Altus Group Limited (ʺAltus” or “the Company”) (TSX: AIF), a
leading provider of asset and fund intelligence for commercial real
estate (“CRE”), announced today its financial and operating results
for the fourth quarter and year ended December 31st, 2023, the
approval by its Board of Directors of the payment of a cash
dividend of $0.15 per common share for the first quarter ending
March 31st, 2024, and its financial outlook for fiscal 2024.
Unless otherwise indicated, all amounts are in
Canadian dollars and percentages are on an as reported basis in
comparison to the same period in 2022. “CC” in the tables indicates
“Constant Currency”.
Q4 2023
Summary:
- Consolidated revenues were $191.6
million, up 4.3% (2.8% on a Constant Currency* basis).
- Profit (loss) improved to $(0.1)
million from $(8.8) million.
- Earnings per share (“EPS”) were
$(0.00) basic and diluted, compared to $(0.20) basic and
diluted.
- Consolidated Adjusted EBITDA* was
$34.2 million, down 2.2% (3.4% on a Constant Currency basis).
- Net cash provided by operating
activities was $44.7 million, up 62.7%, and Free Cash Flow* was a
record $40.1 million, up 109.3%.
- Adjusted EPS* improved to $0.46
from $0.44.
- Analytics revenues were $103.2
million, up 7.4% (6.1% on a Constant Currency basis), of which
Recurring Revenue* was $93.0 million, up 8.4% (7.0% on a Constant
Currency basis). Adjusted EBITDA was $28.1 million, up 9.0% (7.9%
on a Constant Currency basis), driving an Adjusted EBITDA margin*
of 27.3%, up 40 basis points (40 basis points on a Constant
Currency basis).
- Analytics New Bookings* were $26.3
million, down 23.2% (23.4% on a Constant Currency basis), of which
Recurring New Bookings* were $18.2 million, down 12.5% (12.6% on a
Constant Currency basis).
- At the end of Q4 2023, 74% of the
Company’s total ARGUS Enterprise (“AE”) user base had been
contracted on ARGUS Cloud (Cloud Adoption Rate*), compared to 64%
at the end of Q4 2022.
- Property Tax revenues were $60.5
million, up 8.4% (up 5.9% on a Constant Currency basis), and
Adjusted EBITDA was $13.3 million, down 7.6% (10.5% on a Constant
Currency basis).
- Appraisals and Development Advisory
revenues were $28.0 million, down 12.5% (12.4% on a Constant
Currency basis) and Adjusted EBITDA was $2.3 million, down 59.6%
(59.6% on a Constant Currency basis).
- As at December 31st 2023, Funded
debt to EBITDA ratio as defined in the Company’s credit facility
agreement was 2.06 times, and Net debt to Adjusted EBITDA leverage
ratio* was 1.98 times.
- The Company purchased 53,700 shares
in Q4 2023 for $2.1 million under its Normal Course Issuer Bid
(“NCIB”).
*Altus Group uses certain non-GAAP financial
measures such as Adjusted Earnings (Loss), and Constant Currency;
non-GAAP ratios such as Adjusted EPS; total of segments measures
such as Adjusted EBITDA; capital management measures such as Free
Cash Flow; and supplementary financial and other measures such as
Adjusted EBITDA margin, Net debt to Adjusted EBITDA leverage ratio,
New Bookings, Recurring New Bookings, Non-Recurring New Bookings,
Organic Revenue, Recurring Revenue, AE Software Maintenance
Retention Rate, and Cloud Adoption Rate. Refer to the
“Non-GAAP and Other Measures” section for more information on each
measure and a reconciliation of Adjusted EBITDA and Adjusted
Earnings (Loss) to Profit (Loss) and Free Cash Flow to Net cash
provided by (used in) operating activities.
2023
Summary:
- Consolidated revenues were $772.8
million, up 5.1% (2.2% on a Constant Currency* basis).
- Profit (loss) was $10.2 million,
compared to a loss of $(0.9) million,
- Earnings per share (“EPS”) were
$0.23 basic and $0.22 diluted, compared to $(0.02) basic and
diluted.
- Consolidated Adjusted EBITDA was
$135.0 million, down 0.2% (4.2% on a Constant Currency basis).
- Net cash provided by operating
activities was $71.4 million, down 7.3%, and Free Cash Flow was
$58.9 million, up 12.0%.
- Adjusted EPS was $1.64, compared to
$1.89.
- Analytics revenues were $392.9
million, up 13.5% (9.4% on a Constant Currency basis), of which
Recurring Revenue was $354.6 million, up 17.5% (13.2% on a Constant
Currency basis). Adjusted EBITDA was $95.5 million, up 33.1% (26.1%
on a Constant Currency basis), driving an Adjusted EBITDA margin of
24.3%, up 360 basis points (320 basis points on a Constant Currency
basis).
- Consistently delivered over $20
million in New Bookings per quarter despite a challenging external
environment. Analytics New Bookings totalled $94.5 million, down
16.0% (19.1% on a Constant Currency basis), of which Recurring New
Bookings were $64.5 million, down 13.3% (16.3% on a Constant
Currency basis).
- Reflecting the reset of the U.K.
annuity billings, Property Tax revenues were $263.1 million, down
2.0% (4.6% on a Constant Currency basis), and Adjusted EBITDA was
$69.3 million, down 20.9% (23.1% on a Constant Currency basis).
Excluding the $33.2 million impact of the U.K. annuity billings in
2022, revenue growth was 11.8% (8.9% on a Constant Currency
basis).
- Appraisals and Development Advisory
revenues were $117.6 million, down 3.2% (3.1% on a Constant
Currency basis) and Adjusted EBITDA was $11.5 million, down 32.5%
(32.3% on a Constant Currency basis).
- The Company purchased 105,400
shares in FY 2023 for $4.6 million under its NCIB.
“2023 was a year of significant progress driving
revenue, profit and free cash flow growth,” commented Jim Hannon,
Chief Executive Officer of Altus Group. "Looking ahead to 2024 and
beyond, I'm excited about our innovation roadmap which will help
clients achieve superior asset level and fund performance. Our
technology will also drive continued operating efficiencies for our
internal teams fuelling better customer service, margins and
cashflow generation. With the anticipation of a more stable
interest rate environment and increased CRE activity in the second
half of 2024, we are well-positioned for success."
