TORONTO, Aug. 7, 2020 /CNW/ – Bridgemarq Real Estate Services Inc. (“Bridgemarq” or the “Company”) (TSX: BRE) announced today its second quarter consolidated financial results and the approval of a monthly dividend to holders of the Company’s restricted voting shares.
Revenue in the second quarter was $11.4 million compared to $11.8 million for the same period in 2019, on pandemic-driven weakness in Canadian real estate markets.
The Company generated a net loss for the quarter of $9.2 million or $0.97 per share, on a fully diluted basis compared to earnings of $7.8 million in the second quarter of 2019. The difference was due to non-cash, revaluation adjustments on the Exchangeable Units issued by the Company, driven by an increase in the Company’s share price during the quarter.
The Board of Directors approved a dividend to shareholders of $0.1125 per restricted voting share payable September 30, 2020 to shareholders of record on August 31, 2020.
The Company’s annual shareholders’ meeting will be held on August 7th, 2020 at 10 a.m. eastern time.
SECOND QUARTER OPERATING RESULTS
Revenues during the second quarter were $11.4 million, compared to $11.8 million in the same period in 2019. The decrease was primarily due to broad-based economic and real estate market weakness during the second quarter of 2020, driven by Canada’s efforts to combat the pandemic.
The Company generated a net loss for the quarter of $9.2 million, or $0.97 per share on a fully diluted basis. These results included a $11.0 million loss on the fair value of the Exchangeable Units issued by the Company driven by an increase in the Company’s share price from $8.43 at the start of the quarter to $11.75 at June 30, 2020. In the second quarter of 2019 the Company generated net earnings of $7.8 million which included a gain on the fair valuation of the Exchangeable Units of $6.7 million due to a decrease in the share price during that quarter.
Distributable cash flow for the second quarter of 2020 amounted to $3.1 million, compared to $4.8 million generated during the second quarter of 2019. During the quarter, the Company provided certain rebates to its franchisees under an alternate fee plan designed to help the Company’s network of REALTORS®1 and brokerages manage through the uncertain times created by the recent pandemic. These rebates totaled approximately $1.1 million during the quarter.
“After a strong start to the year, our revenues dropped sharply at the start of the second quarter, as the Company and industry overall complied with government and public health requests to restrict brokerage services to only those consumers with critical housing needs, to fight the spread of COVID-19,” said Phil Soper, President and Chief Executive Officer, Bridgemarq Real Estate Services Inc. “While the full impact of the pandemic on Canada’s real estate industry won’t be known for months to come, we are pleased with the pace and strength with which the market bounced back in late May and through June.
“I am immensely proud of the efforts of our team who successfully reengineered our processes to safely provide consumer clients with the critical real estate services they needed. From network-enabled virtual home showings in the field, to remote education and training at a national level, throughout the pandemic the Company has continued to provide the superior service levels our brands are famous for,” said Soper.
“Our investment in market-leading technology and services could not have come at a better time. The rollout of our new rlpSPHERE digital operating platform began during the quarter. This cloud-based, AI-driven system allows our agents and brokerages to serve existing clients and prospect for new, from anywhere on any device. It is a true market differentiator,” Soper continued.
While, historically, our fee structure has been biased towards fees that are fixed in nature, for the period from April 1, 2020 to December 2020, the Company implemented an alternative fee plan to its Franchisees. This temporary plan is a variable fee only plan and is designed to provide financial support to the Company’s franchisees and their agents. As such, for 2020, the Company’s franchise fees will be more closely correlated with the changes in the Canadian real estate market.
The Company has deferred payments of management fees and interest on Exchangeable Units totaling $4.9 million under an agreement previously announced with Brookfield Business Partners L.P. and Bridgemarq Real Estate Services Manager Limited. These deferrals will improve the Company’s liquidity to support operations and dividends in the short term.
