Bridgemarq Real Estate Services$(R)$ Reports Annual Financial Results and Declares Monthly Dividend
Canada NewsWire
TORONTO, March 14, 2025
TORONTO, March 14, 2025 /CNW/ - Bridgemarq Real Estate Services Inc. ("Bridgemarq" or the "Company") (TSX: BRE) reported its annual consolidated financial results and announced a monthly dividend to holders of the Company's restricted voting shares.
HIGHLIGHTS
-- On March 31, 2024, the Company significantly grew its asset base through
the acquisition of certain real estate brokerages from Brookfield
Business Partners ("Brookfield") and internalization of its management
team and settled deferred distributions owing to Brookfield for total
proceeds of approximately $40.9 million.
-- Revenue for 2024 amounted to $350.7 million, compared to the $48.5
million generated in the prior year, due to the inclusion of the
operating results of the acquired businesses from April 1, 2024.
-- The Company generated a net loss of $10.3 million or $1.09 per share in
2024, on a fully diluted basis, compared to net earnings of $4.0 million
or $0.42 per share in 2023, as a result of a loss of $9.3 million on the
valuation of the Exchangeable Units compared to a loss of $1.1 million in
2023.
-- Cash provided by operating activities increased by $3.4 million in 2024,
compared to the prior year, due primarily to a reduction in working
capital requirements.
-- Adjusted Net Earnings amounted to $7.3 million in 2024, compared to $12.4
million in 2023, primarily due to higher interest expenses and increased
impairment and amortization of intangible assets acquired as part of the
transaction, partly offset by the operating results of the acquired
businesses.
-- The Company generated $16.8 million in free cash flow in 2024, compared
to $18.1 million in 2023.
-- The Board of Directors approved a dividend to shareholders of $0.1125 per
Restricted Voting Share, payable on April 30, 2025, to shareholders of
record on March 31, 2025.
FOURTH QUARTER OPERATING RESULTS
For the year ending December 31, 2024, revenues were $350.7 million, compared to $48.5 million generated in 2023. The increase is substantially due to the inclusion of the operating results of the acquired businesses from April 1, 2024. Franchise fees for the year increased marginally as the benefits of both the fee increases implemented at the start of the year and improved market conditions were partly offset by the elimination of the franchise fee revenues previously received from the acquired businesses in the consolidated accounts of the Company. The franchise fees received from the acquired businesses were treated as third party revenue prior to April 1, 2024. In the fourth quarter, revenues amounted to $101.5 million, compared to $10.8 million in the fourth quarter of 2023.
In 2024, the Company generated a net loss of $10.3 million or $1.09 per fully diluted restricted voting share ("Share"), compared to net earnings of $4.0 million or $0.42 per Share in 2023. In the fourth quarter, the Company generated a net loss of $9.6 million or $1.02 per Share, compared to a net loss of $1.0 million or $0.11 per Share in the same period in the prior year. The lower earnings are largely driven by a non-cash, non-operating loss on the fair valuation of the Exchangeable Units, which is directly related to changes in the market price of Bridgemarq's Restricted Voting Shares, and increased depreciation and amortization expense associated with the acquired brokerage business.
Cash flow from operations increased by $3.4 million in 2024, compared to the prior year, due to increased interest income and a reduction in working capital partly offset by higher interest costs. For the quarter, cash provided by operating activities amounted to $1.8 million, compared to $2.3 million in the fourth quarter of 2023, primarily driven by higher interest payments.
Adjusted Net Earnings, which measures earnings of the business before certain non-cash gains and losses on a fully diluted basis, amounted to $7.3 million in 2024, compared to $12.4 million in 2023. For the quarter, Adjusted Net Earnings amounted to a loss of $0.4 million, compared to earnings of $2.2 million in Q4 of 2023. The reduction in Adjusted Net Earnings is primarily due to higher interest rates, increased non-cash amortization of intangible assets acquired as part of the transaction and non-cash impairment charges, partly offset by the positive operating results of the acquired businesses. Adjusted Net Earnings per Share is also lower due to the dilutive impact of issuing additional Exchangeable Units to complete the transaction.