Summary of Operating and Financial Performance by
Reportable Segment:
|
Consolidated |
Quarter ended December 31, |
Year ended December 31, |
In thousands of dollars |
|
2023 |
|
2022 |
% Change |
CC% Change |
|
2023 |
|
2022 |
% Change |
CC% Change |
Revenues |
$ |
191,574 |
$ |
183,762 |
4.3% |
2.8% |
$ |
772,843 |
$ |
735,451 |
5.1% |
2.2% |
Profit (loss) |
$ |
(140) |
$ |
(8,759) |
98.4% |
|
$ |
10,232 |
$ |
(889) |
1,251.0% |
|
Adjusted EBITDA |
$ |
34,168 |
$ |
34,928 |
(2.2%) |
(3.4%) |
$ |
135,041 |
$ |
135,322 |
(0.2%) |
(4.2%) |
Adjusted EBITDA margin |
|
17.8% |
|
19.0% |
|
|
|
17.5% |
|
18.4% |
|
|
Net Cash provided by (used in)
operating activities |
$ |
44,693 |
$ |
27,465 |
62.7% |
|
$ |
71,429 |
$ |
77,085 |
(7.3%) |
|
Free
Cash Flow |
$ |
40,141 |
$ |
19,180 |
109.3% |
|
$ |
58,938 |
$ |
52,605 |
12.0% |
|
Analytics |
|
Quarter ended December 31, |
Year ended December 31, |
In thousands of dollars |
|
2023 |
|
2022 |
% Change |
CC% Change |
|
2023 |
|
2022 |
% Change |
CC% Change |
Revenues |
$ |
103,190 |
$ |
96,061 |
7.4% |
6.1% |
$ |
392,913 |
$ |
346,103 |
13.5% |
9.4% |
Adjusted EBITDA |
$ |
28,145 |
$ |
25,824 |
9.0% |
7.9% |
$ |
95,470 |
$ |
71,730 |
33.1% |
26.1% |
Adjusted EBITDA margin |
|
27.3% |
|
26.9% |
|
|
|
24.3% |
|
20.7% |
|
|
Other Measures |
|
|
|
|
|
|
|
|
Recurring Revenue |
$ |
93,010 |
$ |
85,834 |
8.4% |
7.0% |
$ |
354,563 |
$ |
301,709 |
17.5% |
13.2% |
New Bookings |
$ |
26,253 |
$ |
34,173 |
(23.2%) |
(23.4%) |
$ |
94,493 |
$ |
112,540 |
(16.0%) |
(19.1%) |
Recurring New Bookings |
$ |
18,236 |
$ |
20,849 |
(12.5%) |
(12.6%) |
$ |
64,507 |
$ |
74,434 |
(13.3%) |
(16.3%) |
Non-Recurring New Bookings* |
$ |
8,017 |
$ |
13,324 |
(39.8%) |
(40.2%) |
$ |
29,986 |
$ |
38,106 |
(21.3%) |
(24.4%) |
AE Software Maintenance
Retention Rate* |
|
93% |
|
97% |
|
|
|
96% |
|
97% |
|
|
Geographical revenue
split |
|
|
|
|
|
|
|
|
North America |
|
77% |
|
79% |
|
|
|
77% |
|
77% |
|
|
International |
|
23% |
|
21% |
|
|
|
23% |
|
23% |
|
|
Cloud
Adoption Rate (as at end of period) |
|
74% |
|
64% |
|
|
|
74% |
|
64% |
|
|
Property Tax |
|
Quarter ended December 31, |
Year ended December 31, |
In thousands of dollars |
|
2023 |
|
2022 |
% Change |
CC% Change |
|
2023 |
|
2022 |
% Change |
CC% Change |
Revenues |
$ |
60,524 |
$ |
55,830 |
8.4% |
5.9% |
$ |
263,111 |
$ |
268,583 |
(2.0%) |
(4.6%) |
Adjusted EBITDA |
$ |
13,310 |
$ |
14,412 |
(7.6%) |
(10.5%) |
$ |
69,277 |
$ |
87,533 |
(20.9%) |
(23.1%) |
Adjusted EBITDA margin |
|
22.0% |
|
25.8% |
|
|
|
26.3% |
|
32.6% |
|
|
Appraisals and Development Advisory |
|
Quarter ended December 31, |
Year ended December 31, |
In thousands of dollars |
|
2023 |
|
2022 |
% Change |
CC % Change |
|
2023 |
|
2022 |
% Change |
CC% Change |
Revenues |
$ |
28,046 |
$ |
32,049 |
(12.5%) |
(12.4%) |
$ |
117,577 |
$ |
121,469 |
(3.2%) |
(3.1%) |
Adjusted EBITDA |
$ |
2,254 |
$ |
5,578 |
(59.6%) |
(59.6%) |
$ |
11,540 |
$ |
17,099 |
(32.5%) |
(32.3%) |
Adjusted EBITDA margin |
|
8.0% |
|
17.4% |
|
|
|
9.8% |
|
14.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q4 2023 Review
On a consolidated basis, revenues were $191.6
million, up 4.3% (2.8% on a Constant Currency* basis), and Adjusted
EBITDA was $34.2 million, down 2.2% (3.4% on a Constant Currency
basis). Adjusted EPS improved to $0.46 from $0.44 in the fourth
quarter of 2022.
Profit (loss) was $(0.1) million and $(0.00) per
share, basic and diluted, compared to $(8.8) million and $(0.20)
per share, basic and diluted, in the same period in 2022. Profit
benefitted from higher revenues and lower costs following the
completion of the 2022 global restructuring program, offset by
higher operating costs as well as expenses associated with the
Company’s recently announced acquisitions.
Analytics revenues were $103.2 million, up 7.4%
(6.1% on a Constant Currency basis). Organic Revenue* growth was
6.9% (5.6% on a Constant Currency basis). Adjusted EBITDA was $28.1
million, up 9.0% (7.9% on a Constant Currency basis), driving an
Adjusted EBITDA margin of 27.3%, up 40 basis points (40 basis
points on a Constant Currency basis).
