(TheNewswire)
Edmonton, Alberta – TheNewswire - April 20, 2023 – Yorkton Equity Group Inc. (“Yorkton” or the “Company”) (TSXV:YEG) is pleased to announce its financial results for the year ended December 31, 2022 and provide a corporate update.
Mr. Ben Lui, President and CEO of Yorkton stated that, “We are pleased to announce our financial results for the year ended December 31, 2022. Yorkton’s net rental income has more than tripled to $1.8 million in 2022 and we achieved positive cash flow from operating activities of $0.8 million. These accomplishments are a result of our continued organic growth and accretive investment property acquisitions in strategic markets across British Columbia and Alberta resulting in Yorkton’s total aggregate investment property portfolio being valued at $54.6 million as of December 31, 2022. Our strategic investments are beginning to yield strong returns, and we are optimistic that we can continue to execute on our growth strategy and deliver strong positive results and drive shareholder value in 2023.”
2022 Financial Highlights
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Total rental revenue increased by $1,916,418 or 178% to $2,993,334 in 2022 compared to $1,076,916 in 2021 and net rental income increased by $1,284,507 or 229% to $1,845,211 in 2022 as compared to $560,704 in 2021. These increases were due primarily to the acquisition of multi-family rental properties in 2021 and early 2022 and were partially offset by a decrease in rental revenue and net rental income from the Pacific Mall, acquired in 2020 (Edmonton, AB), due to financial hardship the tenants of the Pacific Mall faced in 2022 from government imposed COVID-19 health mandates which have now been fully lifted. The Company believes that the rental revenue and net rental income from the Pacific Mall will begin to improve in 2023.
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The Company achieved income before income taxes of $69,445 in 2022 compared to a loss before income taxes of $1,219,050 in 2021. Due to the recognition of non-cash deferred income tax expense of $231,418 arising primarily from the increase in the fair market value of the investment properties, as measured in compliance with IFRS, which exceeds their cost base for tax purposes, the Company recorded an overall net and comprehensive loss of $161,973 in 2022, which is a significant improvement from the overall net and comprehensive loss of $1,256,526 in 2021.
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Net cash generated from operating activities in 2022 was $781,186 as compared to net cash spent on operating activities of $976,475 in 2021. This increase of cash generated from operating activities of $1,757,661 from 2021 to 2022 is driven primarily by the acquisition of multi-family rental properties in 2021 and early 2022, which are now fully integrated into Yorkton’s operations.
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During 2022, the Company acquired four (4) new multi-family rental properties in Fort St. John, British Columbia for a total aggregate purchase price, including acquisition costs, of approximately $11.4 million. These purchases were funded with mortgage financing of approximately $9.5 million and cash of hand of approximately $1.9 million. As at December 31, 2022, the value of the Company’s total investment property portfolio was approximately $54.6 million.
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During 2022, the Company issued approximately $3 million of convertible debentures which mature 5 years from the date of issuance and are convertible, at the option of the holder, into common shares of the Company at a price of $0.60 per common share. Approximately $2.8 million of the convertible debentures have an interest rate of 7% per annum and approximately $0.2 million have an interest rate equal to the higher of 7% per annum or the Bank of Canada Prime Rate plus 3.5% per annum as determined on the last business day of the calendar year, to be applied to the subsequent calendar year.
Corporate Update
Below is a summary of certain events that have occurred since the December 31, 2022 year end:
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The Company completed one (1) non-brokered private placement of unsecured convertible debentures for total aggregate gross proceeds of $258,000. The convertible debentures bear interest at a rate of 8% per annum, payable annually only in cash without any conversion of that interest component into common shares and mature on the date that is five (5) years from the date of issuance. The principal amount of each convertible debenture may, at the option of the convertible debenture holder, be converted, in whole or in part, into common shares at a conversion price of $0.30 per common share.
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The Company received approval from the TSX Venture Exchange to commence a normal course issuer bid (the “NCIB”) to repurchase, for cancellation, up to an aggregate of 5,633,871 common shares of the Company. The funds to repurchase the common shares of the Company pursuant to the NCIB will only come from cash provided by operating activities of the Company. The NCIB will expire on January 26, 2024. In March 2023, the Company repurchased 20,000 common shares under the NCIB for a total cost of $3,090.
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On February 27, 2023, the Company acquired The Dwell, a 188 unit multi-family rental complex, with construction completed in 2022, comprising of two luxury condominium grade buildings located in the Schonsee neighborhood in Edmonton (Alberta) for a purchase price of approximately $42 million. The acquisition was financed with a Canada Mortgage and Housing Corporation (“CMHC”) insured mortgage of approximately $40 million at a fixed rate of 3.617% per annum and amortized over 50 years, maturing on June 1, 2028. The Dwell is comprised of 32 one-bedroom with one-bathroom suites, 9 one-bedroom plus den with one-bathroom suites, 143 two-bedroom with two-bathroom suites, and 4 three-bedroom with two-bathroom suites. Each suite is equipped with in-suite laundry, 6-piece energy efficient stainless-steel appliances, designer cabinetry with quartz countertops, air conditioning in select units, 9-foot ceilings in all suites, energy efficient windows throughout, together with one hundred and ninety-one (191) heated underground parking stalls and seventy-three (73) surface parking stalls. The buildings are equipped with elevators serving all levels, with a designated elevator and loading zone for move in/out access and featuring extra wide corridors and spacious lobby for ease of wheelchair access. The Dwell also includes amenities such as a social room in each building, fitness center, two pet wash stations, a bicycle storage room, heated storage lockers on each floor, and enhanced security and safety features.
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About Yorkton
Yorkton Equity Group Inc. is a growth-oriented real estate investment company committed to providing shareholders with growing assets through accretive acquisitions, organic growth, and the active management of multi-family rental properties with significant upside potential. Our current geographical focus is in markets in Alberta and British Columbia with diversified and growing economies, and strong population in-migration. Our business objectives are to achieve growing Net Operating Income (“NOI”) as well as Net Asset Value (“NAV”) in our multi-family rental property portfolio in strategic markets across Canada.
The management team at Yorkton Equity Group Inc. has well over 30 years of real estate experience in acquiring and managing rental assets.
Further information about Yorkton is available on the Company’s website at www.yorktonequitygroup.com and the SEDAR website at www.sedar.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information on Yorkton, please contact:
Ben Lui, CEO - Corporate Office: (780) 409-8228
Yorkton Equity Group Inc. – Shareholder Communications: (780) 907-5263
Email: investors@yorktonequitygroup.com
Forward-looking information
This press release may include forward-looking information within the meaning of Canadian securities legislation concerning the business of Yorkton. Forward-looking information is based on certain key expectations and assumptions made by the management of Yorkton. Although Yorkton believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information because Yorkton can give no assurance that they will prove to be correct. Forward-looking statements contained in this press release are made as of the date of this press release. Yorkton disclaims any intent or obligation to update publicly any forward-looking information, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein in the United States. The securities described herein have not been and will not be registered under the United States Securities Act of 1933, as amended, or any applicable securities laws or any state of the United States and may not be offered or sold in the United States or to the account or benefit of a person in the United States absent an exemption from the registration requirement.
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