The Company generated $16.8 million in free cash flow in 2024, compared to $18.1 million in 2023. In the fourth quarter, the Company generated $1.8 million, compared to $3.6 million in the same quarter the year prior.
"This past year was an exciting year of growth for Bridgemarq," said Spencer Enright, Chief Executive Officer, Bridgemarq Real Estate Services Inc. "The expansion and diversification of our business positions us to more fully participate across a broader spectrum of the home buying and selling experience. We have now fully integrated the acquired operations and are well positioned to be successful in the Canadian real estate market in 2025 and beyond. And, as a completely Canadian company, operating coast to coast, we are proud to offer Canadians bespoke solutions that are truly made in Canada."
MARKET UPDATE
The Canadian residential real estate market expanded by 50% in Q4 of 2024 compared to the same quarter in 2023, and 12% for the full year compared to the year prior.(1) According to the Canadian Real Estate Association, the number of residential home resale transactions increased 38% in the fourth quarter, while the national average selling price increased 9%. On a quarter-over-quarter basis, the average selling price increased by 7% despite a slight dip in sales volumes. For the full year, the national average selling price increased 2% compared to 2023, while transaction volumes rose by 11%.
Spurred by declining borrowing rates, homebuyer activity increased in 2024 compared to the previous year. Since June of 2024, the Bank of Canada has been gradually reducing its target for the overnight lending rate, including the latest update on Wednesday. The Bank's key lending rate currently sits at 2.75%.(2) Despite an increase in housing supply in most major markets across the country, average home prices have continued to rise modestly.
Historically, housing market activity picks up in the spring, although trade tensions with the United States have added an additional element of uncertainty in the market. The governing council of the Bank of Canada has noted that it will proceed carefully with any further changes to interest rates, as it assesses both the upward pressures on inflation from higher costs and the downward pressures from weaker demand.
"In recent months, declining borrowing rates have encouraged more buyers off the sidelines," commented Mr. Enright. "Housing market activity this spring could be more difficult to accurately predict given the political events currently unfolding, but regardless Bridgemarq's unique operating model is well positioned to succeed in all market conditions and across all market cycles."
______________________________ (1) CREA Canadian Housing Market Statistics (2) Bank of Canada reduces policy rate by 25 basis points to 2 3/4 %, March 12, 2024
CASH DIVIDEND
The Company declared a cash dividend of $0.1125 per Restricted Voting Share payable on April 30, 2025, to shareholders of record on March 31, 2025. Total dividends paid during 2024 amounted to $1.35 per Restricted Voting Share, consistent with 2023.
THE COMPANY NETWORK
As at December 31, 2024, the Franchise Network was comprised of 20,283 REALTORS(R) operating under 280 franchise agreements from 684 locations. The Company's corporately owned real estate brokerages operate 36 real estate locations in the Greater Toronto Area, Greater Vancouver and within the province of Quebec, with 2,706 sales representatives.
CONFERENCE CALL
Bridgemarq Real Estate Services Inc. will host a conference call on Friday, March 14, 2025, at 10 a.m. Eastern Daylight Time to discuss its fourth quarter financial results.
To access the call by telephone, please dial 1-888-699-1199 or 416-945-7677.
To access the call online, please visit https://app.webinar.net/KD0nq2zq1ve.
Please connect approximately ten minutes prior to the beginning of the call to ensure participation.
A transcript of the conference call will be available on the Company's website by Wednesday, March 19, 2025.
NON-GAAP FINANCIAL MEASURES
This news release makes reference to Free Cash Flow, Adjusted Net Earnings and Adjusted Net Earnings per Share, which are non-GAAP financial measures. These financial measures do not have any standardized meaning under International Financial Reporting Standards and, accordingly, may not be comparable to similar measures used by other companies.
