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TORONTO, Nov. 28, 2018 (GLOBE NEWSWIRE) – Mitchell Cohen, President and CEO and President of Urbanfund Corp. (TSX-V: UFC) ("Urbanfund" or the "Company"), confirmed today that the Company had filed its financial statements for the three and nine months ended September 30, 2018 (the "Financial Statements"). consolidated financial statements ") and the related management report (the" Management Report ").
OVERVIEW OF ACTIVITIES AND STRATEGY
Business Overview
Urbanfund Corp. is a corporate entity listed on the TSX Venture Exchange ("TSX-V") under the symbol UFC. The Company is a reporting issuer in Alberta, British Columbia and Ontario. Urbanfund's goal is to invest in Canadian real estate projects and real estate related projects, with a focus on a combination of residential and commercial properties. The Company's badets are located in Toronto, Brampton, Belleville, Kitchener, London, Ontario, Quebec and Montreal, Quebec, and Dartmouth, Nova Scotia.
Operational highlights
Part of Urbanfund's strength lies in its ability to attract partners with proven track records, with expertise in residential and commercial development. Urbanfund continues to build alliances with its strategic partners:
- One Bloor Project – Until September 30, 2018, Urbanfund received distributions equaling a profit on real estate sales of $ 800,000. The total profits received as at the date of this press release amounted to $ 4,966,667.
- EDVAC – Until September 30, 2018, the Company sold its units owned by 11-13 Edvac Drive, Brampton, Ontario. The Company received distributions of $ 3,020,000 consisting of a principal repayment of $ 1,625,000 and a distribution of income of $ 1,395,000 on the sale of these units.
- Weber Limited Partnerships – Until September 30, 2018, Urbanfund sold $ 7,300,000 to 48 Weber Street, 61 Roy Street and 65 Roy Street, less transaction costs of $ 417,210. On the closing date, the Company extinguished the $ 4868,918 mortgage loan on 48 Weber Street and 65 Roy Street.
- Headway Corporation ("Quebec Headway") – With the planned completion of renovations to Domaine Anjou, the North Slope and the Renaissance Complex, Québec Headway is experiencing a greater occupancy of tenants. Québec Headway plans to continue renovating its investment properties in Quebec City in anticipation of the increased occupancy of tenants and NOI.
- Highfield Park Portfolio – In 2017, the Company invested $ 7,569,980 to acquire a 20% interest in Highfield Park Residential Inc. In turn, Highfield Park Residential Inc. purchased the Highfield Park Portfolio for $ 113,000,000 plus fees. closing costs, funded through a $ 77,000,000 mortgage and $ 36,000,000 equity. During the nine-month period ended September 30, 2018, Urbanfund recorded $ 277,321 in income and received $ 200,000 in distributions related to its equity investment.
Extension of the dividend reinvestment plan
Urbanfund has changed the number of shares available for issuance under its dividend reinvestment plans for holders of Common Shares and First Preferred Shares, Series A, by carrying the total number of common shares available for issuance at 2,190,140 as at September 30, 2018.
PRESENTATION OF FINANCIAL INFORMATION AND NON-IFRS MEASURES
Presentation of financial information
Unless otherwise indicated, the financial results, including historical comparisons, contained in this press release are based on Urbanfund's consolidated financial statements and annual consolidated financial statements for 2017, which have been prepared in accordance with international standards. Financial Reporting ("IFRS") issued by the International Accounting Standards Board ("IASB") and the Interpretations of the IFRS Interpretations Committee ("IFRIC"). Unless otherwise indicated, amounts are in Canadian dollars and percentage changes are calculated using whole numbers.
RESULTS OF OPERATIONS
In addition to the IFRS measures presented, industry practice is to measure real estate entities by taking into account certain non-IFRS performance measures, such as operating cash flow, adjusted cash flow from operations and net operating income. , as shown below. For more details, please refer to Non-IFRS measures.
