TORONTO, ONTARIO--(Marketwired - Apr 29, 2016) - Mitchell Cohen, President and Chief Executive Officer of Urbanfund Corp. (TSX VENTURE:UFC) (the "Company"), confirmed today that the Company has filed financial statements for the year ended December 31, 2015 (the "Consolidated Financial Statements").
For the year ended December 31, 2015, the Company reported earnings before income taxes of $4,032,941 on revenue of $4,674,131 compared to earnings before income taxes of $2,875,821 on revenue of $4,739,344 for the corresponding year in 2014. The increase in income before taxes is primarily attributable to realized gain on sale of investment property, and fair value adjustments to the Company's investment properties.
Rental revenue decreased to $4,674,131 for the period ended December 31, 2015 from $4,739,344 for the corresponding period ended 2014 principally resulting from the sale in 2015 of an investment property comprising part of the Company's multi-residential portfolio located in Quebec City and Montreal (the "Quebec Properties"). Rental expenses for the year ended December 31, 2015 increased to $2,504,380 compared with $2,374,641 for the corresponding period in 2014 primarily due to higher repairs and maintenance costs in respect of the Quebec Properties.
FUNDS FROM OPERATIONS
Funds from Operations ("FFO") for the years ended December 31, 2015 and 2014 are as follows:
| | | Year Ended
December 31, 2015 | | | Year Ended
December 31, 2014 | |
| Net Income Before Income Taxes | | $ | 4,032,941 | | | $ | 2,875,821 | |
| Adjust for: | | | | | | | | |
| Unrealized gain on Foreign Currency Translation | | $ | (232,969 | ) | | $ | (100,409 | ) |
| Interest Income | | $ | (54,260 | ) | | $ | (31,310 | ) |
| Dividend Income | | | - | | | | - | |
| Unrealized Gain on Marketable Securities | | $ | (20,112 | ) | | | - | |
| Realized Gain on Marketable Securities | | | - | | | $ | (17,244 | ) |
| Fair Value Adjustment on Investment Properties | | $ | (1,945,327 | ) | | $ | (1,545,326 | ) |
| Realized Gain on Investment Property | | $ | (773,857 | ) | | | - | |
| Funds From Operations (FFO) | | $ | 1,006,416 | | | $ | 1,181,532 | |
FFO is a non-IFRS measure and should not be construed as an alternative to net income determined in accordance with IFRS. However, FFO is an operating performance measure which is widely used by the real estate industry and the Company has calculated FFO in accordance with the recommendations of the Real Property Association of Canada ("REALpac").
FFO, or any other non-IFRS performance measure, is not intended to represent operating profits for the period or from a property. Furthermore, it should not be viewed as an alternative to net income, cash flow from operating activities or similar measures of financial performance calculated in accordance with IFRS.
FFO is a widely accepted supplemental measure of financial performance for real estate entities; however, it does not represent amounts available for capital programs, debt service obligations, commitments or uncertainties. FFO should not be interpreted as an indicator of cash generated from operating activities and is not indicative of cash available to fund operating expenditures, or for the payment of cash distributions. FFO is simply one measure of operating performance.
LIQUIDITY AND CAPITAL STRUCTURE
As of December 31, 2015, the Company had cash and cash equivalents in the amount of $7,675,268 (2014 - $4,741,530) and marketable securities of $323,884 (2014 - $320,518).
As at December 31, 2015, the Company had mortgages payable in the amount of $24,366,768 which was comprised of: (i) $11,754,550 representing a mortgage payable for the townhouse complex located at the corner of Don Mills Road and Van Horne Avenue, in Toronto, Ontario; (ii) $5,317,245 is representing a mortgage payable for the commercial shopping centre located at 305 North Front Street, Belleville, Ontario and the commercial shopping centre located 476-480 Wonderland Road South, London, Ontario; (iii) $5,494,973 representing mortgages payable on the Quebec Properties; and (iv) $1,800,000 representing mortgage payable on the units located at 48 Weber Street, Kitchener, Ontario (the "Kitchener Property").
