Builders Capital Takes Advantage of Market Positioning to Improve Results
Calgary, Alberta--(Newsfile Corp. - May 25, 2021) - Builders Capital Mortgage Corp. (TSXV: BCF) ("Builders Capital" or "the Company") announces that it has released its first quarter financial results for the period ending March 31, 2021.
Highlights include:
- Current mortgage portfolio grew by 8.7%
- Total comprehensive income increased by 18.6% over Q1 2020 and 7.8% over the prior quarter
- Assets held for sale were reduced by 18.7% year-over-year
- Consistent with our targeted distribution, dividends paid to Class A public shareholders in the quarter were $0.1972 per share, representing an 8% annual return on the original $10.00 issue price
- Builders Capital has achieved its 8% distribution target for the 29th consecutive quarter since inception
- In line with targets, a weighted average loan-to-value ratio of approximately 75% was achieved in the mortgage portfolio
In commenting on these results, Sandy Loutitt, President of Builders Capital, stated:
"At Builders Capital, we have just experienced the highest rate of mortgage payouts for any six-month period in our history. This is due in no small measure to the rapidly improving real estate markets seen through late 2020 and early 2021. These market conditions have permitted our borrowing clients to sell their completed projects much faster than they have been able to over the past several years. Coupled with the improving prices in these markets, we have also been able to focus on reducing our inventory of foreclosed properties. The resulting influx of cash has allowed us to pursue additional mortgage loans through the past couple of months and we will once again be fully invested very shortly. In addition, we continue to evaluate and pursue lending activity outside of Alberta as we drive for additional geographic diversification. Overall, and thanks to the execution of a business plan designed to both defend against certain market risks while allowing the Company to be well-positioned to take advantage of improving conditions, we continue to provide a solid base for investor confidence and positive returns."
Financial Overview
| Three months ended March 31, 2021 $ | Three months ended March 31, 2020 $ | Three months ended March 31, 2019 $ | |
| Revenues | 704,149 | 703,638 | 845,714 |
| Total comprehensive income | 564,021 | 475,731 | 593,228 |
| Total assets | 27,454,925 | 31,725,932 | 30,146,336 |
| Shareholders' equity | 26,894,699 | 26,997,126 | 26,653,051 |
| Basic and diluted earnings per share | 0.19 | 0.16 | 0.21 |
| Cash dividends declared | 485,880 | 466,880 | 491,066 |
| Cash dividends declared per Class A share | 0.1972 | 0.1972 | 0.1973 |
| Cash dividends declared per Class B share | 0.1008 | 0.0756 | 0.1247 |
A more detailed discussion of the Company's financial results can be found in Builders Capital's First Quarter 2021 Management's Discussion and Analysis, which has been posted along with condensed consolidated interim 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.
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.
For more information, please contact:
John Strangway CPA, CA, Chief Financial Officer
Telephone: (403) 685-9888 Email: jstrangway@builderscapital.ca
Website: www.builderscapital.ca
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.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/85239
