Calgary, Alberta--(Newsfile Corp. - November 29, 2023) - Builders Capital Mortgage Corp. (TSXV: BCF) ("Builders Capital" or "the Company") announced today the release of its third quarter financial results for the period ended September 30, 2023.
Highlights include:
Total comprehensive income ended the quarter at $817,368 in the third quarter of 2023, making this another profitable quarter.
We distributed $0.20 per share to our Class A public shareholders continuing our 10-year unbroken dividend record since inception.
Subsequent to the quarter-end, we distributed $0.40 per share to our Class B shareholders or the equivalent of an annualized 16% return on the original $10.00 share issue price.
Earnings per share increased to $0.26.
Assets held for sale were successfully reduced by 45% year-over-year. By quarter-end, assets held for sale represented just 2.2% of shareholders' equity.
We achieved an approximate weighted average loan-to-value ratio on our mortgage portfolio of slightly better than our 75% target level.
In commenting on these results, Sandy Loutitt, President of Builders Capital, stated:
"Builders Capital has achieved another strong quarter. We are pleased with the overall portfolio returns which are consistent with our previous quarters. We would consider ourselves as cautiously optimistic in that we see continued profitability though in the later portions of 2023 and early 2024 we can see that profitability will not extend to all of our market segments. Accordingly, we are positioning ourselves to manage forward risk and fully expect to pay our A dividends as we have in the past. We've never missed distributing our planned $.20 per quarter to our A shareholders, and were able to distribute quarterly dividends at an annualized 16% rate to our B shareholders at the end of last month while also growing our retained earnings."
"There are concerns in the market that the Canadian economy might slip into recession in the reasonably near future, however high levels of immigration and new household creation are expected to keep demand for housing elevated for some time to come regardless. We are confident that our particular skill set and expertise in the construction finance marketplace will allow us to continue to profitably deploy our capital in this area."
Financial Overview
Nine months ended Sept 30, 2023 $
Nine months ended Sept 30, 2022 $
Nine months ended Sept 30, 2021 $
Nine months ended Sept 30, 2020 $
Revenues
3,415,536
2,697,969
2,176,969
2,400,758
Total comprehensive earnings
2,480,022
2,060,245
1,687,166
1,601,683
Net mortgages receivable, end of period
36,327,104
30,932,071
27,293,615
25,718,826
Total assets
37,189,078
32,117,611
29,778,385
28,680,936
Shareholders' equity
29,5039,27
27,075,517
26,712,456
26,987,856
Basic and Diluted Earnings per share
0.78
0.71
0.58
0.55
Cash dividends declared
817,359
654,078
584,765
590,293
Cash dividends declared per Class A share
0.20
0.20
0.20
0.20
Cash dividends declared per Class B share
0.40
0.40
0.40
0.40
A more detailed discussion of the Company's financial results can be found in Builders Capital's Second quarter 2023 Financial Statements and Management's Discussion and Analysis, which has been posted on the Company's website (www.builderscapital.ca) and filed on SEDAR (www.sedarplus.ca).
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.
Forward-Looking Information 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.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
