TORONTO, Aug. 11, 2017 /CNW/ - Brookfield Real Estate
Services Inc. (TSX: BRE), a leading provider of services to
residential real estate brokers and their
REALTORS®1 today announced its second quarter
financial results (including its cash flow from operations
("CFFO")), and the approval of a 3.9% increase in the monthly
dividend to holders of the Company's restricted voting shares.
HIGHLIGHTS
- Cash Flow from Operations ("CFFO") on a rolling twelve-month
basis increased by 8.9% compared to 2016 to $2.56 per Share.
- The Board of Directors of the Company approved a dividend
of $0.1125 per restricted voting share, payable September 30, 2017 to shareholders of record on
August 31, 2017, representing an
increase in the targeted annualized dividend to $1.35.
- The improvement in CFFO was driven by an increase in royalties
due to a higher number of REALTORS ® in the Company Network.
- The Company's network of REALTORS® (the "Network")
increased to 18,116, up from 17,580 as at December
31, 2016.
SECOND QUARTER OPERATING RESULTS
CFFO for the second quarter of 2017 improved to $9.2 million or $0.72 per share on a diluted basis ("Share"), an
increase of 14.6% as compared to $8.0
million or $0.63 per Share for
the same period in 2016. For the rolling twelve-month period ended
June 30, 2017, CFFO was $2.56 per Share as compared to $2.35 per Share for the rolling twelve-month
period ended June 30, 2016.
Royalties for the three months ended June
30, 2017 were $12.1 million,
compared to $10.9 million for the
same period in 2016. For the six months ended June 30, 2017, royalties were $22.5 million,
compared to $20.3 million for the
same period in 2016.
The increased royalties and improvement in CFFO were driven
primarily by an increase in the number of REALTORS® in the Network
and continued growth in the Canadian real estate market through the
first half of 2017 relative to 2016.
Net earnings for the three months ended June 30, 2017 were $3.3
million, or $0.35 per Share,
compared to $1.2 million or
$0.12 per Share, for the same period
in 2016. For the six months ended June 30,
2017, net earnings were $4.6
million, or $0.49 per Share,
compared to net earnings of $2.1
million or $0.22 per Share,
for the same period in 2016.
"The Company's strong cash flow performance, driven by growth in
the underlying national network, led to a Board of Directors'
decision to increase the dividend," said Phil Soper, President and Chief Executive
Officer, Brookfield Real Estate Services Inc.
THE COMPANY NETWORK
As at June 30, 2017, the Network
was comprised of 18,116 REALTORS®, operating under 297 franchise
agreements providing services from 669 locations, with
approximately a one fifth share of the Canadian residential
real estate market ("Canadian Market") based on 2016 transactional
dollar volume.
CASH DIVIDEND
The Company declared a cash dividend of $0.1125 per restricted voting share payable on
September 30, 2017, to shareholders
of record on August 31, 2017. This
represents a targeted annualized dividend of $1.35 per restricted voting share.
CONFERENCE CALL
Brookfield Real Estate Services Inc. will host a conference call on
Friday, August 11, 2017 at
10 a.m. ET to discuss its second
quarter 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. Participants are
also able to listen online via webcast at:
http://event.on24.com/r.htm?e=1478016&s=1&k=93C7A47B8D4F4F915F6DD794D5CB1E1A.
A recording of the conference call will be available in the
Investor Centre section of the Company's website by Monday, August 14, 2017.
CFFO
This news release and accompanying financial highlights make
reference to CFFO on a total and per Share basis. CFFO is defined
as operating income prior to deducting impairment and amortization
of intangible assets. 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 and the financial position of its business and
believes that many of its shareholders and analysts also find this
measure useful. CFFO does not have any standard meaning prescribed
by International Financial Reporting Standards 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". Words such as "continued", "growing",
"growth" and other expressions that are predictions of or could
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 Company 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 indicated in the forward looking
statements include: changes in the Company's strategy with respect
to dividends, changes in the supply of houses for sale in
Canada or in any particular region
within Canada, changes in the
demand for houses in Canada or any
particular region within Canada,
changes in general economic conditions (including interest rates,
consumer confidence and other general economic factors or
indicators), changes in global and regional economic growth, the
demand for and prices of natural resources on local and
international markets, the level of residential real estate
transactions, the availability of attractive investment
opportunities, the average rate of commissions charged, competition
from other real estate brokers or from discount and/or
Internet-based real estate alternatives, the closing of existing
real estate brokerage offices, other developments in the
residential real estate brokerage industry or the Company
that reduce the number of REALTORS® in the Company's
Network or royalty revenue from the Company's Network, our ability
to maintain brand equity through the use of trademarks, the methods
used by shareholders or analysts to evaluate the value of the
Company and its publicly traded securities, the availability of
equity and debt financing, changes in tax laws or regulations, 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 Company 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.
About Brookfield Real Estate Services Inc.
Brookfield Real Estate Services Inc. is a leading provider of
services to residential real estate brokers and a network of over
18,000 REALTORS®. We operate in Canada under the Royal LePage, Via
Capitale and Johnston & Daniel brands. For more information, go
to www.Brookfieldresinc.com.
Brookfield Real Estate Services Inc. is an affiliate of
Brookfield Asset Management, a leading global alternative asset
manager with over $250 billion of
assets under management. For more information, go
to www.Brookfield.com.
1
|
REALTORS®
is a trademark identifying real estate licensees in Canada who are
members of the Canadian Real Estate Association.
|
Brookfield Real Estate Services Inc.
