BRE Bridgemarq Real Estate Services Inc

TORONTO, March 14, 2025 /CNW/ - Bridgemarq Real Estate Services Inc. ("Bridgemarq" or the "Company") (TSX: BRE) reported its annual consolidated financial results and announced a monthly dividend to holders of the Company's restricted voting shares.

HIGHLIGHTS

• On March 31, 2024, the Company significantly grew its asset base through the acquisition of certain real estate brokerages from Brookfield Business Partners ("Brookfield") and internalization of its management team and settled deferred distributions owing to Brookfield for total proceeds of approximately $40.9 million.
• Revenue for 2024 amounted to $350.7 million, compared to the $48.5 million generated in the prior year, due to the inclusion of the operating results of the acquired businesses from April 1, 2024. 
• The Company generated a net loss of $10.3 million or $1.09 per share in 2024, on a fully diluted basis, compared to net earnings of $4.0 million or $0.42 per share in 2023, as a result of a loss of $9.3 million on the valuation of the Exchangeable Units compared to a loss of $1.1 million in 2023.
• Cash provided by operating activities increased by $3.4 million in 2024, compared to the prior year, due primarily to a reduction in working capital requirements.
• Adjusted Net Earnings amounted to $7.3 million in 2024, compared to $12.4 million in 2023, primarily due to higher interest expenses and increased impairment and amortization of intangible assets acquired as part of the transaction, partly offset by the operating results of the acquired businesses.
• The Company generated $16.8 million in free cash flow in 2024, compared to $18.1 million in 2023.
• The Board of Directors approved a dividend to shareholders of $0.1125 per Restricted Voting Share, payable on April 30, 2025, to shareholders of record on March 31, 2025.

FOURTH QUARTER OPERATING RESULTS

For the year ending December 31, 2024, revenues were $350.7 million, compared to $48.5 million generated in 2023. The increase is substantially due to the inclusion of the operating results of the acquired businesses from April 1, 2024. Franchise fees for the year increased marginally as the benefits of both the fee increases implemented at the start of the year and improved market conditions were partly offset by the elimination of the franchise fee revenues previously received from the acquired businesses in the consolidated accounts of the Company. The franchise fees received from the acquired businesses were treated as third party revenue prior to April 1, 2024. In the fourth quarter, revenues amounted to $101.5 million, compared to $10.8 million in the fourth quarter of 2023.

In 2024, the Company generated a net loss of $10.3 million or $1.09 per fully diluted restricted voting share ("Share"), compared to net earnings of $4.0 million or $0.42 per Share in 2023. In the fourth quarter, the Company generated a net loss of $9.6 million or $1.02 per Share, compared to a net loss of $1.0 million or $0.11 per Share in the same period in the prior year. The lower earnings are largely driven by a non-cash, non-operating loss on the fair valuation of the Exchangeable Units, which is directly related to changes in the market price of Bridgemarq's Restricted Voting Shares, and increased depreciation and amortization expense associated with the acquired brokerage business.

Cash flow from operations increased by $3.4 million in 2024, compared to the prior year, due to increased interest income and a reduction in working capital partly offset by higher interest costs. For the quarter, cash provided by operating activities amounted to $1.8 million, compared to $2.3 million in the fourth quarter of 2023, primarily driven by higher interest payments. 

Adjusted Net Earnings, which measures earnings of the business before certain non-cash gains and losses on a fully diluted basis, amounted to $7.3 million in 2024, compared to $12.4 million in 2023. For the quarter, Adjusted Net Earnings amounted to a loss of $0.4 million, compared to earnings of $2.2 million in Q4 of 2023. The reduction in Adjusted Net Earnings is primarily due to higher interest rates, increased non-cash amortization of intangible assets acquired as part of the transaction and non-cash impairment charges, partly offset by the positive operating results of the acquired businesses. Adjusted Net Earnings per Share is also lower due to the dilutive impact of issuing additional Exchangeable Units to complete the transaction.

The Company generated $16.8 million in free cash flow in 2024, compared to $18.1 million in 2023. In the fourth quarter, the Company generated $1.8 million, compared to $3.6 million in the same quarter the year prior.

