TORONTO, May 31, 2017 (GLOBE NEWSWIRE) -- Mitchell Cohen, President and Chief Executive Officer of Urbanfund Corp. (TSX-V: UFC ) (the “ Company ”), confirmed today that the Company filed financial results for the three month period ended March 31, 2017 (the “ Financial Statements ”).
RESULTS FROM OPERATIONS
For the three month period ended March 31, 2017, the Company reported rental revenue of $1,404,892 compared to rental revenue of $1,180,047 for the corresponding period in 2016. The increase in rental revenue is primarily a result of the completion of the redevelopment and leasing of the Company’s 40 unit property located at 48 Weber Street, Kitchener, Ontario (“ 48 Weber ”) subsequent to the comparative prior year period. Although there was an increase in rental expenses for the three month period ended March 31, 2017 compared to the corresponding period in 2016, net rental income increased from $558,277 in the three month period ended March 31, 2016 to $677,003 in the three month period ended March 31, 2017.
Income before income taxes increased by $162,601 to $391,479 in the three month period ended March 31, 2017 compared to income before income taxes of $228,878 in the corresponding period in 2016.
FUNDS FROM OPERATIONS
Funds from operations for the three month periods ended March 31, 2017 and 2016 are as follows:
| Three month period ended March 31, 2017 | Three month period ended March 31, 2016 | |||||
| Income before income taxes | $391,479 | $228,878 | ||||
| Adjustments: | ||||||
| Interest and dividend income | ($15,054 | ) | ($9,568 | ) | ||
| Fair value adjustment on marketable securities | ($24,997 | ) | ($3,276 | ) | ||
| Fair value adjustment on investment properties | $24,479 | $6,265 | ||||
| Unrealized loss on foreign currency translation | $421 | $90,420 | ||||
| Funds from Operations (FFO) | $ 376,328 | $ 312,719 | ||||
See “Non-IFRS Financial Measures” below.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2017, the Company had cash and cash equivalents in the amount of $7,404,286 and marketable securities of $359,788 (March 31, 2016 - $6,416,804 and $325,754).
As at March 31, 2017, the Company had mortgages payable in the amount of $29,442,346 which was comprised of: (i) $11,588,179 representing a mortgage payable for the Company’s 84 suite townhouse complex located at the corner of Don Mills Road and Van Horne Avenue, in Toronto, Ontario; (ii) $5,045,800 representing a mortgage payable for the commercial shopping centre located at 305 North Front Street, Belleville, Ontario and the commercial shopping centre located 476-480 Wonderland Road South, London, Ontario; (iii) $5,638,180 representing mortgages payable on the Company’s multi-residential portfolio located in Quebec City and Montreal; (iv) $4,745,187 representing a mortgage payable on 48 Weber; (iv) $625,000 representing a mortgage payable on the Company’s 65% interest in a proposed multi-residential rental development site located at 59-65 Weber Street East, Kitchener, Ontario; and (v) $1,800,000 representing a mortgage payable on the industrial redevelopment project located at 11-13 Edvac Drive, Brampton, Ontario.
ASSETS
As of March 31, 2017, total assets were $66,778,547 compared to $57,953,075 as of March 31, 2016.
INTEREST IN REAL ESTATE PROJECT
In September 2009, the Company invested $2,000,000 (a purchase price of $1,233,333 and a deposit of $766,667 for future development costs) for a 10% interest in a limited partnership which in turn has a 33.3% interest in the One Bloor Street East real estate project (the “ Project ”). In prior periods, the Company received $322,667 related to costs recoveries.
The Project is a high density residential and commercial mixed-use site located at the southeast corner of Yonge Street and Bloor Street in Toronto, Ontario. Initial tenant occupancy of the residential units began in November 2016, and the Project is expected to be completed and fully occupied by the second quarter 2018.
As previously disclosed in the Company’s May 12, 2017 news release, subsequent to the period ended March 31, 2017, the Company received a distribution in the amount of $1,633,333, relating to a return of equity previously invested in the Project. Over the next several months, the Company anticipates receiving periodic payments, which will be a return on investment in the Project. The precise timing and quantum of these future distributions will be in the discretion of the project’s managing partner.
