HALIFAX, NS, Nov. 23, 2022 /CNW/ – (TSXV: NXLV) â NexLiving Communities Inc. (“NexLiving” or the “Company”) announced operating and financial results for the three and nine months ended September 30, 2022.
Stavro Stathonikos, President and CEO commented: “We reported record operating and financial results for the third quarter of 2022, with industry leading organic growth of +4.8% for the quarter, and +7.7% year to date, more than offsetting the impact of increased interest costs.”
- Property revenue increased +55% to $3.1 million for the three month period and +57% to $8.6 million for the nine month period, driven by strong property acquisitions and rental rate increases during the period.
- Net operating income (“NOI”) increased +50% to $1.8 million (58.2% margin) for the three month period and +57% to $4.9 million (56.8% margin) for the nine month period.
- Suite count increased to 867 from 549 (+58% Y/Y) at September 30, 2021 as the Company continued to execute on its acquisition pipeline.
- Same property NOI increased +4.8% and +7.7% for the three and nine month periods, respectively. Same property margins improved by +97 basis points and +114 basis points over the three month and nine month periods, respectively, driven by rental rate increases and cost controls.
- The portfolio remained highly occupied with 98% occupancy, which reflects the attractive supply and demand fundamentals that continue to persist in New Brunswick. The increase in vacancy during the period is largely attributable to the Company’s deliberate suite repositioning program in the Ontario market.
- FFO (cents per share) â diluted was 0.17 for the three month period and grew +73% to 0.46 for the nine month period.
Q3 2022 Operating and Financial Highlights:
|
As at |
September 30, |
December 31, |
Change |
|
2022 |
2021 |
||
|
Number of investment properties |
28 |
25 |
3 |
|
Number of suites |
867 |
705 |
162 |
|
Occupancy |
98 % |
99 % |
-128 bps |
|
Debt to total assets |
62.0 % |
57.7 % |
4.3 % |
|
Debt to GBV* |
66.1 % |
65.7 % |
40 bps |
|
Weighted average term to debt maturity (years) |
2.9 |
2.1 |
0.8 |
|
Weighted average contractual interest rate |
2.97 % |
2.12 % |
85 bps |
|
Investment properties |
164,585,000 |
125,162,000 |
31.5 % |
|
Total assets |
177,644,145 |
143,758,717 |
23.6 % |
|
Total liabilities |
110,065,242 |
82,956,832 |
32.7 % |
|
Net asset value |
67,578,903 |
60,801,885 |
11.1 % |
|
Net asset value per share |
0.23 |
0.22 |
1.6 % |
|
For the three months ended September 30 |
2022 |
2021 |
Change |
|
Rental income |
3,088,988 |
1,997,351 |
54.7 % |
|
NOI |
1,796,660 |
1,196,750 |
50.1 % |
|
NOI margin |
58.2 % |
59.9 % |
-175 bps |
|
Net income |
3,004,782 |
3,140,185 |
(4.3) % |
|
FFO* |
494,781 |
255,142 |
93.9 % |
|
FFO (cents per share) – diluted* |
0.17 |
0.14 |
17.5 % |
|
Dividends declared (cents per share) |
0.05 |
0.05 |
– |
|
Weighted average units outstanding – diluted |
298,661,982 |
180,997,796 |
65.0 % |
|
Same property revenue* |
1,819,569 |
1,766,346 |
3.0 % |
|
Same property operating expenses* |
767,111 |
761,847 |
0.7 % |
|
Same property NOI* |
1,052,458 |
1,004,499 |
4.8 % |
|
Same property NOI margin* |
57.8 % |
56.9 % |
97 bps |
|
For the nine months ended September 30 |
2022 |
2021 |
Change |
|
Rental income |
8,564,162 |
5,469,409 |
56.6 % |
|
NOI |
4,862,359 |
3,088,563 |
57.4 % |
|
NOI margin |
56.8 % |
56.5 % |
31 bps |
|
Net income |
5,146,585 |
5,415,612 |
-5.0 % |
|
FFO* |
1,360,028 |
453,996 |
199.6 % |
|
FFO (cents per share) – diluted* |
0.46 |
0.27 |
72.9 % |
|
Dividends declared (cents per share) |
0.10 |
0.10 |
0.0 % |
|
Weighted average units outstanding – diluted |
296,206,451 |
170,957,826 |
73.3 % |
|
Same property revenue* |
5,417,223 |
5,134,845 |
5.5 % |
|
Same property operating expenses* |
2,352,709 |
2,288,700 |
2.8 % |
|
Same property NOI* |
3,064,514 |
2,846,145 |
7.7 % |
|
Same property NOI margin* |
56.6 % |
55.4 % |
114 bps |
*Refer to section “Non-IFRS Financial Measures”
Acquisition Activity:
On August 9, 2022, the Company acquired a 40-suite building in Strathroy, Ont. (294 Saulsbury St.), for $9.4 million. The acquisition was financed with a combination of cash on hand and a $7.9 million short-term debt facility, which includes a capital expenditure facility. 294 Saulsbury is a three-storey building situated on 1.44 acres of land in Strathroy, a bedroom community 30 km west of London, Ontario. The Company plans to undertake a targeted value-add capital program to modernize and reposition the large 1- and 2-bedroom suites.
