TORONTO, ONTARIO today reported net earnings for the year of
$817,000 ($0.02 per share) compared with $802,000 ($0.02 per share)
in 2006.
Operating activities for the year ended December 31, 2007
generated cash of $4,596,000 compared with $229,000 for the same
period in 2006.
Real Estate
Revenue from real estate activities in 2007 consisted of the
recovery of $178,000 of levy credits relating to a property that
had previously been sold. This compares with recoveries of $875,000
in 2006 which included $484,000 of compensation from a municipality
for an over-dedication of parkland, $241,000 in recovery of levy
credits, $114,000 for a reduction in previous development cost
estimates and $36,000 from a recovery of property taxes.
Interest Income
Interest earned during 2007 on outstanding mortgage receivables
and cash surpluses was $322,000 compared with $354,000 in 2006.
Jancor Companies, Inc. (Jancor)
In April 2007, Jannock Properties received proceeds of
US$1,003,000 (Cdn$1,162,000) as its share of an interest payment
that was received by Jancor's subordinated lender. These proceeds
are part of an arrangement with the owners, and the affiliated
subordinated lender of Jancor, whereby Jannock Properties
participates in any proceeds to the subordinated lender after they
reach a threshold level equal to the principal amount of the
subordinated debt of US$16,717,000. In 2006 Jannock Properties
received US$118,000 (Cdn$132,000) after cumulative receipts by
Jancor's subordinated lender first exceeded the threshold
level.
No further payments were received in 2007 as Jancor obtained
deferrals on the payments of principal and interest that were to be
made later in the year on its subordinated debt. Repayment of
principal on the subordinated debt has been extended until
September 2011 and interest payments have been deferred until
September 2008.
With the deterioration in the US residential construction
markets, it is not possible to predict either the timing or the
amount of proceeds that Jannock Properties may receive from its
participation rights in the future.
Jannock Properties has not been able to determine how much of
the proceeds that it has received to date would be taxable and has
consequently made full tax provisions against the amounts received.
An objection to the treatment of the proceeds received in 2006 has
been filed with the Federal and Ontario tax authorities and is
still pending.
Preliminary indications are that earnings before interest,
taxes, depreciation and amortization at Jancor for 2007 will be a
little better than the level achieved in 2006.
General and Administration Expenses
Administrative and other expenses in 2007 were $309,000 and
included $27,000 for an objection that was filed on the income tax
treatment of the proceeds that were received from Jancor's
subordinated lender in 2006. This compares with expenses of
$336,000 in 2006.
In 2007, the Corporation incurred costs of $54,000 for foreign
exchange losses resulting from a delay in converting the Jancor US
debt participation proceeds to Canadian funds.
Cash Flows
Net operating cash inflows in 2007 were $4,596,000 compared with
$229,000 in 2006.
Cash receipts in 2007 were $5,370,000 and included the
collection of mortgages receivable of $3,670,000, recovery of levy
credits of $178,000, interest received on mortgages receivable and
cash surpluses of $360,000 and proceeds from Jancor's subordinated
lender of $1,162,000. In 2006 cash receipts were $1,761,000 and
included the collection of a mortgage receivable of $513,000,
parkland compensation of $484,000, recovery of levy credits of
$241,000 and recovery of property taxes and other of $36,000,
interest received on mortgages receivable and cash surpluses of
$355,000 and proceeds from Jancor's subordinated lender of
$132,000.
Cash payments in 2007 were $774,000 and included income tax
payments on 2006 and 2007 income of $382,000, interest payments of
$10,000 and administrative expenditures of $376,000. In 2006, cash
payments were $1,532,000 and included income tax payments on 2005
and 2006 income of $1,177,000 and administrative expenditures of
$336,000.
Distributions
In 2007 the Corporation distributed $1,781,000 (equivalent to
$0.05 per Class B common share) to shareholders through the
redemption of Class A special shares. This is the same amount that
was distributed to shareholders in 2006.
At the present time, the Corporation does not intend to make any
further distributions until it has obtained a better assessment of
the likelihood of receiving further proceeds from the subordinated
lender to Jancor.