- Revenue growth was driven by robust
Recurring Revenue performance benefitting from the ongoing
transition to cloud subscriptions, new sales, and a higher number
of assets on the Valuation Management Solutions (“VMS”)
platform.
- Recurring Revenue was $93.0
million, up 8.4% (7.0% on a Constant Currency basis). Sequentially,
Recurring Revenue increased by 6.4% from $87.4 million in the third
quarter of 2023, driven primarily by seasonality in new sales and
the frequency of valuations at VMS.
- New Bookings totalled $26.3
million, down 23.2% (23.4% on a Constant Currency basis). Recurring
New Bookings totalled $18.2 million, down 12.5% (12.6% on a
Constant Currency basis), and Non-Recurring New Bookings were $8.0
million, down 39.8% (40.2% on a Constant Currency basis). New
Bookings performance and growth was primarily impacted by the
current economic environment.
- Adjusted EBITDA growth and margin
expansion benefitted from higher revenues, operating efficiencies,
ongoing cost optimization efforts, and foreign exchange
fluctuations.
Property Tax revenues were $60.5 million, up
8.4% (5.9% on a Constant Currency basis), and Adjusted EBITDA was
$13.3 million, down 7.6% (10.5% on a Constant Currency basis).
Growth in the U.S. and the U.K. was partially offset by a decline
in Canada where the Ontario cycle extension is impacting growth.
Adjusted EBITDA reflects higher compensation expenditures and
ongoing investments in the Company’s cybersecurity and other
technology infrastructure, as well as geographic variances of the
revenue base on a year-over-year view. The margin contribution
varies by geography with the U.K. operations having the highest
margin profile.
Appraisals and Development Advisory revenues
were $28.0 million, down 12.5% (12.4% on a Constant Currency
basis), and Adjusted EBITDA was $2.3 million, down 59.6% (59.6% on
a Constant Currency basis). The performance reflects muted market
activity in the current economic environment.
Corporate Costs were $9.5 million, down from
$10.9 million in the same period in 2022.
Free Cash Flow was $40.1 million, up 109.3%, and
net cash provided by operating activities was $44.7 million, up
62.7%.
As at December 31, 2023, bank debt was $308.6
million and cash and cash equivalents was $41.9 million
(representing a Funded debt to EBITDA ratio as defined in the
Company’s credit facility agreement of 2.06 times, or a Net debt to
Adjusted EBITDA leverage ratio of 1.98 times).
Q1 2024 Dividend
Altus Group’s Board of Directors approved the
payment of a cash dividend of $0.15 per common share for the first
quarter ending March 31, 2024, with payment to be made on April 15,
2024 to common shareholders of record as at March 31, 2024.
Altus Group’s Dividend Reinvestment Plan
(“DRIP”) permits eligible shareholders to direct their cash
dividends to be reinvested in additional common shares of the
Company. For shareholders who wish to reinvest their dividends
under the DRIP, Altus Group intends to issue common shares from
treasury at a price equal to 96% of the weighted average closing
price of the shares for the five trading days preceding the
dividend payment date. Full details of the DRIP program are
available on the Company website.
Altus Group confirms that all dividends paid or
deemed to be paid to its common shareholders qualify as ʺeligible
dividendsʺ for purposes of subsection 89(14) of the Income Tax Act
(Canada) and similar provincial and territorial legislation, unless
indicated otherwise.
2024 Business Outlook
The business outlook is presented on a Constant
Currency basis over fiscal 2023. Future acquisitions are not
factored into this outlook.
“Looking ahead, we expect that the CRE macro
pressures will begin to ease by the second half of the year as
interest rates and credit conditions begin to stabilize,” said
Pawan Chhabra, Chief Financial Officer. “The top end of our
Analytics outlook range assumes growth ramping in the second half.
We remain focused on what’s within our control – improving earnings
and maximizing cash generation – which we’re confident we can do
even on a single-digit topline growth rate.”
In fiscal 2024 management expects to grow
consolidated revenue in the single digits, grow Adjusted EBITDA in
the double digits, and improve Adjusted EBITDA margin over 2023.
The business outlook for fiscal 2024 by reportable segment is as
follows:
Business segment: |
FY 2024 outlook: |
Analytics |
- 8 – 12% Recurring Revenue growth
(excluding REVS)
- 400 – 500 bps of Adjusted EBITDA
margin expansion
|
Property Tax |
- Low-to-mid single digit revenue
growth
- 50 – 200 bps of Adjusted EBITDA
margin expansion
|
Appraisals & Development Advisory |
- Low single digit revenue
growth
- Double digit improvement in
Adjusted EBITDA
|
|
|
|
|
Forecasting future results or trends is
inherently difficult for any business and actual results or trends
may vary significantly. The business outlook is forward-looking
information that is based upon the assumptions and subject to the
material risks discussed under the “Forward-Looking Information
Disclaimer” section.
Key assumptions for the business outlook by
segment: Analytics: consistency and growth in number of assets
on the Valuation Management Solutions platform, continued ARGUS
cloud conversions, new sales (including New Bookings converting to
revenue within Management’s expected timeline), client and software
retention consistent with 2023 levels, pricing action, the
successful integration of Forbury, improved operating leverage, as
well as consistent and increasingly stable economic conditions in
financial and CRE markets. Property Tax: continued market
share gains, new sales, optimized client outcomes that result in
improved contingency payments, and improved operating leverage with
technology. Appraisal & Development Advisory: improved
client profitability and improved operating leverage.
|
Q4 & FY 2023 Results Conference Call &
Webcast |
|
|
Date: |
Thursday, February 22,
2024 |
Time: |
5:00 p.m. (ET) |
Webcast: |
https://events.q4inc.com/attendee/963724916 |
Live Call: |
1-888-660-6785
(toll-free) (Conference ID: 8366990) |
Replay: |
https://www.altusgroup.com/investor-relations/ |
|
|
|
|
|
|
About Altus Group
Altus Group is a leading provider of asset and
fund intelligence for commercial real estate. We deliver
intelligence as a service to our global client base through a
connected platform of industry-leading technology, advanced
analytics, and advisory services. Trusted by the largest CRE
leaders, our capabilities help commercial real estate investors,
developers, proprietors, lenders, and advisors manage risks and
improve performance returns throughout the asset and fund
lifecycle. Altus Group is a global company headquartered in Toronto
with approximately 3,000 employees across North America, EMEA and
Asia Pacific. For more information about Altus (TSX: AIF) please
visit www.altusgroup.com.
