TORONTO, May 27, 2025 /CNW/ - Montfort Capital Corp. ("Montfort" or the "Company") (TSXV: MONT), today announced financial results for the fourth quarter and year ended December 31, 2024. All figures are reported in Canadian dollars unless otherwise noted.
Montfort Capital Corp. Logo (CNW Group/Montfort Capital Corp.)
Financial Highlights
Financial Highlights
Three months ended December 31, 2024
Three months ended December 31, 2023
Year ended December 31, 2024
Year ended December 31, 2023
Revenue
$
1,306,866
$
853,580
$
4,721,936
$
3,482,053
Expenses
2,644,665
2,832,520
10,488,215
14,513,903
Net income loss from continuing operations
(1,337,799)
(1,978,941)
(5,785,323)
(10,918,864)
Net loss from discontinued operations
(14,653,497)
(3,604,230)
(17,900,795)
(1,583,860)
Basic and diluted loss per common share:
from continuing operations
(0.02)
(0.03)
(0.09)
(0.15)
from discontinued operations
(0.15)
(0.04)
(0.19)
(0.02)
As at December 31, 2024
As at September 30, 2024
As at December 31, 2024
As at December 31, 2023
Loans receivable - net of allowance
$
189,538,678
$
359,467,328
$
189,538,678
$
320,581,709
For the three months ended December 31, 2024 the Company had the following highlights:
Loans receivable - net of allowance as at December 31, 2024 decreased by $169.9 million or 47% compared to September 30, 2024 due to mainly to the reclassification of $156.8 million of Brightpath mortgage loans receivable to assets held for sale.
Total revenue increased by $0.5 million or 53% compared to Q4 2023, reflecting loan book growth in the Company's continuing operations.
Total expenses decreased by $0.2 million or 7% compared to Q4 2023, as savings in operating expenses were mostly offset by a $1.0 million write-down of equity investments.
The net loss from continuing operations for the quarter was $1.3 million compared to a net loss of $2.0 million in Q4 2023, mainly reflecting the increase in total revenue.
The net loss from discontinued operations increased $11.0 million or 307% to $14.7 million compared to Q4 2023, driven by loan write-offs and expected credit loss provisions in the Brightpath mortgage business that was sold subsequent to yearend.
For the year ended December 31, 2024 the Company had the following highlights:
Loans receivable - net of allowance as at December 31, 2024 decreased by $131.0 million or 41% compared to December 31, 2023 due to mainly to the reclassification of $156.8 million of Brightpath mortgage loans receivable to assets held for sale.
Total revenue increased by $1.2 million or 36%, reflecting loan book growth in the Company's continuing operations as well as an increase in transaction fee income.
Total expenses decreased by $4.0 million or 28%, mainly reflecting a $3.6 million impairment loss on intangible assets recognized in 2023.
The net loss from continuing operations was $5.8 million, compared to a net loss of $10.9 million in the prior year period, reflecting management's efforts to reduce costs and the improved profitability of the Company's continuing businesses.
The net loss from discontinued operations increased $16.3 million or 1030% to $17.9 million, driven by loan write-offs and expected credit loss provisions in the Brightpath mortgage business.
"It is evident that we have materially restructured the business in the past year with the sale of two business units. We have also made great strides in our effort to reduce overhead expenses to align with our more focused business strategy. After adjusting for the approximately $1 million non-cash write-down of legacy TIMIA equity investments, Montfort's continuing operations were approaching breakeven in the fourth quarter" said Ken Thomson, CEO of Montfort. "As we continue to focus on our core, profitable and growing business units, the sightline to consolidated profitability becomes clearer."
Significant Organization Changes
On November 1, 2024, the Company finalized the sale of all of its right, title and interest to TIMIA Capital Inc., TIMIA II GP Inc., TIMIA III GP Inc., TIMIA Capital Holdings Limited Partnership, TIMIA SPIV I Inc., and Montfort USA 1 Corp. The assets sold also included the Company's equity interests in TIMIA LP II and TIMIA LP III. These entities together comprised the TIMIA business unit that offered a technology-based lending platform that provided debt capital to recurring revenue technology businesses in North America ("TIMIA"). TIMIA was sold pursuant to a securities purchase agreement with an affiliate of Round 13 Capital for cash proceeds of $3.6 million after agreed on purchase price adjustments. Round 13 Capital also acquired $2.0 million of TIMIA debt. The Company recognized a gain on disposal of $441,526.
On April 2, 2025, the Company announced it had closed the sale of its mortgage lending business, which was comprised of Brightpath Capital Corporation, Brightpath Servicing Corporation and Brightpath II Servicing Corporation (collectively, "Brightpath"), to a company (the "Buyer") controlled by Mr. Blake Albright. Mr. Albright was a related party as at December 31, 2024 due to his positions as both a director and senior officer of the Company. The proceeds received had an estimated value of $16,567,250 and based on the estimated carrying value of Brightpath's net assets at the sale date, the Company expects to recognize a gain sale of approximately $4 million.
