327 $ 12,900 $ 20,276 $ 31,227
Gross margin 52.5% 32.3% 46.1% 33.1%
Net margin (1) $ 9,843 $ 10,439 $ 16,200 $ 27,761
Net margin 42.0% 26.1% 36.8% 29.4%
Lots Sold 73 239 173 619
Average selling price - lot
units $ 111,000 $ 113,000 $ 114,000 $ 116,000
Acres Sold 18 18 33 37
Average selling price - acre
units $ 846,000 $ 772,000 $ 741,000 $ 640,000
HOUSING DEVELOPMENT
----------------------------
Housing units occupied 55 77 93 126
Revenue (1) $ 23,936 $ 30,431 $ 39,786 $ 51,255
Gross margin (1) $ 5,183 $ 7,051 $ 8,555 $ 12,065
Gross margin 21.7% 23.2% 21.5% 23.5%
Net margin (1) $ 2,277 $ 4,605 $ 3,508 $ 7,773
Net margin 9.5% 15.1% 8.8% 15.2%
Average selling price -
housing units $ 435,000 $ 395,800 $ 428,000 $ 406,800
(1) Results include land revenues and net margin on internal lot sales to
our housing division, as the homes have been sold to external customers by
the housing division during the period. Revenue (and net margin) results of
$3.9 million ($2.7 million) and $6.0 million ($4.1 million) in the three and
six months ended June 30, 2014 and $5.0 million ($3.4 million) and $8.6
million ($5.9 million) in the same period in the prior year, recognized in
both the land and housing divisions have been eliminated on consolidation.
CONDOMINIUM DEVELOPMENT
----------------------------
Attributable to Dream,
excluding equity accounted
investmentsCondominium
occupancies (units) 86 62 157 140
Revenue $ 36,453 $ 30,326 $ 62,427 $ 58,903
Gross margin $ 10,068 $ 8,788 $ 19,873 $ 13,446
Gross margin 27.6% 29.0% 31.8% 22.8%
Net margin $ 9,495 $ 7,365 $ 18,294 $ 10,554
Net margin 26.0% 24.3% 29.3% 17.9%
Average selling price of
condominiums occupied
Per unit $ 415,000 $ 357,000 $ 368,000 $ 365,000
Per square foot $ 517 $ 498 $ 499 $ 576
Pre-sold condominiums
(units) 337 424 337 424
ASSET MANAGEMENT AND
ADVISORY SERVICES
----------------------------
Fee earning assets under
management - listed funds $10,716,630 $ 9,201,028 $10,716,630 $ 9,201,028
Revenue $ 7,427 $ 11,921 $ 17,303 $ 23,105
Gross margin $ 5,177 $ 7,770 $ 10,890 $ 15,620
Gross margin 69.7% 65.2% 62.9% 67.6%
Net margin $ 5,128 $ 7,413 $ 10,140 $ 14,877
Net margin 69.0% 62.2% 58.6% 64.4%
INVESTMENT AND RECREATIONAL
PROPERTIES
----------------------------
Revenue $ 12,284 $ 12,117 $ 26,066 $ 22,567
Net margin $ 1,933 $ 1,921 $ 5,025 $ 3,229
Net margin 15.7% 15.9% 19.3% 14.3%
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Capital Structure
At June 30, 2014, Dream had 76.3 million Subordinate Voting Shares and 3.1
million Class B Shares outstanding. Including the non-controlling interest, the
market capitalization was $1.75 billion and the enterprise value was $2.1
billion. Our debt-to-enterprise value was approximately 18%.
We believe our capital structure remains conservative, which offers significant
flexibility to grow the business over time by seeking out new opportunities
where we can use our experience, expertise and relationships to achieve
attractive risk adjusted returns.
Other Information
Information appearing in this news release is a select summary of results. The
financial statements and management's discussion and analysis for the Company
are available at www.dream.ca and on www.sedar.com.
Conference Call
Senior management will host a conference call to discuss the results tomorrow,
July 25 at 9:00 a.m. (ET). To access the call, please dial 1-866-229-4144 in
Canada and the United States or 416-216-4169 elsewhere and use passcode 6281
674#.
To access the conference call via webcast, please go to Dream's website at
www.dream.ca and click on the link for News and Events, then click on Calendar
of Events. A taped replay of the conference call and the webcast will be
available for 90 days.
About Dream Unlimited Corp.
Dream is one of Canada's leading real estate companies with approximately $14.6
billion of assets under management in North America and Europe. The scope of the
business includes residential land development, housing and condominium
development, asset management for three TSX-listed real estate investment trusts
and one TSX-listed diversified, hard asset alternatives trust, investments in
and management of Canadian renewable energy infrastructure and commercial
property ownership. Dream has an established track record for being innovative
and for its ability to source, structure and execute on compelling investment
opportunities.
Forward-Looking Information
This press release may contain forward-looking information within the meaning of
applicable securities legislation. Forward-looking information is based on a
number of assumptions and is subject to a number of risks and uncertainties,
many of which are beyond Dream's control, which could cause actual results to
differ materially from those that are disclosed in or implied by such
forward-looking information. These risks and uncertainties include, but are not
limited to general and local economic and business conditions, employment
levels, regulatory risks, mortgage rates and regulations, environmental risks,
consumer confidence, seasonality, adverse weather conditions, reliance on key
clients and personnel and competition. All forward looking information in this
press release speaks as of July 24, 2014. Dream does not undertake to update any
such forward looking information whether as a result of new information, future
events or otherwise. Additional information about these assumptions and risks
and uncertainties is disclosed in filings with securities regulators filed on
SEDAR (www.sedar.com).
FOR FURTHER INFORMATION PLEASE CONTACT:
DREAM Unlimited Corp.
Michael J. Cooper
Chief Executive Officer
(416) 365-5145
mcooper@dream.ca
DREAM Unlimited Corp.
Pauline Alimchandani
Chief Financial Officer
(416) 365-5992
palimchandani@dream.ca
www.dream.ca
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