CALGARY, Aug. 14, 2018 /CNW/ – Genesis Land Development Corp. (TSX: GDC) (the “Corporation” or “Genesis”) reported its financial and operating results for the three months (“Q2”) and six months (“H1”) ended June 30, 2018.
Key financial results and operating data for Genesis were as follows:
|
Three months ended |
Six months ended |
||||
|
($000s, except for per share items or unless otherwise noted) |
2018 |
2017 |
2018 |
2017 |
|
|
Key Financial Data |
|||||
|
Total revenues |
18,955 |
38,497 |
33,324 |
54,161 |
|
|
Direct cost of sales |
(14,302) |
(28,392) |
(24,245) |
(38,644) |
|
|
Gross margin |
4,653 |
10,105 |
9,079 |
15,517 |
|
|
Gross margin (%) |
24.5% |
26.2% |
27.2% |
28.6% |
|
|
Net earnings attributable to equity shareholders |
540 |
4,209 |
1,227 |
4,913 |
|
|
Net earnings per share – basic and diluted |
0.01 |
0.09 |
0.03 |
0.11 |
|
|
Cash flows (used in) from operating activities |
(1,336) |
12,251 |
(139) |
10,722 |
|
|
Cash flows (used in) from operating activities per share – basic and diluted |
(0.03) |
0.28 |
0.00 |
0.25 |
|
|
Key Operating Data |
|||||
|
Land Development |
|||||
|
Total residential lots sold (units) |
64 |
78 |
101 |
129 |
|
|
Residential lot revenues |
12,141 |
17,930 |
17,592 |
26,742 |
|
|
Gross margin on residential lots sold |
4,028 |
7,825 |
6,459 |
11,571 |
|
|
Gross margin (%) on residential lots sold |
33.2% |
43.6% |
36.7% |
43.3% |
|
|
Average revenue per lot sold |
190 |
230 |
174 |
207 |
|
|
Development and non-core land sold |
– |
9,000 |
– |
9,000 |
|
|
Home Building |
|||||
|
Homes sold (units) |
24 |
36 |
57 |
55 |
|
|
Revenues (1) |
10,859 |
17,474 |
24,264 |
26,494 |
|
|
Gross margin on homes sold |
1,545 |
3,018 |
3,540 |
4,684 |
|
|
Gross margin (%) on homes sold |
14.2% |
17.3% |
14.6% |
17.7% |
|
|
Average revenue per home sold |
452 |
485 |
426 |
482 |
|
|
Homes (with lots) subject to firm sale contracts (units) at the period end |
37 |
50 |
|||
|
Key Balance Sheet Data |
As at Jun. 30, |
As at Dec. 31, |
|||
|
Cash and cash equivalents |
12,468 |
23,585 |
|||
|
Total assets |
285,137 |
301,425 |
|||
|
Loans and credit facilities |
21,090 |
30,135 |
|||
|
Total liabilities |
65,270 |
81,884 |
|||
|
Shareholders’ equity |
201,523 |
201,397 |
|||
|
Total equity |
219,867 |
219,541 |
|||
|
Loans and credit facilities (debt) to total assets |
7% |
10% |
|||
|
(1) |
Includes revenues of $4,045,000 for 24 lots in Q2 2018 and $8,532,000 for 57 lots in H1 2018 purchased by the Home Building division from the Land Development division (33 and $5,907,000 in Q2 2017; 47 and $8,075,000 in H1 2017) and sold with the home. These amounts are eliminated on consolidation. |
Highlights of Second Quarter
In Q2 2018, Genesis’ cash flow used in operating activities was ($1,336,000) (($0.03) per share), compared to cash flow from operating activities of $12,251,000 ($0.28 per share) for the second quarter of 2017 (“Q2 2017”), a decrease of $13,587,000 ($0.31 per share). The difference was primarily due to a $9,000,000 sale of development land in Q2 2017 with no corresponding sale in Q2 2018, and $5,124,000 paid for the purchase of lots and work-in-progress from a third-party builder in receivership.
Net income for Q2 2018 was $540,000 ($0.01 per share), down from $4,209,000 ($0.09 per share) in Q2 2017 as a result of lower overall revenues. Revenues for Q2 2018 were $18,955,000, down $19,542,000 (51%) from $38,497,000 in Q2 2017. Net income for H1 2018 was $1,227,000 ($0.03 per share) compared to $4,913,000 ($0.11 per share) in H1 2017.
Revenues for H1 2018 of $33,324,000 were down $20,837,000 (39%) compared to $54,161,000 in H1 2017. This was primarily due to there being no development land sales in H1 2018, as well as fewer residential lot sales to third-party builders and lower revenues from home sales by the home building division.
The gross margin on residential lot sales in Q2 2018 was 33%, compared to 44% in Q2 2017, primarily due to the mix of sales by community and product/lot type, the nature and cost of the development work required to ready the lots for sale and the original cost of the land.