During the first quarter of 2020, the Canadian real estate market continued on a positive trajectory that began in the second half of 2019. In mid-March, the pandemic and subsequent government and public health directives to restrict the spread of COVID-19, led to unprecedented market disruption and sharply lower home sales volumes that continued through mid-May 2020. During April and May, the Canadian Real Estate Association reported a 57.6%2 and 39.8%3 year-over-year decrease in monthly sales, respectively. In June, pent up demand drove a 15.2% year-over-year increase in unit sales and a 5.4% year-over-year increase in CREA’s MLS® Home Price Index4 as consumer confidence returned and business activity began to recover. The full extent to which COVID-19 will continue to impact the Canadian Market and the business of the Company is not known at this time and cannot be reasonably predicted.
“Home prices in the second quarter rose as buyers entered the market, attracted by extremely low interest rates and the perception of bargains-to-be-had,” Phil Soper said. “Across Ontario and Quebec in particular, the demand for housing outpaced the growth in new listings. We expect to see sellers return to the market in key supply-constrained regions in numbers that appear sufficient to meet demand as the year progresses.”
The Company declared a cash dividend of $0.1125 cents per restricted voting share payable on September 30, 2020 to shareholders of record on August 31, 2020. The dividend distribution represents a target annual dividend of $1.35 per restricted voting share, which is consistent with 2019.
THE COMPANY NETWORK
As at June 30, 2020, the Network was comprised of 18,921 REALTORS®, operating under 298 franchise agreements providing services from 676 locations, with an approximate 17% share of the Canadian residential real estate market based on 2019 transactional dollar volume.
The Company will be holding its annual meeting of shareholders On August 7th, 2020 at 10 a.m. eastern time. The meeting is a virtual only, live audio webcast.
To access the shareholders’ meeting, please visit https://web.lumiagm.com/116985571 and follow the login instructions. Shareholders and proxyholders will require their unique control number, which is provided by AST Trust Company Canada in accordance with the instructions provided to shareholders. Guests are welcomed to join the meeting by following the platform’s instructions on the morning of the meeting.
This news release and accompanying financial statements make reference to distributable cash flow. Distributable cash flow is defined as operating income before deducting amortization and net impairment or recovery of intangible assets, minus current income tax expense and minus cash used in investing activities. Distributable cash flow is used by the Company to measure the amount of cash generated from operations which is available to the Company’s shareholders on a diluted basis, where such dilution represents the total number of shares of the Company that would be outstanding if holders of exchangeable units converted Class B LP units into restricted voting shares. The Company uses distributable cash flow to assess its operating results and the value of its business and believes that many of its shareholders and analysts also find this measure useful. Distributable cash flow does not have any standard meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies.
This news release contains forward-looking information and other “forward-looking statements”. Words such as “come”, “continue”, “predict”, “appear”, “should”, “provide”, “expect”, “recovery”, “will”, and other expressions that are predictions of or could indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those indicated in the forward-looking statements include: the duration and effects of the COVID-19 pandemic, including the impact of COVID-19 on the economy and the Company’s business, the impact of government or other regulatory initiatives to address the impact of the spread of COVID-19 on the Canadian economy, including the impact on real estate markets, changes in the supply or demand of houses for sale in Canada or in any particular region within Canada, changes in the selling price for houses in Canada or any particular region within Canada, changes in the Company’s cash flow as a result of COVID-19, changes in the Company’s strategy with respect to and/or ability to pay dividends, changes in the productivity of the Company’s REALTORS® or the commissions they charge their customers, changes in government policy, laws or regulations which could reasonably affect the housing markets in Canada, consumer response to any changes in the housing markets in Canada or any changes in government policy, laws or regulations, changes in general economic conditions (including interest rates, consumer confidence and other general economic factors or indicators), changes in global and regional economic growth, the demand for and prices of natural resources on local and international markets, the level of residential real estate transactions, competition from other real estate brokers or from discount and/or Internet-based real estate alternatives, the closing of existing real estate brokerage offices as a result of COVID-19 or otherwise, other developments in the residential real estate brokerage industry or the Company that reduce the number of REALTORS® in the Company’s Network or royalty revenue from the Company’s Network, our ability to maintain brand equity through the use of trademarks, the methods used by shareholders or analysts to evaluate the value of the Company and its publicly traded securities, changes in tax laws or regulations, and other risks detailed in the Company’s annual information form, which is filed with securities commissions and posted on SEDAR at www.sedar.com. Forward-looking information is based on various material factors or assumptions, which are based on information currently available to management. Material factors or assumptions that were applied in drawing conclusions or making estimates set out in the forward-looking statements include, but are not limited to: anticipated economic conditions, anticipated impact of government policies, anticipated financial performance, anticipated market conditions, business prospects, the successful execution of the Company’s business strategies and recent regulatory developments, including as the foregoing relate to COVID-19. The factors underlying current expectations are dynamic and subject to change. Although the forward-looking statements contained in this press release are based upon what management believes are reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
About Bridgemarq Real Estate Services
Bridgemarq is a leading provider of services to residential real estate brokers and a network of approximately 19,000 REALTORS®1. We operate in Canada under the Royal LePage, Via Capitale and Johnston & Daniel brands. For more information, go to bridgemarq.com.