"This past year was an exciting year of growth for Bridgemarq," said Spencer Enright, Chief Executive Officer, Bridgemarq Real Estate Services Inc. "The expansion and diversification of our business positions us to more fully participate across a broader spectrum of the home buying and selling experience. We have now fully integrated the acquired operations and are well positioned to be successful in the Canadian real estate market in 2025 and beyond. And, as a completely Canadian company, operating coast to coast, we are proud to offer Canadians bespoke solutions that are truly made in Canada."

MARKET UPDATE 

The Canadian residential real estate market expanded by 50% in Q4 of 2024 compared to the same quarter in 2023, and 12% for the full year compared to the year prior.¹ According to the Canadian Real Estate Association, the number of residential home resale transactions increased 38% in the fourth quarter, while the national average selling price increased 9%. On a quarter-over-quarter basis, the average selling price increased by 7% despite a slight dip in sales volumes. For the full year, the national average selling price increased 2% compared to 2023, while transaction volumes rose by 11%.

Spurred by declining borrowing rates, homebuyer activity increased in 2024 compared to the previous year. Since June of 2024, the Bank of Canada has been gradually reducing its target for the overnight lending rate, including the latest update on Wednesday. The Bank's key lending rate currently sits at 2.75%.² Despite an increase in housing supply in most major markets across the country, average home prices have continued to rise modestly.

Historically, housing market activity picks up in the spring, although trade tensions with the United States have added an additional element of uncertainty in the market. The governing council of the Bank of Canada has noted that it will proceed carefully with any further changes to interest rates, as it assesses both the upward pressures on inflation from higher costs and the downward pressures from weaker demand.

"In recent months, declining borrowing rates have encouraged more buyers off the sidelines," commented Mr. Enright. "Housing market activity this spring could be more difficult to accurately predict given the political events currently unfolding, but regardless Bridgemarq's unique operating model is well positioned to succeed in all market conditions and across all market cycles."

CASH DIVIDEND

The Company declared a cash dividend of $0.1125 per Restricted Voting Share payable on April 30, 2025, to shareholders of record on March 31, 2025. Total dividends paid during 2024 amounted to $1.35 per Restricted Voting Share, consistent with 2023.

THE COMPANY NETWORK

As at December 31, 2024, the Franchise Network was comprised of 20,283 REALTORS^® operating under 280 franchise agreements from 684 locations. The Company's corporately owned real estate brokerages operate 36 real estate locations in the Greater Toronto Area, Greater Vancouver and within the province of Quebec, with 2,706 sales representatives.

CONFERENCE CALL

Bridgemarq Real Estate Services Inc. will host a conference call on Friday, March 14, 2025, at 10 a.m. Eastern Daylight Time to discuss its fourth quarter financial results.

To access the call by telephone, please dial 1-888-699-1199 or 416-945-7677.

To access the call online, please visit https://app.webinar.net/KD0nq2zq1ve.

Please connect approximately ten minutes prior to the beginning of the call to ensure participation.

A transcript of the conference call will be available on the Company's website by Wednesday, March 19, 2025.

NON-GAAP FINANCIAL MEASURES

This news release makes reference to Free Cash Flow, Adjusted Net Earnings and Adjusted Net Earnings per Share, which are non-GAAP financial measures. These financial measures do not have any standardized meaning under International Financial Reporting Standards and, accordingly, may not be comparable to similar measures used by other companies.

Free Cash Flow represents operating income before deducting interest on leases, depreciation and amortization and net impairment and write-off of intangible assets, minus current income tax expense, minus additions to property and equipment and intangible assets, minus repayment of contract transfer obligations, minus lease payments. The Company believes that Free Cash Flow is a useful supplemental measure of performance as it provides investors with an indication of the amount of cash flow generated by the Company which is available to holders of Restricted Voting Shares and Exchangeable Unitholders, subject to working capital and other investment requirements and principal debt repayments, if any. Please see Free Cash Flow reconciled to Cash Flow from Operating Activities for a reconciliation of Free Cash Flow to cash flow from operating activities in the consolidated statements of cash flows and Free Cash Flow for further information about Free Cash Flow.

