The company’s
Melcor’s golf course operations had a very successful year. Outdoor activities such as golf have been beneficiaries of the COVID-19 pandemic. Also, weather conditions were very favorable through the 2021 golf season. The number of rounds played increased by 17% and revenue growth was 30% over the previous year.
We acknowledge and thank the entire Melcor team for their continued hard work and commitment to serving all company stakeholders. The past 2-year period has been an exceptionally uncertain and challenging time.
We would like to make special acknowledgement of
In closing, Melcor wishes to thank shareholders for their continued support and confidence. We remain committed to protecting and enhancing your investment in the company."
Today the Board declared a dividend of
(1) Readers are reminded that established key performance measures may not have standardized meaning under GAAP. For further information on the Melcor's non-standard measures, non-GAAP measures, operating measures and non-GAAP ratios, refer to the information in the press release below along with the Non-GAAP and Non-Standard Measures section on page 39 of the MD&A
Selected Highlights
($000s except as noted) | 2021 | 2020 | Change | |||
Revenue | 315,628 | 226,818 | 39.2 | % | ||
Gross margin (%)(3) | 44.4 | % | 43.3 | % | 2.5 | % |
Fair value adjustment on investment properties | 19,370 | (76,480 | ) | (125.3 | )% | |
Net income | 56,311 | 11,464 | 391.2 | % | ||
Net margin (%)(3) | 17.8 | % | 5.1 | % | 249.0 | % |
Funds from operations(1) | 81,327 | 51,424 | 58.1 | % | ||
Shareholders' equity | 1,116,469 | 1,077,429 | 3.6 | % | ||
Total assets | 2,113,927 | 2,001,285 | 5.6 | % | ||
($000s except as noted) | ||||||
Per Share Data | ||||||
Basic earnings | 1.70 | 0.34 | 400.0 | % | ||
Diluted earnings | 1.70 | 0.34 | 400.0 | % | ||
Funds from operations(2) | 2.46 | 1.55 | 58.7 | % | ||
Book value(2) | 33.87 | 32.56 | 4.0 | % |
(1) Non-GAAP financial measure. Refer to the Non-GAAP and Non-Standard Measures section on page 39 for further information.
(2) Non-GAAP financial ratio. Refer to the Non-GAAP and Non-Standard Measures section on page 39 for further information.
(3) Supplementary financial measure. Refer to the Non-GAAP and Non-Standard Measures section on page 39 for further information.
2021 revenue was up 39% to a record
Property Development revenue was up 7% contributing
Investment Properties revenue was up 2% as a result of transfers from the Property Development division, which increased GLA by 3% over 2020. The REIT was relatively stable over the prior year despite being the division most challenged by the pandemic.
Revenue in the
Throughout the year, we maintained our conservative and disciplined approach to investment and development activities and the management of our assets and liabilities.
Investing for growth
We purchased 17.10 acres adjacent to other holdings in
Our Property Development division completed and transferred 9 buildings (118,734 sf) in 2021 with a further 6,913 sf under development and 23,247 sf completed and awaiting lease up at year end. Revenue was up 7% over 2020 as interdivisional fair value adjustments related to prior year building transfers were applied. Revenue from the Property Development division is eliminated on consolidation. Transfers to Investment Properties will positively impact results in future years as we continue to grow our income-producing assets for long-term holding or for sale to the REIT. We continued to progress commercial land through the development, approvals and lease-up process and have an additional 7 buildings in 5 projects expected to be completed and transferred to Investment Properties in 2022.
Capital recycling
We completed the following dispositions of US assets during the year:
- We disposed of one residential unit in
Arizona for$0.34 million (US$0.28 million ) net of transaction costs. - We disposed of a residential brownstone complex (10 units) for
$7.08 million (US$5.68 million ) net of transaction costs.
Return to Shareholders
We continued to distribute profits to our shareholders, In 2021, we paid dividends of
We declared a dividend of
Outlook
Melcor owns a high quality portfolio of assets, including raw land, developed land inventory (residential lots and acres for multi-family and commercial development), income-producing properties and championship golf courses.
The recent increase in the price of oil, coupled with the hot housing market in
To continue to meet housing market demand, we expect to bring on new phases in 2022. On the commercial side, retail activity remains steady and we expect that to continue in 2022. Our US assets continue to deliver positive results and we expect the US to continue to grow as a percentage of our overall revenues.
Our business model has adapted to changing times and economic cycles over the years. We will maintain our disciplined, conservative approach to operations to ensure that we remain profitable while achieving our fundamental goals of protecting shareholder investment and sharing corporate profit with our shareholders.