Bridgemarq is an affiliate of Brookfield Business Partners, a business services and industrials company focused on owning and operating high-quality businesses that benefit from barriers to entry and/or low production costs. Brookfield Business Partners is listed on the New York and Toronto stock exchanges. Further information is available at bbu.brookfield.com.
1 The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA.
2 CREA, Canadian home sales and listings post record declines in April 2020, May 15, 2020.
3 CREA, Canadian home sales and new listings on the rise in May, June 15, 2020.
4 CREA, Canadian home sales and new listings up again in June, July 15, 2020.
Bridgemarq Real Estate Services Inc.
(Unaudited, in thousands of Canadian dollars, except per share information)
Interim Balance Sheet Highlights
Other current assets
Total current assets
Accounts payable and accrued liabilities
Interest payable on Exchangeable Units
Dividends payable to shareholders
Contract transfer obligation
Total current liabilities
Other non-current liabilities
Total Liabilities and Shareholders’ deficit
Interim Earnings Highlights
Fixed franchise fees
Variable franchise fees
Cost of other revenue
Impairment, write-off and amortization of intangible assets
Interest on Exchangeable Units
Gain (loss) on fair value of Exchangeable Units
Loss on interest rate swap
Gain on deferred payments
Income tax expense
Deferred income tax recovery (expense)
Net and comprehensive earnings (loss)
Basic earnings (loss) per Restricted Voting Share
Diluted earnings (loss) per Share
Interim Cash Flow Highlights
Cash provided by operating activities:
Cash used for investing activities:
Cash used for financing activities:
Change in cash for the period
Cash, beginning of the period
Cash, end of the period
Interim Distributable Cash Flow Highlights
Distributable Cash Flow
Distibutable Cash Flow per Share
June 30, 2020
June 30, 2019
Distributable Cash Flow
Distibutable Cash Flow per Share
SOURCE Bridgemarq Real Estate Services Inc.
For further information: Sarah Louise Gardiner, Director of Investor Relations, Bridgemarq Real Estate Services, [email protected], Tel: 416-510-5783
The local real estate market set more records in August, with total home sales increasing nearly 40 per cent from the same time in 2019.
There were 260 homes sold last month, shattering the previous record of 210 set in August 2017. It was also the first time more than 250 homes were sold in a month in the Huron-Perth region.
“One difference in this local market compared to many others in Ontario is that the massive rebound in sales has been accompanied by a sustained increase in new listings,” Huron Perth Association of Realtors president Sherrie Roulston said. “The market remains historically tight, and prices are moving up to record levels as a result.”
The average price of residential properties sold in August 2020 was a record $477,756, up 19.8 per cent from August 2019. The cumulative dollar value of all home sales in August 2020 was $124.2 million, a large increase of 65.7 per cent from the same month in 2019. This was also a new record, not only for August, but for any month in the local real estate association’s history.
“You’re in the heat of it through the month and things are going crazy, and when you see the percentages, it’s (surprising),” Roulston said.
