CALGARY, Alberta, Nov. 28, 2018 (GLOBE NEWSWIRE) -- Builders Capital Mortgage Corp. (TSX VENTURE: BCF) (“Builders Capital” or “the Company”) today released third quarter financial results for the period ending September 30, 2018.
Highlights:
- Builders Capital continues to meet its dividend commitment to Class A Common shareholders in the third quarter with a distribution payment of $0.2016 per share, equivalent to an 8% annual return on the $10.00 issue price.
- The Company increased its mortgage portfolio by $1.3 million, or 4.8%, compared to Q3 of 2017.
- Builders Capital reduced foreclosed properties with the sale of one property and entered into a sales contract for one of the two remaining properties in the portfolio.
- The Company generated third quarter mortgage revenue of $0.87 million, representing an annualized 12.3% of gross share capital, calculated on the weighted average shares outstanding.
- Quarterly operating expenses are lower year-over-year at 11.5% of revenues.
- The Company’s debt-to-equity ratio was a conservative 11.7% at the end of the period.
- Earnings exceeded the amount required to pay planned Class A Non-Voting Share dividends by 1.5 times.
Sandy Loutitt, President of Builders Capital, commented, “As this year has progressed, we have been successful in navigating through the minor difficulties posed by earlier foreclosures, and are on track to ensure both the maximum deployment of available funds and the continuing payment of our basic dividends to our public shareholders. We are aware of the difficulties being experienced by the oil and gas industry in Western Canada and its potential effect on regional home construction, but are confident in our ability to maintain our consistent standards. Our management team has successfully navigated through similar waters in the past, and we are confident that strategies and programs particular to Builders Capital will continue to keep the Company in good stead as we move forward.”
Despite the recent turbulence in the oil industry, market forecasters continue to predict a recovery for Alberta’s economy following the province’s lengthy recession and the outlook is generally favourable for the three western provinces where the Company operates. Moreover, in the home construction and related financing business circles, Builders Capital remains well positioned to continue sourcing high-quality lending opportunities that appropriately balance risk while maintaining attractive returns for shareholders. Larger competitors retreating from certain markets, has provided the Company with the opportunity to assert itself as a more significant option for regional independent housing contractors.
Q3 2018 FINANCIAL OVERVIEW
Three months ended September 30, 2018 $ | Three months ended September 30, 2017 $ | |||
| Revenues | 870,441 | 854,603 | ||
| Total comprehensive income | 563,880 | 595,960 | ||
| Total assets | 29,898,420 | 30,005,779 | ||
| Shareholders’ equity | 26,768,731 | 25,296,956 | ||
| Basic and diluted earnings per share | 0.20 | 0.23 | ||
| Cash dividends declared | 542,343 | 565,362 | ||
| Cash dividends declared per Class A share | 0.2016 | 0.2016 | ||
| Cash dividends declared per Class B share | 0.189 | 0.2057 | ||
| Mortgage Portfolio | $ | 27,904,877 | $ | 26,639,087 |
A more detailed discussion of the Company’s financial results can be found in Builders Capital’s Third Quarter 2018 Management’s Discussion and Analysis, which has been posted along with unaudited interim condensed financial statements for the quarter on the Company’s website (www.builderscapital.ca) and filed on SEDAR (www.sedar.com).
About Builders Capital
Builders Capital is a mortgage lender providing short-term course-of-construction financing to builders of residential, wood-frame properties in Western Canada. The Company commenced active operations on December 12, 2013 on the closing of its initial public offering, whereupon it acquired a portfolio of mortgages from two predecessor companies.
Builders Capital’s investment objective is to generate attractive returns, relative to risk, in order to provide stable and consistent distributions to shareholders while remaining focused on capital preservation and satisfying the criteria mandated for mortgage investment corporations (“MIC”) as defined in the Income Tax Act.
As an MIC, Builders Capital is not subject to income tax provided that it distributes all of its taxable income as dividends to shareholders within 90 days of its December 31st year-end. Such dividends are generally treated by shareholders as interest income, so that each shareholder is in the same tax position as if their proportionate share of mortgage investments made by the company had been made directly by the shareholder.
Forward-Looking Information
This news release contains forward-looking statements within the meaning of applicable securities legislation, including statements with respect to management’s beliefs, estimates and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “expect”, “intent”, “estimate”, “anticipate”, “believe”, “should”, “plans” or “continue” or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. These statements are not guarantees of future performance and are based on estimates and assumptions that are subject to risks and uncertainties which could cause actual results to differ materially from the forward-looking statements contained in this news release. These include, among other things, risks associated with mortgage lending, competition for mortgage lending, real estate values, interest rate fluctuations, environmental matters and the general economic environment. The company cautions that the foregoing list is not exhaustive, as other factors could adversely affect its results, performance or achievements. Readers are cautioned against undue reliance on any forward-looking statements. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, Builders Capital undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
For more information, please contact:
John Strangway, Chief Financial Officer
Telephone: (403) 685-9888
Email: jstrangway@builderscapital.ca
Website: www.builderscapital.ca