Non-GAAP and Other Measures
Altus Group uses certain non-GAAP financial
measures, non-GAAP ratios, total of segments measures, capital
management measures, and supplementary and other financial measures
as defined in National Instrument 52-112 - Non-GAAP and Other
Financial Measures Disclosure (“NI 52-112”). Management believes
that these measures may assist investors in assessing an investment
in the Company’s shares as they provide additional insight into the
Company’s performance. Readers are cautioned that they are not
defined performance measures, and do not have any standardized
meaning under IFRS and may differ from similar computations as
reported by other similar entities and, accordingly, may not be
comparable to financial measures as reported by those entities.
These measures should not be considered in isolation or as a
substitute for financial measures prepared in accordance with
IFRS.
Adjusted Earnings (Loss): Altus
Group uses Adjusted Earnings (Loss) to facilitate the calculation
of Adjusted EPS. How it’s calculated: Profit (loss) added or
(deducted) by: profit (loss) from discontinued operations;
occupancy costs calculated on a similar basis prior to the adoption
of IFRS 16; depreciation of right‐of‐use assets; amortization of
intangibles of acquired businesses; acquisition and related
transition costs (income); unrealized foreign exchange losses
(gains); (gains) losses on disposal of right‐of‐use assets,
property, plant and equipment and intangibles; share of (profit)
loss of joint venture; non‐cash share‐based compensation costs;
(gains) losses on equity derivatives net of mark‐to‐market
adjustments on related RSUs and DSUs; (gains) losses on
derivatives; interest accretion on contingent consideration
payables; restructuring costs (recovery); impairment charges;
(gains) losses on investments; (gains) losses on hedging
transactions and interest expense (income) on swaps; other costs or
income of a non‐operating and/or non‐recurring nature; finance
costs (income), net ‐ leases; and the tax impact of these
items.
Constant Currency: Altus Group
uses Constant Currency to allow current financial and operational
performance to be understood against comparative periods without
the impact of fluctuations in foreign currency exchange rates
against the Canadian dollar. How it’s calculated: The financial
results and non-GAAP and other measures presented at Constant
Currency within this document are obtained by translating monthly
results denominated in local currency (U.S. dollars, British pound,
Euro, Australian dollars, and other foreign currencies) to Canadian
dollars at the foreign exchange rates of the comparable month in
the previous year.
Adjusted EPS: Altus Group uses
Adjusted EPS to assess the performance of the business, on a per
share basis, before the effects of the noted items because they
affect the comparability of the Company’s financial results and
could potentially distort the analysis of trends in business
performance. How it’s calculated: Adjusted Earnings (Loss) divided
by basic weighted average number of shares, adjusted for the
effects of the weighted average number of restricted shares.
Adjusted Earnings before Interest,
Taxes, Depreciation and Amortization (“Adjusted EBITDA”):
Altus Group uses Adjusted EBITDA to evaluate the performance of the
business, as well as when making decisions about the ongoing
operations of the business and the Company’s ability to generate
cash flows. This measure represents Adjusted EBITDA determined on a
consolidated entity-basis as a total of the various segments. All
other Adjusted EBITDA references are disclosed in the financial
statements and are not considered to be non-GAAP financial measures
pursuant to NI 52-112. How it’s calculated: Profit (loss) added or
(deducted) by: profit (loss) from discontinued operations;
occupancy costs calculated on a similar basis prior to the adoption
of IFRS 16; depreciation of right‐of‐use assets; depreciation of
property, plant and equipment and amortization of intangibles;
acquisition and related transition costs (income); unrealized
foreign exchange (gains) losses; (gains) losses on disposal of
right‐of-use assets, property, plant and equipment and intangibles;
share of (profit) loss of joint venture; non‐cash share‐based
compensation costs; (gains) losses on equity derivatives net of
mark‐to market adjustments on related restricted share units
(“RSUs”) and deferred share units (“DSUs”); (gains) losses on
derivatives, restructuring costs (recovery); impairment charges;
(gains) losses on investments; other costs or income of a
non‐operating and/or non‐recurring nature; finance costs (income),
net ‐ leases; finance costs (income), net ‐ other; and income tax
expense (recovery).
Free Cash Flow: Altus Group
uses Free Cash Flow to understand how much of the cash generated
from operating activities is available to repay borrowings and to
reinvest in the Company. How it’s calculated: Net cash provided by
(used in) operating activities deducted by capital
expenditures.
Adjusted EBITDA Margin: Altus
Group uses Adjusted EBITDA margin to evaluate the performance of
the business, as well as when making decisions about the ongoing
operations of the business and its ability to generate cash flows.
How it’s calculated: Adjusted EBITDA divided by revenue.
Net debt to Adjusted EBITDA leverage
ratio: Altus Group uses Net debt to Adjusted EBITDA
leverage ratio as a measure of its ability to service debt and
other long-term obligations. How it’s calculated: Net debt (total
borrowings less cash and cash equivalents, net of short-term
deposits) divided by Adjusted EBITDA.
New Bookings, Recurring New Bookings and
Non-Recurring New Bookings: For its Analytics reportable
segment, Altus Group uses New Bookings, Recurring New Bookings and
Non-Recurring New Bookings as measures to track the performance and
success of sales initiatives, and as an indicator of future revenue
growth. New Bookings is inclusive of any new signed contracts as
well as any additional solutions and services added by existing
customers within the Analytics reportable segment. The contract
value of renewals is excluded from this metric with the exception
of additional capacity or products purchased at the time of
renewal. How it’s calculated: New Bookings: The total of annual
contract values for new sales of the Company’s recurring solutions
and services (software subscriptions, Valuation Management
Solutions and data subscriptions) plus the total of contract values
for one-time engagements (consulting, training, and due diligence).