The assets of the Brightpath business unit are presented as held for sale as at December 31, 2024 and the operating results for both TIMIA and Brightpath have been reclassified as discontinued operations (see ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS in the MD&A for the year ended December 31, 2024 for additional details).
The sales of TIMIA and Brightpath are part of management action plans to improve the Company's profitability and financial position by restructuring operations to decrease expenses and focus on more profitable, lower risk lending operations. Going forward, the Company plans to continuing growing the lending assets of its remaining business lines and evaluating opportunities to bolster liquidity and funding, which may included the disposition of certain non-core assets.
This news release is qualified in its entirety by the Company's financial statements for the year ended December 31, 2024 and the associated Management's Discussion & Analysis, which can be downloaded from the Company's profile on SEDAR+ at https://www.sedarplus.ca/
About Montfort Capital Corp.
Montfort builds and manages private credit portfolios that have focused investing strategies for the institutional and accredited investors markets. During the year, the Company operated under five divisions, two of which have been divested and are now reported as discontinued operations for 2024. For further information, please visit www.montfortcapital.com.
The Company originates, underwrites and manages secured loans through the following operating divisions:
Continuing Operations
Langhaus provides insurance policy-backed lending solutions to high-net-worth individuals and entrepreneurs in Canada. Langhaus' loans are collateralized by the assignment of the borrower's whole life insurance policy, personal and/or corporate guarantees and, in some cases, other tangible collateral.
Nuvo partners with Canadian alternative asset managers and ultra high-net-worth individuals to provide revolving net asset value based loans (ie. 'NAV loans').
Pivot specializes in asset-based lending targeting SME borrowers in Canada. Sources of revenue include net interest income from loans receivable, origination fees and amendment fees. In addition, Pivot earns loan servicing fees and performance fee income for loan management services performed.
Discontinued Operations
The Brightpath business was sold subsequent to year end on April 2, 2025. Brightpath is a registered mortgage brokerage and mortgage administrator, administering a portfolio of first and second mortgages secured by residential properties.. As at December 31, 2024, the assets and liabilities of Brightpath are classified as held for sale and the operating results are included under discontinued operations.
The TIMIA business unit was sold on November 1, 2024 and its operating results are included in discontinued operations. TIMIA originated, underwrote and serviced private-market loans in the technology space. TIMIA offered revenue-based investment to fast growing, business-to-business recurring revenue software businesses in North America.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Forward-Looking Information
Certain statements contained in this press release constitute "forward-looking information" and "forward-looking statements", collectively "forward looking statements". All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "designed", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These forward-looking statements include, but are not limited to: projected timing of profitability of the Company; growth of the Company's existing businesses; and the Company's ability to continue to operate as a going concern.
This forward-looking information is based on a number of material factors and assumptions including, but not limited to: stable interest rates and financing costs remaining consistent with current market conditions; no material adverse changes in general economic conditions in key markets; competitive positioning remaining stable in the Company's target markets; Montfort retaining key personnel responsible for client acquisition and relationship management; stability in the competitive landscape of the Company's businesses with no disruptive new market entrants; credit spreads in private lending markets remaining consistent with current market conditions; no significant changes in asset valuations that would impact collateral values; continued demand for private credit; maintenance of current underwriting standards and loan approval processes; no material changes in loan origination channels or referral networks; continued effectiveness of the Company's credit risk assessment methodologies; ability to maintain current loan servicing capabilities and operational efficiencies; ability to maintain relationships with key capital providers, co-lenders and financial partners; and availability of external financing at reasonable rates These assumptions should be considered carefully by readers.
The forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements. These risks and uncertainties include, but are not limited to: lower than expected revenue growth in the Company's core business segments; potential for increased competition that could compress profit margins; possibility of higher operating costs than forecasted; risk of economic downturn affecting demand for the Company's services; unforeseen regulatory changes impacting the Company's business model and/or cost structure; delays in realizing anticipated cost synergies or operational efficiencies; risk of market saturation limiting organic growth opportunities; failure to successfully execute planned expansion initiatives; possibility of increased competition in target markets; inability to attract or retain key talent needed for growth; technological changes that could disrupt existing business models; customer acquisition costs increasing beyond projected levels; and the Company being unable to continue as a going concern due to its inability to procure additional liquidity and / or financing on reasonable terms.
We do not undertake to update any forward-looking information, except as, and to the extent required by, applicable securities laws.
Based on current available information, the Company believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that those expectations will prove to be correct. The forward-looking statements in this press release are expressly qualified by this statement, and readers are advised not to place undue reliance on the forward-looking statements.
