TORONTO, Nov. 9, 2021 /CNW/ - Bridgemarq Real Estate
Services Inc. ("Bridgemarq" or the "Company") (TSX: BRE) today
announced its third quarter consolidated financial results and the
approval of a monthly dividend to holders of the Company's
restricted voting shares.
HIGHLIGHTS
- Revenue in the third quarter was $12.4
million, an increase of 16% over the same period in 2020.
The primary drivers of the improvement were an increase in the
number of REALTORS® in the Company network and the return of
standard fees.
- Net earnings for the quarter were $3.9
million or $0.28 per share, on
a fully-diluted basis compared to a loss of $2.2 million or $0.23 per share in the third quarter of
2020.
- Distributable Cash Flow improved to $5.2
million from $4.4 in the third
quarter of 2020.
- The Board of Directors approved a dividend to shareholders of
$0.1125 per restricted voting share
payable December 31, 2021 to
shareholders of record on November 30,
2021.
- The Board of Directors approved a resolution to increase the
size of the Board to six directors and appointed Ms. Jitanjli Datt
as a director of the Company.
THIRD QUARTER OPERATING RESULTS
Revenues during the third quarter were $12.4 million, compared to $10.7 million in the same period in 2020. For the
period from April 1, 2020 to
December 31, 2020, the Company
provided fee relief to its network of REALTORS®1 which
contributed to lower revenues in the third quarter of 2020. The
Pandemic Fee Relief Plan suspended fixed fees and charged higher
variable fees, subject to a cap. On January 1, 2021, the Company reverted to its
standard fee plan which provides for fees that are more fixed in
nature. The Company also benefited from an increase in the number
of REALTORS® in the Company network compared to 2020.
The Company generated net earnings for the quarter of
$3.9 million, or $0.28 per share on a fully diluted basis, an
improvement over the loss of $2.2
million, or $0.23 per share in
2020. The increase is due to improved operating results and a
$1.7 million unrealized gain on the
fair valuation of the Exchangeable Units compared to an unrealized
loss of $3.5 million during the third
quarter of 2020.
Distributable cash flow for the third quarter of 2021 amounted
to $5.2 million, compared to
$4.4 million generated during the
third quarter of 2020. The increase in distributable cash flow was
primarily due to higher revenues resulting from the expiry of the
Pandemic Fee Relief Plan on January 1,
2021, partly offset by higher management fees, higher
administration expense and higher current income tax expense.
"We are pleased with the Company's performance over the
challenging year past. Our network of leading brokers and agents
has grown greatly, and the firm's financial performance has been
very strong," said Phil Soper,
President and Chief Executive Officer, Bridgemarq Real Estate
Services Inc. "The support that our leadership team across the
nation provided Realtors during the pandemic, together with our
industry leading, cloud-based, AI-driven technology has helped our
people flourish in the difficult operating environment. We are
pleased that our proven business model has continued to deliver
strong cash flow and believe the Company's brands will continue to
attract and retain talented real estate professionals."
MARKET UPDATE
Sales activity was high compared to historic third quarter
levels as Canadians continued to prioritize home ownership during
the pandemic. As demand continued to outstrip available inventory,
sales activity during the quarter was constrained by available
product resulting in slightly lower year-over-year activity.
Canada's inventory shortage is
evident in cities from coast-to-coast. As buyers struggle to
transact, the pipeline of demand continues to grow and is expected
to put further upward pressure on home prices.
CASH DIVIDEND
The Company declared a cash dividend of $0.1125 cents per restricted voting share payable
on December 31, 2021 to shareholders
of record on November 30, 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 September 30, 2021, the
Network was comprised of 19,934 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.
BOARD OF DIRECTORS
The Board of Directors approved a resolution to increase the
size of the board from five members to six and appointed Ms.
Jitanjli Datt as an Independent Director of the Company. Ms. Datt
previously held a strategic advisory position at Forum Equity
Partners, an alternative investment management firm with a focus on
real estate and private equity. Ms. Datt is a graduate of Sir
Wilfrid Laurier University with an
Honours BBA degree. Ms. Datt will remain a director until the
next annual meeting of shareholders, at which time she is expected
to be considered for election as an Independent Director at the
meeting.
CONFERENCE CALL
Bridgemarq Real Estate Services Inc. will host a conference
call on Tuesday, November 9, 2021 at
10 a.m. ET to discuss its third
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=1508763&tp_key=8bec61f617
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, November 19, 2021.
DISTRIBUTABLE CASH FLOW AND DISTRIBUTABLE CASH FLOW PER
SHARE
This news release and accompanying financial statements makes
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 "are", "believe",
"continued", "demand", "expected", "is", "provides", "put",
"struggle", "upward", "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: 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 20,000
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.