Corporate Items
The Corporation will hold its Annual General Meeting at 10.00
a.m. on Thursday May 8, 2008. The number of Class B common shares
outstanding is 35,631,932. Currently there are 65 Class A special
shares that are associated with each common Class B share. The
combination of one Class B common and 65 Class A special shares is
listed as a unit on the TSX Ventures Exchange (trading symbol:
JPL.UN).
The Corporation is headquartered in Mississauga, Ontario. The
mandate for the Corporation is to dispose of its assets in a manner
that maximizes value and distributes the net proceeds realized from
those assets to shareholders in a timely fashion.
Forward-looking statements contained in this news release
involve risks and uncertainties that could cause actual results to
differ materially from those contemplated by such statements.
Factors that could cause such differences include local real estate
markets, zoning applications, changes in interest rates and general
economic conditions. In addition, there are risk factors described
from time to time in the reports and disclosure documents filed by
Jannock Properties Limited with Canadian and U.S. securities
regulatory agencies and commissions.
JANNOCK PROPERTIES LIMITED
Balance Sheet
(in thousands of Canadian dollars)
December 31 December 31
2007 2006
----------- ------------
Assets
Mortgages receivable $ - $ 3,670
Other assets 21 62
Future income tax assets 34 -
Cash and cash equivalents 5,825 3,010
----------- ------------
----------- ------------
$ 5,880 $ 6,742
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Liabilities
Accounts payable and accrued liabilities $ 27 $ 47
Income taxes payable 470 91
Future income tax liabilities - 257
----------- ------------
----------- ------------
$ 497 $ 395
----------- ------------
Shareholders' Equity
Capital stock $ 23,115 $ 24,896
Contributed surplus 6,868 6,868
Deficit (24,600) (25,417)
----------- ------------
----------- ------------
$ 5,383 $ 6,347
----------- ------------
----------- ------------
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$ 5,880 $ 6,742
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JANNOCK PROPERTIES LIMITED
Statement of Income and Deficit
(in thousands of Canadian dollars, except per share amounts)
Year ended December 31
-------------------------
2007 2006
---------- ----------
Revenue
Interest income $ 322 $ 354
Cost of sales - recovery of prior years'
cost of sales amount 178 875
Recovery on Jancor Companies, Inc. 1,162 132
---------- ----------
1,662 1,361
---------- ----------
Expenses
General and administrative expenses 309 336
Interest 10 -
Foreign exchange loss 54 (1)
---------- ----------
373 335
---------- ----------
---------- ----------
Income before income taxes 1,289 1,026
Income taxes provided/(recovered) - current 762 321
- future (290) (97)
---------- ----------
- total 472 224
---------- ----------
Net income for the year $ 817 $ 802
Deficit - Beginning of year $(25,417) $ (26,219)
---------- ----------
Deficit - End of year $(24,600) $ (25,417)
---------- ----------
---------- ----------
Basic income per share $ 0.02 $ 0.02
---------- ----------
---------- ----------
JANNOCK PROPERTIES LIMITED
Statement of Cash Flows
(in thousands of Canadian dollars)
Year ended December 31
------------------------
2007 2006
----------- -----------
Cash provided by (used in)
Operating activities
Cash receipts
Recovery of prior years' cost of sale amounts $ 178 $ 761
Collection of mortgages receivable 3,670 513
Interest received 360 355
Recovery on Jancor Companies, Inc. 1,162 132
----------- -----------
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5,370 1,761
----------- -----------
Cash payments
Income taxes (382) (1,177)
Interest payments (10) -
Expenditures on land development (6) (19)
Other payments (376) (336)
----------- -----------
(774) (1,532)
----------- -----------
----------- -----------
4,596 229
----------- -----------
Financing activities
Redemption of capital stock (1,781) (1,781)
----------- -----------
(1,781) (1,781)
----------- -----------
----------- -----------
----------- -----------
Increase/(decrease) in cash and cash
equivalents 2,815 (1,552)
Cash and cash equivalents - Beginning of year 3,010 4,562
----------- -----------
Cash and cash equivalents - End of year $ 5,825 $ 3,010
----------- -----------
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Contacts: Jannock Properties Limited Brian Jamieson (905)
821-4464 Email: bjamie@jannockproperties.com
Jannock Pptys Ltd (TSXV:JPL.UN)
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