TORONTO, March 9,
2023 /CNW/ - Bridgemarq Real Estate Services Inc.
("Bridgemarq" or the "Company") (TSX: BRE) today released its
annual consolidated financial results and announced a monthly
dividend to holders of the Company's restricted voting shares.
HIGHLIGHTS
- Revenue for 2022 was $49.9
million compared to $50.2
million in 2021, as growth in the number of REALTORS® in the
Company Network served to substantially offset the impact of weaker
real estate markets in 2022.
- The Company recorded net earnings of $21.0 million or $1.19 per share in 2022, on a fully diluted
basis, compared to $4.8 million or
$0.50 per share in 2021, as a result
of an $11.5 million gain on the
valuation of the Exchangeable Units, compared to a loss of
$5.0 million in 2021.
- Distributable Cash Flow per Share amounted to $1.59 for 2022, compared to $1.66 for the prior year.
- The Company's network of REALTORS® increased to 20,686 at
December 2022, up from 20,159 in
2021.
- The Board of Directors approved a dividend to shareholders of
$0.1125 per Restricted Voting Share
payable April 28, 2023, to
shareholders of record on March 31,
2023.
FOURTH QUARTER OPERATING
RESULTS
For the year ending December 31,
2022, revenues were $49.9
million compared to $50.2
million in 2021. The decrease in revenue results from
significant weakness in the Canadian real estate market in the last
half of the year, partly offset by an increase in the number of
REALTORS® in the Company Network. The Company grew its agent count
by 3% in 2022. During the fourth quarter, revenues were
$10.4 million, compared to
$10.7 million last year.
In 2022, the Company recorded net earnings of $21.0 million, compared to $4.8 million in 2021. The improved result was due
to an $11.5 million gain on the
valuation of the Exchangeable Units, compared to a loss of
$5.0 million in 2021. The fair
valuation adjustment on the Exchangeable Units is directly related
to changes in the market price of the Company's Restricted Voting
Shares. For the fourth quarter, the Company generated net earnings
of $6.0 million, or $0.18 per Share, compared to net earnings of
$2.5 million, or $0.22 per Share, in the same quarter of 2021.
Distributable Cash Flow for the year amounted to $20.2 million, or $1.59 per Share, compared to the $21.3 million, or $1.66 per Share, recorded in 2021. The lower cash
flow is due to lower revenues, higher administration expenses and
higher income taxes partly offset by lower management fees. For the
fourth quarter, Distributable Cash Flow amounted to $3.8 million, compared to $4.1 million in 2021.
"Despite a significant reduction in transaction volumes in
Canadian real estate throughout 2022, following nearly two years of
pandemic-fueled intensity, we are pleased with our performance over
the last year and the Company's ability to weather market
downturns, due to our largely fixed-revenue per agent driven
revenues," said Phil Soper,
President and Chief Executive Officer, Bridgemarq Real Estate
Services, Inc. "While a rapid rise in interest rates hampered
demand and sent many buyers and sellers to the sidelines, the
Company was able to continue to grow its REALTOR® network,
welcoming more than 500 agents to the Company's brands last year.
The strength of our reputation in the market and our innovative
technology offering continues to attract productive real estate
professionals to the Company."
MARKET UPDATE
The Canadian residential real estate market posted further
declines in the fourth quarter as sales volumes decreased
nationally by 38% compared to the same period in 2021, and 25% for
the full year compared to the record volumes recorded in
2021.1 According to the Canadian Real Estate
Association, the national average selling price declined 12% in the
fourth quarter compared to the same period in 2021, however home
prices remain significantly higher than pre-pandemic levels,
increasing 26% compared to the fourth quarter of 2019.
A nationwide shortage in housing supply helped to keep prices
from declining further, as many sellers appear to have delayed
listing their homes until demand improves. Housing activity may
increase in the coming months, as both buyers and sellers are
expected to return to the market once interest rates, which saw
their highest levels in 15 years early in 2023, stabilize.
Canada's inflation rate
continues to fall, reaching 6.3% in December, 2022, and 5.9% in
January, 2023.2 Inflation has not come down as much or
as quickly as the Bank of Canada
might have hoped, in part because of the country's strong job
market, which continues to support the economy. A series of
interest rate hikes in 2022 contributed to lower home sales and
decreased demand throughout the year. If the central bank continues
to hold the policy rate, activity in the market could return to
levels consistent with historical trends.
___________________________
|
1 CREA
Canadian Housing Market Statistics
|
2
Statistics Canada, Consumer Price Index, January
2023
|
CASH DIVIDEND
The Company declared a cash dividend of $0.1125 per Restricted Voting Share payable on
April 28, 2023, to shareholders
of record on March 31, 2023. The
dividend paid during 2022 amounted to $1.35 per Restricted Voting Share, consistent
with 2021.
