TORONTO, May 8, 2018 /CNW/ - Brookfield Real Estate
Services Inc. (TSX: BRE) (the "Company"), a leading provider of
services to residential real estate brokers and their
REALTORS®1 today announced its first 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 4% compared to 2017 to $2.57 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 18,708, up from 18,135 as at December
31, 2017.
- The Board of Directors of the Company approved a dividend
of $0.1125 per restricted voting share, payable June 29, 2018 to shareholders of record on
May 31, 2018, representing an
increase in the targeted annual dividend to $1.35.
FIRST QUARTER OPERATING RESULTS
Net earnings for the three months ended March 31, 2018 were a net loss of $0.4 million, or $0.04 per Share, compared to net earnings of
$1.3 million or $0.13 per Share, for the same period in 2017.
CFFO for the first quarter was $7.6
million or $0.59 per share on
a diluted basis ("Share"), a 3% increase as compared to
$7.4 million or $0.58 per Share for the same period in 2017. For
the rolling twelve-month period ended March
31, 2018, CFFO was $2.57 per
Share as compared to $2.47 per Share
for the rolling twelve-month period ended March 31, 2017.
Royalties for the three months ended March 31, 2018 were $10.5
million, compared to $10.4
million in Q1 2017. For the rolling twelve-month period
ended March, 31, 2018, royalties were $44.3 million, compared
to $43.5 million for the same period
in 2017.
"Our solid financial results reflect the Company's ability to be
resilient despite volatility in some of Canada's largest real estate markets.
Another quarter of improved cash flow generation highlights the
value of our business model, which emphasizes fixed and recurring
revenue streams," said Phil Soper,
President and Chief Executive Officer, Brookfield Real Estate
Services Inc.
The increased royalties and improvement in CFFO were driven
primarily by an increase in the number of REALTORS® in
the Network.
THE COMPANY NETWORK
As at March 31, 2018, the Network
was comprised of 18,708 REALTORS®, operating under 297 franchise
agreements providing services from 677 locations, with an
approximate 20% share of the Canadian residential real estate
market ("Canadian Market") based on 2017 transactional dollar
volume. The Company Network grew by 573 REALTORS®, largely due to
the purchase of 38 Franchise Agreements representing an annual
revenue stream of approximately $1.3
million.
CASH DIVIDEND
The Company declared a cash dividend of $0.1125 per restricted voting share payable on
June 29, 2018, to shareholders of
record on May 31, 2018. This
represents a targeted annual dividend of $1.35 per restricted voting share.
CONFERENCE CALL
Brookfield Real Estate Services Inc. will discuss its first
quarter financial results at the Company's AGM on Tuesday May 8, 2018 at 10:00 a.m. at Vantage Venues, Inverness Room, 27th Floor, 150 King
Street West, Toronto, Ontario.
Participants can join via webcast at:
https://event.on24.com/wcc/r/1649778/5D4BE6A8C160C8AC2B54099D0E496F6A
Please connect approximately ten minutes prior to the beginning
of the webcast to ensure participation.
A copy of the Annual General Meeting presentation will be
available on the Company's website by Friday, May 11, 2018
at: http://www.brookfieldresinc.com/content/investor_centre/webcasts_and_presentations-25072.html
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 "thrive" "targeted"
"will" 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.
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Brookfield Real
Estate Services Inc.
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Interim Balance
Sheet Highlights
|
|
|
As at
|
March
31,
|
December
31,
|
(Unaudited, in
thousands of Canadian dollars)
|
2018
|
2017
|
Cash
|
$
|
2,648
|
$
|
3,458
|
Other current
assets
|
5,639
|
4,645
|
Total current
assets
|
8,287
|
8,103
|
Non-current
assets
|
92,524
|
85,420
|
Total
assets
|
$
|
100,811
|
$
|
93,523
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
1,014
|
$
|
803
|
Purchase
obligation
|
2,284
|
1,497
|
Interest payable on
Exchangeable Units
|
484
|
484
|
Dividends payable to
shareholders
|
1,067
|
1,067
|
Other current
liabilities
|
-
|
400
|
Total current
liabilities
|
4,849
|
4,251
|
Debt
facilities
|
72,891
|
65,677
|
Exchangeable
Units
|
57,901
|
54,973
|
Total
Liabilities
|
135,641
|
124,901
|
Shareholders'
deficit
|
(34,830)
|
(31,378)
|
Total Liabilities
and Shareholders' deficit
|
$
|
100,811
|
$
|
93,523
|
|
|
|
Interim Earnings
(Loss) Highlights
|
|
|
|
|
|
For three months
ended March 31,
|
|
|
(Unaudited, in
thousands of Canadian dollars)
|
2018
|
2017
|
Royalties
|
$
|
10,470
|
$
|
10,409
|
Administration,
Management Fee and Interest Expense
|
(2,915)
|
(3,035)
|
Cash Flow from
Operations
|
7,555
|
7,374
|
Impairment, write-off
and amortization of intangible assets
|
(2,009)
|
(2,182)
|
Interest on
Exchangeable Units
|
(1,452)
|
(1,428)
|
Loss on fair value of
Exchangeable Units
|
(2,928)
|
(1,365)
|
Gain on interest rate
swap
|
59
|
50
|
Loss on fair value of
purchase obligation
|
(518)
|
(74)
|
Income tax
expense
|
(1,072)
|
(1,096)
|
Net and
comprehensive earnings (loss)
|
$
|
(365)
|
$
|
1,279
|
Basic earnings
(loss) per Restricted Voting Share
|
$
|
(0.04)
|
$
|
0.13
|
Diluted earnings
(loss) per Share
|
$
|
(0.04)
|
$
|
0.13
|
Cash Flow from
Operations per Share on a diluted basis
|
$
|
0.59
|
$
|
0.58
|
|
|
|
Interim Cash Flow
Highlights
|
|
|
|
|
|
For three months
ended March 31,
|
|
|
(Unaudited, in
thousands of Canadian dollars)
|
2018
|
2017
|
Cash provided by
Operating activities:
|
$
|
3,721
|
$
|
3,409
|
Cash provided used
for Investing activities:
|
(8,530)
|
(7,525)
|
Cash provided by
Financing activities:
|
3,999
|
4,319
|
Change in cash for
the period
|
(810)
|
203
|
Cash, beginning of
the period
|
3,458
|
3,102
|
Cash, end of the
period
|
$
|
2,648
|
$
|
3,305
|
SOURCE Royal LePage Limited