TORONTO, March 8, 2022
/CNW/ - Bridgemarq Real Estate Services Inc. ("Bridgemarq" or the
"Company") (TSX: BRE) today released its annual consolidated
financial results and the approval of a monthly dividend to holders
of the Company's restricted voting shares.
HIGHLIGHTS
- Revenue for 2021 was $50.2
million compared to $40.3
million for 2020 as Canada
experienced its strongest real estate market on record.
- The Company recorded net earnings of $4.8 million or $0.50 per share, on a fully diluted basis
compared to earnings of $0.8 million
or $0.08 per share in 2020.
- The Company generated Distributable Cash Flow for the year of
$21.3 million compared to
$13.9 million in 2020.
- The Company's network of REALTORS® increased to 20,159 as at
December 2021, up from 19,046 in
2020.
- The Board of Directors approved a dividend to shareholders of
$0.1125 per restricted voting share
payable April 29, 2022 to
shareholders of record on March 31,
2022.
FOURTH QUARTER OPERATING RESULTS
For the year ending December 31,
2021, revenues were $50.2
million compared to $40.3
million in 2020. The increase in revenue is a result of very
strong real estate markets across the country. In addition,
the Company grew its agent count by 6% and benefited from the
expiry of the Pandemic Fee Relief Plan on December 31, 2020. During the fourth quarter,
revenues were $10.7 million, compared
to $7.1 million in the same period in
2020.
The Company recorded net earnings of $4.8
million compared to $0.8
million in 2020. The improved results were driven by a
$9.9 million increase in revenues and
a $1.9 million gain on the fair value
of the interest rate swap compared to a $2.2
million loss in 2020. These improvements were partly offset
by a $5.0 million loss of the fair
valuation on the Exchangeable Units, an increase in management fees
as a result of higher revenues, and a higher income tax expense.
The fair value of the exchangeable units is determined with
reference to the trading price of the Company's restricted voting
shares. For the fourth quarter, the Company generated net earnings
of $2.5 million, compared to net loss
of $8.0 million in the fourth quarter
of 2020.
Distributable Cash Flow for the year amounted to $21.3 million or $1.66 per share, $7.4
million higher than the $13.9
million generated in 2021 primarily due to higher revenues
and less cash used in investing activities due to rebates provided
under the Pandemic Fee Relief Plan in 2020. This increase was
partly offset by higher management fees and a higher current income
tax expense. For the fourth quarter, Distributable Cash Flow
amounted to $4.1 million, compared to
$1.9 million in 2020.
"It was an exceptional year for the Canadian residential real
estate industry, and for Bridgemarq," said Phil Soper, President and Chief Executive
Officer, Bridgemarq Real Estate Services. "The mid-2020 launch of
rlpSphere, our revolutionary cloud-based, AI driven operating
platform continued to capture the attention of Canadian Realtors®
right through 2021. Coupled with the country's most popular real
estate company website, royallepage.ca, which saw over 100 million
consumer visits during the year, and we have shown once more that
we are not just the nation's oldest national real estate firm, but
the most innovative.
"This focus on innovation, combined with best-in-class training,
business services and marketing, helped Bridgemarq's highly
regarded brands attract over 1,100 new practitioners during the
year," Soper concluded.
MARKET UPDATE
As Canadians continued to prioritize home ownership during the
pandemic, home sales reached all-time record levels. The
chronically low supply of housing continued to put upward pressure
on home prices. Demand from new household formation; newcomers to
Canada; and buyers who were not
able to transact in 2021, are expected to continue to put upward
pressure on home prices through the spring market as demand
continues to outpace supply.
Low interest rates are generally supportive of real estate
markets in Canada. On March 2, the Bank of Canada, increased the overnight rate by 25
basis points to 0.50%. This increase comes almost two years
after the overnight rate was slashed to its current levels in
response to uncertainty around the impact of the pandemic. Included
in the announcement was the statement that economic growth is very
strong and that inflation remains well above the Bank's target
range. The Bank further stated it will use its monetary
policy tools to return inflation to its 2% target, it remains to be
seen how much interest rates will increase and what impact those
increases could have on the Canadian Market.
While economic growth in the fourth quarter of 2021 was ahead of
the Bank's forecast of 4% in 2021, there remains a concern that if
a new wave of COVID-19 infections occurs, it could impact the
economy and employment, potentially slowing housing demand.
CASH DIVIDEND
The Company declared a cash dividend of $0.1125 cents per restricted voting share payable
on April 29, 2022 to shareholders of
record on March 31, 2022. The
dividend distribution represents a target annual dividend of
$1.35 per restricted voting share,
which is consistent with 2021.
THE COMPANY NETWORK
As at December 31, 2022 the
Network was comprised of 20,159 REALTORS®, operating under 281
franchise agreements providing services from 723 locations, with an
approximate 32% share of all home sales in Canada, consistent with 31% in 2020.
CONFERENCE CALL
Bridgemarq Real Estate Services Inc. will host a conference
call on Tuesday, March 8, 2022 at
10 a.m. ET to discuss its fourth
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=1531923&tp_key=5b942d0b83
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, March 18, 2022.