Free Cash Flow represents operating income before deducting interest on leases, depreciation and amortization and net impairment and write-off of intangible assets, minus current income tax expense, minus additions to property and equipment and intangible assets, minus repayment of contract transfer obligations, minus lease payments. The Company believes that Free Cash Flow is a useful supplemental measure of performance as it provides investors with an indication of the amount of cash flow generated by the Company which is available to holders of Restricted Voting Shares and Exchangeable Unitholders, subject to working capital and other investment requirements and principal debt repayments, if any. Please see Free Cash Flow reconciled to Cash Flow from Operating Activities for a reconciliation of Free Cash Flow to cash flow from operating activities in the consolidated statements of cash flows and Free Cash Flow for further information about Free Cash Flow.
Adjusted Net Earnings represents operating income minus income tax expense. Adjusted Net Earnings per Share is calculated by dividing Adjusted Net Earnings by the total number of Restricted Voting Shares outstanding, on a diluted basis. Management believes that Adjusted Net Earnings and Adjusted Net Earnings per Share are useful supplemental measures as they provide investors with an indication of the operating results of the Company on a fully-diluted basis (excluding certain non-cash or non-recurring items that do not directly impact the ongoing operations of the Company) as if all Exchangeable Units had been converted into Restricted Voting Shares at the beginning of the period presented. Non-cash and non-recurring items excluded from the calculation of Adjusted Net Earnings are comprised of gains or losses on interest rate swaps, gains on settlement of liabilities and losses on amendment of the Company's debt facilities.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking information and other "forward-looking statements". Words such as "assesses", "be", "believes", "beyond", "could", "further", "growth", "in", "may", "may not", "participate", "positioned", "positions", "predict", "proceed", "to", "uncertainty", "will", and other expressions that are predictions of or could 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 Company 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 indicated in the forward-looking statements include, but are not limited to: any resurgence of COVID-19 (including any impact of COVID-19 on the economy and the Company's business), changes in the supply or demand of houses for sale in Canada or in any particular region within Canada, changes in the selling price for houses in Canada or any particular region within Canada, changes in the Company's cash flow, changes in the Company's strategy with respect to and/or ability to pay dividends, changes in the productivity of the Company's REALTORS(R) or the commissions they charge their customers, changes in government policy, laws or regulations which could reasonably affect the housing markets in Canada or the economy in general, changes to any products or services developed or offered by the Company, consumer response to any changes in the housing markets in Canada or any changes in government policy, laws or regulations, changes in general economic conditions (including interest rates, consumer confidence and other general economic factors or indicators), changes in global and regional economic growth, changes in the demand for and prices of natural resources on local and international markets, the level of residential real estate transactions, competition from other real estate brokers or from discount and/or Internet-based real estate alternatives, the closing of existing real estate brokerage offices, other developments in the residential real estate brokerage industry or the Company that reduce the number of REALTORS(R) in the Company's network or revenue from the Company's network of REALTORS(R), our ability to maintain brand equity through the use of trademarks, the methods used by shareholders or analysts to evaluate the value of the Company and its publicly-traded securities, changes in tax laws or regulations, and other risks detailed in the Company's annual information form, which is filed with securities commissions and posted on SEDAR+ at www.sedarplus.ca. Forward-looking information is based on various material factors or assumptions, which are based on information currently available to management. Material factors or assumptions that were applied in drawing conclusions or making estimates set out in the forward-looking statements include, but are not limited to: anticipated economic conditions, anticipated impact of government policies, anticipated financial performance, anticipated market conditions, business prospects, the successful execution of the Company's business strategies and recent regulatory developments, including as the foregoing relate to COVID-19. The factors underlying current expectations are dynamic and subject to change. Although the forward-looking statements contained in this release are based upon what management believes are reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. The Company 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.
About Bridgemarq Real Estate Services
Bridgemarq is a leading provider of services to residential real estate brokers and a network of more than 21,000 REALTORS(R) through its franchise network and corporately owned brokerages. We operate in Canada under the Royal LePage(R) , Proprio Direct(R) , Via Capitale(R) , Johnston & Daniel(R) and Les Immeubles Mont-Tremblant brands. For more information, go to www.bridgemarq.com.
