TORONTO, ONTARIO–(Marketwired – Nov. 30, 2015) – Mitchell Cohen, President and Chief Executive Officer of Urbanfund Corp. (TSX VENTURE:UFC) (the “Company”), confirmed today that the Company has filed financial results for the three and nine month periods ended September 30, 2015 (the “Financial Statements”).
For the three month period ended September 30, 2015, the Company reported earnings before income taxes of $909,696 on rental revenues of $1,149,350 compared to earnings before income taxes of $330,672 on rental revenues of $1,207,687 for the corresponding period in 2014 mainly due to a realized gain on the sale of a residential complex forming part of the Company’s interest in 10 residential properties consisting of 1,870 residential suites located in Quebec and Montreal (the “Quebec Properties”). Revenues decreased for the nine month comparative periods due to lower rental revenue resulting from the sale. Rental expenses for the three month period ended September 30, 2015 increased to $602,235 compared to $580,385 for the corresponding period in 2014. The increase was a result of redevelopment expenses related to the Company’s interest in the 48 Weber Street, Kitchener, Ontario multi-residential redevelopment project (the “Kitchener Property”).
Net income for the nine month period ended September 30, 2015 increased to $1,268,989 from $600,310 during the corresponding period in 2014. This increase was attributable to a reduction in financing costs, realized gain on sale of investment property, unrealized gain on marketable securities due to foreign currency exchange, and decrease in unrealized loss on investment properties.
Financing costs increased during the three month period ended September 30, 2015 to $248,589 from $239,878 for the corresponding period ended September 30, 2014. Administrative costs increased to $112,314 during the three month period ended September 30, 2015 from $14,464 for the corresponding period ended September 30, 2014, mainly due to legal costs connected to, among other things, creating the dividend policy and reinvestment plans.
FUNDS FROM OPERATIONS
Funds from Operations (“FFO”) is a non-IFRS measure and should not be construed as an alternative to net income determined in accordance with IFRS. However, FFO is an operating performance measure which is widely used by the real estate industry and the Company has calculated FFO in accordance with the recommendations of the Real Properties Association of Canada (“REALpac”).
FFO, or any other non-IFRS performance measure, is not intended to represent operating profits for the period or from a property. Furthermore, it should not be viewed as an alternative to net income, cash flow from operating activities or similar measures of financial performance calculated in accordance with IFRS.
FFO is a widely accepted supplemental measure of financial performance for real estate entities; however, it does not represent amounts available for capital programs, debt service obligations, commitments or uncertainties. FFO should not be interpreted as an indicator of cash generated from operating activities and is not indicative of cash available to fund operating expenditures, or for the payment of cash distributions. FFO is simply one measure of operating performance.
FFO for the three and nine month periods ended September 30, 2015 were as follows:
|3 Months Ended
|3 Months Ended
|9 Months Ended
|9 Months Ended
|Earnings (Loss) before income tax||$||909,696||$||330,672||$||1,475,201||$||678,195|
|Interest and dividend income||$||(20,508||)||$||(7,462||)||$||(45,301||)||$||(25,734||)|
|Unrealized (gain) loss on securities||$||(54,960||)||$||(27,679||)||$||(197,950||)||$||(84,201||)|
|Unrealized loss on investment properties||$||125,841||$||77,429||$||265,662||$||324,823|
|Realized gain on sale of investment properties||$||(773,857||)||–||$||(773,857||)||–|
|Funds from Operations (FFO)||$||186,212||$||372,960||$||723,755||$||893,083|
During the three month period ended September 30, 2015, FFO decreased to $186,212 from $372,960 for the corresponding period ended September 30, 2014. FFO decreased during the nine month period ended September 30, 2015 to $723,755 from $893,083 for the corresponding nine month period ended September 30, 2014.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2015, the Company had cash and marketable securities on hand in the amount of $5,589,799 and $580,616 respectively and short term investments in the amount of $2,721,171.
As of September 30, 2015, the Company had mortgages payable in the amount of $24,589,946, which was comprised of: (i) $11,836,331 representing a mortgage payable for the Don Mills Property; (ii) $5,370,430 is representing mortgages payable for the Belleville Property and London Property, (iii) $5,583,185 representing a mortgage payable on the Quebec Property, (iv) $1,800,000 representing mortgage payable on Kitchener Property.
As of September 30, 2015, total assets were $53,833,316 compared to $47,211,558 as of December 31, 2014.
SUMMARY OF QUARTERLY RESULTS
The following selected financial data is derived from the unaudited quarterly financial statements of the Company:
|Quarter ended||Revenue||Net Income||Net Income
|September 30, 2015||$||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||$||2,462,190||0.057||0.048|
|September 30, 2014||$||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||$||165,087||0.004||0.003|
|December 31, 2013||$||1,330,217||$||1,418,536||0.030||0.027|
Basic earnings per share are computed using the weighted average number of common shares outstanding during the year. Diluted net income per share is computed using the weighted average number of common shares outstanding during the year. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options using the treasury stock method.
As part of the Company’s long-term strategy to maximize shareholder value, the board of directors approved the implementation of a dividend policy (the “Dividend Policy”). Accordingly, on June 17, 2015, the Company announced that it adopted the Dividend Policy, a dividend reinvestment plan for holders of common shares in the capital of the Company and a dividend reinvestment plan for the holder of Series A, first preferred shares (the “Preferred Shares”) in the capital of the Company.
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 record date.
For comprehensive disclosure of the Company’s performance for the three month and nine month periods ended September 30, 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 period ended September 30, 2015, which have been filed with applicable securities regulators on SEDAR at www.sedar.com.
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.
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 dividends. 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 November 30, 2015.
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.
President & CEO
(416) 703-1877 x1025