Continued Caution Amid Market Uncertainty
Calgary, Alberta–(Newsfile Corp. – May 28, 2020) – Builders Capital Mortgage Corp. (TSXV: BCF) (“Builders Capital” or “the Company”) today released its first quarter financial results for the period ending March 31, 2020.
- Consistent with our targeted distribution, dividends paid to Class A public shareholders in the first quarter were $0.1972 per share, representing an 8% annual return on the original $10.00 issue price.
- Our mortgage portfolio grew to 95% of our shareholders’ equity figure in the first quarter, a quarterly increase of 13.5%; assets held for sale were reduced by 43% year-over-year.
- We achieved a conservative debt-to-equity ratio of 17.5%
- Our weighted average loan-to-value ratio continued to strengthen.
Sandy Loutitt, President of Builders Capital, commented as follows:
“Clearly, it would be trite to suggest that the combination of low oil prices and wide-reaching COVID-19 measures have created anything less than a challenging operating environment for Builders Capital and virtually any other business entity in Western Canada. Nevertheless, we continue to make our first priority the preservation of the investment capital with which we have been entrusted, and are actively working to working to overcome any potential impacts created by the current state of affairs. Our aggressive management of problem loans and foreclosures has already achieved some results in the mitigation of identified risks, as has our introduction and application of more conservative standards for the underwriting of new loans. Our management team has been very successful in negotiating paths through challenging economic times in the last two decades, and we are confident these skills and abilities will continue to stand Builders Capital in good stead as the next chapters of this market difficulty unfold. Presently, our strategy of reducing risk and improving the strength of our portfolio by, among other things, shifting assets from Alberta to the BC market, is already showing results, and we will actively consider entering new markets where we see positive economic opportunities for productive portfolio growth.”
|Three months ended March 31,
|Three months ended March 31,
|Three months ended March 31,
|Total comprehensive income||475,731||593,228||575,892|
|Basic and diluted earnings per share||0.16||0.21||0.21|
|Cash dividends declared||466,880||491,066||583,522|
|Cash dividends declared per Class A share||0.1972||0.1973||0.1973|
|Cash dividends declared per Class B share||0.0756||0.1247||0.1763|
A more detailed discussion of the Company’s financial results can be found in Builders Capital’s First Quarter 2020 Management’s Discussion and Analysis, which has been posted along with audited condensed financial statements for the year 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, government and private industry response to the current COVID-19 epidemic, 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.
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