Virtus August Newsletter Update
From today's August edition of the Virtus Group Advisory monthly newsletter.
CIBT Education Group (TSX:MBA) During the month, CIBT provided an update on their GEC Pearson project. As many of you may recall, CIBT Education Group is building out an impressive portfolio of student housing in the Vancouver core. GEC Pearson is no exception as this was one of the earliest investments the company made in May 2014 for $41.5 million plus FFE (furniture fixture equipment) of $2.5 million. Fast forward to July 17 and the property has an appraised value of $86.1 million, double what they paid for it. We are impressed by this result not only because CIBT Education Group has a 38.5% equity interest in the property but also because the company successfully identified a fast growing market that continues to prove lucrative. The company will take possession in October 2017 and the building is anticipated to provide $4M in annual gross rental income. As well, CIBT reported 3rd quarter results. Total revenues increased from $27M to $37M for the 9 months ended, an approximate increase of 35%. Rental revenues increased a staggering 265% from $1.4M to $5.2M. EPS for the 9 months ended now sits at 7 cents a share. Overall the company impressed us again with strong top line growth and growing rental revenue stream which is expected to ramping up as more properties are completed.