The gross margin of the homebuilding division was 14% in Q2 2018, down from 17% in Q2 2017 due to the adjustment of prices to reflect market conditions and the change in product mix to lower priced and lower margin single-family homes.
Total expenses for Q2 2018 were lower than in Q2 2017, with savings of $234,000 (6%) realized in sales, general and administrative expenses and lower interest expense of $252,000 (41%) due to lower average loan balances during Q2 2018 compared to Q2 2017.
Genesis’ had $12,468,000 in cash and cash equivalents at June 30, 2018, compared to $23,585,000 as at December 31, 2017, the decrease being primarily due to the $8,000,000 payment on the vendor-take-back mortgage payable in the first quarter of 2018. As a result of this payment, total loans and credit facilities as at June 30, 2018 were $21,090,000, 30% lower than at December 31, 2017. Loans and credit facilities outstanding at June 30, 2018 were 7% of total assets, compared to $30,135,000 or 10% of total assets at December 31, 2017.
SALE OF DEVELOPMENT LANDS
On July 30, 2018, the Corporation completed the sale of a 1.8 acre commercial parcel of land in the Calgary Metropolitan Area for $2,688,000 which was paid in cash on closing. The Corporation also expects to complete the sale of another 7.8 acre multifamily parcel for $7,810,000 in August 2018.
$0.24 PER SHARE SPECIAL DIVIDEND DECLARED
The Board of Directors has declared a special cash dividend of $0.24 per common share for a total of approximately $10,309,000, payable to shareholders of record on August 28, 2018, and will be paid on September 12, 2018.
Dividend History and Share Buybacks
Since 2014 when it paid its first dividend, Genesis will have returned $51.9 million, including the current dividend declared, to shareholders by way of dividends and bought back nearly 2 million common shares for approximately $5.9 million under its normal course issuer bid (approximately 4.4% of the common shares outstanding at the commencement of the program in 2015).
|
($000s, except for number of shares and per share |
Dividend per |
Total |
Shares |
Cost of |
|
|
2018 (dividend will paid be on Sep.12, 2018) |
$0.24 |
$10,309 |
300,000 |
$1,101 |
|
|
2017 |
0.46 |
19,896 |
493,085 |
1,456 |
|
|
2016 |
0.25 |
10,936 |
551,796 |
1,420 |
|
|
2015 |
0.12 |
5,331 |
628,598 |
1,887 |
|
|
2014 |
0.12 |
5,386 |
– |
– |
|
|
Total |
$1.19 |
$51,858 |
1,973,479 |
$5,864 |
|
Additional Information
The information contained in this press release should be read in conjunction with the unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2018 and 2017 and the related Management’s Discussion and Analysis (“MD&A”) dated August 14, 2018 which have been filed with Canadian securities regulatory authorities. Copies of these documents may be obtained via www.sedar.com or our website at www.genesisland.com.
About Genesis
Genesis Land Development Corp. is a land developer and residential home builder in the Calgary Metropolitan Area. The Corporation’s common shares are listed on the Toronto Stock Exchange (TSX: GDC).
ADVISORIES
Forward-Looking Statements
This news release may contain certain statements which constitute forward-looking statements or information (“forward-looking statements”) within the meaning of applicable securities legislation, including Canadian Securities Administrators’ National Instrument 51-102 ‘Continuous Disclosure Obligations’, concerning the business, operations and financial performance and condition of Genesis. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”.
Although Genesis believes that the anticipated future results, performance or achievements expressed or implied by forward-looking statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements because they involve assumptions, known and unknown risks, uncertainties and other factors many of which are beyond the Corporation’s control, which may cause the actual results, performance or achievements of Genesis to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Accordingly, Genesis cannot give any assurance that its expectations will in fact occur and cautions that actual results may differ materially from those in the forward-looking statements.
Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to: the impact of contractual arrangements and incurred obligations on future operations and liquidity; local real estate conditions, including the development of properties in close proximity to Genesis’ properties; the uncertainties of real estate development and acquisition activity; fluctuations in interest rates; ability to access and raise capital on favourable terms; not realizing on the anticipated benefits from transactions or not realizing on such anticipated benefits within the expected time frame; labour matters, governmental regulations, stock market volatility and other risks and factors described from time to time in the documents filed by Genesis with the securities regulators in Canada available at www.sedar.com, including the Corporation’s MD&A under the heading “Risks and Uncertainties” and the AIF under the heading “Risk Factors”. Furthermore, the forward-looking statements contained in this news release are made as of the date of this news release and, except as required by applicable law, Genesis does not undertake any obligation to publicly update or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Genesis Land Development Corp.
View original content: http://www.newswire.ca/en/releases/archive/August2018/14/c4300.html