Bridgemarq Real Estate Services® Reports Annual Financial Results
HIGHLIGHTS
- Revenue for 2023 was
$48.5 million compared to$49.9 million the prior year, due to weakness in the Canadian market, as the overall value of Canadian residential real estate transactions dropped 14% compared to 2022. - The Company recorded net earnings of
$4.0 million or$0.42 per share in 2023, on a fully diluted basis, compared to$21.0 million or$1.19 per share in 2022, as a result of a loss of$1.1 million on the valuation of the Exchangeable Units compared to an$11.5 million gain in 2022. - Cash provided by operating activities amounted to
$13.7 million in 2023 compared to$15.6 million in 2022, as weaker markets and higher administration expenses negatively affected cash flow. - Bridgemarq received shareholder approval on
March 25, 2024 , to proceed with the acquisition of certain real estate brokerage operations owned by Brookfield Business Partners and to internalize the management of the Company. - The Board has approved the appointments of
Spencer Enright to CEO of the Company andLorraine Bell to Chair of the Board, effective upon closing of the transaction to acquire the brokerage operations of Brookfield and internalize the management of the Company.Phil Soper will continue in his current role as President of Bridgemarq. - The Company's network of REALTORS® totaled 20,529 as at
December 31, 2023 , down modestly from 20,686 in 2022. - The Company had previously announced a dividend to shareholders of
$0.1125 per Restricted Voting Share payableApril 30, 2024 , to shareholders of record onMarch 28, 2024 .
FOURTH QUARTER OPERATING RESULTS
For the year ending
The Company recorded net earnings of
Cash provided by operating activities amounted to
"Sustained high interest rates in 2023 resulted in fewer transactions nationwide compared to the previous two years, pushing less productive real estate professionals out of the industry. Despite a modest decline in agent count, we are pleased with our performance over the course of a difficult year, and with the Company's ability to continue to deliver stable results for its shareholders," said
"Many buyer hopefuls have been sitting on the sidelines awaiting one of two signals: that interest rates are about to fall, or that house prices have begun to appreciate again. While the
MARKET UPDATE
While the Canadian residential real estate market grew by 5% in Q4 of 2023 compared to the same quarter in the prior year, it recorded a decline of 26% compared to Q3 as activity slowed through the final months of the year.1 According to the
Despite a slowdown in market activity through 2023, which led to a gradual increase of inventory, home price declines have been modest due to a fundamental shortage of housing supply in
The
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1 CREA Canadian Housing Market Statistics |
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ACQUISITION OF BROKERAGE OPERATIONS AND INTERNALIZATION OF MANAGEMENT
On
The Transaction is expected to close before the end of March, 2024. Additional details describing the Transaction can be found at www.bridgemarq.com.
As a result of the acquisition of the brokerage operations, the Company will benefit from a broader revenue base and will earn revenues from the gross commission income earned by brokerages operating under the Royal LePage®, Via Capitale®,
"The acquisition of these brokerage operations and the internalization of management is an important step in the long-term success and growth of our business. Expanding the Company's profile, by including direct brokerage operations and adding
ORGANIZATIONAL CHANGES
The Board of Directors has approved the appointment of Mr.
CASH DIVIDEND
The Company previously announced a cash dividend of
THE COMPANY NETWORK
As at
CONFERENCE CALL
Bridgemarq Real Estate Services Inc. will host a conference call on
To access the call, please dial in or connect via webcast as shown below:
To access the call by telephone, please dial 1-888-664-6383 or 416-764-8650.
To access the call online, please visit https://app.webinar.net/X6e3orLzKOw.
Please connect approximately ten minutes prior to the beginning of the call to ensure participation.
