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Builders Capital Mortgage Corp. Reports 2019 First Quarter Results: Mortgage Portfolio Continues to Strengthen
Calgary, Alberta--(Newsfile Corp. - May 28, 2019) - Builders Capital Mortgage Corp. (TSXV: BCF) ("Builders Capital" or "the Company") today released first quarter financial results for the period ending March 31, 2019.
Highlights Include: Consistent with the prior twenty consecutive fiscal quarters and in line with our targeted distribution plan, dividends paid to Class A public shareholders in the first quarter were $0.1973 per share, representing an 8% annual return on the original $10.00 issue price. First quarter mortgage revenue of $846,000 was up by 2% year-over-year and represented an annualized 12.3% of gross share capital calculated on the weighted average shares outstanding, compared to $829,000, or 12.5% of gross share capital in Q1 2018. At quarter-end, our debt-to-equity ratio was a conservative 13.1%. Earnings exceeded the amount required to pay planned Class A Non-Voting Share dividends by a healthy 1.6 times.
Sandy Loutitt, President of Builders Capital, commented, "2018 was a difficult year for the housing markets in British Columbia, Alberta and Saskatchewan, and the weakness has continued into 2019.Nevertheless, given our past success in similar markets, we are very confident in our ability to successfully navigate the difficulties posed by this weakness and to continue to ensure the maximum deployment of available funds. Certainly, the results of this quarter suggest we are on the right track and that we may have turned a corner on that weakness.Just as importantly, these results extend the Company's unblemished history of more than five years of continuous payments of 8% per year dividends to our public shareholders."
Despite the difficult market conditions brought on by downstream oil distribution issues and by government policy decisions, labour market and demographic fundamentals remain supportive for housing demand. Builders Capital remains well positioned to continue to source high quality lending opportunities that appropriately balance risk while maintaining attractive returns for shareholders. With larger competitors retreating from certain markets, Builders Capital has become a significant option for home construction companies, which in turn has provided the Company with the opportunity to assert itself as a more significant option for regional independent housing contractors. Going forward we expect to complete and sell the properties held in inventory, to continue to source and fund new and profitable construction mortgages and to benefit from gradually improving markets.
Q1 2019 FINANCIAL OVERVIEW
$ Three months
ended March 31,
Revenues 845,714 828,979
Total comprehensive income 593,228 575,892
Total assets 30,146,336 30,060,233
Shareholders' equity 26,653,051 25,679,439
Basic and diluted earnings per share 0.21 0.21
Cash dividends declared 491,066 583,522
Cash dividends declared per Class A share 0.1973 0.1973
Cash dividends declared per Class B share 0.1247 0.1763
A more detailed discussion of the Company's financial results can be found in Builders Capital's First Quarter 2019 Management's Discussion and Analysis, which has been posted along with unaudited interim condensed financial statements for the quarter on the Company's website ( www.builderscapital.ca ) and filed on SEDAR ( www.sedar.com ).
About Builders Capital
Builders Capital is a mortgage lender providing short-term course-of-construction financing to builders of residential, wood-frame properties in Western Canada. The Company commenced active operations on December 12, 2013 on the closing of its initial public offering, whereupon it acquired a portfolio of mortgages from two predecessor companies.
Builders Capital's investment objective is to generate attractive returns, relative to risk, in order to provide stable and consistent distributions to shareholders while remaining focused on capital preservation and satisfying the criteria mandated for mortgage investment corporations ("MIC") as defined in the Income Tax Act.
As an MIC, Builders Capital is not subject to income tax provided that it distributes all of its taxable income as dividends to shareholders within 90 days of its December 31st year-end. Such dividends are generally treated by shareholders as interest income, so that each shareholder is in the same tax position as if their proportionate share of mortgage investments made by the company had been made directly by the shareholder.
This news release contains forward-looking statements within the meaning of applicable securities legislation, including statements with respect to management's beliefs, estimates and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intent", "estimate", "anticipate", "believe", "should", "plans" or "continue" or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. These statements are not guarantees of future performance and are based on estimates and assumptions that are subject to risks and uncertainties which could cause actual results to differ materially from the forward-looking statements contained in this news release. These include, among other things, risks associated with mortgage lending, competition for mortgage lending, real estate values, interest rate fluctuations, environmental matters and the general economic environment. The company cautions that the foregoing list is not exhaustive, as other factors could adversely affect its results, performance or achievements. Readers are cautioned against undue reliance on any forward-looking statements. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Except as required by applicable law, Builders Capital undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
For more information, please contact:
John Strangway, Chief Financial Officer
Telephone: (403) 685-9888
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