TORONTO, May 11, 2021 /CNW/ - Bridgemarq Real Estate
Services Inc. ("Bridgemarq" or the "Company") (TSX: BRE) announced
today its first quarter consolidated financial results and the
approval of a monthly dividend to holders of the Company's
restricted voting shares.
HIGHLIGHTS
- Revenue in the first quarter was strong at $13.1 million, an increase of 18% over the same
period in 2020. Strong housing markets and an increase in the
number of REALTORS® in the Company network contributed to the
increase.
- The Company generated a net loss for the quarter of
$2.5 million or $0.27 per share, on a fully-diluted basis
compared to earnings of $20.1 million
in the first quarter of 2020. The difference was due to non-cash,
revaluation adjustments on the Exchangeable Units issued by the
Company, driven by an increase in the Company's share price during
the quarter.
- Distributable Cash Flow improved to $5.6
million or $0.44 per
fully-diluted share from $3.9 million
or $0.30 per share in the first
quarter of 2020.
- The Board of Directors approved a dividend to shareholders of
$0.1125 per restricted voting share
payable June 30, 2021 to shareholders
of record on May 31, 2021.
- The Company's annual shareholders' meeting will be held on
May 11th, 2021 at 10 a.m. eastern time.
FIRST QUARTER OPERATING RESULTS
Revenues during the first quarter were $13.1 million, compared to $11.1 million in the same period in 2020. The
increase was primarily due to strong housing markets and an
increase of 270 REALTORS® in the Company network.
The Company generated a net loss for the quarter of $2.5 million, or $0.27 per share on a fully diluted
basis. These results included a $5.4
million loss on the fair value of the Exchangeable Units
issued by the Company driven by an increase in the Company's share
price from $14.80 at the start of the
quarter to $16.41 at March 31, 2021.
Distributable cash flow for the first quarter of 2021 amounted
to $5.6 million, compared to
$3.9 million generated during the
first quarter of 2020. The increase in distributable cash flow was
primarily due to higher revenues, partly offset by higher
management fees and higher income tax expenses.
"From coast to coast, in the cities, suburbs and countryside,
our Realtors experienced one of the busiest winter markets on
record. Seasonal activity levels are typically very low in January
and February. This year saw uncharacteristically high consumer
demand through the entire first quarter. The Company was able to
capitalize and drive strong financial results," said Phil Soper, President and Chief Executive
Officer, Bridgemarq Real Estate Services Inc. "The supportive
market and growth in the size of our agent network positions us
well for a successful 2021."
MARKET UPDATE
The Canadian Market finished 2020 on a high note, positive
momentum that continued right through the quarter and April,
2021. Continued low borrowing costs, an improving employment
picture and high levels of demand from Canadians seeking to improve
housing situations have put upward pressure on
home prices.
While market fundamentals are poised to sustain strong momentum
into the back half of the year, it remains to be seen how factors
such as stubbornly high unemployment in certain sectors and
eroding affordability might act as a drag on future growth.
Recovering immigration numbers and a return of tens of thousands
of temporary residents, predominantly foreign students, is
expected to support continued recovery in condominiums, a sector
that has lagged in performance over the past year.
As more people are vaccinated, additional inventory could enter
the market, as consumer comfort levels rise. This could partly ease
the severe housing shortage that has developed during the
pandemic.
A third wave of COVID-19 continues to disrupt the economy and
the day-to-day lives of Canadians. However, real estate services
technology available prior to the pandemic, as well as new
innovations over the past year that have enhanced digital services,
have allowed for most brokerage and agent activity to be seamlessly
conducted online. Where onsite activities are required, COVID-19
best practices are used to significantly reduce risk.
CASH DIVIDEND
The Company declared a cash dividend of $0.1125 cents per restricted voting share payable
on June 30, 2021 to shareholders of
record on May 31, 2021. The dividend
distribution represents a target annual dividend of $1.35 per restricted voting share, which is
consistent with 2020.