BRIDGEMARQ(R) & DESIGN / BRIDGEMARQ REAL ESTATE SERVICES(R), VIA CAPITALE(R), JOHNSTON & DANIEL(R) and PROPRIO DIRECT(R) are registered trademarks of Residential Income Fund L.P. and are used under licence. ROYAL LEPAGE(R) is a registered trademark of Royal Bank of Canada and is used under licence.
The trademarks REALTOR(R), REALTORS(R) and the REALTOR(R) logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA.
Bridgemarq Real Estate Services Inc.
Balance Sheet Highlights
--------------------------------------------
(Unaudited)
($ 000's) December 31, December 31,
2024 2023
Cash $ 9,088 $ 5,743
Cash held in trust 35,467 -
Other current assets 9,318 4,671
Total current assets 53,873 10,414
Non-current assets 103,572 54,478
Total assets $ 157,445 $ 64,892
Accounts payable and accrued liabilities $ 16,837 $ 1,407
Customer deposits 35,467 -
Interest payable on Exchangeable Units 909 484
Dividends payable to shareholders 1,067 1,067
Contract transfer obligation - 356
Lease liabilities 3,000 -
Exchangeable Units 93,916 -
Total current liabilities 151,196 3,314
Debt facilities 66,904 67,022
Other non-current liabilities 19,590 7,851
Exchangeable Units - 43,825
Total Liabilities 237,690 122,012
Shareholders' deficit (80,245) (57,120)
Total Liabilities and Shareholders' deficit $ 157,445 $ 64,892
Interim Earnings
Highlights
Three months Three months
(Unaudited) ended ended Year ended Year ended
(in 000's) except per December 31, December 31, December 31, December 31,
Share amounts
2024 2023 2024 2023
Gross Commission
Income $ 86,699 $ - $ 288,360 $ -
Franchise fees 10,466 10,059 44,994 44,845
Other revenue 4,333 766 17,316 3,609
Revenues 101,498 10,825 350,670 48,454
Commissions (83,411) - (274,907) -
Cost of other revenue (714) (193) (5,150) (1,031)
Operating Expenses (12,204) (5,482) (41,932) (22,044)
Interest on debt (1,056) (738) (4,646) (2,967)
Interest on lease
obligation (303) - (936) -
3,810 4,412 23,099 22,412
Impairment and
write-off of
intangible assets (854) - (2,629) (201)
Amortization of
intangible assets (3,404) (1,708) (11,995) (6,894)
Interest on
Exchangeable Units (2,726) (1,452) (9,628) (5,806)
Gain (loss) on fair
value of Exchangeable
Units (6,436) (1,364) (9,286) (1,098)
Gain on settlement of
deferred payments - - 1,224 -
Gain on settlement of
contract transfer
obligation - - 99 -
Loss on termination of
lease (45) - (45) -
Loss on disposal of
property and
equipment (12) (12) -
Loss on interest rate
swap - (436) - (1,386)
Loss on debt facility
amendment - - - (122)
Current income tax
expense (592) (642) (2,907) (3,396)
Deferred income tax
expense (recovery) 627 151 1,758 488
Net and comprehensive
earnings (loss) $ (9,632) $ (1,039) $ (10,322) $ 3,997
Basic earnings (loss)
per share $ (1.02) $ (0.11) $ (1.09) $ 0.42
Diluted earnings
(loss) per share $ (1.02) $ (0.11) $ (1.09) $ 0.42
Cash Flow Highlights
(Unaudited)
($ 000's)
Cash provided by
operating activities: $ 1,803 $ 2,272 $ 17,099 13,667
Cash provided by (used
for) investing
activities: (463) (271) 2,483 (1,477)
Cash used for
financing activities: (4,387) (3,201) (16,237) (12,866)
Change in cash during
the year (3,047) (1,200) 3,345 (676)
Cash, beginning of the
year 12,135 6,943 5,743 6,419
Cash, end of the year $ 9,088 $ 5,743 $ 9,088 $ 5,743
Free Cash Flow
Highlights
(Unaudited)
($ 000's) except per
Share amounts
Free Cash Flow $ 1,821 $ 3,617 $ 16,810 $ 18, 074
