TORONTO, Aug. 10, 2021 /CNW/ - Bridgemarq Real Estate
Services Inc. ("Bridgemarq" or the "Company") (TSX: BRE) announced
today its second quarter consolidated financial results and the
approval of a monthly dividend to holders of the Company's
restricted voting shares.
HIGHLIGHTS
- Revenue in the second quarter was $14.0
million, an increase of 22% over the same period in 2020.
Strong housing markets compared to a pandemic-impacted 2020 second
quarter and an increase in the number of REALTORS® in the Company
network contributed to the increase.
- Net earnings for the quarter were $0.9
million or $0.10 per share, on
a fully-diluted basis compared to a loss of $9.2 million in the second quarter of 2020. The
results for the quarter reflect a loss on the fair valuation of the
exchangeable units of $2.5 million,
compared to a loss of $7.9 million
last year.
- Distributable Cash Flow improved to $6.4
million, an increase of 73% over the same period in the
second quarter of 2020.
- The Board of Directors approved a dividend to shareholders of
$0.1125 per restricted voting share
payable September 30, 2021 to
shareholders of record on August 31,
2021.
SECOND QUARTER OPERATING RESULTS
Revenues during the second quarter were $14.0 million, compared to $11.4 million in the same period in 2020. Strong
housing markets and an increase in the number of REALTORS® in the
Company network supported the improvement. Revenues in 2020
were negatively impacted by the implementation of a temporary fee
plan implemented to support our network of franchisees through the
pandemic.
The Company generated net earnings for the quarter of
$0.9 million, or $0.10 per share on a fully diluted
basis. These results included a $2.6
million increase in revenue as a result of the increase in
agent count and the stronger real estate market. Revenue gains were
substantially offset by a $2.5
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 $16.41 at the start of the
quarter to $17.17 at June 30, 2021.
Distributable cash flow for the second quarter of 2021 amounted
to $6.4 million, compared to
$3.7 million generated during the
second quarter of 2020. The increase in distributable cash flow was
primarily due to higher revenues, partly offset by higher
management fees and higher current income tax expenses.
"Our best-in-class technology and training helped the
Company's network of agents and brokers flourish
while navigating the challenges of operating in the pandemic
era. Canadians placed great importance on housing during a time
when public health authorities repeatedly asked us to shelter at
home. As preparedness met strong demand, our brands were able
to grow and profit," said Phil
Soper, President and Chief Executive
Officer, Bridgemarq Real Estate Services
Inc. "Through the second quarter, we saw overall demand
began to moderate from record highs. And while property values
continued to climb, it was at more modest rates
of appreciation.
"Looking ahead, robust housing market activity should be
sustained by pent-up demand from hopeful buyers who were
unsuccessful during the inventory-constrained year just past. The
recovery of hospitality and tourism jobs, the return of hundreds of
thousands of foreign students, and soaring immigration levels bode
well for our investment and rental sector. Canada welcomed over 25,000 immigrants in
June," Soper concluded.
MARKET UPDATE
Low interest rates and the desire for more living space drove
the strong demand that characterized the second half of 2020 and
the first quarter of 2021. While these factors remain, demand did
begin to moderate in the second quarter of the year as some
potential buyers were priced out of the market by rapidly rising
home prices. While demand calmed to a more sustainable pace, it
continued to outstrip supply and home prices rose, albeit at a
moderating rate.
Housing market activity is expected to remain strong in the
months ahead due in part to surging immigration and the return of
rental demand. In October 2020, the
federal government announced that it would accept over 1.2 million
immigrants in the 2021 to 2023 time period. Company research
reveals that new Canadians tend to rent homes during their first
three years in the country. Add to this housing demand from
numerous sectors, including employment recovery in travel, tourism
and hospitality, and the return of in-person classes at
universities and colleges, meaning both domestic and foreign
students will be looking for places to live. This could revitalize
the investor segment and support rising condominium prices. Buyers
who paused their search due to lack of supply or other reasons are
also expected to return to the market as the fierce competition for
listed homes eases.
There remains a concern that if a new wave of COVID-19
infections occurs, it could impact the economy and employment,
slowing housing demand.
CASH DIVIDEND
The Company declared a cash dividend of $0.1125 cents per restricted voting share payable
on September 30, 2021 to shareholders
of record on August 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 June 30, 2021, the Network
was comprised of 19,588 REALTORS®, operating under 286 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.
CONFERENCE CALL
Bridgemarq Real Estate Services Inc. will host a conference
call on Tuesday, August 10, 2021 at
10 a.m. ET to discuss its second
quarter financial results.
To access the call by telephone, please dial 1-888-664-6392 or
416-764-8659.
To access the call online, please visit
https://produceredition.webcasts.com/starthere.jsp?ei=1484472&tp_key=99c2ab872f
Please connect approximately ten minutes prior to the beginning
of the call to ensure participation.
A recording of the conference call will be available in the
Investor Centre section of the Company's website by Friday, August 20, 2021.
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 "are", "begin",
"continued", "could", "demand", "desire", "driven", "eases",
"expected", "flourish", "have", "looking", "met", "navigating",
"impact", "improved", "including", "increase", "is", "low",
"recovery", "remains", "return", "rising", "should", "soaring",
"surging", "sustained", "sustainable", "tend", 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.