THE COMPANY NETWORK
As at December 31, 2022, the
Company Network was comprised of 20,686 REALTORS® operating under
283 Franchise Agreements from 725 locations. During 2022, REALTORS®
in the Company Network participated in approximately 28% of all
home resales in Canada.
CONFERENCE CALL
Bridgemarq Real Estate Services Inc. will host a conference
call on Thursday, March 9,
2023, at 10 a.m. ET to discuss
its fourth quarter financial results.
To access the call by telephone, please dial 1-888-254-3590 or
647-484-0475 and enter confirmation number 3623041.
To access the call online, please visit
https://event.mymeetingroom.com/Public/ClickToJoin/ZW5jPW1TZXlxRGt2U09lZEQwYVVPcUZzQXRzaHl1NW5jVGVodEtGUTJ0WFZJNjRrUHFKU3ZtWkNYdz09
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 Monday, March 13, 2023.
DISTRIBUTABLE CASH FLOW AND
DISTRIBUTABLE CASH FLOW PER SHARE
This news release and accompanying financial statements make
reference to Distributable Cash Flow and Distributable Cash Flow
per Share, which are non-GAAP financial measures and do not have
any standardized meaning under International Financial Reporting
Standards and, accordingly, may not be comparable to similar
measures used by other companies. Distributable Cash Flow
represents operating income before deducting amortization and net
impairment of intangible assets, minus current income tax expense,
minus cash used in investing activities. Distributable Cash Flow
per Share is calculated by dividing the Distributable Cash Flow by
the total number of Restricted Voting Shares outstanding, on a
diluted basis. Management believes that Distributable Cash Flow and
Distributable Cash Flow per Share are useful supplemental measures
of performance as they provide investors with an indication of the
amount of cash flow generated after investing activities which is
available to holders of Restricted Voting Shares and Exchangeable
Unitholders, subject to working capital and other investment
requirements.
FORWARD-LOOKING
STATEMENTS
This news release contains forward-looking information and other
"forward-looking statements". Words such as, "continues", "appear",
"until", "may", "expect", "could", 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: any resurgence
of COVID-19 (including any impact of COVID-19 on the economy and
the Company's business), 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, 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 or the economy in general, changes to
any products or services developed or offered by the Company,
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, changes in 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, other developments in the residential real estate
brokerage industry or the Company that reduce the number of
REALTORS® in the Company's Network or 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 21,000
REALTORS®3. 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.
_____________________________
|
3 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.
|
|
|
|
|
|
|
December
31,
|
December
31,
|
Balance Sheet
Highlights
|
2022
|
2021
|
Cash
|
$
6,419
|
$
6,217
|
Other current
assets
|
5,469
|
3,917
|
Total current
assets
|
11,888
|
10,134
|
Non-current
assets
|
60,741
|
68,462
|
Total
assets
|
$
72,629
|
$
78,596
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
1,138
|
$
1,107
|
Interest payable on
Exchangeable Units
|
484
|
484
|
Dividends payable to
shareholders
|
1,067
|
1,067
|
Contract transfer
obligation
|
602
|
573
|
Debt
facilities
|
66,959
|
|
Total current
liabilities
|
70,250
|
3,231
|
Debt
facilities
|
|
68,419
|
Other non-current
liabilities
|
7,966
|
9,152
|
Exchangeable
Units
|
42,727
|
54,274
|
Total
Liabilities
|
120,943
|
135,076
|
Shareholders'
deficit
|
(48,314)
|
(56,480)
|
Total Liabilities
and Shareholders' deficit
|
$
72,629
|
$
78,596
|
|