With appropriate levels of serviced land inventory, movement of residential and commercial land through the municipal approvals process, steady occupancy rates and capacity on our operating facility, we remain well-positioned for the future.
Non-GAAP & Non-Standard Measures
FFO is a key measures of performance used by real estate operating companies; however, that is not defined by International Financial Reporting Standards (“IFRS”), do not have standard meanings and may not be comparable with other industries or income trusts. This non-IFRS measures are more fully defined and discussed in the Melcor’s management discussion and analysis for the period ended
FFO Reconciliation
Consolidated | ||||
($000s) | Year Ended | |||
2021 | 2020 | |||
Net income for the year | 56,311 | 11,464 | ||
Amortization of operating lease incentives | 8,160 | 7,879 | ||
Fair value adjustment on investment properties | (19,370 | ) | 76,480 | |
Depreciation on property and equipment | 1,334 | 1,407 | ||
Stock based compensation expense | 1,132 | 873 | ||
Non-cash financing costs | 3,479 | 2,043 | ||
Gain on sale of asset | (151 | ) | (40 | ) |
Deferred income taxes | 4,684 | (5,409 | ) | |
Fair value adjustment on REIT units | 25,748 | (43,273 | ) | |
FFO | 81,327 | 51,424 | ||
Investment Properties | ||||
($000s) | Year Ended | |||
2021 | 2020 | |||
Divisional income for the year (1) | 31,077 | (30 | ) | |
Fair value adjustment on investment properties | (10,850 | ) | 20,392 | |
Amortization of operating lease incentives | 1,624 | 1,754 | ||
Divisional FFO | 21,851 | 22,116 | ||
REIT | ||||
($000s) | Year Ended | |||
2021 | 2020 | |||
Divisional income for the year (1) | 43,710 | (22,387 | ) | |
Fair value adjustment on investment properties | (2,879 | ) | 62,748 | |
Amortization of operating lease incentives | 4,218 | 3,779 | ||
Divisional FFO | 45,049 | 44,140 |
(1) Refer to note 24 to the consolidated financial statements
MD&A and Financial Statements
Information included in this press release is a summary of results. This press release should be read in conjunction with Melcor’s 2021 consolidated financial statements and management’s discussion and analysis for the year ended
Annual General Meeting
PLEASE NOTE: This year, in response to the COVID-19 pandemic, and in order to conduct the meeting in a manner that protects the health and safety of our directors, shareholders and the public at large, the meeting will be webcast with voting only by instrument of proxy. We invite shareholders to join our annual meeting on
About
Melcor is a diversified real estate development and asset management company that transforms real estate from raw land through to high-quality finished product in both residential and commercial built form. Melcor develops and manages mixed-use residential communities, business and industrial parks, office buildings, retail commercial centres and golf courses. Melcor owns a well diversified portfolio of assets in
Melcor has been focused on real estate since 1923. The Company has built over 140 communities across western
Melcor’s headquarters are located in
Forward Looking Statements
In order to provide our investors with an understanding of our current results and future prospects, our public communications often include written or verbal forward-looking statements.
Forward-looking statements are disclosures regarding possible events, conditions, or results of operations that are based on assumptions about future economic conditions, courses of action and include future-oriented financial information.
This news release and other materials filed with the Canadian securities regulators contain statements that are forward-looking. These statements represent Melcor’s intentions, plans, expectations, and beliefs and are based on our experience and our assessment of historical and future trends, and the application of key assumptions relating to future events and circumstances. Future-looking statements may involve, but are not limited to, comments with respect to our strategic initiatives for 2020 and beyond, future development plans and objectives, targets, expectations of the real estate, financing and economic environments, our financial condition or the results of or outlook of our operations.
By their nature, forward-looking statements require assumptions and involve risks and uncertainties related to the business and general economic environment, many beyond our control. There is significant risk that the predictions, forecasts, valuations, conclusions or projections we make will not prove to be accurate and that our actual results will be materially different from targets, expectations, estimates or intentions expressed in forward-looking statements. We caution readers of this document not to place undue reliance on forward-looking statements. Assumptions about the performance of the Canadian and US economies and how this performance will affect Melcor’s business are material factors we consider in determining our forward-looking statements. For additional information regarding material risks and assumptions, please see the discussion under Business Environment and Risk in our annual MD&A.
Readers should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. Except as may be required by law, we do not undertake to update any forward-looking statement, whether written or oral, made by the Company or on its behalf.
Contact Information:
Director, Corporate Communications
Tel: 1.855.673.6931 x4707
ir@Melcor.ca
Source:
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