CALGARY, March 14, 2019 /CNW/ - Genesis Land Development
Corp. (TSX: GDC) (the "Corporation" or "Genesis") reported its
financial and operating results for the three months ended ("Q4")
and year ended ("YE") December 31,
2018. Genesis is a land developer and residential home builder
operating in the Calgary
Metropolitan Area ("CMA"), holding and developing a significant
portfolio of well-located, entitled and unentitled residential,
commercial and mixed-use lands and serviced lots in the CMA.
2018 was a difficult year in the Calgary region as a number of economic
challenges resulted in a weak housing market. Iain Stewart, President and CEO of
Genesis, commented, "Despite this environment, Genesis is
pleased to report positive cash flows from operating activities of
$14.7 million and net earnings of
$4.1 million in 2018. In addition,
dividends of $10.3 million
($0.24 per share) were paid to
shareholders and $3.5 million of
shares were repurchased. In 2018, we maintained our solid asset
base and strong financial position and we are well positioned for
the future."
2018 Highlights:
- Positive cash flow from operations of $14.7 million and net earnings of $4.1 million.
- Dividends of $10.3 million
($0.24 per share) were paid and 1.07
million shares were repurchased for $3.5
million under Genesis' normal course issuer bid.
- $28.3 million was invested in our
land development program, including the development of four new
phases which will provide an additional 362 single family lots and
six multi-family sites.
- An acquisition for $5.1 million
was completed which added 31 single family lots in a Genesis
community.
- Zoning approval was received on the 185 acre multi-purpose
"Omni" project and zoning and servicing approvals progressed in the
Sage Hill Crossing and Southeast
Calgary developments.
- Solid financial position maintained with $24.0 million in cash and cash equivalents and
$31.7 million in loans and credit
facilities (being 11% of total assets) at December 31, 2018.
- Leadership transition – Iain
Stewart appointed President and CEO with Stephen Griggs appointed Executive Chair,
working collaboratively to implement Genesis's strategy and
business plan.
- An equity based long term incentive plan comprised of stock
options and deferred share units was approved by the Board to align
management incentives with the interests of shareholders.
Selected financial results and operating data:
($000s, except for
per share items or unless otherwise noted)
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Key Balance Sheet
Data
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As at Dec. 31,
2018
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As at Dec. 31,
2017
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Cash and cash
equivalents
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24,042
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23,585
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Total
assets
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278,156
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301,425
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Loans and credit
facilities
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31,696
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30,135
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Shareholders'
equity
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191,970
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201,397
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Loans and credit
facilities (debt) to total assets
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11%
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10%
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Three months
ended
December 31,
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Year ended
December 31,
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($000s, except for
per share items or unless otherwise noted)
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2018
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2017
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2018
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2017
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Key Financial
Data
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Total
revenues
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20,935
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65,644
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81,437
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150,933
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Net earnings
attributable to equity shareholders
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2,358
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8,713
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4,124
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16,998
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Net earnings per
share - basic and diluted
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0.06
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0.20
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0.10
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0.39
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Cash flows from
operating activities
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7,192
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27,298
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14,747
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46,908
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Cash flows from
operating activities per share - basic and diluted
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0.16
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0.62
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0.34
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1.08
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Key Operating
Data
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Land
Development
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Total residential
lots sold (units)
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33
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78
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176
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266
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Residential lot
revenues
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6,603
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12,203
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31,769
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49,206
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Development and
non-core land sales revenue
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4,628
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41,000
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15,126
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55,234
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Home
Building
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Homes sold
(units)
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32
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44
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121
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148
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Revenues
(1)
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16,033
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18,463
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54,113
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67,707
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Home sales subject to
firm sale contracts (units) at the period end
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34
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31
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(1)
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Includes revenues
of $6,329,000 for 32 lots in Q4 2018 and $19,571,000 for 121 lots
in YE 2018 purchased by the Home Building division from the Land
Development division (41 and $6,022,000 in Q4 2017; 134 and
$21,214,000 in YE 2017) and sold with the home. These amounts are
eliminated on consolidation.
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Genesis, along with most other land developers and home builders
in the CMA, experienced a significant slowdown in sales activity in
all areas in 2018 compared to 2017, with fewer sales of residential
homes, fewer lots sold to third-party builders and lower sales of
development lands.
Overall, revenues for 2018 were $81.4
million, down $69.5 million
(46%) from $150.9 million
in 2017. The largest contributor to this decline was from a
decline of $40.1 million in
development land sales, with $15.1
million realized in 2018, compared to $55.2 million in 2017, primarily due to:
- In 2017, development land sales included the sale of the
undeveloped "Fowler" land parcel for $41.0
million by a limited partnership controlled by Genesis;
- 55 lots residential lot were sold in 2018 to third party
builders totaling $12.1 million,
compared to 132 lots ($27.8 million)
in 2017, a decline of $15.7 million
or 56%; and
- Home sales of 121 units ($54.1
million), down 18% from 148 ($67.7
million) in 2017.
Outlook
In 2019, Genesis will continue to implement the strategy
developed in 2017. The Corporation will focus on developing its
assets in a prudent manner and actively market lots, parcels and
homes while controlling costs with the goal of maximizing cash flow
and maintaining its solid financial position.
With the expected completion in 2019 of the development program
started in 2018 for four new phases, and with no additional phases
planned to be started in 2019, Genesis expects to have sufficient
lot inventory to meet market needs. Genesis will continue to pursue
servicing and zoning approvals to maximize the value of its land
holdings. The strong land base, integrated approach, solid
financial position and experienced team positions Genesis to take
advantage of opportunities that may arise in this
environment.
For 2019 the business plan remains focused on:
- Maximizing the return of capital to shareholders and investing
in additional lands
- Obtaining additional zoning and servicing entitlements
- Planning for the development and sale of lands
- Servicing additional phases
- Adding third-party builders in Genesis communities
- Increasing the velocity of homes sold
Additional Information
The information contained in this press release should be read
in conjunction with the Consolidated Financial Statements for the
years ended December 31, 2018 and
2017 and the related Management's Discussion and Analysis
("MD&A") dated March 14, 2019
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.
Genesis Annual Meeting
Genesis will hold its annual general meeting on May 9, 2019 at 1 pm
MST in Calgary at the
Genesis head office 7315 - 8th Street NE, Calgary AB T2E 8A2.
ADVISORIES
Forward-Looking Statements
This news release contains 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.
Forward-looking statements are based on material factors or
assumptions made by us with respect to, among other things,
opportunities that may or may not be pursued by us; changes in the
real estate industry; fluctuations in the Canadian and Alberta economy; changes in the number of lots
sold and homes delivered per year; and changes in laws or
regulations or the interpretation or application of those laws and
regulations. Forward-looking statements in this news release
include, but are not limited to, the expected completion
dates of various projects that the Corporation is currently engaged
in, plans and strategies surrounding the acquisition of additional
land, anticipated general economic and business conditions, the
Alberta real estate cycle,
expectations for lot and home prices, construction starts and
completions, anticipated expenditures on land development
activities, being able to increase home sales process and
construction margins, the timing of the annual meeting and the
ability to continue to renew or repay financial
obligations.
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 in 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.