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", "continues",
"commitment", "expects", "most", "put", "remains", 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.
|
|
|
|
|
|
|
|
|
|
|
December
31,
|
December
31,
|
|
|
Balance Sheet
Highlights
|
2021
|
2020
|
|
|
Cash
|
$
|
6,217
|
$
|
9,156
|
|
|
Other current
assets
|
3,917
|
3,171
|
|
|
Total current
assets
|
10,134
|
12,327
|
|
|
Non-current
assets
|
68,462
|
76,632
|
|
|
Total
assets
|
$
|
78,596
|
$
|
88,959
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
1,107
|
$
|
1,282
|
|
|
Interest payable on
Exchangeable Units
|
484
|
484
|
|
|
Dividends payable to
shareholders
|
1,067
|
1,067
|
|
|
Contract transfer
obligation
|
573
|
549
|
|
|
Total current
liabilities
|
3,231
|
3,382
|
|
|
Debt
facilities
|
68,419
|
73,379
|
|
|
Other non-current
liabilities
|
9,152
|
11,388
|
|
|
Exchangeable
Units
|
54,274
|
49,249
|
|
|
Total
Liabilities
|
135,076
|
137,398
|
|
|
Shareholders'
deficit
|
(56,480)
|
(48,439)
|
|
|
Total Liabilities
and Shareholders' deficit
|
$
|
78,596
|
$
|
88,959
|
|
|
|
|
|
|
|
|
Three
months
|
Three
months
|
|
|
|
ended
|
ended
|
Year
ended
|
Year ended
|
|
December
31,
|
December
31,
|
December
31,
|
December
31,
|
Interim Earnings
Highlights
|
2021
|
2020
|
2021
|
2020
|
Fixed franchise
fees
|
$
|
7,931
|
$
|
1,191
|
$
|
31,016
|
$
|
11,247
|
Variable franchise
fees
|
1,716
|
4,776
|
13,750
|
23,900
|
Other
revenue
|
1,070
|
1,119
|
5,436
|
5,192
|
Revenues
|
10,717
|
7,086
|
50,202
|
40,339
|
|
|
|
|
|
Cost of other
revenue
|
(253)
|
(235)
|
(1,035)
|
(716)
|
Administration
recoveries (expenses)
|
(240)
|
171
|
(646)
|
(608)
|
Management
fees
|
(4,631)
|
(4,185)
|
(20,158)
|
(16,875)
|
Interest
expense
|
(735)
|
(758)
|
(2,960)
|
(3,001)
|
|
4,858
|
2,079
|
25,403
|
19,139
|
Impairment, write-off
and amortization of intangible assets
|
(1,862)
|
(2,026)
|
(7,631)
|
(8,873)
|
Interest on
Exchangeable Units
|
(1,451)
|
(1,451)
|
(5,806)
|
(5,806)
|
Gain (loss) on fair
value of Exchangeable Units
|
1,132
|
(6,622)
|
(5,025)
|
(266)
|
Gain (loss) on
interest rate swap
|
688
|
205
|
1,887
|
(2,208)
|
Gain on deferred
payments
|
-
|
-
|
-
|
1,191
|
Income tax
expense
|
(715)
|
(82)
|
(3,818)
|
(2,090)
|
Deferred income tax
expense
|
(132)
|
(80)
|
(248)
|
(320)
|
Net and
comprehensive (loss) earnings
|
$
|
2,518
|
$
|
(7,977)
|
$
|
4,762
|
$
|
767
|
Basic (loss)
earnings per Restricted Voting Share
|
$
|
0.27
|
$
|
(0.84)
|
$
|
0.50
|
$
|
0.08
|
Diluted (loss)
earnings per Share
|
$
|
0.22
|
$
|
(0.84)
|
$
|
0.50
|
$
|
0.08
|
|
|
|
|
|
Cash Flow
Highlights
|
|
|
|
|
Cash provided by
operating activities:
|
$
|
2,318
|
$
|
1,793
|
$
|
15,139
|
$
|
19,866
|
Cash used for
investing activities:
|
(66)
|
(84)
|
(275)
|
(3,109)
|
Cash used for
financing activities:
|
(5,701)
|
(3,201)
|
(17,803)
|
(12,803)
|
Change in cash for
the period
|
(3,449)
|
(1,492)
|
(2,939)
|
3,954
|
Cash, beginning of
the period
|
9,666
|
10,648
|
9,156
|
5,202
|
Cash, end of the
period
|
$
|
6,217
|
$
|
9,156
|
$
|
6,217
|
$
|
9,156
|
|
|
|
|
|
Distributable Cash
Flow Highlights
|
|
|
|
|
Distributable Cash
Flow
|
$
|
4,077
|
$
|
1,913
|
$
|
21,310
|
$
|
13,940
|
Distributable Cash
Flow per Share
|
$
|
0.32
|
$
|
0.15
|
$
|
1.66
|
$
|
1.09
|
SOURCE Bridgemarq Real Estate Services Inc.