ASSETS / LIABILITIES
As of December 31, 2015, total assets were $56,472,836 as compared to $47,211,558 as of December 31, 2014. The increase of $9,261,278 in total assets as at December 31, 2015 is due to the acquisition of a controlling interest in multi-residential rental complex redevelopment projects; being the Kitchener Property and the redevelopment project located at 61 Roy Street West, Kitchener, Ontario (the "Adjacent Property"), the balance of the proceeds raised from mortgage refinancing and fair value adjustments to investment properties.
DIVIDENDS AND DIVIDEND REINVESTMENT PLAN
The Company confirmed on June 17, 2015 that it adopted a dividend policy (the "Dividend Policy"), a dividend reinvestment plan for holders of common shares in the capital of the Company (the "Common Shares") and a dividend reinvestment plan for the holder of Series A, first preferred shares (the "Preferred Shares") in the capital of the Company (collectively, the "DRIPs") as part of the Company's long-term strategy to maximize shareholder value.
Pursuant to the Dividend Policy, the Company intends to pay an annual aggregate dividend of $0.005 per Common Share and $0.005 per Preferred Share, payable quarterly in the amount of $0.00125 per Common Share and Preferred Share. The record date for dividends is anticipated to be set as the last business day of March, June, September and December in each year and the payment date in each case is anticipated to be approximately two weeks from the applicable record date.
During 2015, the Company made dividend payments on its Common Shares and Preferred Shares on August 17, 2015 for the first quarterly period ended June 30, 2015 and on October 15, 2015 for the quarterly period ended September 30, 2015. The Company declared a dividend on its Common Shares and Preferred Shares on December 31, 2015, which was subsequently paid on January 15, 2016.
The DRIPs are voluntary programs permitting holders of Common Shares and Preferred Shares to automatically, and without charge, reinvest dividends to acquire additional Common Shares at a specified discount to the volume-weighted average market price calculated as of the date of the dividend payment. The Company has reserved an aggregate of 2,000,000 Common Shares for the issuance to participants enrolled in the DRIPs. During 2015, the Company issued 179,072 common shares for an aggregate issue price of $37,533 to shareholders participating in the DRIPs.
The declaration and payment of future dividends and the quantum of any such dividends will be subject to the Company's board of directors' determination, in its discretion, taking into account, among other things, business performance, financial condition, growth plans and expected capital requirements, statutory solvency tests, as well as any contractual restrictions on such dividends, including any agreements entered into with lenders to the Corporation or its subsidiaries. There can be no assurance that dividends will be paid at the intended rate or at any rate in the future.
SUMMARY OF QUARTERLY RESULTS
The following selected financial data is derived from the unaudited quarterly financial statements of the Company:
|
Quarter ended
| | Revenue | | Net Income | |
Net Income
Per Share
(Basic)(1)
| |
Net Income
Per Share
(Diluted)(2)
|
| December 31, 2015 | | $ | 1,152,900 | | $ | 1,994,193 | | $ | 0.046 | | $ | 0.039 |
| September 30, 2015 | | $ | 1,149,350 | | $ | 762,293 | | $ | 0.017 | | $ | 0.015 |
| June 30, 2015 | | $ | 1,188,353 | | $ | 89,726 | | $ | 0.002 | | $ | 0.002 |
| March 31, 2015 | | $ | 1,183,528 | | $ | 416,970 | | $ | 0.010 | | $ | 0.008 |
| December 31, 2014 | | $ | 1,192,556 | | $ | 2,462,190 | | $ | 0.057 | | $ | 0.048 |
| September 31, 2014 | | $ | 1,203,021 | | $ | 315,922 | | $ | 0.007 | | $ | 0.006 |
| June 30, 2014 | | $ | 1,185,504 | | $ | 119,301 | | $ | 0.003 | | $ | 0.002 |
| March 31, 2014 | | $ | 1,158,263 | | $ | 165,087 | | $ | 0.004 | | $ | 0.003 |
| Notes: |
| 1. | Basic net income or loss per common share is calculated by dividing the net income or loss by the weighted average number of common shares outstanding during the period. |
| 2. | Diluted net income or loss per common share is calculated by dividing the applicable net income or loss by the sum of the weighted average number of common shares outstanding and all additional shares that would have been outstanding if potentially dilutive common shares had been issued during the period. The dilutive effect of outstanding stock options on net income per share is calculated by determining the proceeds for the exercise of such securities which are then assumed to be used to purchase common shares of the Company. |