Adjusted Net Earnings represents operating income minus income tax expense. Adjusted Net Earnings per Share is calculated by dividing Adjusted Net Earnings by the total number of Restricted Voting Shares outstanding, on a diluted basis. Management believes that Adjusted Net Earnings and Adjusted Net Earnings per Share are useful supplemental measures as they provide investors with an indication of the operating results of the Company on a fully-diluted basis (excluding certain non-cash or non-recurring items that do not directly impact the ongoing operations of the Company) as if all Exchangeable Units had been converted into Restricted Voting Shares at the beginning of the period presented. Non-cash and non-recurring items excluded from the calculation of Adjusted Net Earnings are comprised of gains or losses on interest rate swaps, gains on settlement of liabilities and losses on amendment of the Company's debt facilities.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking information and other "forward-looking statements". Words such as "assesses", "be", "believes", "beyond", "could", "further", "growth", "in", "may", "may not", "participate", "positioned", "positions", "predict", "proceed", "to", "uncertainty", "will", and other expressions that are predictions of or could indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those indicated in the forward-looking statements include, but are not limited to: any resurgence of COVID-19 (including any impact of COVID-19 on the economy and the Company's business), changes in the supply or demand of houses for sale in Canada or in any particular region within Canada, changes in the selling price for houses in Canada or any particular region within Canada, changes in the Company's cash flow, changes in the Company's strategy with respect to and/or ability to pay dividends, changes in the productivity of the Company's REALTORS® or the commissions they charge their customers, changes in government policy, laws or regulations which could reasonably affect the housing markets in Canada or the economy in general, changes to any products or services developed or offered by the Company, consumer response to any changes in the housing markets in Canada or any changes in government policy, laws or regulations, changes in general economic conditions (including interest rates, consumer confidence and other general economic factors or indicators), changes in global and regional economic growth, changes in the demand for and prices of natural resources on local and international markets, the level of residential real estate transactions, competition from other real estate brokers or from discount and/or Internet-based real estate alternatives, the closing of existing real estate brokerage offices, other developments in the residential real estate brokerage industry or the Company that reduce the number of REALTORS® in the Company's network or revenue from the Company's network of REALTORS®, our ability to maintain brand equity through the use of trademarks, the methods used by shareholders or analysts to evaluate the value of the Company and its publicly-traded securities, changes in tax laws or regulations, and other risks detailed in the Company's annual information form, which is filed with securities commissions and posted on SEDAR+ at www.sedarplus.ca. Forward-looking information is based on various material factors or assumptions, which are based on information currently available to management. Material factors or assumptions that were applied in drawing conclusions or making estimates set out in the forward-looking statements include, but are not limited to: anticipated economic conditions, anticipated impact of government policies, anticipated financial performance, anticipated market conditions, business prospects, the successful execution of the Company's business strategies and recent regulatory developments, including as the foregoing relate to COVID-19. The factors underlying current expectations are dynamic and subject to change. Although the forward-looking statements contained in this release are based upon what management believes are reasonable assumptions, the Company cannot assure readers that actual results will be consistent with these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

About Bridgemarq Real Estate Services

Bridgemarq is a leading provider of services to residential real estate brokers and a network of more than 21,000 REALTORS^® through its franchise network and corporately owned brokerages. We operate in Canada under the Royal LePage^®, Proprio Direct^®, Via Capitale^®, Johnston & Daniel^® and Les Immeubles Mont-Tremblant brands. For more information, go to www.bridgemarq.com.

BRIDGEMARQ® & DESIGN / BRIDGEMARQ REAL ESTATE SERVICES®, VIA CAPITALE®, JOHNSTON & DANIEL® and PROPRIO DIRECT® are registered trademarks of Residential Income Fund L.P. and are used under licence. ROYAL LEPAGE® is a registered trademark of Royal Bank of Canada and is used under licence.

The trademarks REALTOR®, REALTORS® and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA.

SOURCE Bridgemarq Real Estate Services Inc.