CALGARY, Aug. 11, 2016 /CNW/ - Genesis Land
Development Corp. (TSX: GDC) (the "Corporation" or "Genesis") is
pleased to report its financial and operating results for the three
and six months ended June 30, 2016.
SUMMARY CORPORATE HIGHLIGHTS
Our key financial results and operating data are as follows:
|
|
|
|
Three months
ended
June
30,
|
Six months
ended
June
30,
|
($000s, except for per share items or unless
otherwise
noted)
|
2016
|
2015
|
2016
|
2015
|
Key Financial
Data
|
|
|
|
|
Total
revenues
|
26,148
|
31,822
|
58,572
|
47,595
|
Gross
margin
|
7,603
|
(1,147)
|
15,837
|
3,544
|
Net earnings attributable to equity
shareholders
|
2,828
|
1,333
|
4,938
|
1,393
|
Net earnings per share – basic and
diluted
|
0.06
|
0.03
|
0.11
|
0.03
|
Cash flows from (used in) operating
activities
|
14,394
|
(1,324)
|
26,663
|
(20,051)
|
Cash flows from (used in) operating activities per
share(1)
|
0.33
|
(0.03)
|
0.60
|
(0.45)
|
Key Operating
Data
|
|
|
|
|
Residential lots sold to third parties
(units)
|
22
|
3
|
22
|
6
|
Residential lots sold through home building business
segment
(units)
|
35
|
27
|
71
|
42
|
Average revenue per lot
sold
|
176
|
194
|
183
|
189
|
Development land sold
(acres)
|
1,653
|
4
|
1,667
|
4
|
Homes sold
(units)
|
40
|
59
|
82
|
91
|
Average revenue per home
sold
|
538
|
526
|
533
|
509
|
New home orders
(units)
|
46
|
42
|
74
|
61
|
|
|
|
|
|
|
|
As at June
30,
|
|
|
|
2016
|
2015
|
Homes with firm sale contracts
(units)
|
|
|
55
|
107
|
|
|
|
|
|
Key Balance Sheet Data ($000s, except for
per share items or unless otherwise
noted)
|
As at June 30, 2016
|
As at December 31, 2015
|
Cash and cash
equivalents
|
|
|
15,359
|
11,399
|
Total
assets
|
|
|
305,978
|
331,045
|
Loans and credit
facilities
|
|
|
40,583
|
63,819
|
Total
liabilities
|
|
|
76,865
|
106,054
|
Shareholders'
equity
|
|
|
216,246
|
212,125
|
Total
equity
|
|
|
229,113
|
224,991
|
(1)
Basic and diluted amounts per
share
|
|
|
|
|
Overview of Market and Operating Results
With major reductions in operating costs, a focused and creative
home selling effort and a strong balance sheet, Genesis has
delivered profitable operations and generated significant positive
cash flows. During the second quarter of 2016, Genesis reduced its
debt by $23,236,000 from $63,819,000 at December
31, 2015 to $40,583,000 at
June 30, 2016. Genesis grew its cash
on hand from $11,399,000 at
December 31, 2015 to $15,359,000 at June 30,
2016, resulting in a net debt position of $25,224,000.
Focussed and creative selling efforts targeting the quick
possession home segment resulted in home building work in progress
being reduced by $10,378,000 from
$30,768,000 at December 31, 2015 to $20,390,000 at June 30,
2016. Genesis also focusses on selling residential lots and
developed townhouse sites to third parties.
The results for the six months ended June
30, 2016 are substantially improved relative to the same
period in 2015. 2016 revenues included two land parcel sales
($11,800,000) with no significant
land parcel sales in the same period in 2015 ($100,000). Despite a continuing challenging
economic environment, the business is delivering strong results.
The general margin improvement in the second quarter was due to
cost saving initiatives implemented in March
2016. General, administrative and sales expenses for the
second quarter of 2016 were reduced by $923,000 to $3,770,000 compared to $4,693,000 in the second quarter of 2015, or by
19.7%.
Highlights
Volumes and Revenue:
- Genesis sold 40 homes in Q2 2016 with revenues of $21,533,000 (Q2 2015 – 59 and $31,029,000 respectively). Of the 40 homes, 35
were built on residential lots supplied by Genesis', generating
residential lot revenues of $6,952,000 (Q2 2015 – 27 and $5,140,000 respectively).
- Genesis sold 82 homes in YTD 2016 with revenues of $43,742,000 (YTD 2015 – 91 and $46,330,000 respectively). Of the 82 homes, 71
were built on residential lots supplied by Genesis, generating
residential lot revenues of $13,956,000 (YTD 2015 – 42 and $7,899,000 respectively).
- Sales of homes, delivered on a quick possession basis, were
higher at 15 during Q2 2016 compared to 3 during Q2 2015. YTD sales
of quick possession homes were higher at 36 for 2016 compared to 12
during 2015.
- New home orders were 46 during Q2 2016 compared to 42 in Q2
2015. YTD new home orders were 74 during 2016 compared to 61 in
2015.
- The Q2 2016 closing order book of 55 firm home sales contracts
compared to 107 at the close of Q2 2015. This year over year
decline is believed to be due to home buyers preferring homes that
can be delivered on a quick possession basis. Genesis has been
successful in delivering quick possession homes in sufficient
volumes to offset the decline in pre-sales orders.
- A 1,653 acre non-core development land parcel was sold in Q2
2016 with revenues of $1,650,000 (Q2
2015 – $100,000).
Net Earnings:
- Net earnings were $2,828,000 for
Q2 2016 compared to $1,333,000 in Q2
2015 and $4,938,000 for YTD 2016
compared to $1,393,000 for YTD
2015.
Cash Flows from Operating Activities
- Cash inflows from operating activities on a quarterly basis
were $14,394,000 (inflows of
$0.33 per share) at Q2 2016 compared
to cash outflows of $1,324,000
(outflows of $0.03 per share) at Q2
2015. Cash inflows from operating activities were $26,663,000 (inflows of $0.60 per share) YTD compared to cash outflows of
$20,051,000 (outflows of $0.45 per share) at Q2 2015.
Loans and credit facilities:
- Loans and credit facilities at June 30,
2016 were $40,583,000,
compared to $63,819,000 at
December 31, 2015, a reduction of
$23,236,000.
- The components of loans and credit facilities related to land
servicing and home building (excludes the vendor-take-back mortgage
and a loan held by a limited partnership) amount to $4,845,000 which is a reduction of $8,271,000 since March 31,
2016 and $16,528,000 since
December 31, 2016.
- Genesis made repayments, net of advances, of $8,340,000 during Q2 2016 compared to
$2,499,000 during Q2 2015 and
$16,669,000 during YTD 2016 compared
to $8,031,000 during YTD 2015. In
addition, Genesis made a payment of $8,000,000 as the first installment of a
$40,000,000 VTB.
Continued cost reductions:
- Genesis continues to review its business with a focus on cost
reductions, particularly as long term contractual commitments end
and, if necessary to operations, can be replaced with lower cost,
shorter term arrangements.
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, 2016 and 2015 and the
related Management's Discussion and Analysis ("MD&A") dated
August 11, 2016 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". Forward-looking
statements in this news release include statements with respect to
the economic environment and Genesis' ongoing review of its
business. 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 or unanticipated impact of general
economic conditions in Canada,
the United States and globally;
the impact of election of governments in Alberta and Canada and the direction of policy which could
impact the overall pace of economic growth; 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; 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, any forward-looking statements
contained in the 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.