Three
months
|
Three
months
|
|
|
|
ended
|
ended
|
Year
ended
|
Year ended
|
|
December
31,
|
December 31,
|
December
31,
|
December 31,
|
Interim Earnings
Highlights
|
2022
|
2021
|
2022
|
2021
|
Fixed franchise
fees
|
$
8,445
|
$
7,931
|
$
33,150
|
$
31,016
|
Variable franchise
fees
|
1,249
|
1,716
|
12,465
|
13,750
|
Other
revenue
|
730
|
1,070
|
4,256
|
5,436
|
Revenues
|
10,424
|
10,717
|
49,871
|
50,202
|
|
|
|
|
|
Cost of other
revenue
|
(315)
|
(253)
|
(1,207)
|
(1,035)
|
Administration
expenses
|
(210)
|
(240)
|
(1,120)
|
(646)
|
Management
fees
|
(4,496)
|
(4,631)
|
(19,872)
|
(20,158)
|
Interest
expense
|
(759)
|
(735)
|
(2,970)
|
(2,960)
|
|
4,644
|
4,858
|
24,702
|
25,403
|
Write-off of intangible
assets
|
|
-
|
(154)
|
-
|
Amortization of
intangible assets
|
(1,761)
|
(1,862)
|
(7,168)
|
(7,631)
|
Interest on
Exchangeable Units
|
(1,452)
|
(1,452)
|
(5,806)
|
(5,806)
|
Gain (loss) on fair
value of Exchangeable Units
|
5,191
|
1,132
|
11,547
|
(5,025)
|
Gain on interest rate
swap
|
48
|
688
|
2,203
|
1,887
|
Income tax
expense
|
(668)
|
(715)
|
(3,948)
|
(3,818)
|
Deferred income tax
expense
|
3
|
(132)
|
(407)
|
(248)
|
Net and
comprehensive earnings (loss)
|
$
6,005
|
$
2,517
|
$
20,969
|
$
4,762
|
Basic earnings
(loss) per Restricted Voting Share
|
$
0.63
|
$
0.27
|
$
2.21
|
$
0.50
|
Diluted earnings
(loss) per Share
|
$
0.18
|
$
0.22
|
$
1.19
|
$
0.50
|
|
|
|
|
|
Cash Flow
Highlights
|
|
|
|
|
Cash provided by
operating activities:
|
$
2,213
|
$
2,318
|
$
15,103
|
$
15,139
|
Cash used for investing
activities:
|
(196)
|
(66)
|
(598)
|
(275)
|
Cash used for financing
activities:
|
(3,201)
|
(5,701)
|
(14,303)
|
(17,803)
|
Change in cash for
the period
|
(1,184)
|
(3,449)
|
202
|
(2,939)
|
Cash, beginning of
the period
|
7,603
|
9,666
|
6,217
|
9,156
|
Cash, end of the
period
|
$
6,419
|
$
6,217
|
$
6,419
|
$
6,217
|
|
|
|
|
|
Distributable Cash
Flow Highlights
|
|
|
|
|
|
|
|
|
|
Distributable Cash
Flow
|
$
3,781
|
$
4,077
|
$
20,156
|
$
21,310
|
Distributable Cash Flow
per Share
|
$
0.30
|
$
0.32
|
$
1.57
|
$
1.66
|
|
|
|
|
Twelve
months
|
Twelve
months
|
|
ended
|
ended
|
|
December
31,
|
December 31,
|
|
|
|
Distributable Cash
Flow
|
$
20,156
|
$
21,310
|
Distributable Cash Flow
per Share
|
$
1.57
|
$
1.66
|
Distributable Cash
Flow Reconciled to Cash Flow from Operating
Activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
months
|
Three months
|
Twelve
months
|
Twelve
months
|
(Unaudited)
|
ended
|
ended
|
ended
|
ended
|
($ 000's)
|
December
31,
|
December 31,
|
December
31,
|
December 31,
|
|
2022
|
2021
|
2022
|
2021
|
|
|
|
|
|
Cash flow from
operating activities
|
$
2,213
|
$
2,318
|
$
15,103
|
$
15,139
|
Add
(deduct):
|
|
|
|
|
Interest on Exchangeable
Units
|
1,452
|
1,451
|
5,806
|
5,806
|
Current Income tax
expense
|
(668)
|
(715)
|
(3,948)
|
(3,818)
|
Income taxes paid
|
825
|
1,470
|
4,075
|
4,350
|
Changes in non-cash working
capital
|
159
|
(319)
|
(241)
|
358
|
Interest expense
|
(2,250)
|
(2,148)
|
(8,763)
|
(8,602)
|
Interest paid
|
2,246
|
2,086
|
8,722
|
8,353
|
Interest income
|
72
|
-
|
129
|
(28)
|
Interest received
|
(72)
|
-
|
(129)
|
27
|
Deferral of
payments
|
-
|
-
|
-
|
-
|
Gain on deferred
payments
|
-
|
-
|
-
|
-
|
Cash used for investing
activities
|
(196)
|
(66)
|
(598)
|
(275)
|
Distributable Cash
Flow
|
$
3,781
|
$
4,077
|
$
20,156
|
$
21,310
|
|
|
|
|
|
For twelve months
ended,
|
December
31,
|
December 31,
|
(in 000's) except per
Share amounts
|
2022
|
2021
|
|
|
|
Revenues
|
$
49,871
|
$
50,202
|
Less:
|
|
|
Cost of other
revenue
|
1,207
|
1,035
|
Administration
expenses
|
1,120
|
646
|
Management fees
|
19,872
|
20,158
|
Interest expense
|
2,970
|
2,960
|
Current income tax
expense
|
3,948
|
3,818
|
Cash used for investing
activities
|
598
|
275
|
Distributable Cash
Flow
|
$
20,156
|
$
21,310
|
SOURCE Bridgemarq Real Estate Services Inc.