|
September
30
|
December
31,
|
Interim Balance
Sheet Highlights
|
2021
|
2020
|
Cash
|
$
|
|
9,666
|
$
|
|
9,156
|
Other current
assets
|
|
|
4,057
|
|
|
3,171
|
Total current
assets
|
|
|
13,723
|
|
|
12,327
|
Non-current
assets
|
|
|
70,533
|
|
|
76,632
|
Total
assets
|
$
|
|
84,256
|
$
|
|
88,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
|
1,377
|
$
|
|
1,282
|
Interest payable on
Exchangeable Units
|
|
|
484
|
|
|
484
|
Dividends payable to
shareholders
|
|
|
1,067
|
|
|
1,067
|
Current income taxes
payable
|
|
|
315
|
|
|
-
|
Contract transfer
obligation
|
|
|
566
|
|
|
549
|
Total current
liabilities
|
|
|
3,809
|
|
|
3,382
|
Debt
facilities
|
|
|
70,909
|
|
|
73,379
|
Other non-current
liabilities
|
|
|
9,929
|
|
|
11,388
|
Exchangeable
Units
|
|
|
55,406
|
|
|
49,249
|
Total
Liabilities
|
|
|
140,053
|
|
|
137,398
|
Shareholders'
deficit
|
|
|
(55,797)
|
|
|
(48,439)
|
Total Liabilities
and Shareholders' deficit
|
$
|
|
84,256
|
$
|
|
88,959
|
|
Three
months
|
Three
months
|
|
Nine
Months
|
|
Nine
Months
|
|
ended
|
ended
|
|
ended
|
|
ended
|
|
September
30,
|
September
30,
|
|
September
30,
|
|
September
30,
|
Interim Earnings
Highlights
|
2021
|
2020
|
|
2021
|
|
2020
|
Fixed franchise
fees
|
$
|
|
7,836
|
$
|
|
1,239
|
$
|
23,085
|
$
|
10,056
|
Variable franchise
fees
|
|
|
3,483
|
|
|
8,038
|
|
12,034
|
|
19,124
|
Other
revenue
|
|
|
1,115
|
|
|
1,460
|
|
4,366
|
|
4,073
|
Revenues
|
|
|
12,434
|
|
|
10,737
|
|
39,485
|
|
33,253
|
|
|
|
|
|
|
|
|
|
|
|
Cost of other
revenue
|
|
|
(215)
|
|
|
(197)
|
|
(782)
|
|
(481)
|
Administration
recoveries (expenses)
|
|
|
(264)
|
|
|
50
|
|
(406)
|
|
(779)
|
Management
fees
|
|
|
(4,986)
|
|
|
(4,411)
|
|
(15,527)
|
|
(12,690)
|
Interest
expense
|
|
|
(740)
|
|
|
(761)
|
|
(2,225)
|
|
(2,243)
|
|
|
|
6,229
|
|
|
5,418
|
|
20,545
|
|
17,060
|
Impairment, write-off
and amortization of intangible assets
|
|
|
(1,905)
|
|
|
(2,117)
|
|
(5,769)
|
|
(6,847)
|
Interest on
Exchangeable Units
|
|
|
(1,452)
|
|
|
(1,452)
|
|
(4,355)
|
|
(4,355)
|
Gain (loss) on fair
value of Exchangeable Units
|
|
|
1,730
|
|
|
(3,527)
|
|
(6,157)
|
|
6,356
|
Gain (loss) on
interest rate swap
|
|
|
254
|
|
|
133
|
|
1,199
|
|
(2,413)
|
Gain on deferred
payments
|
|
|
-
|
|
|
310
|
|
-
|
|
1,191
|
Income tax
expense
|
|
|
(987)
|
|
|
(722)
|
|
(3,103)
|
|
(2,008)
|
Deferred income tax
expense
|
|
|
(4)
|
|
|
(250)
|
|
(116)
|
|
(240)
|
Net and
comprehensive (loss) earnings
|
$
|
|
3,865
|
$
|
|
(2,207)
|
$
|
2,244
|
$
|
8,744
|
Basic (loss)
earnings per Restricted Voting Share
|
$
|
|
0.41
|
$
|
|
(0.23)
|
$
|
0.24
|
$
|
0.92
|
Diluted (loss)
earnings per Share
|
$
|
|
0.28
|
$
|
|
(0.23)
|
$
|
0.24
|
$
|
0.53
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow
Highlights
|
|
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities:
|
$
|
|
4,311
|
$
|
|
4,699
|
$
|
12,821
|
$
|
18,073
|
Cash used for
investing activities:
|
|
|
(52)
|
|
|
(268)
|
|
(209)
|
|
(3,025)
|
Cash used for
financing activities:
|
|
|
(3,201)
|
|
|
(3,201)
|
|
(12,102)
|
|
(9,602)
|
Change in cash for
the period
|
|
|
1,058
|
|
|
1,230
|
|
510
|
|
5,446
|
Cash, beginning of
the period
|
|
|
8,608
|
|
|
9,418
|
|
9,156
|
|
5,202
|
Cash, end of the
period
|
$
|
|
9,666
|
$
|
|
10,648
|
$
|
9,666
|
$
|
10,648
|
|
|
|
|
|
|
|
|
|
|
|
Distributable Cash
Flow Highlights
|
|
|
|
|
|
|
|
|
|
|
Distributable Cash
Flow
|
$
|
|
5,190
|
$
|
|
4,428
|
$
|
17,233
|
$
|
12,027
|
Distributable Cash
Flow per Share
|
$
|
|
0.41
|
$
|
|
0.35
|
$
|
1.35
|
$
|
0.94
|
|
Twelve
months
|
Twelve
months
|
|
ended
|
ended
|
|
September 30,
2021
|
September 30,
2020
|
|
|
|
Distributable Cash
Flow
|
$
|
|
19,146
|
$
|
|
15,855
|
Distibutable Cash
Flow per Share
|
$
|
|
1.49
|
$
|
|
1.24
|
SOURCE Bridgemarq Real Estate Services Inc.