TORONTO, Nov. 10, 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 third quarter
financial results (including its cash flow from operations
("CFFO")), and the approval of a 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 5.4% compared to the same period in 2016 to
$2.55 per Share, 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 18,117, up from 17,580 as at December
31, 2016.
- The Board of Directors of the Company approved a dividend
of $0.1125 per restricted voting share, payable December 29, 2017 to shareholders of record on
November 30, 2017, representing an
increase in the targeted annualized dividend to $1.35.
THIRD QUARTER OPERATING RESULTS
CFFO for the third quarter of 2017 was $9.2 million or $0.71 per share on a diluted basis ("Share"), a
slight decrease as compared to $9.3
million or $0.73 per Share for
the same period in 2016. For the rolling twelve-month period ended
September 30, 2017, CFFO was
$2.55 per Share as compared to
$2.42 per Share for the rolling
twelve-month period ended September 30, 2016.
Royalties for the three months ended September 30, 2017 were $12.2 million, compared to $12.6 million for the same period in 2016. For
the nine months ended September 30,
2017, royalties were $34.8 million, compared to
$32.8 million for the same period in
2016.
"Despite modest quarter-over-quarter home price appreciation in
the Greater Toronto Area, a
significant decrease in the region's sales volume weakened the
Canadian Market resulting in a slight decrease in royalty revenue
this quarter," said Phil Soper,
President and Chief Executive Officer, Brookfield Real Estate
Services Inc. "The market impact on our revenues was limited to 3%
as the majority of our fees are fixed in nature."
The increased royalties and improvement in CFFO for the nine
months ended September 30, 2017 were
driven primarily by an increase in the number of REALTORS® in the
Network and a strong Canadian Market in the first six months of the
year.
Net earnings for the three months ended September 30, 2017 were $5.0 million, or $0.52 per Share, compared to a net loss of
$1.0 million or $0.11 per Share, for the same period in 2016. For
the nine months ended September 30,
2017, net earnings were $9.6
million, or $1.01 per Share,
compared to net earnings of $1.1
million or $0.11 per Share,
for the same period in 2016.
THE COMPANY NETWORK
As at September 30, 2017, the
Network was comprised of 18,117 REALTORS®, operating under 294
franchise agreements providing services from 662 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
December 29, 2017, to shareholders of
record on November 30, 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, November 10, 2017 at
9:30 a.m. ET to discuss its third
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=1528779&s=1&k=79E511F5D8A8F92494B4B7F1176681D0
A recording of the conference call will be available in the
Investor Centre section of the Company's website by Wednesday, November 15, 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 "continue", "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.
Brookfield Real
Estate Services Inc.
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Interim Balance
Sheet Highlights
|
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As at
|
|
|
September 30,
|
December
31,
|
(Unaudited, in
thousands of Canadian dollars)
|
|
|
2017
|
2016
|
Cash
|
|
|
$
|
2,644
|
$
|
3,102
|
Other current
assets
|
|
|
4,935
|
4,114
|
Total current
assets
|
|
|
7,579
|
7,216
|
Non-current
assets
|
|
|
87,419
|
85,187
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Total
assets
|
|
|
$
|
94,998
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$
|
92,403
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
|
$
|
867
|
$
|
893
|
Current portion of
purchase obligation
|
|
|
1,611
|
3,559
|
Interest payable on
Exchangeable Units
|
|
|
484
|
476
|
Dividends
payable
|
|
|
1,067
|
1,027
|
Other current
liabilities
|
|
|
525
|
435
|
Total current
liabilities
|
|
|
4,554
|
6,390
|
Debt
facilities
|
|
|
66,163
|
63,720
|
Other non-current
liabilities
|
|
|
98
|
1,114
|
Exchangeable
Units
|
|
|
55,239
|
52,477
|
Total
Liabilities
|
|
|
126,054
|
123,701
|
Shareholders'
deficit
|
|
|
(31,056)
|
(31,298)
|
Total Liabilities
and Shareholders' deficit
|
|
|
$
|
94,998
|
$
|
92,403
|
|
|
|
|
|
Interim Earnings
(Loss) Highlights
|
|
|
|
|
|
Three
months
|
Three
months
|
Nine
months
|
Nine
months
|
|
ended
|
ended
|
ended
|
ended
|
|
September 30,
|
September 30,
|
September
30,
|
September 30,
|
(Unaudited, in
thousands of Canadian dollars)
|
2017
|
2016
|
2017
|
2016
|
Royalties
|
$
|
12,235
|
$
|
12,567
|
$
|
34,772
|
$
|
32,833
|
Administration
Expense
|
(163)
|
(252)
|
(706)
|
(750)
|
Management
Fee
|
(2,288)
|
(2,331)
|
(6,428)
|
(6,021)
|
Interest
Expense
|
(626)
|
(662)
|
(1,923)
|
(1,980)
|
Cash Flow from
Operations
|
9,158
|
9,322
|
25,715
|
24,082
|
Impairment, write-off
and amortization of intangible assets, net
|
(1,280)
|
(2,395)
|
(5,573)
|
(7,539)
|
Interest on
Exchangeable Units
|
(1,444)
|
(1,428)
|
(4,299)
|
(4,283)
|
Loss on fair value of
Exchangeable Units
|
(333)
|
(5,391)
|
(2,762)
|
(6,456)
|
Gain on interest rate
swap
|
547
|
177
|
1,017
|
201
|
Gain / (loss) on fair
value of purchase obligation
|
213
|
311
|
35
|
(1,401)
|
Income tax
expense
|
(1,904)
|
(1,634)
|
(4,567)
|
(3,538)
|
Net and
comprehensive earnings / (loss)
|
$
|
4,957
|
$
|
(1,038)
|
$
|
9,566
|
$
|
1,066
|
Basic earnings /
(loss) per Restricted Voting Share
|
$
|
0.52
|
$
|
(0.11)
|
$
|
1.01
|
$
|
0.11
|
Diluted earnings /
(loss) per Share
|
$
|
0.52
|
$
|
(0.11)
|
$
|
1.01
|
$
|
0.11
|
Cash Flow from
Operations per Share on a diluted basis
|
$
|
0.71
|
$
|
0.73
|
$
|
2.01
|
$
|
1.88
|
Cash Flow from
Operations per Share on a diluted basis - rolling twelve-month
period ended September 30,
|
|
|
$
|
2.55
|
$
|
2.42
|
|
|
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Interim Cash Flow
Highlights
|
|
|
|
|
|
Three
months
|
Three
months
|
Nine
months
|
Nine
months
|
|
ended
|
ended
|
ended
|
ended
|
|
September
30,
|
September
30,
|
September
30,
|
September
30,
|
(Unaudited, in
thousands of Canadian dollars)
|
2017
|
2016
|
2017
|
2016
|
Cash provided by
Operating activities:
|
$
|
6,695
|
$
|
7,077
|
$
|
16,645
|
$
|
15,416
|
Cash provided used
for Investing activities:
|
(12)
|
(7)
|
(10,179)
|
(8,018)
|
Cash provided /
(used) by/for Financing activities:
|
(6,661)
|
(6,081)
|
(6,924)
|
(8,244)
|
Change in cash for
the period
|
22
|
989
|
(458)
|
(846)
|
Cash, beginning of
the period
|
2,622
|
3,810
|
3,102
|
5,645
|
Cash, end of the
period
|
$
|
2,644
|
$
|
4,799
|
$
|
2,644
|
$
|
4,799
|
1 REALTORS® is a trademark identifying
real estate licensees in Canada
who are members of the Canadian Real Estate Association.
SOURCE Brookfield Real Estate Services Inc.