Select quarterly information
| Three months ended September 30 | Nine months ended September 30 | ||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||
| Results of exploitation | |||||||||||||
| Returned | $ | 1,183,605 | $ | 1,307,855 | $ | 4,021,589 | $ | 4119105 | |||||
| Income (loss) before taxes | (205,540 | ) | 197,865 | 3,785,693 | 2,660,688 | ||||||||
| Net income and comprehensive income | 120,460 | 494,100 | 3,148,693 | 2,695,923 | |||||||||
| Per share, attributable to shareholders | |||||||||||||
| Basic income per share | $ | 0.006 | $ | 0,011 | $ | 0.073 | $ | 0,060 | |||||
| Diluted earnings per share | $ | 0.006 | $ | 0,010 | $ | 0,063 | $ | 0,052 | |||||
| Non-IFRS measures (i) | |||||||||||||
| FFO | $ | 760 651 | $ | 211,975 | $ | 2,852,070 | $ | 2,413,375 | |||||
| ACFO | (144,930 | ) | (277,093 | ) | 3261553 | 1,588,739 | |||||||
| Like a | September 30, 2018 |
December 31, 2017 | September 30, 2017 | ||||||||||
| Financial situation | |||||||||||||
| Total badets | $ | 77,655,021 | $ | 84,332,317 | $ | 68360782 | |||||||
| Total investment goods | $ | 56,257,766 | $ | 61,427,685 | $ | 58,552 259 | |||||||
| Total debt | $ | 28,726,342 | $ | 36,584,854 | $ | 28,886,616 | |||||||
| Non-IFRS measures (i) | |||||||||||||
| Debt on total badets | 37 | % | 43 | % | 42 | % | |||||||
| Adjusted EBITDA debt (ii) | 3.24 | 4.80 | 9.22 | ||||||||||
| Interest coverage ratio (ii) | 8.06 | 5.83 | 2.10 | ||||||||||
| Debt service ratio (ii) | 1.72 | 2.57 | 0.55 | ||||||||||
(i) Represents non-IFRS measures. For definitions and bases of presentation of non-IFRS measures, see: Non-IFRS measures section below.
(ii) Calculated over a period of twelve months.
Summary of quarterly results
| For the three months ended, | Returned | Net income attributable to shareholders | Basic income per share | Diluted earnings per share | ||||
| September 30, 2018 | $ | 1,183,605 | $ | 296,300 | $ | 0.006 | $ | 0.006 |
| June 30, 2018 | 2,335,133 | 1,412,797 | 0,036 | 0.031 | ||||
| March 31, 2018 | 5,641,214 | 1,617,596 | 0,036 | 0.031 | ||||
| December 31, 2017 | 1,387,165 | 4,559,257 | 0,101 | 0.087 | ||||
| September 30, 2017 | 1,307,855 | 507198 | 0,011 | 0,010 | ||||
| June 30, 2017 | 1,406,358 | 1,772,792 | 0,040 | 0,034 | ||||
| March 31, 2017 | 1,404,892 | 418,127 | 0,009 | 0,008 | ||||
| December 31, 2016 | 1,280,138 | 1,728,996 | 0,039 | 0.033 | ||||
Funds from operations ("FFO")
| Three months ended September 30 | Nine months ended September 30 | |||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| Net income attributable to shareholders | $ | 296,300 | $ | 507198 | $ | 3,326,693 | $ | 2,698,117 | ||||
| Add / (deduce): | ||||||||||||
| Interest income | (25,040 | ) | (15,078 | ) | (82.921 | ) | (83,017 | ) | ||||
| Result of the investment accounted for by the equity method | (91,100 | ) | – | (277,321 | ) | – | ||||||
| Distributions from an investment accounted for by the equity method | 200,000 | – | 200,000 | – | ||||||||
| Deferred tax expense (recovery) | (369,000 | ) | (283,000 | ) | 1000 | (212,000 | ) | |||||
| Adjustment of the fair value of marketable securities | (20,428 | ) | (1,438 | ) | (100,488 | ) | (73.279) | ) | ||||
| Adjustment of the fair value of investment properties | 771.547 | 5,532 | (209,104) | ) | 86,066 | |||||||
| Straight line of rental income | (1,628 | ) | (1,239 | ) | (5,789 | ) | (2,512 | ) | ||||
| FFO | $ | 760 651 | $ | 211,975 | $ | 2,852,070 | $ | 2,413,375 | ||||
| Weighted average number of shares – basic | 45,586,534 | 44,334,681 | 45,410,624 | 44,707,170 | ||||||||
| Weighted average number of shares – diluted | 52,878,260 | 51,579,681 | 52,835,624 | 52132170 | ||||||||
| FFO per share – basic | $ | 0,017 | $ | 0.005 | $ | 0,063 | $ | 0,054 | ||||
| EPS per share – diluted | $ | 0.014 | $ | 0,004 | $ | 0,054 | $ | 0,046 | ||||
Adjusted Cash Flow from Operations ("ACFO")
| Three months ended September 30 | Nine months ended September 30 | |||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||
| Cash provided by operating activities (used) | $ | (74,945 | ) | $ | (114,917 | ) | $ | 4,073,204 | $ | 2235146 | ||
| Adjustments to changes in working capital for ACFO (i) | 204,175 | (75,274 | ) | 310,349 | 201399 | |||||||
| Standardized capital expenditures (ii) | (450,000 | ) | (100,000 | ) | (1.300.000 | ) | (850,000 | ) | ||||
| Non-majority interests | 175,840 | 13098 | 178,000 | 2,194 | ||||||||
| ACFO | $ | (144,930 | ) | $ | (277,093 | ) | $ | 3261553 | $ | 1,588,739 | ||
(i) Includes changes in working capital that, based on the February 2017 REALpac white paper, are not representative of a sustainable cash flow for distribution. Includes non-operating income taxes, tenant deposits and deferred financing fees.
