CALGARY, Aug. 14, 2018 /CNW/ - Genesis Land Development
Corp. (TSX: GDC) (the "Corporation" or "Genesis") reported its
financial and operating results for the three months ("Q2") and six
months ("H1") ended June 30,
2018.
Key financial results and operating data for Genesis were as
follows:
|
|
Three months
ended
June 30,
|
Six months
ended
June 30,
|
($000s, except for
per share items or unless otherwise noted)
|
2018
|
2017
|
2018
|
2017
|
Key Financial
Data
|
|
|
|
|
Total
revenues
|
18,955
|
38,497
|
33,324
|
54,161
|
Direct cost of
sales
|
(14,302)
|
(28,392)
|
(24,245)
|
(38,644)
|
Gross
margin
|
4,653
|
10,105
|
9,079
|
15,517
|
Gross margin
(%)
|
24.5%
|
26.2%
|
27.2%
|
28.6%
|
Net earnings
attributable to equity shareholders
|
540
|
4,209
|
1,227
|
4,913
|
Net earnings per
share - basic and diluted
|
0.01
|
0.09
|
0.03
|
0.11
|
Cash flows (used in)
from operating activities
|
(1,336)
|
12,251
|
(139)
|
10,722
|
Cash flows (used in)
from operating activities per share - basic and diluted
|
(0.03)
|
0.28
|
0.00
|
0.25
|
Key Operating
Data
|
|
|
|
|
Land
Development
|
|
|
|
|
Total residential
lots sold (units)
|
64
|
78
|
101
|
129
|
Residential lot
revenues
|
12,141
|
17,930
|
17,592
|
26,742
|
Gross margin on
residential lots sold
|
4,028
|
7,825
|
6,459
|
11,571
|
Gross margin (%) on
residential lots sold
|
33.2%
|
43.6%
|
36.7%
|
43.3%
|
Average revenue per
lot sold
|
190
|
230
|
174
|
207
|
|
|
|
|
|
Development and
non-core land sold
|
-
|
9,000
|
-
|
9,000
|
|
|
|
|
|
Home
Building
|
|
|
|
|
Homes sold
(units)
|
24
|
36
|
57
|
55
|
Revenues
(1)
|
10,859
|
17,474
|
24,264
|
26,494
|
Gross margin on homes
sold
|
1,545
|
3,018
|
3,540
|
4,684
|
Gross margin (%) on
homes sold
|
14.2%
|
17.3%
|
14.6%
|
17.7%
|
Average revenue per
home sold
|
452
|
485
|
426
|
482
|
Homes (with lots)
subject to firm sale contracts (units) at the period end
|
|
|
37
|
50
|
|
|
|
|
|
|
|
|
|
|
Key Balance Sheet
Data
|
|
|
As at Jun. 30,
2018
|
As at Dec. 31,
2017
|
Cash and cash
equivalents
|
|
|
12,468
|
23,585
|
Total
assets
|
|
|
285,137
|
301,425
|
Loans and credit
facilities
|
|
|
21,090
|
30,135
|
Total
liabilities
|
|
|
65,270
|
81,884
|
Shareholders'
equity
|
|
|
201,523
|
201,397
|
Total
equity
|
|
|
219,867
|
219,541
|
Loans and credit
facilities (debt) to total assets
|
|
|
7%
|
10%
|
|
|
(1)
|
Includes revenues
of $4,045,000 for 24 lots in Q2 2018 and $8,532,000 for 57 lots in
H1 2018 purchased by the Home Building division from the Land
Development division (33 and $5,907,000 in Q2 2017; 47 and
$8,075,000 in H1 2017) and sold with the home. These amounts are
eliminated on consolidation.
|
Highlights of Second Quarter
In Q2 2018, Genesis' cash flow used in operating activities was
($1,336,000) (($0.03) per share), compared to cash flow from
operating activities of $12,251,000
($0.28 per share) for the second
quarter of 2017 ("Q2 2017"), a decrease of $13,587,000 ($0.31
per share). The difference was primarily due to a $9,000,000 sale of development land in Q2 2017
with no corresponding sale in Q2 2018, and $5,124,000 paid for the purchase of lots and
work-in-progress from a third-party builder in receivership.