DIVIDEND AND DIVIDEND REINVESTMENT PLAN
The Company confirmed on June 17, 2015 that it adopted a dividend policy (the “ Dividend Policy ”), a dividend reinvestment plan for holders of common shares in the capital of the Company (the “ Common Shares ”) and a dividend reinvestment plan for the holder of Series A, first preferred shares (the “ Preferred Shares ”) in the capital of the Company (collectively, the “ DRIP ”).
As part of the Company's long-term strategy to maximize shareholder value, the board of directors has approved the implementation of the Dividend Policy. Pursuant to the Dividend Policy, the Company intends to pay an annual aggregate dividend of $0.005 per Common Share and $0.005 per Preferred Share, payable quarterly in the amount of $0.00125 per Common Share and Preferred Share. The record date for dividends is anticipated to be set as the last business day of March, June, September and December in each year and the payment date in each case is anticipated to be approximately two weeks from the applicable record date.
The DRIP is a voluntary program permitting holders of Common Shares and Preferred Shares to automatically, and without charge, reinvest dividends to acquire additional Common Shares at a specified discount to the volume-weighted average market price calculated as of the date of the dividend payment. The Company has reserved an aggregate of 2,000,000 Common Shares for the issuance to participants enrolled in the DRIP. During the three month period March 31, 2017, the Company issued 126,754 Common Shares for an aggregate issue price of $52,376 to shareholders participating in the DRIP. During 2017, the Company made dividend payments on each of: (i) January 15, 2017 to shareholders of record as of December 31, 2016; and (ii) April 15, 2017 to shareholders of record as of March 31, 2017.
The declaration and payment of future dividends and the quantum of any such dividends will be subject to the Company's Board of Directors' determination, in its discretion, taking into account, among other things, business performance, financial condition, growth plans and expected capital requirements, statutory solvency tests, as well as any contractual restrictions on such dividends, including any agreements entered into with lenders to the Corporation or its subsidiaries. There can be no assurance that dividends will be paid at the intended rate or at any rate in the future.
ABOUT URBANFUND
Urbanfund Corp. is a Toronto-based real estate development and operating company. Urbanfund Corp. is a TSX Venture exchange listed real estate company based in Toronto. The Company’s common shares trade under the symbol UFC on the TSX Venture Exchange. Urbanfund’s focus is to identify, evaluate and invest in real estate or real estate related projects. The Company’s assets are located in Toronto, Brampton, Kitchener, Belleville and London, Ontario and in Montreal and Quebec City, Quebec. The Company’s strategy going forward remains committed to seek accretive real estate or real estate-related opportunities.
NON-IFRS FINANCIAL MEASURES
Funds from operations (“ FFO ”) is a non-IFRS measure and should not be construed as an alternative to net income determined in accordance with IFRS. However, FFO is an operating performance measure, which is widely used by the real estate industry and the Company has calculated FFO in accordance with the recommendations of the Real Property Association of Canada (“ REALpac ”).
FFO, or any other non-IFRS performance measure, is not intended to represent operating profits for the period or from a property. Furthermore, it should not be viewed as an alternative to net income, cash flow from operating activities or similar measures of financial performance calculated in accordance with IFRS.
FFO is a widely accepted supplemental measure of financial performance for real estate entities; however, it does not represent amounts available for capital programs, debt service obligations, commitments or uncertainties. FFO should not be interpreted as an indicator of cash generated from operating activities and is not indicative of cash available to fund operating expenditures, or for the payment of cash distributions. FFO is simply one measure of operating performance.
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements, which reflect Management's expectations regarding the Company's growth, results of operations, performance and business prospects and opportunities and future dividend payments. Statements about the Company's future plans and intentions, results, levels of activity, cash flow from operations, performance, goals or achievements, proposed dividends, anticipated timing and quantum of receipt of distributions from the Project or other future events constitute forward-looking statements. Wherever possible, words such as "may", "will", "should", "could", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict" or "potential" or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect Management's current beliefs and are based on information currently available to management as at the date hereof.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including: general economic and market segment conditions, interest rates, costs outside of the Company's control such as real estate taxes and utilities, the ability of tenants to satisfy their contractual rent obligations and any unforeseen repair, maintenance or replacement of the Company's assets. More detailed assessment of the risks that could cause actual results to materially differ than current expectations is contained in the “Risks and Uncertainties” section of the Company’s most recent Management's Discussion and Analysis dated the date hereof.
Neither 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 release.
For further information please contact: Urbanfund Corp. Mitchell Cohen President & CEO (416) 703-1877x1025
