CALGARY, May 3, 2019 /CNW/ - Genesis Land Development
Corp. (TSX: GDC) (the "Corporation" or "Genesis") reported its
financial and operating results for the three months ended
March 31, 2019 ("Q1
2019"). 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.
2019 Q1 Highlights:
- Positive cash flow from operating activities of $4.6 million and net earnings of $0.74 million;
- Solid financial position maintained with $15.3 million in cash and cash equivalents and
$18.8 million in loans and credit
facilities (being 7% of total assets) at March 31, 2019;
- In March, Genesis entered into a letter agreement for the
proposed purchase of approximately 160 acres of development land
for residential development in the CMA. The completion of this
acquisition is subject to a number of conditions; and
- The four phase land development capital program that was
initiated in 2018 is expected to be completed as part of the
$28.9 million to be invested in 2019
creating 362 single family lots and 6 multi-family sites.
Selected financial results and operating data:
|
|
|
Three months
ended
March
31,
|
($000s, except for
per share items or unless otherwise noted)
|
2019
|
2018
|
Key Financial
Data
|
|
|
Total
revenues
|
12,697
|
14,369
|
Net earnings
attributable to equity shareholders
|
74
|
687
|
Net earnings per
share - basic and diluted
|
0.00
|
0.02
|
Cash flows from
operating activities
|
4,583
|
1,197
|
Cash flows from
operating activities per share - basic and diluted
|
0.11
|
0.03
|
Key Operating
Data
|
|
|
Land
Development
|
|
|
Total residential
lots sold (units)
|
33
|
37
|
Residential lot
revenues
|
5,376
|
5,451
|
|
|
|
Home
Building
|
|
|
Homes sold
(units)
|
26
|
33
|
Revenues
(1)
|
11,086
|
13,405
|
New home orders at
period end (units)
|
36
|
17
|
|
(1)
Includes revenues of $3,765,000 for 26 lots in Q1 2019 purchased by
the Home Building division from the Land Development division
($4,487,000 and 33 in Q1 2018) and sold with the home. These
amounts are eliminated on consolidation
|
|
|
|
($000s, except for
per share items or unless otherwise noted)
|
As at Mar.
31,
2019
|
As at Dec.
31,
2018
|
Key Balance Sheet
Data
|
|
|
Cash and cash
equivalents
|
15,347
|
24,042
|
Total
assets
|
262,929
|
278,156
|
Loans and credit
facilities
|
18,840
|
31,696
|
Shareholders'
equity
|
192,400
|
191,970
|
Loans and credit
facilities (debt) to total assets
|
7%
|
11%
|
The first quarter of 2019 saw continued economic challenges in
the Calgary region. The regional
housing market is considered oversupplied, which has negatively
impacted first quarter results for 2019 as compared to the same
period in 2018.
Genesis experienced lower revenue in Q1 2019 compared to Q1
2018. Overall revenues for Q1 2019 were $12,697,000, down $1,672,000 (12%) from $14,369,000 in Q1 2018. Home sales revenue
in Q1 2019 was lower than in Q1 2018 by $2,319,000 (17%) with 26 units sold ($11,086,000) vs 33 units ($13,405,000) in Q1 2018, while residential lots
sales to third party builders increased by $647,000 to 7 lots ($1,611,000) in Q1 2019 from 4 lots ($964,000) in Q1 2018. The lower revenue resulted
in net earnings attributable to equity shareholders for Q1 2019 of
$74,000 ($0.00 per share - basic and diluted) compared to
$687,000 ($0.02 per share - basic and diluted) in Q1
2018.
Genesis generated positive cash flows from operating activities
of $4,583,000 ($0.11 per share - basic and diluted) in Q1 2019,
compared to cash flows from operating activities of $1,197,000 ($0.03
per share - basic and diluted) in Q1 2018.
Genesis had $15,347,000 in cash
and cash equivalents at March 31,
2019 compared to $24,042,000
as at December 31, 2018 with the
reduction due primarily to Genesis making an $8,000,000 payment on a vendor-take-back mortgage
payable in the first quarter of 2019. As a result of this payment,
total loans and credit facilities outstanding at March 31, 2019 were $18,840,000, 7% of the total book value of
assets, compared to $31,696,000 or
11% of the total book value of assets at December 31, 2018.
Outlook
In 2019, Genesis continues to implement its strategy focused 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.
The first quarter of 2019 included 28 new home orders, an increase
over the 19 new home orders in the first quarter of 2018.
Outstanding new home orders stood at 36 at March 31, 2019 compared to 17 at March 31, 2018.
With the expected completion in 2019 of the development program
for four new phases started in 2018, 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
actively 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.
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 months ended March 31, 2019 and 2018 and the related
Management's Discussion and Analysis ("MD&A") dated
May 3, 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, the proposed purchase of additional lands
for future development in the CMA, 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; labor 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.