August is traditionally a slower month for the housing market as homeowners and prospective buyers are busy taking holidays and preparing for school’s return, but COVID-19 has shifted the market in 2020.
“There are a lot (of buyers) coming from out of town, whether it be Kitchener, Guelph, the (Greater Toronto Area) for sure,” Roulston said. “It’s driving our market up.”
On a year-to-date basis, home sales have totalled 1,410 units over the first eight months of the year – now up four per cent from the same period in 2019.
There were 244 new residential listings in August 2020, which was three more than a year ago and the largest number of new listings added in the month of August in more than five years.
Overall supply continues to run at record low levels, though. Active residential listings numbered 284 units at the end of August, which was a significant decline of 39.4 per cent from the end of August 2019.
Residential months of inventory numbered 1.1 at the end of August 2020, down from the 2.5 months recorded at the end of August 2019 and below the long-run average of 4.7 months for this time of year. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
The year-to-date average price of homes sold is $434,401, rising 13.7 per cent from the first eight months of 2019.
For years, the Canadian real estate market has been dominated by a handful of cities, such as Toronto, Vancouver and Montreal. Everyone wanted to live in these red-hot markets – and for a good reason. These urban centres have everything you would want, from arts and entertainment to a diverse range of amenities. Then, of course, the coronavirus pandemic happened, and it turned everything upside down, including the dominant trends within the Canadian real estate market.
Who would have predicted at the start of 2020 that big city dwellers would be fleeing these metropolises to live in rural areas? This is one of the trends unfolding in the fallout of the COVID-19 public health crisis. With more Canadian businesses embracing work-from-home policies, many people are taking advantage of the opportunity to relocate to cottage country. As such, small cottage country towns are becoming attractive destinations for homebuyers.
Whether you are ready to pack up and leave your city-living days behind, or you’re looking for your next big investment opportunity, here’s what you need to know about some of the hottest markets in Canadian cottage country.
Canadian Real Estate: The Hottest Markets Across Cottage Country
#1 Kawartha Lakes, Ontario
The Kawartha Lakes has long been a getaway target for Torontonians since it is roughly a 90-minute drive from the heart of the city. The region is mostly known for its cottage vacations, but it offers a diverse array of activities and sights, including horseback riding, boating, hiking trails, golf, and so much more. Plus, you can access the Trans Canada Trail and Ferris Provincial Park. Now that the pandemic has altered buying trends, Kawartha is turning into an all-season home for many city dwellers.
According to the Kawartha Lakes Real Estate Association (KLREA), residential home sales surged 39.5 per cent in July. Home prices rose 3.8 per cent to a record high of $480,164. Since Kawartha is becoming a top destination for homeowners in the Greater Toronto Area (GTA), there has been a surge in demand, but supply has been unable to keep up, which has turned the municipality into a seller’s market.
#2 Muskoka Lakes, Ontario
Like the Kawarthas, Muskoka is at the top of the list of most popular cottage country destinations. And, like the Kawarthas, Muskoka provides so much more than an idyllic getaway. From Gravenhurst to Bracebridge, you can relish in great seasonal festivals, hiking, wineries, and art galleries, all year long.
The Lakelands Association of REALTORS® reported a 29.8-per-cent jump in non-waterfront residential sales and a 64.2-per-cent spike in waterfront sales in July. Prices within Muskoka have also popped: 15.5 per cent for non-waterfront properties ($385,250) and 21.5 per cent for waterfront housing ($675,000). The housing supply in Muskoka remains low, but the demand continues to rise, resulting in a seller’s market.
#3 Gulf Islands, British Columbia
If you desire to be on the west coast, consider the Gulf Islands in British Columbia. This has long been a much-desired cottage destination, mainly for its five major islands (Pender, Galiano, Mayne, Salt Spring and Saturna). Although the Gulf Islands are appealing due to the fact that you can choose to disconnect, or you can still stay connected to the outside world with frequent B.C. Ferries, water taxis and private boats.
The Gulf Islands have been steadily rising for several years now, and real estate agents in British Columbia say that the region could attract even more interest in the months to come. Over the last year, prices have risen as much as 41.61 per cent. Since 2015, prices have gone up as much as 132.7 per cent!