Fair Value of Investment Properties:
The Company’s weighted average capitalization rate as at September 30, 2022, decreased to 4.63% from 4.75% at December 31, 2021. The decrease was primarily due to the acquisition of three properties during 2022, of which two were in Ontario and are valued at a capitalization rate below the portfolio average. The gain in fair value recorded by the Company reflects forecasted NOI growth due to expected rent increases along with lower property taxes in New Brunswick.
Interest Rate Exposure:
On September 8, 2022 the Company refinanced its maturing mortgage on the McLaughlin property and entered into a new $14.9 million CMHC insured mortgage for the property at a five year fixed interest rate of 3.83%. The new mortgage replaced the previous $10.8 million mortgage with an interest rate of 1.56%.
Dividend:
The Company’s board of directors has approved and declared a dividend of 0.05 cents per common share for the quarter ending December 31, representing 0.2 cents per share on an annualized basis. The dividend is payable on, or after December 30 to shareholders of record at the close of business on December 2.
The Company designates these taxable dividends to be paid to its holders as eligible dividends and will notify the holders such dividends are being paid as eligible dividends for the purposes of the Income Tax Act (Canada) and corresponding provincial legislation.
About the Company
NexLiving continues to execute its plans to acquire recently built or refurbished, highly leased multi-residential properties in bedroom communities in Atlantic Canada. The Company aims to satisfy the needs of the newly emerging 55+ resident. The demographic that has changed the world is now changing the way residential rental apartments cater to their requirements. Their desire for community, along with service, quality and convenience has led to the emergence of the 55+ active living segment. Apartments are their next “home”, after years of owning they look forward to the carefree lifestyle provided through renting in a community of their peers. NexLiving intends to consolidate this emerging market niche. For its recently acquired properties in Ontario the Company plans to undertake a targeted value-add capital program to modernize and reposition the large 1- and 2-bedroom suites. The Company currently owns 867 units in New Brunswick and Ontario. NexLiving has also developed a robust pipeline of qualified properties for potential acquisition. By screening the properties identified to match the criteria set out by the Company (proximity to healthcare, amenities, services and recreation), management has assembled a significant pipeline of potential acquisitions for consideration by the Company’s Board of Directors.
For more information about NexLiving, please refer to our website at www.nexliving.ca and our public disclosure at www.sedar.com.
Forward-Looking Statements
This news release forward-looking information within the meaning of applicable Canadian securities laws (“forward-looking statements“). All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “projects”, “estimates”, “forecasts”, “intends”, “continues”, “anticipates”, or “does not anticipate” or “believes” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements contained in this news release include, but are not limited to management’s expectations of additional rental increases to come into effect by year end and the further enhancement of the Company’s financial results. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. These forward-looking statements reflect the current expectations of the Company’s management regarding future events and operating performance, but involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual events could differ materially from those projected herein and depend on a number of factors. These risks and uncertainties are more fully described in regulatory filings, including the Company’s Annual Information Form, which can be obtained on SEDAR at www.sedar.com, under NexLiving’s profile, as well as under Risk Factors section of the MD&A released on April 18, 2022. Although forward-looking statements contained in this new release are based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this new release speak only as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.
Non-IFRS Financial Measures
The Company prepares and releases unaudited consolidated interim financial statements and audited consolidated annual financial statements prepared in accordance with IFRS. In this and other earnings releases, as a complement to results provided in accordance with IFRS, NexLiving discloses financial measures not recognized under IFRS which do not have standard meanings prescribed by IFRS. These include FFO, FFO (cents per share) â diluted, Debt to GBV and Same Property metrics (collectively, the “Non-IFRS Measures“). These Non-IFRS Measures are further defined and discussed in the MD&A released on November 23, 2022, which should be read in conjunction with this news release. Since these measures are not recognized under IFRS, they may not be comparable to similar measures reported by other issuers. The Company presents the Non-IFRS measures because management believes these Non-IFRS measures are relevant measures of the ability of NexLiving to earn revenue and to evaluate its performance and cash flows. A reconciliation of these Non-IFRS measures is included in the MD&A released on November 23, 2022. The Non-IFRS measures should not be construed as alternatives to net income (loss) or cash flows from operating activities determined in accordance with IFRS as indicators of the Company’s performance.
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 press release.
SOURCE NexLiving Communities Inc.
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