Bridgemarq Real
Estate Services Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
Interim Balance
Sheet Highlights
|
|
2021
|
|
2020
|
|
|
|
|
Cash
|
$
|
8,608
|
$
|
9,156
|
|
|
|
|
Other current
assets
|
|
4,591
|
|
3,171
|
|
|
|
|
Total current
assets
|
|
13,199
|
|
12,327
|
|
|
|
|
Non-current
assets
|
|
72,531
|
|
76,632
|
|
|
|
|
Total
assets
|
$
|
85,730
|
$
|
88,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
1,778
|
$
|
1,282
|
|
|
|
|
Interest payable on
Exchangeable Units
|
|
484
|
|
484
|
|
|
|
|
Dividends payable to
shareholders
|
|
1,067
|
|
1,067
|
|
|
|
|
Contract transfer
obligation
|
|
559
|
|
549
|
|
|
|
|
Total current
liabilities
|
|
3,888
|
|
3,382
|
|
|
|
|
Debt
facilities
|
|
70,899
|
|
73,379
|
|
|
|
|
Other non-current
liabilities
|
|
10,270
|
|
11,388
|
|
|
|
|
Exchangeable
Units
|
|
57,136
|
|
49,249
|
|
|
|
|
Total
Liabilities
|
|
142,193
|
|
137,398
|
|
|
|
|
Shareholders'
deficit
|
|
(56,463)
|
|
(48,439)
|
|
|
|
|
Total Liabilities
and Shareholders' deficit
|
$
|
85,730
|
$
|
88,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months
|
|
Three
months
|
|
Six
Months
|
|
Six Months
|
|
|
ended
|
|
ended
|
|
ended
|
|
ended
|
|
|
June
30,
|
|
June 30,
|
|
June
30,
|
|
June 30,
|
Interim Earnings
Highlights
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Fixed franchise
fees
|
$
|
7,665
|
$
|
1,276
|
$
|
15,249
|
$
|
8,817
|
Variable franchise
fees
|
|
4,806
|
|
8,467
|
|
8,551
|
|
11,086
|
Other
revenue
|
|
1,481
|
|
1,651
|
|
3,251
|
|
2,613
|
Revenues
|
|
13,952
|
|
11,394
|
|
27,051
|
|
22,516
|
|
|
|
|
|
|
|
|
|
Cost of other
revenue
|
|
(294)
|
|
(165)
|
|
(567)
|
|
(284)
|
Administration
expenses
|
|
(90)
|
|
(174)
|
|
(142)
|
|
(829)
|
Management
fees
|
|
(5,364)
|
|
(4,203)
|
|
(10,541)
|
|
(8,279)
|
Interest
expense
|
|
(745)
|
|
(732)
|
|
(1,485)
|
|
(1,482)
|
|
|
7,459
|
|
6,120
|
|
14,316
|
|
11,642
|
Impairment, write-off
and amortization of intangible assets
|
|
(1,913)
|
|
(2,311)
|
|
(3,864)
|
|
(4,730)
|
Interest on
Exchangeable Units
|
|
(1,452)
|
|
(1,452)
|
|
(2,904)
|
|
(2,904)
|
Gain (loss) on fair
value of Exchangeable Units
|
|
(2,529)
|
|
(11,048)
|
|
(7,887)
|
|
9,883
|
Gain (loss) on
interest rate swap
|
|
380
|
|
(211)
|
|
945
|
|
(2,546)
|
Gain on deferred
payments
|
|
-
|
|
881
|
|
-
|
|
881
|
Income tax
expense
|
|
(1,008)
|
|
(556)
|
|
(2,116)
|
|
(1,286)
|
Deferred income tax
recovery (expense)
|
|
(23)
|
|
(599)
|
|
(112)
|
|
10
|
Net and
comprehensive (loss) earnings
|
$
|
914
|
$
|
(9,176)
|
$
|
(1,622)
|
$
|
10,950
|
Basic (loss)
earnings per Restricted Voting Share
|
$
|
0.10
|
$
|
(0.97)
|
$
|
(0.17)
|
$
|
1.15
|
Diluted (loss)
earnings per Share
|
$
|
0.10
|
$
|
(0.97)
|
$
|
(0.17)
|
$
|
0.31
|
|
|
|
|
|
|
|
|
|
Cash Flow
Highlights
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities:
|
$
|
5,291
|
$
|
10,485
|
$
|
8,511
|
$
|
13,375
|
Cash used for
investing activities:
|
|
(47)
|
|
(1,845)
|
|
(157)
|
|
(2,757)
|
Cash used for
financing activities:
|
|
(5,701)
|
|
(3,201)
|
|
(8,902)
|
|
(6,402)
|
Change in cash for
the period
|
|
(457)
|
|
5,439
|
|
(548)
|
|
4,216
|
Cash, beginning of
the period
|
|
9,065
|
|
3,979
|
|
9,156
|
|
5,202
|
Cash, end of the
period
|
$
|
8,608
|
$
|
9,418
|
$
|
8,608
|
$
|
9,418
|
|
|
|
|
|
|
|
|
|
Distributable Cash
Flow Highlights
|
|
|
|
|
|
|
|
|
Distributable Cash
Flow
|
$
|
6,404
|
$
|
3,719
|
$
|
12,043
|
$
|
7,599
|
Distributable Cash
Flow per Share
|
$
|
0.50
|
$
|
0.29
|
$
|
0.94
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
months
|
|
Twelve
months
|
|
|
|
|
|
|
ended
|
|
ended
|
|
|
|
|
|
|
June 30,
2021
|
|
June 30,
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributable Cash
Flow
|
$
|
18,190
|
$
|
16,988
|
|
|
|
|
Distibutable Cash
Flow per Share
|
$
|
1.42
|
$
|
1.33
|
|
|
|
|
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.
|
SOURCE Bridgemarq Real Estate Services Inc.