Recurring New Bookings: The total of annual contract values for new
sales of the recurring solutions and services. Non-Recurring New
Bookings: The total of contract values for one-time
engagements.
Organic Revenue: Altus Group
uses Organic Revenue to evaluate and assess revenue trends in the
business on a comparable basis versus the prior year, and as an
indicator of future revenue growth. How it’s calculated: Revenue
deducted by revenues from business acquisitions that are not fully
integrated (up to the first anniversary of the acquisition).
Recurring Revenue: For its
Analytics reportable segment, Altus Group uses Recurring Revenue as
measures to assess revenue trends in the business, and as
indicators of future revenue growth. How it’s calculated: Recurring
Revenue: Revenue from software subscriptions recognized on an over
time basis in accordance with IFRS 15, software maintenance revenue
associated with the Company’s legacy licenses sold on perpetual
terms, Valuation Management Solutions, and data subscriptions.
AE Software Maintenance Retention
Rate: For its Analytics reportable segment, Altus Group
uses AE Software Maintenance Retention Rate as a measure to
evaluate its success in retaining its AE software customers. With
the majority of the AE customer base having now converted from
legacy maintenance contracts to subscription contracts this metric
is now less relevant and will be updated in the future. How it’s
calculated: Percentage of the available AE software maintenance
renewal opportunity in a fiscal period that renews, calculated on a
dollar basis, excluding any growth in user count or product
expansion.
Cloud Adoption Rate: For its
Analytics reportable segment, Altus Group uses the Cloud Adoption
Rate as a measure of its progress in transitioning the AE user base
to its cloud-based platform, a key component of its overall product
strategy. How it’s calculated: Percentage of the total AE user base
contracted on the ARGUS Cloud platform.
Forward-looking Information
Certain information in this press release may
constitute “forward-looking information” within the meaning of
applicable securities legislation. All information contained in
this press release, other than statements of current and historical
fact, is forward-looking information. Forward-looking information
includes, but is not limited to, the discussion of the Company’s
business, strategies and expectations of future performance,
including any guidance on financial expectations, and its
expectations with respect to cash flows and liquidity. Generally,
forward-looking information can be identified by use of words such
as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate”,
“intend”, “plan”, “would”, “could”, “should”, “continue”, “goal”,
“objective”, “remain” and other similar terminology.
Forward-looking information is not, and cannot
be, a guarantee of future results or events. Forward-looking
information is based on, among other things, opinions, assumptions,
estimates and analyses that, while considered reasonable by us at
the date the forward-looking information is provided, inherently
are subject to significant risks, uncertainties, contingencies and
other factors that may not be known and may cause actual results,
performance or achievements, industry results or events to be
materially different from those expressed or implied by the
forward-looking information. The material factors or assumptions
that the Company identified and applied in drawing conclusions or
making forecasts or projections set out in the forward-looking
information (including the 2024 Business Outlook Summary) include,
but are not limited to: engagement and product pipeline
opportunities in Analytics will result in associated definitive
agreements; continued adoption of cloud subscriptions by the
Company’s customers; retention of material clients and bookings;
sustaining the Company’s software and subscription renewals;
settlement volumes in the Property Tax reportable segment occurring
on a timely basis and assessment authorities processing appeals in
a manner consistent with expectations; successful execution of the
Company’s business strategies; consistent and stable economic
conditions or conditions in the financial markets including stable
interest rates and credit availability for CRE; consistent and
stable legislation in the various countries in which the Company
operate; consistent and stable foreign exchange conditions; no
disruptive changes in the technology environment; opportunity to
acquire accretive businesses and the absence of negative financial
and other impacts resulting from strategic investments or
acquisitions on short term results; successful integration of
acquired businesses; and continued availability of qualified
professionals.
Inherent in the forward-looking information are
known and unknown risks, uncertainties and other factors that could
cause the Company’s actual results, performance or achievements, or
industry results, to differ materially from any results,
performance or achievements expressed or implied by such
forward-looking information. Those risks include, but are not
limited to: the commercial real estate market, the general state of
the economy; the Company’s financial performance; the Company’s
financial targets; the Company’s international operations;
acquisitions; business interruption events; third party information
and data; cybersecurity; industry competition; professional talent;
the Company’s subscription renewals; the Company’s sales pipeline;
client concentration and loss of material clients; the Company’s
cloud transition; product enhancements and new product
introductions; technological strategy; intellectual property;
property tax appeals and seasonality; compliance with laws and
regulations; privacy and data protection; artificial intelligence;
the Company’s use of technology; the Company’s leverage and
financial covenants; interest rates; inflation; the Company’s brand
and reputation; fixed price and contingency engagements; currency
fluctuations; credit; tax matters; health and safety hazards; the
Company’s contractual obligations; legal proceedings; regulatory
review; the Company’s insurance limits; the Company’s ability to
meet the solvency requirements necessary to make dividend payments;
the Company’s share price; the Company’s capital investments; the
issuance of additional common shares and debt, the Company’s
internal and disclosure controls; environmental, social and
governance (“ESG”) matters; climate risk; and geopolitical risks,
as well as those described in the Company’s annual publicly filed
documents, including the Annual Information Form for the year ended
December 31, 2023 (which are available on SEDAR+ at
www.sedarplus.ca).
Investors should not place undue reliance on
forward-looking information as a prediction of actual results. The
forward-looking information reflects management’s current
expectations and beliefs regarding future events and operating
performance and is based on information currently available to
management. Although The Company has attempted to identify
important factors that could cause actual results to differ
materially from the forward-looking information contained herein,
there are other factors that could cause results not to be as
anticipated, estimated or intended. The forward-looking information
contained herein is current as of the date of this press release
and, except as required under applicable law, we do not undertake
to update or revise it to reflect new events or circumstances.
Additionally, the Company undertakes no obligation to comment on
analyses, expectations or statements made by third parties in
respect of Altus Group, the Company’s financial or operating
results, or the Company’s securities.
Certain information in this press release,
including sections entitled “2024 Business Outlook Summary”, may be
considered as “financial outlook” within the meaning of applicable
securities legislation. The purpose of this financial outlook is to
provide readers with disclosure regarding Altus Group’s reasonable
expectations as to the anticipated results of its proposed business
activities for the periods indicated. Readers are cautioned that
the financial outlook may not be appropriate for other
purposes.