(ii) Standard capital expenditures are management's estimate of the capital expenditures required to maintain the current condition of the property and rental income. Refer to Non-IFRS measures section below.
LIQUIDITY AND CAPITAL RESOURCES
Urbanfund expects to meet all its obligations, including dividends to shareholders, property maintenance, capital expenditures and other commitments as they become due. The Company has various sources of financing to fund future acquisitions and continues to fund working capital requirements from cash generated from operating activities. Cash flow from operating activities depends on the occupancy rate of the Company's income properties.
The following table shows cash as a percentage of debt:
| Like a | September 30, 2018 |
December 31, 2017 | ||||
| Cash | $ | 9,173,546 | $ | 8,002,475 | ||
| Accounts receivable (i) | 246.579 | 344.596 | ||||
| Negotiable securities | 555,390 | 446,825 | ||||
| Liquidity | $ | 9,975,515 | $ | 8,793,896 | ||
| Mortgages to pay | 28,726,342 | 36,584,854 | ||||
| Debt | $ | 28,726,342 | $ | 36,584,854 | ||
| Liquidity as a percentage of debt | 34.7 | % | 24.0 | % | ||
(i) As of the date of this press release, Urbanfund has recovered its amounts due as at September 30, 2018 and, as a result, the accounts receivable have been recorded in liquidity.
The liquid badets of the company will be affected by the contractual commitments set out in the Urbanfund management report. Urbanfund's debt may be financed by the company's cash and cash equivalents, marketable securities and rental income from real estate operations.
DIVIDEND REINVESTMENT PLAN ("DRIP")
On June 17, 2015, the Company adopted a dividend policy (the "Dividend Policy") and implemented dividend reinvestment plans for the Company's common and preferred shareholders (collectively, "DRIP"). "). The DRIP is a voluntary program that allows holders of common and preferred shares of the Company to reinvest automatically and free of quarterly dividends to purchase additional common shares at a price below their volume weighted average price to the date of payment.
On June 18, 2018, Urbanfund changed its dividend policy to increase the annual dividend at a rate of $ 0.02 per common share and $ 0.02 per preferred share, an increase of 100% over in the previous year, payable quarterly of $ 0.005 per common and preferred share. share.
During the nine months ended September 30, 2018, 488,394 common shares were issued under the Company's DRIP, generating additional equity of $ 292,067 (September 30, 2017 – $ 441,940 and $ 210,063). The average participation rate of the DRIP was 77.9%.
Previously, the company had reserved a total of 2,000,000 common shares for issuance to DRIP members. Given the Company's determination to provide Shareholders with the opportunity to participate in the DRIP, the Board changed its DRIP Policy to increase the number of Common Shares reserved for issuance under the DRIP. of it. On June 13, 2018, Urbanfund received approval for the rise of the TSX Venture Exchange. Notwithstanding the above, the maximum number of common shares reserved for issuance under the DRIP may not exceed 5% of the issued and outstanding common shares of the Company. As at September 30, 2018, the maximum number of additional common shares that may be reserved for issuance under the DRIP (including common shares not issued under the previous DRIP) was 2,190,140.
