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TORONTO, Nov. 23, 2021 /CNW/ - Cliffside Capital Ltd.
("Cliffside" or the "Company") (TSXV: CEP) is pleased
to announce strong financial results for the third quarter ended
September 30, 2021.
As the pandemic-induced restrictions begin to ease,
Cliffside has begun to grow assets through acquisition of new
finance receivables and is pleased to report:
- Acquisition of $53.8 million of
gross finance receivables during the quarter;
- $0.8 million increase in net
income to $1.5 million for nine
months ended September 30, 20201
compared to the same period prior year, driven by better
performance and consistent with the expected profitability of the
portfolio over its life;
- Q3 2021 net loss of $159,039 was
impacted by a pre-tax amount of $1,449,937 resulting from the movement in Stage 1
provision for credit losses of $845,397, arising from acquisition of
$53.8 million in new finance
receivable, and amortization of $605,540 of financing costs incurred on securing
new funding facilities for CAR LP I; and
- Provision for credit losses declined to $2.2 million for nine months ended September 30, 2021 compared to $4.6 million in prior year, through a combination
of slower acquisition of new finance receivables during first half
of the year, governmental economic support for individuals and
closely managing borrower performance.
As previously announced, the Company successfully raised
$4.5 million in gross proceeds
through a private placement of its common shares, of which it
invested $3.75 million in a newly
formed special purpose private limited partnership, CAR LP I, for a
60% of ownership and the remaining $0.75
million is to be used for its general working capital
requirements. The new private limited partnership was formed to
acquire non-prime consumer auto loan receivables.
CAR LP I entered into a new securitization funding facility with
a Schedule 1 Bank for up to $140
million and a subordinated debt commitment for up to
$35.2 million from a private Canadian
asset management firm. The new funding structure will result in
better funding costs and improved cash flows for the Company. In
addition, the company also renewed its securitization funding
facilities with its existing third-party lenders for up to an
additional $85 million, bringing
total funding availability to up to $260.2
million pursuant to the applicable terms of the funding
facilities.
Cliffside also paid a quarterly cash dividend on the outstanding
Common Shares of $0.0025 per Common
Share (or $0.01 on an annualized
basis) on November 1, 2021, to
holders of Common Shares of record at the close of business on
Oct 1, 2021. The dividend was an
"eligible dividend" for Canadian income tax purposes.
"The third quarter was highlighted by record quarterly
acquisition of receivables of $53.8
million, strong portfolio performance, improved funding
facility terms and the announcement of a quarterly cash dividend. I
am very pleased with our results in the quarter and the momentum
gained by all the positive activities. Our focus remains on
acquiring new receivables with strong risk-adjusted returns to
drive long-term value for our shareholders" said CEO Steve Malone.
Cliffside looks to grow its asset base and net interest margin
by closely managing its credit exposure, costs, and net interest
expense.
Further information on Cliffside's financial results can be
found at www.cliffsidecapital.ca.
About Cliffside
Cliffside is focused on investing in strategic partnerships with
parties who have specialized expertise and a proven track record in
originating and servicing loans and similar types of financial
assets. Cliffside's strategy is to generate revenue as an investor,
affording its shareholders an opportunity to invest in the growing
alternative lending sector with the potential for attractive yields
and minimal operational risk while earning a reliable total return.
For more information, see Cliffside's filings on SEDAR at
www.sedar.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION: This news release includes certain
"forward-looking statements" under applicable Canadian securities
legislation. Forward-looking statements include, but are not
limited to, statements with respect to the business and operations
of Cliffside. Forward-looking statements are necessarily based upon
a number of estimates and assumptions that, while considered
reasonable, are subject to known and unknown risks, uncertainties,
and other factors which may cause the actual results and future
events to differ materially from those expressed or implied by such
forward-looking statements. Such factors include, but are not
limited to: general business, economic, competitive, political and
social uncertainties; the results of operations; potential for
conflicts of interests; the availability of appropriate finance
receivables that may be purchased by the Company's limited
partnerships under existing funding facilities; and volatility of
Common Share price and volume. There can be no assurance that such
statements will prove to be accurate or complete, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Cliffside disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
Neither the TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
SOURCE Cliffside Capital Ltd.