FOR FURTHER INFORMATION PLEASE
CONTACT:
Camilla BartosiewiczChief Communications
Officer, Altus Group(416)
641-9773camilla.bartosiewicz@altusgroup.com
Consolidated Statements of Comprehensive
Income (Loss)For the Years Ended December 31, 2023
and 2022 (Expressed in Thousands of Canadian
Dollars, Except for Per Share Amounts)
|
|
Year ended December 31, |
|
|
|
2023 |
|
2022 |
Revenues |
|
$ |
772,843 |
$ |
735,451 |
Expenses |
|
|
|
Employee compensation |
|
|
481,765 |
|
463,949 |
Occupancy |
|
|
7,848 |
|
7,032 |
Other operating |
|
|
176,484 |
|
152,893 |
Depreciation of right-of-use assets |
|
|
11,121 |
|
11,968 |
Depreciation of property, plant and equipment |
|
|
6,102 |
|
6,562 |
Amortization of intangibles |
|
|
40,717 |
|
40,995 |
Acquisition and related transition costs (income) |
|
|
3,834 |
|
4,928 |
Share of (profit) loss of joint venture |
|
|
(3,146) |
|
(3,013) |
Restructuring costs (recovery) |
|
|
388 |
|
38,896 |
(Gain) loss on investments |
|
|
301 |
|
164 |
Finance costs (income), net - leases |
|
|
1,222 |
|
1,913 |
Finance costs (income), net - other |
|
|
23,877 |
|
5,284 |
Profit (loss) before income taxes |
|
|
22,330 |
|
3,880 |
Income
tax expense (recovery) |
|
|
12,098 |
|
4,769 |
Profit (loss) for the year |
|
$ |
10,232 |
$ |
(889) |
Profit (loss) for the
year attributable to: |
|
|
|
Non-controlling interest |
|
$ |
- |
$ |
(3) |
Shareholders of the Company |
|
$ |
10,232 |
$ |
(886) |
Other comprehensive
income (loss): |
|
|
|
Items that may be reclassified
to profit or loss in subsequent periods: |
|
|
|
Currency translation differences |
|
|
(2,055) |
|
11,027 |
Items that are not
reclassified to profit or loss in subsequent periods: |
|
|
|
Changes in investments measured at fair value through other
comprehensive income, net of tax |
|
|
(1,144) |
|
(328) |
Other comprehensive income (loss), net of tax |
|
|
(3,199) |
|
10,699 |
Total comprehensive income (loss) for the year, net of
tax |
|
$ |
7,033 |
$ |
9,810 |
Comprehensive income
(loss) for the year, net of tax, attributable to: |
|
|
|
Non-controlling interest |
|
$ |
- |
$ |
(3) |
Shareholders of the Company |
|
$ |
7,033 |
$ |
9,813 |
|
|
|
|
Earnings (loss) per
share attributable to the shareholders of the Company during the
year |
|
|
|
Basic earnings (loss) per
share |
|
|
$0.23 |
|
$(0.02) |
Diluted
earnings (loss) per share |
|
|
$0.22 |
|
$(0.02) |
Consolidated Balance SheetsAs at
December 31, 2023 and 2022 (Expressed in Thousands
of Canadian Dollars)
|
|
December 31, 2023 |
December 31, 2022 |
Assets |
|
|
|
Current
assets |
|
|
|
Cash and cash equivalents |
|
$ |
41,892 |
$ |
55,267 |
Trade receivables and other |
|
|
250,462 |
|
255,518 |
Income taxes recoverable |
|
|
9,532 |
|
7,399 |
Derivative financial instruments |
|
|
677 |
|
1,694 |
Total current assets |
|
|
302,563 |
|
319,878 |
Non-current
assets |
|
|
|
Trade receivables and other |
|
|
10,511 |
|
6,969 |
Derivative financial instruments |
|
|
8,134 |
|
18,519 |
Investments |
|
|
14,509 |
|
19,313 |
Investment in joint venture |
|
|
22,655 |
|
19,509 |
Deferred tax assets |
|
|
30,650 |
|
28,855 |
Right-of-use assets |
|
|
25,282 |
|
38,873 |
Property, plant and equipment |
|
|
19,768 |
|
21,582 |
Intangibles |
|
|
270,641 |
|
292,806 |
Goodwill |
|
|
509,980 |
|
497,582 |
Total non-current assets |
|
|
912,130 |
|
944,008 |
Total assets |
|
$ |
1,214,693 |
$ |
1,263,886 |
Liabilities |
|
|
|
Current
liabilities |
|
|
|
Trade payables and other |
|
$ |
199,220 |
$ |
222,941 |
Income taxes payable |
|
|
4,710 |
|
2,063 |
Lease liabilities |
|
|
14,346 |
|
14,856 |
Total current liabilities |
|
|
218,276 |
|
239,860 |
Non-current
liabilities |
|
|
|
Trade payables and other |
|
|
22,530 |
|
27,265 |
Lease liabilities |
|
|
33,755 |
|
45,459 |
Borrowings |
|
|
307,451 |
|
317,828 |
Deferred tax liabilities |
|
|
30,144 |
|
33,604 |
Total non-current liabilities |
|
|
393,880 |
|
424,156 |
Total liabilities |
|
|
612,156 |
|
664,016 |
Shareholders’
equity |
|
|
|
Share capital |
|
|
769,296 |
|
747,668 |
Contributed surplus |
|
|
50,143 |
|
48,608 |
Accumulated other comprehensive income (loss) |
|
|
42,434 |
|
47,165 |
Retained earnings (deficit) |
|
|
(259,336) |
|
(243,571) |
Total shareholders’ equity |
|
|
602,537 |
|
599,870 |
Total liabilities and shareholders’ equity |
|
$ |
1,214,693 |
$ |
1,263,886 |
Consolidated Statements of Cash
FlowsFor the Years Ended December 31, 2023 and
2022(Expressed in Thousands of Canadian
Dollars)
|
Year ended December 31, |
|
|
2023 |
|
2022 |
Cash flows from
operating activities |
|
|
|
Profit (loss) before income taxes |
|
$ |
22,330 |
$ |
3,880 |
Adjustments for: |
|
|
|
Depreciation of right-of-use assets |
|
|
11,121 |
|
11,968 |
Depreciation of property, plant and equipment |
|
|
6,102 |
|
6,562 |
Amortization of intangibles |
|
|
40,717 |
|
40,995 |
Finance costs (income), net - leases |
|
|
1,222 |
|
1,913 |
Finance costs (income), net - other |
|
|
23,877 |
|
5,284 |