Free Cash Flow per
Share $ 0.12 $ 0.38 $ 1.12 $ 1.91
Free Cash Flow Reconciled to Cash
Flow from Operating
Activities
Three months Three months Twelve months Twelve months
(Unaudited) ended ended ended ended
($ 000's) December 31, December 31, December 31, December 31,
2024 2023 2024 2023
Cash flow from
operating
activities $ 1,803 $ 2,272 $ 17,099 $ 13,667
Add (deduct):
Interest on
Exchangeable
Units 2,726 1,452 9,628 5,806
Interest on
Lease
Obligation 303 - 936 -
Current Income
tax expense (592) (642) (2,907) (3,396)
Income taxes
paid 507 800 2,909 3,500
Changes in
non-cash
working capital (1,028) (329) (4,284) (289)
Interest expense (4,083) (2,298) (15,210) (9,143)
Interest paid 3,758 2,634 13,447 9,406
Interest income 378 113 1,526 404
Interest
received (378) (113) (1,526) (404)
Lease payments (1,105) - (3,276) -
Additions to
property and
equipment and
intangible
assets (463) (116) (1,528) (873)
Repayment of
contract
transfer
obligation and
other (5) (155) (4) (604)
Free Cash Flow $ 1,821 $ 3,617 $ 16,810 $ 18,074
Adjusted Net
Earnings Highlights
(Unaudited)
(in 000's) except
per Share amounts
Adjusted net
earnings (loss) $ (413) $ 2,213 $ 7,326 $ 12,410
Adjusted net
earnings (loss) per
Share $ (0.03) $ 0.17 $ 0.49 $ 0.97
Three months Three months Twelve months Twelve months
(Unaudited) ended ended ended ended
($ 000's) December 31, December 31, December 31, December 31,
2024 2023 2024 2023
Gross Commission
Income $ 86,699 $ - $ 288,360 $ -
Franchise fees 10,466 10,059 44,994 44,845
Other revenue 4,333 766 17,316 3,609
Revenues 101,498 10,825 350,670 48,454
Commissions (83,411) - (274,907) -
Cost of other
revenue (714) (193) (5,150) (1,031)
Operating Expenses (12,204) (5,482) (41,932) (22,044)
Interest on debt (1,056) (738) (4,646) (2,967)
Interest on lease
obligation (303) - (936) -
Impairment and
write-off of
intangible assets (854) - (2,629) (201)
Amortization of
intangible assets (3,404) (1,708) (11,995) (6,894)
Operating Income (448) 2,704 8,475 15,317
Current income tax
expense (592) (642) (2,907) (3,396)
Deferred income tax
recovery 627 151 1,758 488
Adjusted net
earnings (loss) $ (413) $ 2,213 $ 7,326 $ 12,410
Three months Three months Twelve months Twelve months
(Unaudited) ended ended ended ended
($ 000's) December 31, December 31, December 31, December 31,
2024 2023 2024 2023
Net and
comprehensive
earnings (loss) $ (9,632) $ (1,039) $ (10,322) $ 3,997
Add (deduct):
Interest on
Exchangeable Units 2,726 1,452 9,628 5,806
Gain (loss) on fair
value of
Exchangeable Units 6,436 1,364 9,286 1,098
Gain on settlement
of deferred
payments - - (1,224) -
Gain on settlement
of contract
transfer obligation - - (99) -
Loss on termination
of lease 45 - 45 -
Loss on disposal of
property and
equipment 12 - 12 -
Loss on interest
rate swap - 436 - 1,386
Loss on debt
facility amendment - - - 122
Adjusted net
earnings (loss) $ (413) $ 2,213 $ 7,326 $ 12,410
SOURCE Bridgemarq Real Estate Services Inc.
View original content: http://www.newswire.ca/en/releases/archive/March2025/14/c9221.html
/CONTACT:
For more information, please contact: Anne-Elise Cugliari Allegritti, Director of Investor Relations, Bridgemarq Real Estate Services, info@bridgemarq.com, Tel: 416-510-5783; Glen McMillan, Chief Financial Officer, Bridgemarq Real Estate Services, glen.mcmillan@bridgemarq.com, Tel: 416-417-3870
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