Net income for Q2 2018 was $540,000 ($0.01 per
share), down from $4,209,000
($0.09 per share) in Q2 2017 as a
result of lower overall revenues. Revenues for Q2 2018 were
$18,955,000, down $19,542,000 (51%) from $38,497,000 in Q2 2017. Net income for H1 2018
was $1,227,000 ($0.03 per share) compared to $4,913,000 ($0.11
per share) in H1 2017.
Revenues for H1 2018 of $33,324,000 were down $20,837,000 (39%) compared to $54,161,000 in H1 2017. This was primarily
due to there being no development land sales in H1 2018, as
well as fewer residential lot sales to third-party builders and
lower revenues from home sales by the home building division.
The gross margin on residential lot sales in Q2 2018 was 33%,
compared to 44% in Q2 2017, primarily due to the mix of sales by
community and product/lot type, the nature and cost of the
development work required to ready the lots for sale and the
original cost of the land.
The gross margin of the homebuilding division was 14% in Q2
2018, down from 17% in Q2 2017 due to the adjustment of prices to
reflect market conditions and the change in product mix to lower
priced and lower margin single-family homes.
Total expenses for Q2 2018 were lower than in Q2 2017, with
savings of $234,000 (6%) realized in
sales, general and administrative expenses and lower interest
expense of $252,000 (41%) due to
lower average loan balances during Q2 2018 compared to Q2 2017.
Genesis' had $12,468,000 in cash
and cash equivalents at June 30,
2018, compared to $23,585,000
as at December 31, 2017, the decrease
being primarily due to the $8,000,000
payment on the vendor-take-back mortgage payable in the first
quarter of 2018. As a result of this payment, total loans and
credit facilities as at June 30, 2018
were $21,090,000, 30% lower than at
December 31, 2017. Loans and credit
facilities outstanding at June 30,
2018 were 7% of total assets, compared to $30,135,000 or 10% of total assets at
December 31, 2017.
SALE OF DEVELOPMENT LANDS
On July 30, 2018, the Corporation
completed the sale of a 1.8 acre commercial parcel of land in the
Calgary Metropolitan Area for
$2,688,000 which was paid in cash on
closing. The Corporation also expects to complete the sale of
another 7.8 acre multifamily parcel for $7,810,000 in August 2018.
$0.24 PER SHARE SPECIAL
DIVIDEND DECLARED
The Board of Directors has declared a special cash dividend of
$0.24 per common share for a total of
approximately $10,309,000, payable to
shareholders of record on August 28,
2018, and will be paid on September
12, 2018.
Dividend History and Share Buybacks
Since 2014 when it paid its first dividend, Genesis will have
returned $51.9 million, including the
current dividend declared, to shareholders by way of dividends and
bought back nearly 2 million common shares for approximately
$5.9 million under its normal course
issuer bid (approximately 4.4% of the common shares outstanding at
the commencement of the program in 2015).
|
($000s, except for
number of shares and per share
items)
|
Dividend per
share
|
Total
dividends
|
Shares
repurchased
and cancelled
|
Cost of
repurchases
|
2018 (dividend will
paid be on Sep.12, 2018)
|
$0.24
|
$10,309
|
300,000
|
$1,101
|
2017
|
0.46
|
19,896
|
493,085
|
1,456
|
2016
|
0.25
|
10,936
|
551,796
|
1,420
|
2015
|
0.12
|
5,331
|
628,598
|
1,887
|
2014
|
0.12
|
5,386
|
-
|
-
|
Total
|
$1.19
|
$51,858
|
1,973,479
|
$5,864
|
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, 2018 and 2017 and the
related Management's Discussion and Analysis ("MD&A") dated
August 14, 2018 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".
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 of contractual arrangements and
incurred obligations on future operations and liquidity; 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; ability to access and raise capital on favourable terms; not
realizing on the anticipated benefits from transactions or not
realizing on such anticipated benefits within the expected time
frame; 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, the forward-looking statements
contained in this 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.