Share-based compensation |
|
|
23,068 |
|
29,380 |
Unrealized foreign exchange (gain) loss |
|
|
1,622 |
|
(3,854) |
(Gain) loss on investments |
|
|
301 |
|
164 |
(Gain) loss on disposal of right-of-use assets, property, plant and
equipment and intangibles |
|
|
454 |
|
825 |
(Gain) loss on equity derivatives |
|
|
8,599 |
|
8,740 |
Share of (profit) loss of joint venture |
|
|
(3,146) |
|
(3,013) |
Impairment of right-of-use assets, net of (gain) loss on
sub-leases |
|
|
(565) |
|
6,906 |
Net changes in: |
|
|
|
Operating working capital |
|
|
(24,117) |
|
177 |
Liabilities for cash-settled share-based compensation |
|
|
591 |
|
(5,303) |
Deferred consideration payables |
|
|
(1,610) |
|
(3,384) |
Contingent consideration payables |
|
|
(2,989) |
|
3,010 |
Net cash generated by (used
in) operations |
|
|
107,577 |
|
104,250 |
Less: interest paid on borrowings |
|
|
(20,273) |
|
(11,729) |
Less: interest paid on leases |
|
|
(1,222) |
|
(1,913) |
Less: income taxes paid |
|
|
(14,889) |
|
(14,832) |
Add: income taxes refunded |
|
|
236 |
|
1,309 |
Net cash provided by (used in) operating
activities |
|
|
71,429 |
|
77,085 |
Cash flows from
financing activities |
|
|
|
Proceeds from exercise of options |
|
|
10,417 |
|
8,161 |
Financing fees paid |
|
|
(8) |
|
(1,898) |
Proceeds from borrowings |
|
|
72,154 |
|
84,500 |
Repayment of borrowings |
|
|
(83,599) |
|
(57,136) |
Payments of principal on lease liabilities |
|
|
(15,094) |
|
(14,982) |
Proceeds from right-of-use asset lease inducements |
|
|
525 |
|
- |
Dividends paid |
|
|
(26,579) |
|
(24,699) |
Treasury shares purchased for share-based compensation |
|
|
(4,817) |
|
(4,608) |
Cancellation of shares |
|
|
(4,780) |
|
(8,003) |
Net cash provided by (used in) financing
activities |
|
|
(51,781) |
|
(18,665) |
Cash flows from
investing activities |
|
|
|
Purchase of investments |
|
|
(841) |
|
(858) |
Purchase of intangibles |
|
|
(7,664) |
|
(19,047) |
Purchase of property, plant and equipment |
|
|
(4,827) |
|
(5,433) |
Proceeds from investments |
|
|
28 |
|
22 |
Proceeds from disposal of investments |
|
|
3,471 |
|
1,112 |
Acquisitions, net of cash acquired |
|
|
(25,090) |
|
(29,853) |
Net cash provided by (used in) investing
activities |
|
|
(34,923) |
|
(54,057) |
Effect
of foreign currency translation |
|
|
1,900 |
|
(367) |
Net increase
(decrease) in cash and cash equivalents |
|
|
(13,375) |
|
3,996 |
Cash
and cash equivalents, beginning of year |
|
|
55,267 |
|
51,271 |
Cash and cash equivalents, end of year |
|
$ |
41,892 |
$ |
55,267 |
Reconciliation of Profit (Loss) to
Adjusted EBITDA and Adjusted Earnings (Loss)
The following table provides a reconciliation of
Profit (Loss) to Adjusted EBITDA and Adjusted Earnings (Loss):
|
|
Quarter ended December 31, |
Year ended December 31, |
In thousands of dollars, except for per share amounts |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Profit (loss) for the
period |
|
$ |
(140) |
$ |
(8,759) |
$ |
10,232 |
$ |
(889) |
Occupancy costs calculated on
a similar basis prior to the adoption of IFRS 16 (1) |
|
|
(2,859) |
|
(2,905) |
|
(11,902) |
|
(11,993) |
Depreciation of right-of-use
assets |
|
|
2,690 |
|
2,831 |
|
11,121 |
|
11,968 |
Depreciation of property,
plant and equipment and amortization of intangibles (7) |
|
|
12,031 |
|
11,290 |
|
46,819 |
|
47,557 |
Acquisition and related
transition costs (income) |
|
|
3,759 |
|
207 |
|
3,834 |
|
4,928 |
Unrealized foreign exchange
(gain) loss (2) |
|
|
904 |
|
(1,821) |
|
1,622 |
|
(3,854) |
(Gain) loss on disposal of
right-of-use assets, property, plant and equipment and
intangibles (2) |
|
|
(2) |
|
825 |
|
454 |
|
825 |
Share of (profit) loss of
joint venture |
|
|
(810) |
|
(786) |
|
(3,146) |
|
(3,013) |
Non-cash share-based
compensation costs (3) |
|
|
4,455 |
|
7,123 |
|
19,792 |
|
24,544 |
(Gain) loss on equity
derivatives net of mark-to-market adjustments on related RSUs and
DSUs (3) |
|
|
942 |
|
(1,890) |
|
4,594 |
|
2,481 |
Restructuring costs
(recovery) |
|
|
311 |
|
17,001 |
|
388 |
|
38,896 |
(Gain) loss on
investments (4) |
|
|
659 |
|
47 |
|
301 |
|
164 |
Other non-operating and/or
non-recurring (income) costs (5) |
|
|
2,658 |
|
2,957 |
|
13,735 |
|
11,742 |
Finance costs (income), net -
leases |
|
|
265 |
|
463 |
|
1,222 |
|
1,913 |
Finance costs (income), net -
other (8) |
|
|
8,823 |
|
7,918 |
|
23,877 |
|
5,284 |
Income
tax expense (recovery) (9) |
|
|
482 |
|
427 |
|
12,098 |
|
4,769 |
Adjusted EBITDA |
|
$ |
34,168 |
$ |
34,928 |
$ |
135,041 |
$ |
135,322 |
Depreciation of property,
plant and equipment and amortization of intangibles of non-acquired
businesses (7) |
|
|
(3,602) |
|
(2,376) |
|
(13,506) |
|
(8,955) |
Finance (costs) income, net -
other (8) |
|
|
(8,823) |
|
(7,918) |
|
(23,877) |
|
(5,284) |
(Gain) loss on hedging
transactions, including currency forward contracts and interest
expense (income) on swaps |
|
|
3,762 |
|
3,396 |
|
3,057 |
|
(6,856) |
Interest accretion on
