HALIFAX, NS , March 2, 2021 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI) (TSX: CKI.DB) today announced its results for the three months and year ended December 31, 2020 .
Results for the Year Ended December 31, 2020
Net loss attributable to equity holders of the Company for the year ended December 31, 2020 was $19.2 million compared to net income of $38.4 million in 2019. During the year ended December 31, 2020 , the Company had unrealized losses on its investments of $24.6 million compared to unrealized gains of $17.0 million in 2019. The Company had realized gains on its investments of $30.4 million for the year ended December 31, 2020 compared with realized losses of $3.3 million in 2019.
During 2020, the Company's book value per Common Share decreased by $3.86 , or 25.6%. The decrease can primarily be ascribed to (i) the distribution to shareholders of the Company's shares of TerraVest Industries Inc. with a value at the time of distribution in the amount of $58.1 million , or $3.58 per Common Share, (ii) a net revaluation loss of certain hotels owned by Holloway Lodging Corporation ("Holloway") in the amount of $12.1 million , or $0.73 per Common Share, (iii) losses in our operating businesses and corporate overhead in an amount of $12.1 million , or $0.73 per Common Share, offset by (iv) repurchasing our Common Shares at prices below our book value per share in the amount of $11.3 million , or $0.35 per Common Share, (v) net realized/unrealized gains on our marketable securities in the amount of $5.8 million , or $0.35 per Common Share, (vi) an increase in the after-tax value of our pension plan surplus in the amount of $4.8 million , or $0.29 per Common Share, and (vii) a fair value increase of certain office buildings owned by Holloway in the amount of $2.0 million , or $0.12 per Common Share. Our book value per Common Share at the end of the year was $11.20 while our Common Share price was $6.68 .
Results for the Fourth Quarter 2020
Net realized and unrealized gains on investments for the fourth quarter of 2020 were $18.0 million compared to gains of $6.3 million for the same period in 2019. Revaluation gains on hotel properties were $2.3 million in the fourth quarter of 2020 compared to a loss of $0.8 million for the same period in 2019. General and administrative expenses during the fourth quarter of 2020 were $1.0 million lower than expenses during the same period in 2019 due to ongoing cost reductions as a result of the pandemic. The Company had net income attributable to equity holders of the Company of $14.5 million in the fourth quarter of 2020 compared to net income of $6.0 million in the same period in 2019. This was largely driven by the realized and unrealized net gains on investments during the period compared to the same period in the prior year. Comprehensive income attributable to equity holders of the Company for the fourth quarter was $29.6 million compared to comprehensive income of $11.2 million for the same period in 2019.
For the three months ended December 31, 2020 , Clarke's basic earnings per share ("EPS") was $0.94 , compared to $0.36 for the same period in 2019, and the diluted EPS was $0.79 , compared to $0.34 for the same period in 2019.
COVID-19
The spread of COVID-19, consumer and business perceptions of the danger of COVID-19 and Canadian and provincial government responses to COVID-19 have affected the Company materially and adversely during 2020. The impact has been particularly strong on the hotel and ferry businesses due to the decline in business and leisure travel and even day-to-day commuting.
Economic activity has been resuming throughout the second half of the year, and our businesses are beginning to recover. How long it takes for business levels to normalize remains highly uncertain. We do not expect to generate significant positive cash flow at Holloway or our ferry business until the travel and leisure industries return to more normal economic levels.
Additional commentary on our full year results can be found in our Management's Discussion & Analysis for the year ended December 31, 2020 .
Other Information
Further information about Clarke, including Clarke's Consolidated Financial Statements and Management's Discussion & Analysis for the year ended December 31, 2020 , is available at www.sedar.com and www.clarkeinc.com .
Highlights of the consolidated financial statements for the three months and year ended December 31, 2020 compared to the three months and year ended December 31, 2019 are as follows:
|
|
|
|
|
|
(in millions, except per share amounts)
|
Three months
ended
December 31,
2020
$
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Three months
ended
December 31,
2019
$
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Year ended
December 31,
2020
$
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Year ended
December 31,
2019
$
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|
Hotel and management services
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6.0
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15.2
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30.5
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73.9
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|
Provision of services
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0.8
|
1.4
|
4.6
|
8.1
|
|
Bargain purchase
|
―
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―
|
―
|
21.8
|
|
Investment and other income (loss) *
|
20.1
|
6.2
|
(8.2)
|
16.7
|
|
Net income (loss) attributable to equity
|
14.5
|
6.0
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(19.2)
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38.4
|
|
holders of the Company
|
|
Comprehensive income (loss)
|
29.6
|
11.2
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(10.5)
|
38.9
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|
attributable to equity holders of the
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|
Company
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Basic EPS
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0.94
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0.36
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(1.21)
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2.90
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|
Diluted EPS
|
0.79
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0.34
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(1.21)
|
2.78
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|
Total assets
|
311.0
|
401.2
|
311.0
|
401.2
|
|
Long-term financial liabilities
|
109.7
|
94.3
|
109.7
|
94.3
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Book value per share
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11.20
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15.06
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11.20
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15.06
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*Investment and other income (loss) include unrealized/realized gains/losses on investments, hotel revaluations, dividend and interest income, pension recovery/expense, insurance proceeds, losses on disposal of assets, and foreign exchange gains/losses.
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About Clarke
Halifax -based Clarke invests in a variety of private and publicly-traded businesses and participates actively where necessary to enhance the performance of such businesses and increase its return. Clarke's securities trade on the Toronto Stock Exchange (CKI, CKI.DB); for more information about Clarke Inc., please visit our website at www.clarkeinc.com .
Cautionary Statement Regarding Use of Non-IFRS Accounting Measures
This press release makes reference to the Company's book value per share as a measure of the performance of the Company as a whole. Book value per share is measured by dividing shareholders' equity at the date of the statement of financial position by the number of Common Shares outstanding at that date. Clarke's method of determining this amount may differ from other companies' methods and, accordingly, this amount may not be comparable to measures used by other companies. This amount is not a performance measure as defined under IFRS and should not be considered either in isolation of, or as a substitute for, net earnings prepared in accordance with IFRS.
Note on Forward-Looking Statements and Risks
This press release may contain or refer to certain forward-looking statements relating, but not limited, to the Company's expectations, intentions, plans and beliefs with respect to the Company. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budgets", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "believes", or equivalents or variations of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements include, without limitation, those with respect to the future or expected performance of the Company's investee companies, the future price and value of securities held by the Company, changes in these securities holdings, the future price of oil and value of securities held in the Company's energy basket, changes to the Company's hedging practices, currency fluctuations and requirements for additional capital. Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, interest rates, foreign currency fluctuations, the sale of Company investments, the fact that dividends from investee companies are not guaranteed, reliance on key executives, commodity market risk, risks associated with investment in derivative instruments and other factors. With respect to the Company's investment in a ferry operation, such risks and uncertainties include, among others, weather conditions, safety, claims and insurance, labour relations, and other factors.
Although the Company has attempted to identify important factors that could cause actions, events or results not to be as estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, the Company does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.
SOURCE Clarke Inc.
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