TORONTO, May 6, 2015 /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 months ended March 31, 2015 was $6.0
million or $0.47 per
Restricted Voting Share ("Share") on a diluted basis, up
$0.3 million as compared to
$5.7 million or $0.44 per Share for the same period in 2014.
OVERVIEW OF FIRST QUARTER OPERATING RESULTS
CFFO for the rolling 12 month period ended March 31, 2015 was $2.04 per Share as compared to $2.02 for the 12 months ended December 31, 2014. Royalties for the three months
ended March 31, 2015 was $8.45 million or $0.66 per Share, up from $8.15 million or $0.64 per Share for the same period in 2014. Net
loss for the three months ended March 31,
2015 was $3.5 million or
$0.37 loss per Share as compared to
net loss of $4.8 million or
$0.51 loss per Share for the same
period in 2014.
During the Quarter, the Company generated CFFO of $6.0 million, up 5.6% from $5.7 million for the same period of 2014 driven
primarily by an increase in year-over-year royalty fees resulting
from a larger Agent base.
For the rolling twelve months ended March
31, 2015, the Canadian Market, as defined by Market
transactional dollar volume, closed up 12.2%, at $200.9 billion, as compared to the same period of
2014, driven by 6.5% increase in selling price and 5.4% increase in
units sold. For the three months ended March 31, 2015 the Canadian Market closed up
11.8%, at $43.2 billion, as compared
to the same period of 2014, driven by a 7.1% and 4.4% increase in
price and units sold, respectively.
On a rolling twelve-month basis, the GTA Market experienced a
quarter-over-same-quarter increase of 15.4% driven by a 8.1%
increase in selling price, and a 6.7% increase in home sale
activity. For the three months ended March
31, 2015, the GTA Market experienced an 18.5% increase on an
8.3% increase in selling price and a 9.4% increase in home sale
activity over the same period in 2014.
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 start of 2015 has been successful both financially and
operationally for the Company," said Phil
Soper, President and Chief Executive Officer, Brookfield
Real Estate Services Inc. "Our royalties and cash flow from
operations were both up on a year-over-year basis, in large part
because of our expanding network of agents. We continued to see
success in our acquisition strategy, having added over 500 new
agents and operations in Ontario,
Saskatchewan, Quebec and British
Columbia since our vend-in period closed last October."
"I am pleased that in the first quarter we were able to achieve
a successful rollout of rlpnetwork, our intranet for Royal LePage
agents and brokers, and our Broker Advisory Services program. Both
of these initiatives will help our network of agents improve their
productivity and maximize their earning potential," added
Soper.
The Company Network
As at March 31, 2015, the Company
Network was comprised of 16,206 REALTORS®, operating
under 312 franchise agreements providing services from 668
locations, with approximately one fifth share of the Market based
on 2014 transactional dollar volume.
Outlook
"It is an interesting period in the Canadian
residential real estate market, where different territories have
markedly mixed prospects for the year ahead. We expect that
Toronto, Vancouver and some surrounding areas will
remain hot as many eager buyers chase the limited inventory
available. Provinces where energy is a major component of the
economy, including Alberta,
Saskatchewan and Newfoundland and Labrador, are likely to see less activity and
potentially softer prices if oil prices remained depressed,
although we are encouraged by the bounce back in the price per
barrel of oil we saw in April," said Soper.
_______________________________________________
1REALTOR® is a trademark identifying real estate
licensees in Canada who are members of the Canadian Real Estate
Association.
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Monthly Cash Dividend
The Company declared a cash dividend of $0.10 per Share for the month of May 2015, payable on June
30, 2015, to shareholders of record on May 29, 2015.
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 prescribed 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 16,206 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, May 6, 2015 at
2 p.m. ET to discuss its financial
results for the first quarter of 2015.
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
May 7, 2015 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
months ended March 31, 2015 contain
further information on the company's strategy, operations and
financial results and 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. (TSX: BRE) is a
leading provider of services to residential real estate brokers and
a network of 16,206 REALTORS®, as at March 31, 2015. It generates cash flow from fixed
and variable fees derived from real estate brokers and agents
operating in Canada under the
Royal LePage, Via Capitale and Johnston & Daniel brands.
Approximately 71 per cent of company revenue is based on fees that
are fixed in nature, providing revenue stability and helping
insulate cash flows from market fluctuations. The recurring fixed
revenue structure combined with strong brands and a successful
growth strategy position it to continue generating stable,
long-term cash flows and paying monthly dividends to shareholders.
For further information, please visit www.brookfieldresinc.com.
SOURCE Brookfield Real Estate Services Inc.