The reference date for dividends is the last business day of each quarter and the payment is approximately two weeks from the record date. The following table summarizes our quarterly distributions as at September 30, 2018.
| Payment date | Registered shareholders | |
| Distribution for the fourth quarter of 2017 | January 16, 2018 | December 31, 2017 |
| Breakdown 2018, quarter 1 | April 16, 2018 | March 31, 2018 |
| 2018, quarter 2 distribution | July 16, 2018 | June 30, 2018 |
| 2018, third quarter distribution | October 15, 2018 | September 28, 2018 |
NON-IFRS MEASURES
In addition to the IFRS measures presented, industry practice is to measure real estate entities by taking into account certain non-IFRS performance measures, such as cash flow from operations, adjusted cash flows from operations, and income. operational net. Management believes that these measures are useful for investors as they are a widely recognized measure of Urbanfund's performance and provide a relevant basis for comparison with other real estate entities. In addition to IFRS results, these measures are also used internally to measure the operational performance of our real estate portfolio. These measures are non-IFRS compliant and do not have standardized definitions. As a result, our calculations of these non-IFRS measures may not be comparable to those of other reporting issuers. In addition, the method of calculation used by Urbanfund that is not in accordance with IFRS may differ from that used by other reporting issuers and, therefore, may not be comparable.
The Real Property Association of Canada ("REALpac") published a white paper in February 2017 defining revised definitions for certain non-IFRS financial measures of cash flows and operating performance commonly used by the Canadian real estate sector. Urbanfund reviewed these guidelines and adopted certain measures, if any, from our report for the fourth quarter of 2017.
Funds from operations ("FFO")
Funds from operations ("AFFO") is a non-IFRS financial measure of operating performance, widely used by the Canadian real estate industry, according to a white paper published in April 2014 and subsequently revised in February 2017. it presents the operating performance in relation to the net result and to the global result IFRS, which does not necessarily give a complete vision of the performance. IFRS net income and comprehensive income include items such as fair value adjustments of investment properties subject to market fluctuations, which are not representative of the twelve-month operating performance of the Company.
Cash flow from operations is calculated as consolidated net income and comprehensive income attributable to Urbanfund shareholders, adjusted for, among other things, fair value adjustments of investment properties, transaction gains and losses and adjustments to the fair market value of marketable securities. Cash flow from operations should not be interpreted as an alternative to net income or cash flows generated by or used in operating activities, as determined in accordance with IFRS. A reconciliation of net income to IFRS net income is presented in the section Results of exploitation above.
Adjusted Cash Flow from Operations ("ACFO")
In February 2017, REALpac introduced a new non-IFRS measure, "Adjusted Cash Flow from Operations" ("ACFO"), which aims to measure the sustainable economic cash flows available for distributions. . ACFO is used by management as an input, as are cash flows from operations to measure Urbanfund's distribution ratios.
ACFO is calculated as cash provided or used in operating activities in accordance with IFRS plus, but not limited to, adjustments for working capital items that are not considered indicative of cash flow. sustainable distributions, such as changes in other badets, indirect taxes payable, and income. taxes payable, cash distributions from investments, realized gains or losses on available-for-sale marketable securities and deduction of capital expenditures. ACAF should not be interpreted as an alternative to the cash flows generated by or used in the context of operational activities determined in accordance with IFRS. A reconciliation of cash flows from operating activities or used by ACFO and consistent with IFRS is presented in Results of exploitation above.
Standardized capital expenditures
Standardized capital expenditures are management's estimate of the amount of capital expenditures required to maintain the current physical condition and rental income. Management will consider a number of items to estimate normalized capital expenditures based on age and size of the real estate portfolio, such as the review of capital expenditures and the comparison of budgeted and actual expenditures on a quarterly basis.
Urbanfund does not obtain independent support for its standard capital expenditures, but relies on management's expertise to arrive at this estimate. The CFO and the CEO both have extensive experience in residential and commercial real estate and in-depth knowledge of the real estate portfolio.
Actual capital expenditures can vary significantly from quarter to quarter, depending on many factors. It is management's opinion that standardized capital expenditures are a larger factor than actual capital expenditures in the Company's valuation of the Corporation's FASC and in determining the appropriate level of dividends over time. A number of factors affect changes in capital expenditures, including the expiry of leases, tenant vacancy, age and location of properties, and market conditions.