Interim Balance
Sheet Highlights
|
|
|
|
|
|
|
|
|
As at
|
|
|
|
|
|
June
30,
|
|
December
31,
|
(Unaudited, in
thousands of Canadian dollars)
|
|
|
|
|
|
2017
|
|
2016
|
Cash
|
|
|
|
|
$
|
2,622
|
$
|
3,102
|
Other current
assets
|
|
|
|
|
|
5,319
|
|
4,114
|
Total current
assets
|
|
|
|
|
|
7,941
|
|
7,216
|
Non-current
assets
|
|
|
|
|
|
89,099
|
|
85,187
|
Total
assets
|
|
|
|
|
$
|
97,040
|
$
|
92,403
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
|
|
|
$
|
1,131
|
$
|
893
|
Current portion of
purchase obligation
|
|
|
|
|
|
1,825
|
|
3,559
|
Interest payable on
Exchangeable Units
|
|
|
|
|
|
476
|
|
476
|
Dividends
payable
|
|
|
|
|
|
1,027
|
|
1,027
|
Other current
liabilities
|
|
|
|
|
|
234
|
|
435
|
Total current
liabilities
|
|
|
|
|
|
4,693
|
|
6,390
|
Debt
facilities
|
|
|
|
|
|
69,648
|
|
63,720
|
Other non-current
liabilities
|
|
|
|
|
|
644
|
|
1,114
|
Exchangeable
Units
|
|
|
|
|
|
54,907
|
|
52,477
|
Total
Liabilities
|
|
|
|
|
|
129,892
|
|
123,701
|
Shareholders'
deficit
|
|
|
|
|
|
(32,852)
|
|
(31,298)
|
Total Liabilities
and Shareholders' deficit
|
|
|
|
|
$
|
97,040
|
$
|
92,403
|
|
|
|
|
|
|
|
|
|
Interim Earnings
Highlights
|
|
|
|
|
|
|
|
|
|
|
Three
months
|
|
Three
months
|
|
Six
months
|
|
Six months
|
|
|
ended
|
|
ended
|
|
ended
|
|
ended
|
|
|
June
30,
|
|
June 30,
|
|
June
30,
|
|
June 30,
|
(Unaudited, in
thousands of Canadian dollars)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Royalties
|
$
|
12,128
|
$
|
10,869
|
$
|
22,537
|
$
|
20,266
|
Administration
Expense
|
|
(6)
|
|
(203)
|
|
(543)
|
|
(498)
|
Management
Fee
|
|
(2,296)
|
|
(2,003)
|
|
(4,140)
|
|
(3,690)
|
Interest
Expense
|
|
(643)
|
|
(653)
|
|
(1,297)
|
|
(1,318)
|
Cash Flow from
Operations
|
|
9,183
|
|
8,010
|
|
16,557
|
|
14,760
|
Impairment, write-off
and amortization of intangible assets
|
|
(2,111)
|
|
(2,539)
|
|
(4,293)
|
|
(5,144)
|
Interest on
Exchangeable Units
|
|
(1,427)
|
|
(1,427)
|
|
(2,855)
|
|
(2,855)
|
Loss on fair value of
Exchangeable Units
|
|
(1,064)
|
|
(1,531)
|
|
(2,429)
|
|
(1,065)
|
Gain on interest rate
swap
|
|
420
|
|
136
|
|
470
|
|
24
|
Loss on fair value of
purchase obligation
|
|
(104)
|
|
(248)
|
|
(178)
|
|
(1,712)
|
Income tax
expense
|
|
(1,567)
|
|
(1,239)
|
|
(2,663)
|
|
(1,904)
|
Net and
comprehensive earnings
|
$
|
3,330
|
$
|
1,162
|
$
|
4,609
|
$
|
2,104
|
Basic earnings per
Restricted Voting Share
|
$
|
0.35
|
$
|
0.12
|
$
|
0.49
|
$
|
0.22
|
Diluted earnings
per Share
|
$
|
0.35
|
$
|
0.12
|
$
|
0.49
|
$
|
0.22
|
Cash Flow from
Operations per Share on a diluted basis
|
$
|
0.72
|
$
|
0.63
|
$
|
1.29
|
$
|
1.15
|
Cash Flow from
Operations per Share on a diluted basis - rolling twelve-month
period ended June 30,
|
|
|
|
|
$
|
2.56
|
$
|
2.35
|
|
|
|
|
|
|
|
|
|
Interim Cash Flow
Highlights
|
|
|
|
|
|
|
|
|
|
|
Three
months
|
|
Three
months
|
|
Six
months
|
|
Six months
|
|
|
ended
|
|
ended
|
|
ended
|
|
ended
|
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June 30,
|
(Unaudited, in
thousands of Canadian dollars)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Cash provided by
Operating activities:
|
$
|
6,541
|
$
|
5,005
|
$
|
9,950
|
$
|
8,339
|
Cash provided used
for Investing activities:
|
|
(2,642)
|
|
(2,720)
|
|
(10,167)
|
|
(8,011)
|
Cash provided /
(used) by/for Financing activities:
|
|
(4,582)
|
|
(3,082)
|
|
(263)
|
|
(2,163)
|
Change in cash for
the period
|
|
(683)
|
|
(797)
|
|
(480)
|
|
(1,835)
|
Cash, beginning of
the period
|
|
3,305
|
|
4,607
|
|
3,102
|
|
5,645
|
Cash, end of the
period
|
$
|
2,622
|
$
|
3,810
|
$
|
2,622
|
$
|
3,810
|
SOURCE Brookfield Real Estate Services Inc.