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following table highlights selected financial information for the Company's past three years:
| | | Year ended
December 31, 2015 | | Year ended
December 31, 2014 | | Year ended December 31, 2013 |
| Revenue | | $ | 4,674,131 | | $ | 4,739,344 | | $ | 4,405,761 |
| Net Income | | $ | 3,263,182 | | $ | 3,062,500 | | $ | 2,385,453 |
| Net Income per Share | | | | | | | | | |
| - Basic(1) | | $ | 0.07 | | $ | 0.07 | | $ | 0.05 |
| - Diluted(2) | | $ | 0.06 | | $ | 0.06 | | $ | 0.05 |
| Total Assets | | $ | 56,472,836 | | $ | 47,211,558 | | $ | 45,091,043 |
| Mortgages Payable | | $ | 24,366,768 | | $ | 19,637,737 | | $ | 20,377,807 |
| Cash Dividends Declared per Share | | $ | 0.0037 | | | Nil | | | Nil |
| Notes: |
| 1. | Basic net income or loss per common share is calculated by dividing the net income or loss by the weighted average number of common shares outstanding during the period. |
| 2. | Diluted net income or loss per common share is calculated by dividing the applicable net income or loss by the sum of the weighted average number of common shares outstanding and all additional shares that would have been outstanding if potentially dilutive common shares had been issued during the period. The dilutive effect of outstanding stock options on net income per share is calculated by determining the proceeds for the exercise of such securities which are then assumed to be used to purchase common shares of the Company. |
FOURTH QUARTER RESULTS
For the quarter ended December 31, 2015, the Company reported net income of $1,994,193 ($0.046 per common share) compared with a net income of $2,462,190 ($0.057 per common share) for the corresponding quarter in 2014. The Company's revenues decreased in the quarter ended December 31, 2015 to $1,152,900 compared with revenues of $1,192,556 for the corresponding period in 2014. Revenues decreased primarily due to the sale of the investment property. The decrease in net income for the three month period ended December 31, 2015 compared with the corresponding period ended December 31, 2014 is due to higher repairs and maintenance across the Quebec Properties.
For comprehensive disclosure of the Company's performance for the year ended December 31, 2015 and its financial position as at such date, reference should be made to: (i) the Financial Statements and the notes thereto; and (ii) management's discussion and analysis of financial condition at, and results of operations for the year ended December 31, 2015, which have been filed with applicable securities regulators on SEDAR at www.sedar.com.
ABOUT URBANFUND
Urbanfund Corp. is a Toronto-based real estate development and operating company. Urbanfund Corp. is a TSX Venture exchange listed real estate company based in Toronto. The Company's common shares trade under the symbol UFC on the TSX Venture Exchange. Urbanfund's focus is to identify, evaluate and invest in real estate or real estate related projects. The Company's assets are located in Toronto, Kitchener, Belleville and London, Ontario and in Montreal and Quebec City, Quebec. The Company's strategy going forward remains committed to seek accretive real estate or real estate-related opportunities.
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements, which reflect Management's expectations regarding the Company's growth, results of operations, performance and business prospects and opportunities and future dividend payments. Statements about the Company's future plans and intentions, results, levels of activity, cash flow from operations, performance, goals or achievements, proposed dividends or other future events constitute forward-looking statements. Wherever possible, words such as "may", "will", "should", "could", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict" or "potential" or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect Management's current beliefs and are based on information currently available to management as at the date hereof.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including: general economic and market segment conditions, interest rates, costs outside of the Company's control such as Real Estate Taxes and utilities, the ability of tenants to satisfy their contractual rent obligations and any unforeseen repair, maintenance or replacement of the Company's assets. More detailed assessment of the risks that could cause actual results to materially differ than current expectations is contained in the "Risks and Uncertainties" section of the Company's most recent Management's Discussion and Analysis dated the date hereof.
Neither 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 release.
