TORONTO, ONTARIO–(Marketwired – May 31, 2016) – Mitchell Cohen, President and Chief Executive Officer of Urbanfund Corp. (TSX VENTURE:UFC) (the “Company”), confirmed today that the Company filed financial results for the three month period ended March 31, 2016 (the “Financial Statements”).
For the three month period ended March 31, 2016, the Company reported earnings before income taxes of $228,878 on rental revenues of $1,180,047 compared to earnings before income taxes of $430,380 on rental revenues of $1,183,528 for the corresponding period in 2015. This decrease is primarily attributable to the unrealized loss on foreign currency translation.
Rental expenses for the three month period ended March 31, 2016 decreased to $621,770 compared to $650,571 for the corresponding period in 2015. The decrease is primarily the result of lower repairs and maintenance expense for the Company’s interest in 10 residential properties consisting of 1,870 residential suites located in Quebec and Montreal (the “Quebec Properties”).
FUNDS FROM OPERATIONS
Funds from Operations (“FFO”) is a non-IFRS measure and should not be construed as an alternative to net income determined in accordance with IFRSQueb. However, FFO is an operating performance measure which is widely used by the real estate industry and the Company has calculated FFO in accordance with the recommendations of the Real Property Association of Canada (“REALpac”).
FFO, or any other non-IFRS performance measure, is not intended to represent operating profits for the period or from a property. Furthermore, it should not be viewed as an alternative to net income, cash flow from operating activities or similar measures of financial performance calculated in accordance with IFRS.
FFO is a widely accepted supplemental measure of financial performance for real estate entities; however, it does not represent amounts available for capital programs, debt service obligations, commitments or uncertainties. FFO should not be interpreted as an indicator of cash generated from operating activities and is not indicative of cash available to fund operating expenditures, or for the payment of cash distributions. FFO is simply one measure of operating performance.
FFO for the periods ended March 31, 2016 and 2015 are as follows:
| Three month period ended | Three month period ended | |||||
| March 31, 2016 | March 31, 2015 | |||||
| Earnings Before Income Taxes | $ | 228,878 | $ | 430,380 | ||
| Adjust for: | ||||||
| Unrealized (Gain)/Loss on Foreign Currency Translation | $ | 90,420 | $ | (161,370 | ) | |
| Interest Income | $ | (9,568 | ) | $ | (8,046 | ) |
| Unrealized (Gain)/Loss on Marketable Securities | $ | (3,276 | ) | – | ||
| Unrealized (Gain)/Loss on Investment Properties | $ | 6,265 | – | |||
| Funds From Operations (FFO) | $ | 312,719 | $ | 260,964 | ||
Financing costs decreased during the three month period ended March 31, 2016 to $192,964 from $230,273 for the corresponding period ended in 2015. Administrative costs during the period ended March 31, 2016 increased to $52,594 from $41,720 for the corresponding period in 2015 due to legal costs related to corporate services.
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 2016, the Company had cash and cash equivalents in the amount of $6,416,804 and marketable securities of $325,754.
As at March 31, 2016, the Company had mortgages payable in the amount of $25,617,371 which was comprised of: (i) $11,672,200, representing a mortgage payable for the 84 suite townhouse complex located at the corner of Don Mills Road and Van Horne Avenue, in Toronto, Ontario; (ii) $5,263,496 representing a mortgage payable for the 72,761 square foot one-storey commercial shopping centre located at 305 North Front Street, Belleville, Ontario and the 16,000 square foot one-storey commercial shopping centre located 476-480 Wonderland Road South, London, Ontario; (iii) $5,405,068 representing mortgages payable on the Quebec Properties; and (iv) $3,276,607 representing mortgages payable on the Company’s 65% interest in a residential building with 40 units located at 48 Weber Street, Kitchener, Ontario and the Company’s 65% interest in a multi-residential rental complex redevelopment project located at 61 Roy Street West, Kitchener, Ontario.