THE COMPANY NETWORK
As at March 31, 2021, the Network
was comprised of 19,316 REALTORS®, operating under 287 franchise
agreements providing services from 663 locations, with an
approximate 16% share of the Canadian residential real estate
market based on 2020 transactional dollar volume.
SHAREHOLDERS MEETING
The Company will be holding its annual meeting of shareholders
on May 11th, 2020 at 10 a.m. eastern time. The meeting is a
virtual only, live audio webcast.
To access the shareholders' meeting, please
visit https://web.lumiagm.com/446931801 and follow the
login instructions. Shareholders and proxyholders will require
their unique control number, which is provided by AST Trust Company
Canada in accordance with the instructions provided to
shareholders. Guests are welcomed to join the meeting by following
the platform's instructions on the morning of the meeting.
For more information on participation at the virtual only, live
audio webcast, please review the Company's meeting guide
(http://www.bridgemarq.com/meeting-guide) and the Management
Information Circular. For answers to frequently asked questions
regarding the virtual meeting platform, please
visit https://go.lumiglobal.com/faq.
DISTRIBUTABLE CASH FLOW
This news release and accompanying financial statements make
reference to distributable cash flow. Distributable cash flow is
defined as operating income before deducting amortization and net
impairment or recovery of intangible assets, minus current income
tax expense and minus cash used in investing activities.
Distributable cash flow 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 holders of exchangeable units converted Class B LP
units into restricted voting shares. The Company uses distributable
cash flow to assess its operating results and the value of its
business and believes that many of its shareholders and analysts
also find this measure useful. Distributable cash flow 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". Words such as "supportive", "growth",
"continued", "improving", "demand", "pressure", "are", "sustain",
"momentum", "remains", "stubbornly", "eroding", "future",
recovering", "return", "is", "support", "have", "could", "rise",
"ease", "shortage", "has" 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: the duration
and effects of the COVID-19 pandemic, including the impact of
COVID-19 on the economy and the Company's business, the impact of
government or other regulatory initiatives to address the impact of
the spread of COVID-19 on the Canadian economy, including the
impact on real estate markets, changes in the supply or demand of
houses for sale in Canada or in
any particular region within Canada, changes in the selling price for
houses in Canada or any particular
region within Canada, changes in
the Company's cash flow as a result of COVID-19, changes in the
Company's strategy with respect to and/or ability to pay dividends,
changes in the productivity of the Company's REALTORS® or the
commissions they charge their customers, changes in government
policy, laws or regulations which could reasonably affect the
housing markets in Canada,
consumer response to any changes in the housing markets in
Canada or any changes in
government policy, laws or regulations, 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, competition from other real
estate brokers or from discount and/or Internet-based real estate
alternatives, the closing of existing real estate brokerage offices
as a result of COVID-19 or otherwise, 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, 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. Forward-looking information is based on
various material factors or assumptions, which are based on
information currently available to management. Material factors or
assumptions that were applied in drawing conclusions or making
estimates set out in the forward-looking statements include, but
are not limited to: anticipated economic conditions, anticipated
impact of government policies, anticipated financial performance,
anticipated market conditions, business prospects, the successful
execution of the Company's business strategies and recent
regulatory developments, including as the foregoing relate to
COVID-19. The factors underlying current expectations are dynamic
and subject to change. Although the forward-looking statements
contained in this press release are based upon what management
believes are reasonable assumptions, the Company cannot assure
readers that actual results will be consistent with these
forward-looking statements. 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 Bridgemarq Real Estate Services
Bridgemarq is a leading provider of services to residential real
estate brokers and a network of approximately 19,000 REALTORS®1. We
operate in Canada under the Royal LePage, Via Capitale
and Johnston & Daniel brands. For more information, go
to bridgemarq.com.