A recording and transcript of the conference call will be available on the Company's website by
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking information and other "forward-looking statements". Words such as "about to", "anticipated", "awaiting", "begin", "believe", "confident", "continue", "future", "increases", "is", "effective", "expect", "expected", "growth", "later", "proceed", "pursuant", "to", "will", "will be", "yet", 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, but are not limited to: 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
About
Bridgemarq is a leading provider of services to residential real estate brokers and a network of approximately 21,000 REALTORS®. We operate in
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
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BRIDGEMARQ® & DESIGN / |
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The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The |
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Balance Sheet Highlights |
2023 |
2022 |
Cash |
$ 5,743 |
$ 6,419 |
Other current assets |
4,671 |
5,469 |
Total current assets |
10,414 |
11,888 |
Non-current assets |
54,478 |
60,741 |
Total assets |
$ 64,892 |
$ 72,629 |
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Accounts payable and accrued liabilities |
$ 1,407 |
$ 1,138 |
Interest payable on Exchangeable Units |
484 |
484 |
Dividends payable to shareholders |
1,067 |
1,067 |
Contract transfer obligation |
356 |
602 |
Debt facilities |
- |
66,959 |
Total current liabilities |
3,314 |
70,250 |
Debt facilities |
67,022 |
- |
Other non-current liabilities |
7,851 |
7,966 |
Exchangeable Units |
43,825 |
42,727 |
Total Liabilities |
122,012 |
120,943 |
Shareholders' deficit |
(57,120) |
(48,314) |
Total Liabilities and Shareholders' deficit |
$ 64,892 |
$ 72,629 |
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Three months |
Three months |
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ended |
ended |
Year ended |
Year ended |
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Interim Earnings Highlights |
2023 |
2022 |
2023 |
2022 |
Fixed franchise fees |
$ 8,466 |
$ 8,445 |
$ 33,652 |
$ 33,150 |
Variable franchise fees |
1,593 |
1,249 |
11,193 |
12,465 |
Other revenue |
766 |
730 |
3,609 |
4,256 |
Revenues |
10,825 |
10,424 |
48,454 |
49,871 |
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Cost of other revenue |
(193) |
(315) |
(1,031) |
(1,207) |
Administration expenses |
(1,060) |
(210) |
(2,885) |
(1,120) |
Management fees |
(4,422) |
(4,496) |
(19,159) |
(19,872) |
Interest expense |
(738) |
(759) |
(2,967) |
(2,970) |
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4,412 |
4,644 |
22,412 |
24,702 |
Impairment and write-off of intangible assets |
- |
- |
(201) |
(154) |
Amortization of intangible assets |
(1,708) |
(1,761) |
(6,894) |
(7,168) |
Interest on Exchangeable Units |
(1,452) |
(1,452) |
(5,806) |
(5,806) |
Gain (loss) on fair value of Exchangeable Units |
(1,364) |
5,191 |
(1,098) |
11,547 |
Gain (loss) on interest rate swap |
(436) |
48 |
(1,386) |
2,203 |
Loss on debt facility amendment |
- |
- |
(122) |
- |
Income tax expense |
(642) |
(668) |
(3,396) |
(3,948) |
Deferred income tax expense (recovery) |
151 |
3 |
488 |
(407) |
Net and comprehensive earnings (loss) |
$ (1,039) |
$ 6,005 |
$ 3,997 |
$ 20,969 |
Basic earnings (loss) per Restricted Voting Share |
$ (0.11) |
$ 0.63 |
$ 0.42 |
$ 2.21 |
Diluted earnings (loss) per Share |
$ (0.11) |
$ 0.18 |
$ 0.42 |
$ 1.19 |
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Cash Flow Highlights |
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Cash provided by operating activities: |
$ 2,689 |
$ 2,669 |
$ 13,667 |
$ 15,559 |
Cash used for investing activities: |
(687) |
(652) |
(1,477) |
(1,054) |
Cash used for financing activities: |
(3,201) |
(3,201) |
(12,866) |
(14,303) |
Change in cash for the period |
(1,200) |
(1,184) |
(676) |
202 |
Cash, beginning of the period |
6,943 |
7,603 |
6,419 |
6,217 |
Cash, end of the period |
$ 5,743 |
$ 6,419 |
$ 5,743 |
$ 6,419 |
SOURCE