TORONTO, March 5, 2014 /CNW/ - Brookfield Real Estate
Services Inc. (the "Company") (TSX: BRE), a leading provider of
services to residential real estate brokers and their
REALTORS®¹, today announced that cash flow from
operations ("CFFO") for the three and twelve months ended
December 31, 2013 was $6.0 million or $0.46 per restricted voting share ("Share"), up
from $5.4 million or $0.42 per Share for the same quarter in 2012 and
$25.2 million or $1.97 per Share, down slightly from $25.4 million or $1.98 per Share for the same period in 2012.
Royalties for the three and twelve months ended December 31, 2013 were $8.3 million and $36.3
million, respectively, compared to $8.1 million and $36.5
million, respectively for the same period in 2012. Net
earnings for the three and twelve months ended December 31, 2013 was $0.6
million and $0.9 million, or
$0.04 and $0.09 earnings per Share, respectively, as
compared to $0.8 million and
$3.0 million or $0.06 and $0.31
earnings per Share, respectively, for the same period in
2012.
OVERVIEW OF FOURTH QUARTER OPERATING RESULTS
During the Quarter the Company generated CFFO of $6.0 million, up $0.6
million from the same period in 2012. Royalties were
$8.3 million, up $0.2 million from fourth quarter 2012 as home
sales have recovered after a period of reduced activity driven in
part by the tightening of mortgage-lending restrictions in July of
2012, which pushed comparative market activity into the first half
of 2012.
For the twelve months ended December 31,
2013, the Canadian market transactional dollar volume was
$175.1 billion, an increase of 6.1%
from the same period in 2012, driven by a 5.1% and 0.9% increase in
average price and number of units sold, respectively. For the three
months ended December 31, 2013, the
Canadian market transactional dollar volume was up 18.7% over the
same period in 2012, driven by a 9.3% and 8.6% increase in average
price and number of units sold, respectively.
"Brookfield Real Estate Services Inc. is pleased to report its
fourth quarter and year-end results for 2013, which demonstrate the
momentum that has returned to the residential real estate market
after a correction that lasted four quarters spanning the second
half of 2012 and first half of 2013," said Phil Soper, President and Chief Executive,
Brookfield Real Estate Services Inc. "While economic risks persist,
a strengthening domestic economy with declining unemployment
numbers, and a housing market that has returned to normal levels
point to a strong year ahead for the Company and its
investors."
The Company's revenue is primarily fixed in nature, based on the
number of REALTORS® in the network. This structure
provides revenue protection from the impact of revenue declines
when the market cools, but also reduces the degree to which the
Company participates in periods of rapid market
expansion.
The Company Network
As at December 31, 2013 the Company
Network was comprised of 15,310 REALTORS®, operating
under 307 Franchise Agreements providing services from 627
locations, with an approximate 24% share of the Market based on
2012 transactional dollar volume.
Outlook
"At the mid-point of 2013 Canada's housing market emerged from a
12-month long cyclical correction that saw sales volumes slow
markedly. The second half of the year saw sales volumes surge as
buyers returned to the market. Looking ahead, we expect the
momentum we witnessed at year-end to continue into and throughout
2014. There remains significant pent up demand from home buyers who
deferred their purchase in 2013, which should help drive an active
spring buying season. We expect a sellers' market to prevail in the
first half of 2014, followed by a balanced market for the remainder
of the year."
Monthly Cash Dividend
The Company declared a cash dividend of $0.10 per share for the month of March 2014, payable on April 30, 2014, to shareholders of record on
March 31, 2014.
CFFO
This news release and accompanying financial statements make
reference to cash flow from operations ("CFFO") on a total and per
restricted voting share basis. CFFO is defined as net income prior
to fair value changes, amortization, interest on exchangeable
units, income taxes, items related to other income and interests of
exchangeable unitholders. CFFO is used by the Company to measure
the amount of cash generated from operations which is available to
the Company's shareholders on a diluted basis where such dilution
represents the total number of shares of the Company that would be
outstanding if exchangeable unitholders converted Class B LP units
into shares of the Company. The Company uses CFFO to assess its
operating results, the value of its business and believes that many
of its shareholders and analysts also find this measure of value to
them. CFFO does not have any standard meaning pre- scribed by IFRS
and therefore may not be comparable to similar measures presented
by other companies.
Forward-Looking Statements
This news release contains forward-looking information and other
"forward-looking statements". The words such as "should", "will",
"continue", "plan", "believe", "expect", "anticipate", "intend",
"estimate", "approximate", "expected" and other expressions that
are predictions of or indicate future events and trends and that do
not relate to historical matters identify forward-looking
statements. Reliance should not be placed on forward-looking
statements because they involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of the Corporation to differ materially
from anticipated future results, performance or achievement
expressed or implied by such forward-looking statements. Factors
that could cause actual results to differ materially from those set
forward in the forward looking statements include a change in
general economic conditions, interest rates, consumer confidence,
the level of residential real estate resale transactions, the
average rate of commissions charged, competition from other
traditional real estate brokers or from discount and/or
Internet-based real estate alternatives, the availability of
acquisition opportunities and/or the closing of existing real
estate brokerage offices, other developments in the residential
real estate brokerage industry or the Corporation that reduce the
number of and/or royalty revenue from the Company's network of
15,310 REALTORS®, our ability to maintain brand equity
through the use of trademarks, the availability of equity and debt
financing, a change in tax provisions, and other risks detailed in
the Company's annual information form, which is filed with
securities commissions and posted on SEDAR at www.sedar.com.
The Corporation undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
Conference Call
Brookfield Real Estate Services Inc. will host a conference call on
Wednesday, March 5, 2014 at
10 a.m. ET to discuss its fourth
quarter and year-end financial results.
To access the call by telephone, please dial (888) 231-8191 or
(647) 427-7450. Please connect approximately ten minutes prior to
the beginning of the call to ensure participation. A recording of
the conference call will be available on the Company's website by
March 6, 2014 at
http://www.brookfieldresinc.com/content/investor_centre-25063.html.
Supplemental Information
The Company's Interim Condensed Consolidated Financial Statements,
Supplemental Information and IFRS overview for the three and nine
months ended September 30, 2013
containing further information on the company's strategy,
operations and financial results can be found on our website at
www.brookfieldresinc.com. The Company's Management Discussion and
Analysis, Financial Statements and associated regulatory filings
will follow within prescribed timelines. Shareholders are
encouraged to read these documents.
Brookfield Real Estate Services Inc. Profile
The Company is a leading provider of services to residential real
estate brokers and their REALTORS®¹. The Company
generates cash flow from franchise royalties and service fees
derived from a national network of real estate brokers and agents
in Canada operating under the
Royal LePage, Via Capitale Real Estate Network and Johnston &
Daniel brand names. At December 31,
2013, the Company network consisted of 15,310
REALTORS®. The Company network has an approximate 24%
share of the Canadian residential resale real estate market based
on 2012 transactional dollar volume. The Company generates both
fixed and variable fee components. Variable fees are primarily
driven by the total transactional dollar volume from the sales
commissions of REALTORS®, while fixed fees are based on
the number of agents and sales representatives in the network.
Approximately 73% of the Company's revenue is based on fees that
are fixed in nature; this provides revenue stability and helps
insulate the Company's cash flows from market fluctuations. The
Company is listed on the TSX and trades under the symbol "BRE". For
further information about the Company, please
visit www.brookfieldresinc.com.
1 REALTOR® is a trademark
identifying real estate licensees in Canada who are members of the Canadian Real
Estate Association.
SOURCE Brookfield Real Estate Services Inc.