#4 Eastern Townships, Quebec
For years, people have rented cottages for their chalet-style getaways in Eastern Townships. The Quebec region has 89 municipalities, including Magog, Sherbrooke and Coaticook. In addition to being surrounded by nature, the southeastern Quebec region has plenty of gourmet wine facilities, spas, golf courses, and winter sports, as well as more than a dozen national and regional parks that can be enjoyed year-round.
Data from the Quebec Professional Association of Real Estate Brokers suggest transactions climbed as much as 20 per cent in this region. Prices above the $500,000 level are also the new norm, and experts forecast that prices will continue to go up amid more Montrealers fleeing to the suburbs.
#5 Frontenac County, Ontario
Frontenac County is a three-hour drive from Toronto, sandwiched between Kingston and Ottawa. It would be easy to surmise that Frontenac is attracting mostly Torontonians, but the urban flight trend is bringing people from large cities across Ontario. The main problem is that affordable all-season cottages do not stay on the market long, especially those priced below $500,000.
In July, Kingston and its surrounding areas witnessed a new sales record, rising 35.8 per cent from the same period last year, says Kingston and Area Real Estate Association (KAREA). The average price of homes sold was an astounding $458,026, which was up 15.2 per cent from July 2019.
Earlier this spring, many cottage country mayors discouraged urbanites from leaving their big cities to come to these small towns for fear of spreading the highly infectious respiratory illness. But these warnings might not have been enough for city dwellers searching for vacation homes or all-season cottages. As people from the nation’s largest cities seek less densely populated communities, cottage country destinations nationwide can anticipate a massive boom – and this could last all year long for many of these rural regions. For realtors within these small communities, perhaps the fiercely competitive bidding wars commonplace in Toronto and Vancouver’s real estate transactions, will become the new norm in 2021. Stranger things – like for example, a global pandemic and killer hornets – have happened.
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In an effort to increase disclosure of the ownership of real
estate in B.C., the Land Owner Transparency Act (“LOTA”)
received royal asset and will be in force as soon as regulations
are prescribed. The Land
Title and Survey Authority of B.C. is advising that the Land
Owner Transparency Registry (“LOTR”) will be launched
soon – as early as this Fall. Once launched,
transferees will be required to file a “transparency
declaration” which will be stored in LOTR, a searchable public
registry with information about indirect ownership interests in
But what does that disclosure look like?
Who must disclose?
holders,” generally including
Partners in a partnership
Corporate interest holder of at least
10% of outstanding shares or voting rights. (Confusingly, this is
different than the requirements under Property Transfer Tax Returns
and under the new Business Corporations Amendment Act)
When to disclose?
Upon registering a legal interest in
land in the Land Title Office;
If there is a change in interest
A reporting body discovers an
A reporting body is a pre-existing
owner when LOTA comes into force; and
A registered owner ceases to be a
relevant reporting body.
declaration indicating if you are a reporting body and
Reporting Bodies must also file a transparency report disclosing the following
Corporations: name, registered
address and head office address, jurisdiction of incorporation or
continuation, incorporation number and business number
Trusts: information regarding
the trustee and settlor corresponding to certain information
required for individual interest holders
partnership’s business name, type of partnership, registered
address or head office address, address of principal business
premises, jurisdiction of organization, and identification number
and business number
Individual interest holders of
the relevant reporting body must disclose:
Full name, date of birth, SIN, tax
number, principal residence and last known address;
Residency and citizenship status;
Date on which one became or ceased to
be an interest holder and the nature of the individual’s
interest in the reporting body.
As noted above, these disclosure requirements are confusingly
similar to, but different from:
The B.C. private companies
Transparency Register (FAQs
Property Transfer Tax Requirements
(PTT Return Guide
here; additional info
B.C. Law Society Client
Identification and Verification Requirements (Details
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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From what I have read, the demand for cottage properties has soared during COVID. City folk are eager to get out of the city for a change of scenery, especially since many people are still working from home.
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