contingent consideration payables |
|
|
- |
|
- |
|
- |
|
6 |
Tax
effect of adjusted earnings (loss) adjustments (9) |
|
|
(4,613) |
|
(7,939) |
|
(25,527) |
|
(28,511) |
Adjusted earnings (loss)* |
|
$ |
20,892 |
$ |
20,091 |
$ |
75,188 |
$ |
85,722 |
Weighted average number of shares - basic |
|
|
45,421,165 |
|
44,715,291 |
|
45,302,194 |
|
44,635,448 |
Weighted average number of restricted shares |
|
|
433,123 |
|
597,408 |
|
485,530 |
|
633,675 |
Weighted average number of shares - adjusted |
|
|
45,854,288 |
|
45,312,699 |
|
45,787,724 |
|
45,269,123 |
Adjusted earnings (loss) per
share (6) |
|
$ |
0.46 |
$ |
0.44 |
|
1.64 |
$ |
1.89 |
|
|
|
|
|
|
|
|
|
|
(1) Management uses the non-GAAP occupancy costs calculated on
a similar basis prior to the adoption of IFRS 16 when analyzing
financial and operating performance.(2) Included in other
operating expenses in the consolidated statements of comprehensive
income (loss).(3) Included in employee compensation expenses
in the consolidated statements of comprehensive income
(loss).(4) Gain (loss) on investments relates to changes in
the fair value of investments in partnerships.(5) Other
non-operating and/or non-recurring income (costs) for the quarter
and year ended December 31, 2023 relate to legal, advisory,
consulting, and other professional fees related to organizational
and strategic initiatives. For the quarter and year ended December
31, 2022, other non-operating and/or non-recurring income (costs)
relate to legal, advisory, and other consulting costs related to
organizational and strategic initiatives, including those related
to the transition of certain members of our leadership team. These
are included in other operating expenses in the consolidated
statements of comprehensive income (loss).(6) Refer to page 4
of the MD&A for the definition of Adjusted EPS.(7) For the
purposes of reconciling to Adjusted Earnings (Loss), the
amortization of intangibles of acquired businesses is adjusted from
Profit (loss) for the period. Per the quantitative reconciliation
above, we have added back depreciation of property, plant and
equipment and amortization of intangibles and then deducted the
depreciation of property, plant and equipment and amortization of
intangibles of non-acquired businesses to arrive at the
amortization of intangibles of acquired businesses.(8) For the
purposes of reconciling to Adjusted Earnings (Loss), the interest
accretion on contingent consideration payables and (gains) losses
on hedging transactions and interest expense (income) on swaps is
adjusted from Profit (loss) for the period. Per the quantitative
reconciliation above, we have added back finance costs (income),
net – other and then deducted finance costs (income), net – other
prior to adjusting for interest accretion on contingent
consideration payables and (gains) losses on hedging transactions
and interest expense (income) on swaps.(9) For the purposes of
reconciling to Adjusted Earnings (Loss), only the tax impacts for
the reconciling items noted in the definition of Adjusted Earnings
(Loss) is adjusted from Profit (loss) for the period. Please refer
to page 3 of the MD&A for the definition of Adjusted Earnings
(Loss). |
Reconciliation of Free Cash
Flow
The Company proactively manages and optimizes
Free Cash Flow available for reinvestment in the business. Free
Cash Flow is reconciled as follows:
Free Cash Flow |
|
Quarter ended December 31, |
Year ended December 31, |
In thousands of dollars |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net cash provided by (used in)
operating activities |
|
$ |
44,693 |
$ |
27,465 |
$ |
71,429 |
$ |
77,085 |
Less: Capital Expenditures |
|
|
4,552 |
|
8,285 |
|
12,491 |
|
24,480 |
Free Cash
Flow |
|
$ |
40,141 |
$ |
19,180 |
$ |
58,938 |
$ |
52,605 |
Constant Currency
The following tables provide a summarization of
the foreign exchange rates used as presented based on the average
monthly rates, and the foreign exchange rates used for Constant
Currency for currencies in which the Company primarily transacts
in:
|
Quarter ended December 31, 2023 |
Year ended December 31, 2023 |
|
As presented |
For Constant Currency |
As presented |
For Constant Currency |
Canadian Dollar |
1.000 |
1.000 |
1.000 |
1.000 |
United States Dollar |
1.361 |
1.357 |
1.349 |
1.301 |
Pound Sterling |
1.689 |
1.593 |
1.677 |
1.608 |
Euro |
1.464 |
1.386 |
1.459 |
1.370 |
Australian Dollar |
0.886 |
0.892 |
0.896 |
0.903 |
|
Quarter ended December 31, 2023 |
Year ended December 31, 2023 |
|
As presented |
For Constant Currency |
As presented |
For Constant Currency |
Canadian Dollar |
1.000 |
1.000 |
1.000 |
1.000 |
United States Dollar |
1.357 |
1.260 |
1.301 |
1.254 |
Pound Sterling |
1.593 |
1.699 |
1.608 |
1.724 |
Euro |
1.386 |
1.441 |
1.370 |
1.483 |
Australian Dollar |
0.892 |
0.918 |
0.903 |
0.942 |
Grafico Azioni Altus (TSX:AIF)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Altus (TSX:AIF)
Storico
Da Gen 2024 a Gen 2025