Net operating income ("NOI")
Net investment income is a non-IFRS measure and is defined by Urbanfund as rental income from income properties, less direct property costs such as utilities, property taxes adjusted to normalize impact application requirements of IFRIC 21, Levies, repairs and maintenance, wages, insurance, bad debts, real estate management fees and other property-specific costs. Management believes that the NIP is a significant additional measure of the income generated by the Corporation's income properties and is used to value the portfolio as well as a key element in determining the value of real estate.
Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA")
Adjusted EBITDA is a non-IFRS measure used by management as an input into a number of debt measures to measure Urbanfund's debt profile to badess the Company's ability to meet its obligations, including debt service. Adjusted EBITDA is used as an alternative to net income as it excludes major non-cash items such as fair value adjustments of investment properties and unrealized gains or losses on available-for-sale marketable securities. interest, current and deferred income taxes and recoveries, equity accounted investees and other items that management believes to be non-operating. A reconciliation of adjusted EBITDA to net income under IFRS is presented under Debt profile section of the management report.
Debt / Adjusted EBITDA
Debt to Adjusted EBITDA is a non-IFRS measure calculated based on the last 12 months. It is defined as total quarterly average debt (net of cash and cash equivalents) divided by Adjusted EBITDA. Debt profile section of the management report.
Debt service ratio
The debt service ratio is a 12-month non-IFRS measure, Adjusted EBITDA divided by the sum of total interest costs (including capitalized interest costs) and repayments of principal of mortgages . It measures Urbanfund's ability to honor its debts. The debt service ratio is calculated under Debt profile section of the management report.
Interest coverage ratio
The interest coverage ratio is a non-IFRS measure calculated over a 12-month period, defined as Adjusted EBITDA divided by the sum of total interest costs (including capitalized interest costs). It measures Urbanfund's ability to meet its interest obligations. The interest coverage ratio is calculated under Debt profile section of the management report.
ADDITIONAL INFORMATION
For full disclosure of Urbanfund's performance, the Company's consolidated financial statements and notes, as well as the Management's Discussion and Analysis for the three and nine months ended September 30, 2018, which have been filed by Electronic filing with the Canadian securities regulatory authorities through the Electronic Document Recovery and Analysis ("SEDAR") can be found on the SEDAR website at www.sedar.com.
PROSPECTIVE INFORMATION
Certain information in this press release contains forward-looking information within the meaning of applicable Canadian securities laws. This information includes, but is not limited to, statements made in Business Overview and Strategy, Results of Operations, Liquidity and Capital Resources, and other statements regarding Urbanfund's objectives, its strategies for achieving these objectives, as well as statements regarding management's beliefs, plans, estimates and intentions, as well as similar statements regarding events, results and results. , circumstances, performance or future expectations not anticipated. Forward-looking information can generally be identified using prospective terminology such as "outlook", "objective", "may", "will" "Anticipate", "believe", "should", "plan", "continue" or similar expressions suggesting future results or events or their negative consequences. This forward-looking information reflects management's beliefs and is based on currently available information. All forward-looking information in this press release is qualified by the following warnings.
Forward-looking information necessarily involves known and unknown risks and uncertainties, whether general or specific, and it is possible that expectations, forecasts, forecasts, projections or conclusions may not prove to be accurate and that badumptions are not accurate and that objectives, objectives and strategic priorities may not be achieved. A number of factors, many of which are beyond Urbanfund's control, affect the operations, performance and results of the Corporation and its subsidiaries and result in a significant difference between actual results and current expectations of future events. or estimated or expected results.
The forward-looking statements included in this press release are as of the date of this press release and should in no way be construed as reflecting Urbanfund's views on a date subsequent thereto. Management badumes no obligation, except as required by applicable law, to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
A more detailed badessment of the risks that could cause actual results to differ materially from current expectations is presented under Risks and uncertainties Urbanfund MD & A section for the quarters and nine months ended September 30, 2018.
For more information, please contact:
Mitchell Cohen
President, Chief Executive Officer and Director
Urbanfund Corp.
406-703-1877 ext. 1025
Neither the TSX Venture Exchange nor its regulator (as defined in the policies of the TSX Venture Exchange) badume any responsibility for the adequacy or accuracy of this press release. .
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