Bridgemarq Real Estate Services Reports Annual Financial Results and Monthly Dividend
(TORONTO, ON) March 9, 2023 – Bridgemarq Real Estate Services Inc. (“Bridgemarq” or the “Company”) (TSX: BRE) today released its annual consolidated financial results and announced a monthly dividend to holders of the Company’s restricted voting shares.
● Revenue for 2022 was $49.9 million compared to $50.2 million in 2021, as growth in the number of REALTORS® in the Company Network served to substantially offset the impact of weaker real estate markets in 2022.
● The Company recorded net earnings of $21.0 million or $1.19 per share in 2022, on a fully diluted basis, compared to $4.8 million or $0.50 per share in 2021, as a result of an $11.5 million gain on the valuation of the Exchangeable Units, compared to a loss of $5.0 million in 2021.
● Distributable Cash Flow per Share amounted to $1.59 for 2022, compared to $1.66 for the prior year.
● The Company’s network of REALTORS® increased to 20,686 at December 2022, up from 20,159 in 2021.
● The Board of Directors approved a dividend to shareholders of $0.1125 per Restricted Voting Share payable April 28, 2023, to shareholders of record on March 31, 2023.
FOURTH QUARTER OPERATING RESULTS
For the year ending December 31, 2022, revenues were $49.9 million compared to $50.2 million in 2021. The decrease in revenue results from significant weakness in the Canadian real estate market in the last half of the year, partly offset by an increase in the number of REALTORS® in the Company Network. The Company grew its agent count by 3% in 2022. During the fourth quarter, revenues were $10.4 million, compared to $10.7 million last year.
In 2022, the Company recorded net earnings of $21.0 million, compared to $4.8 million in 2021. The improved result was due to an $11.5 million gain on the valuation of the Exchangeable Units, compared to a loss of $5.0 million in 2021. The fair valuation adjustment on the Exchangeable Units is directly related to changes in the market price of the Company’s Restricted Voting Shares. For the fourth quarter, the Company generated net earnings of $6.0 million, or $0.18 per Share, compared to net earnings of $2.5 million, or $0.22 per Share, in the same quarter of 2021.
Distributable Cash Flow for the year amounted to $20.2 million, or $1.59 per Share, compared to the $21.3 million, or $1.66 per Share, recorded in 2021. The lower cash flow is due to lower revenues, higher administration expenses and higher income taxes partly offset by lower management fees. For the fourth quarter, Distributable Cash Flow amounted to $3.8 million, compared to $4.1 million in 2021.
“Despite a significant reduction in transaction volumes in Canadian real estate throughout 2022, following nearly two years of pandemic-fueled intensity, we are pleased with our performance over the last year and the Company’s ability to weather market downturns, due to our largely fixed-revenue per agent driven revenues,” said Phil Soper, President and Chief Executive Officer, Bridgemarq Real Estate Services, Inc. “While a rapid rise in interest rates hampered demand and sent many buyers and sellers to the sidelines, the Company was able to continue to grow its REALTOR® network, welcoming more than 500 agents to the Company’s brands last year. The strength of our reputation in the market and our innovative technology offering continues to attract productive real estate professionals to the Company.”
The Canadian residential real estate market posted further declines in the fourth quarter as sales volumes decreased nationally by 38% compared to the same period in 2021, and 25% for the full year compared to the record volumes recorded in 2021. According to the Canadian Real Estate Association, the national average selling price declined 12% in the fourth quarter compared to the same period in 2021, however home prices remain significantly higher than pre-pandemic levels, increasing 26% compared to the fourth quarter of 2019.
A nationwide shortage in housing supply helped to keep prices from declining further, as many sellers appear to have delayed listing their homes until demand improves. Housing activity may increase in the coming months, as both buyers and sellers are expected to return to the market once interest rates, which saw their highest levels in 15 years early in 2023, stabilize.
Canada’s inflation rate continues to fall, reaching 6.3% in December, 2022, and 5.9% in January, 2023. Inflation has not come down as much or as quickly as the Bank of Canada might have hoped, in part because of the country’s strong job market, which continues to support the economy. A series of interest rate hikes in 2022 contributed to lower home sales and decreased demand throughout the year. If the central bank continues to hold the policy rate, activity in the market could return to levels consistent with historical trends.
The Company declared a cash dividend of $0.1125 per Restricted Voting Share payable on April 28, 2023, to shareholders of record on March 31, 2023. The dividend paid during 2022 amounted to $1.35 per Restricted Voting Share, consistent with 2021.
THE COMPANY NETWORK
As at December 31, 2022, the Company Network was comprised of 20,686 REALTORS® operating under 283 Franchise Agreements from 725 locations. During 2022, REALTORS® in the Company Network participated in approximately 28% of all home resales in Canada.
Bridgemarq Real Estate Services Inc. will host a conference call on Thursday, March 9, 2023, at 10 a.m. ET to discuss its fourth quarter financial results.
To access the call by telephone, please dial 1-888-254-3590 or 647-484-0475 and enter confirmation number 3623041.
To access the call online, please visit https://event.mymeetingroom.com/Public/ClickToJoin/ZW5jPW1TZXlxRGt2U09lZEQwYVVPcUZzQXRzaHl1NW5jVGVodEtGUTJ0WFZJNjRrUHFKU3ZtWkNYdz09
Please connect approximately ten minutes prior to the beginning of the call to ensure participation.
A recording of the conference call will be available in the Investor Centre section of the Company's website by Monday, March 13, 2023.
DISTRIBUTABLE CASH FLOW AND DISTRIBUTABLE CASH FLOW PER SHARE
This news release and accompanying financial statements make reference to Distributable Cash Flow and Distributable Cash Flow per Share, which are non-GAAP financial measures and do not have any standardized meaning under International Financial Reporting Standards and, accordingly, may not be comparable to similar measures used by other companies. Distributable Cash Flow represents operating income before deducting amortization and net impairment of intangible assets, minus current income tax expense, minus cash used in investing activities. Distributable Cash Flow per Share is calculated by dividing the Distributable Cash Flow by the total number of Restricted Voting Shares outstanding, on a diluted basis. Management believes that Distributable Cash Flow and Distributable Cash Flow per Share are useful supplemental measures of performance as they provide investors with an indication of the amount of cash flow generated after investing activities which is available to holders of Restricted Voting Shares and Exchangeable Unitholders, subject to working capital and other investment requirements.
This news release contains forward-looking information and other “forward-looking statements”. Words such as, “continues”, “appear”, “until”, “may”, “expect”, “could”, 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: any resurgence of COVID-19 (including any impact of COVID-19 on the economy and the Company’s business), 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, 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 or the economy in general, changes to any products or services developed or offered by the Company, 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, changes in 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, other developments in the residential real estate brokerage industry or the Company that reduce the number of REALTORS® in the Company’s Network or 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 21,000 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
For more information, please contact:
Anne-Elise Cugliari Allegritti
Director of Investor Relations
Bridgemarq Real Estate Services Inc.
 CREA Canadian Housing Market Statistics
* 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.