ASSETS
As of March 31, 2016, total assets were $57,953,075 compared to $47,552,586 at March 31, 2015 and compared to $56,472,836 as at December 31, 2015.
DIVIDENDS AND DIVIDEND REINVESTMENT PLAN
As part of the Company’s long-term strategy to maximize shareholder value, in 2015 the Board of Directors implemented a dividend policy. Pursuant to the dividend policy, the Company intends to pay an annual aggregate dividend of $0.005 per Common Share and $0.005 per Preferred Share, payable quarterly in the amount of $0.00125 per Common Share and Preferred Share. The record date for dividends is anticipated to be set as the last business day of March, June, September and December in each year and the payment date in each case is anticipated to be approximately two weeks from the applicable record date.
The Company has a dividend reinvestment plan for holders of common shares in the capital of the Company (the “Common Shares”) and a dividend reinvestment plan for the holder of Series A, first preferred shares (the “Preferred Shares”) in the capital of the Company (collectively, the “DRIP”). The DRIP is a voluntary program permitting holders of Common Shares and Preferred Shares to automatically, and without charge, reinvest dividends to acquire additional Common Shares at a specified discount to the volume-weighted average market price calculated as of the date of the dividend payment. The Company has reserved an aggregate of 2,000,000 Common Shares for the issuance to participants enrolled in the DRIP.
The Company declared a dividend on its Common Shares and Preferred Shares on December 31, 2015, which was subsequently paid on January 15, 2016.
The Company declared a dividend on its Common Shares and Preferred Shares on March 31, 2016, which was subsequently paid on April 15, 2016. On April 15, 2016, the Company paid dividends of $0.00125 per Series A, first preferred share and common share in aggregate of $73,481 to the holders of record as of March 31, 2016. Of this amount, $60,876 was reinvested through the Company’s dividend reinvestment plan.
The declaration and payment of future dividends and the quantum of any such dividends will be subject to the Company’s Board of Directors’ determination, in its discretion, taking into account, among other things, business performance, financial condition, growth plans and expected capital requirements, statutory solvency tests, as well as any contractual restrictions on such dividends, including any agreements entered into with lenders to the Corporation or its subsidiaries. There can be no assurance that dividends will be paid at the intended rate or at any rate in the future.
ABOUT URBANFUND
Urbanfund Corp. is a Toronto-based real estate development and operating company. Urbanfund Corp. is a TSX Venture exchange listed real estate company based in Toronto. The Company’s common shares trade under the symbol UFC on the TSX Venture Exchange. Urbanfund’s focus is to identify, evaluate and invest in real estate or real estate related projects. The Company’s assets are located in Toronto, Kitchener, Belleville and London, Ontario and in Montreal and Quebec City, Quebec. The Company’s strategy going forward remains committed to seek accretive real estate or real estate-related opportunities.
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements, which reflect Management’s expectations regarding the Company’s growth, results of operations, performance and business prospects and opportunities and dividends. Statements about the Company’s future plans and intentions, results, levels of activity, cash flow from operations, performance, goals or achievements, proposed dividends or other future events constitute forward-looking statements. Wherever possible, words such as “may”, “will”, “should”, “could”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict” or “potential” or the negative or other variations of these words, or similar words or phrases, have been used to identify these forward-looking statements. These statements reflect Management’s current beliefs and are based on information currently available to management as at the date hereof.
Forward-looking statements involve significant risk, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking statements. These factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this press release, and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as required by law. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including: general economic and market segment conditions, interest rates, costs outside of the Company’s control such as Real Estate Taxes and utilities, the ability of tenants to satisfy their contractual rent obligations and any unforeseen repair, maintenance or replacement of the Company’s assets. More detailed assessment of the risks that could cause actual results to materially differ than current expectations is contained in the “Risks and Uncertainties” section of the Company’s most recent Management’s Discussion and Analysis dated May 30, 2016.
Neither 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.
Mitchell Cohen
President & CEO
(416) 703-1877×1025