Bridgemarq is an affiliate of Brookfield Business Partners, a
business services and industrials company focused on owning and
operating high-quality businesses that benefit from barriers to
entry and/or low production costs. Brookfield Business Partners is
listed on the New York and Toronto stock
exchanges. Further information is available
at bbu.brookfield.com.
1 The trademarks
REALTOR®, REALTORS® and the REALTOR® logo are controlled by The
Canadian Real Estate Association (CREA) and identify real estate
professionals who are members of CREA.
|
Bridgemarq Real
Estate Services Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
December
31,
|
Interim Balance
Sheet Highlights
|
2021
|
2020
|
Cash
|
$
9,065
|
$
9,156
|
Other current
assets
|
4,685
|
3,171
|
Total current
assets
|
13,750
|
12,327
|
Non-current
assets
|
74,560
|
76,632
|
Total
assets
|
$
88,310
|
$
88,959
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
1,650
|
$
1,282
|
Interest payable on
Exchangeable Units
|
484
|
484
|
Dividends payable to
shareholders
|
1,067
|
1,067
|
Contract transfer
obligation
|
552
|
549
|
Total current
liabilities
|
3,753
|
3,382
|
Debt
facilities
|
73,388
|
73,379
|
Other non-current
liabilities
|
10,738
|
11,388
|
Exchangeable
Units
|
54,607
|
49,249
|
Total
Liabilities
|
142,486
|
137,398
|
Shareholders'
deficit
|
(54,176)
|
(48,439)
|
Total Liabilities
and Shareholders' deficit
|
$
88,310
|
$
88,959
|
|
|
|
|
Three
months
|
Three
months
|
|
ended
|
ended
|
|
March
31,
|
March
31,
|
Interim Earnings
Highlights
|
2021
|
2020
|
Fixed franchise
fees
|
$
7,584
|
$
7,541
|
Variable franchise
fees
|
3,745
|
2,619
|
Other
revenue
|
1,770
|
962
|
Revenues
|
13,099
|
11,122
|
|
|
|
Cost of other
revenue
|
(273)
|
(119)
|
Administration
expenses
|
(52)
|
(655)
|
Management
fees
|
(5,177)
|
(4,076)
|
Interest
expense
|
(740)
|
(750)
|
|
6,857
|
5,522
|
Impairment, write-off
and amortization of intangible assets
|
(1,951)
|
(2,419)
|
Interest on
Exchangeable Units
|
(1,452)
|
(1,452)
|
Gain (loss) on fair
value of Exchangeable Units
|
(5,358)
|
20,931
|
Gain (loss) on
interest rate swap
|
565
|
(2,335)
|
Income tax
expense
|
(1,108)
|
(730)
|
Deferred income tax
recovery (expense)
|
(89)
|
609
|
Net and
comprehensive (loss) earnings
|
$
(2,536)
|
$
20,126
|
Basic (loss)
earnings per Restricted Voting Share
|
$
(0.27)
|
$
2.12
|
Diluted (loss)
earnings per Share
|
$
(0.27)
|
$
0.05
|
|
|
|
Cash Flow
Highlights
|
|
|
Cash provided by
operating activities:
|
$
3,220
|
$
2,890
|
Cash used for
investing activities:
|
(110)
|
(912)
|
Cash used for
financing activities:
|
(3,201)
|
(3,201)
|
Change in cash for
the period
|
(91)
|
(1,223)
|
Cash, beginning of
the period
|
9,156
|
5,202
|
Cash, end of the
period
|
$
9,065
|
$
3,979
|
|
|
|
|
Twelve
months
|
Twelve
months
|
|
ended
|
ended
|
|
31-Mar-20
|
31-Mar-19
|
Distributable Cash
Flow Highlights
|
|
|
Distributable Cash
Flow
|
$
15,505
|
$
18,151
|
Distributable Cash
Flow per Share
|
$
1.21
|
$
1.42
|
SOURCE Bridgemarq Real Estate Services Inc.