TORONTO, March 5, 2014 /CNW/ - Brookfield Real Estate Services Inc. (the
"Company") (TSX: BRE), a leading provider of services to residential
real estate brokers and their REALTORS®¹, today announced that cash flow from operations ("CFFO") for the three
and twelve months ended December 31, 2013 was $6.0 million or $0.46 per
restricted voting share ("Share"), up from $5.4 million or $0.42 per
Share for the same quarter in 2012 and $25.2 million or $1.97 per
Share, down slightly from $25.4 million or $1.98 per Share for the same
period in 2012.
Royalties for the three and twelve months ended December 31, 2013 were
$8.3 million and $36.3 million, respectively, compared to $8.1 million
and $36.5 million, respectively for the same period in 2012. Net
earnings for the three and twelve months ended December 31, 2013 was
$0.6 million and $0.9 million, or $0.04 and $0.09 earnings per Share,
respectively, as compared to $0.8 million and $3.0 million or $0.06 and
$0.31 earnings per Share, respectively, for the same period in 2012.
OVERVIEW OF FOURTH QUARTER OPERATING RESULTS
During the Quarter the Company generated CFFO of $6.0 million, up $0.6
million from the same period in 2012. Royalties were $8.3 million, up
$0.2 million from fourth quarter 2012 as home sales have recovered
after a period of reduced activity driven in part by the tightening of
mortgage-lending restrictions in July of 2012, which pushed comparative
market activity into the first half of 2012.
For the twelve months ended December 31, 2013, the Canadian market
transactional dollar volume was $175.1 billion, an increase of 6.1%
from the same period in 2012, driven by a 5.1% and 0.9% increase in
average price and number of units sold, respectively. For the three
months ended December 31, 2013, the Canadian market transactional
dollar volume was up 18.7% over the same period in 2012, driven by a
9.3% and 8.6% increase in average price and number of units sold,
respectively.
"Brookfield Real Estate Services Inc. is pleased to report its fourth
quarter and year-end results for 2013, which demonstrate the momentum
that has returned to the residential real estate market after a
correction that lasted four quarters spanning the second half of 2012
and first half of 2013," said Phil Soper, President and Chief
Executive, Brookfield Real Estate Services Inc. "While economic risks
persist, a strengthening domestic economy with declining unemployment
numbers, and a housing market that has returned to normal levels point
to a strong year ahead for the Company and its investors."
The Company's revenue is primarily fixed in nature, based on the number
of REALTORS® in the network. This structure provides revenue protection from the
impact of revenue declines when the market cools, but also reduces the
degree to which the Company participates in periods of rapid market
expansion.
The Company Network
As at December 31, 2013 the Company Network was comprised of 15,310
REALTORS®, operating under 307 Franchise Agreements providing services from 627
locations, with an approximate 24% share of the Market based on 2012
transactional dollar volume.
Outlook
"At the mid-point of 2013 Canada's housing market emerged from a
12-month long cyclical correction that saw sales volumes slow markedly.
The second half of the year saw sales volumes surge as buyers returned
to the market. Looking ahead, we expect the momentum we witnessed at
year-end to continue into and throughout 2014. There remains
significant pent up demand from home buyers who deferred their purchase
in 2013, which should help drive an active spring buying season. We
expect a sellers' market to prevail in the first half of 2014, followed
by a balanced market for the remainder of the year."
Monthly Cash Dividend
The Company declared a cash dividend of $0.10 per share for the month of
March 2014, payable on April 30, 2014, to shareholders of record on
March 31, 2014.
CFFO
This news release and accompanying financial statements make reference
to cash flow from operations ("CFFO") on a total and per restricted
voting share basis. CFFO is defined as net income prior to fair value
changes, amortization, interest on exchangeable units, income taxes,
items related to other income and interests of exchangeable
unitholders. CFFO is used by the Company to measure the amount of cash
generated from operations which is available to the Company's
shareholders on a diluted basis where such dilution represents the
total number of shares of the Company that would be outstanding if
exchangeable unitholders converted Class B LP units into shares of the
Company. The Company uses CFFO to assess its operating results, the
value of its business and believes that many of its shareholders and
analysts also find this measure of value to them. CFFO does not have
any standard meaning pre- scribed by IFRS and therefore may not be
comparable to similar measures presented by other companies.
Forward-Looking Statements
This news release contains forward-looking information and other
"forward-looking statements". The words such as "should", "will",
"continue", "plan", "believe", "expect", "anticipate", "intend",
"estimate", "approximate", "expected" and other expressions that are
predictions of or indicate future events and trends and that do not
relate to historical matters identify forward-looking statements.
Reliance should not be placed on forward-looking statements because
they involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of the
Corporation to differ materially from anticipated future results,
performance or achievement expressed or implied by such forward-looking
statements. Factors that could cause actual results to differ
materially from those set forward in the forward looking statements
include a change in general economic conditions, interest rates,
consumer confidence, the level of residential real estate resale
transactions, the average rate of commissions charged, competition from
other traditional real estate brokers or from discount and/or
Internet-based real estate alternatives, the availability of
acquisition opportunities and/or the closing of existing real estate
brokerage offices, other developments in the residential real estate
brokerage industry or the Corporation that reduce the number of and/or
royalty revenue from the Company's network of 15,310 REALTORS®, our ability to maintain brand equity through the use of trademarks,
the availability of equity and debt financing, a change in tax
provisions, and other risks detailed in the Company's annual
information form, which is filed with securities commissions and posted
on SEDAR at www.sedar.com. The Corporation undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Conference Call
Brookfield Real Estate Services Inc. will host a conference call on
Wednesday, March 5, 2014 at 10 a.m. ET to discuss its fourth quarter
and year-end financial results.
To access the call by telephone, please dial (888) 231-8191 or (647)
427-7450. Please connect approximately ten minutes prior to the
beginning of the call to ensure participation. A recording of the
conference call will be available on the Company's website by March 6,
2014 at http://www.brookfieldresinc.com/content/investor_centre-25063.html.
Supplemental Information
The Company's Interim Condensed Consolidated Financial Statements,
Supplemental Information and IFRS overview for the three and nine
months ended September 30, 2013 containing further information on the
company's strategy, operations and financial results can be found on
our website at www.brookfieldresinc.com. The Company's Management Discussion and Analysis, Financial Statements
and associated regulatory filings will follow within prescribed
timelines. Shareholders are encouraged to read these documents.
Brookfield Real Estate Services Inc. Profile
The Company is a leading provider of services to residential real estate
brokers and their REALTORS®¹. The Company generates cash flow from franchise royalties and service
fees derived from a national network of real estate brokers and agents
in Canada operating under the Royal LePage, Via Capitale Real Estate
Network and Johnston & Daniel brand names. At December 31, 2013, the
Company network consisted of 15,310 REALTORS®. The Company network has an approximate 24% share of the Canadian
residential resale real estate market based on 2012 transactional
dollar volume. The Company generates both fixed and variable fee
components. Variable fees are primarily driven by the total
transactional dollar volume from the sales commissions of REALTORS®, while fixed fees are based on the number of agents and sales
representatives in the network. Approximately 73% of the Company's
revenue is based on fees that are fixed in nature; this provides
revenue stability and helps insulate the Company's cash flows from
market fluctuations. The Company is listed on the TSX and trades under
the symbol "BRE". For further information about the Company, please
visit www.brookfieldresinc.com.
1 REALTOR® is a trademark identifying real estate licensees in Canada who are
members of the Canadian Real Estate Association.
SOURCE Brookfield Real Estate Services Inc.
