HALIFAX,
NS, May 25, 2023 /CNW/ - (TSXV:
NXLV) – NexLiving Communities Inc. ("NexLiving" or
the "Company") announced operating and financial results for the
three months ended March 31,
2023.
Stavro Stathonikos, President
& CEO commented: "Over the past year, we secured over 70% of
our mortgage book at an average rate of 3.79%. Our strategic
acquisitions and 13% organic growth have more than offset the
impact of higher interest rates, driving a material 103%
year-over-year increase in FFO per share. Going forward we continue
to see a positive operating environment as supply-demand imbalances
persist in our core markets."
Summary of Results
- Suite count increased to 1,166 from 705 at March 31, 2023 (+65% Y/Y) as the Company
continued to execute on its acquisition pipeline.
- Property revenue increased +65% to $4.2
million for the three-month period, driven by the
acquisition of high quality properties and rental rate
increases.
- Net operating income ("NOI") increased +82% to $2.3 million (55% margin) for the three-month
period.
- Same-property NOI increased +13.2% for the quarter, driven by a
6.0% increase in same property revenue and a 1.3% decrease in same
property expenses. The lower expenses are primarily due to a
reduction in property tax rates in New
Brunswick, partially offset by approximately $50,000 in non-recurring repair and maintenance
expense associated with damage caused by a winter storm that
affected certain New Brunswick
properties. Excluding the winter storm impact, same-property NOI
increased +17.1% for the quarter.
- The portfolio remained highly occupied at 97.1% at March 31, 2023, up 33 basis points over the
quarter. Approximately 40% of the vacant units were attributable to
the Company's suite repositioning program in the Ontario market, which is progressing ahead of
expectations. New Brunswick
occupancy was 98.1%, with approximately half of the vacancy being
related to recent acquisitions of newly constructed properties,
which the Company expects to lease up in the near term.
- FFO per share grew +103% for the quarter on a fully diluted
basis.
Q1 2023 Operating and Financial Highlights:
As at
|
31-Mar-23
|
31-Dec-22
|
Change
|
Number of
suites
|
1,166
|
1,016
|
150
|
Occupancy
|
97.1 %
|
96.8 %
|
33 bps
|
Debt to total
assets
|
67.7 %
|
66.0 %
|
171 bps
|
Debt to GBV*
|
67.3 %
|
66.0 %
|
131 bps
|
Weighted average term
to debt maturity (years)
|
4.0
|
2.8
|
1.1 yrs
|
Weighted average
contractual interest rate
|
3.60 %
|
2.99 %
|
61 bps
|
Investment
properties
|
245,636,406
|
203,071,000
|
21.0 %
|
Total assets
|
247,634,890
|
205,715,083
|
20.4 %
|
Total
liabilities
|
167,730,200
|
135,818,258
|
23.5 %
|
Net asset
value
|
79,904,690
|
69,896,825
|
14.3 %
|
Net asset value per
share
|
0.242
|
0.238
|
1.4 %
|
For the three months
ended March 31
|
2023
|
2022
|
Change
|
Rental
income
|
4,205,209
|
2,553,345
|
64.7 %
|
NOI
|
2,329,164
|
1,278,089
|
82.2 %
|
NOI margin
|
55.4 %
|
50.1 %
|
533 bps
|
Net
income
|
2,644,781
|
1,178,982
|
124.3 %
|
FFO*
|
555,613
|
270,515
|
105.4 %
|
FFO (cents per share) -
diluted*
|
0.18
|
0.09
|
102.9 %
|
Dividends declared
(cents per share)
|
0.05
|
0.05
|
-
|
Weighted average units
outstanding - diluted
|
310,060,787
|
306,345,962
|
1.2 %
|
Same property
revenue*
|
2,705,455
|
2,553,345
|
6.0 %
|
Same property operating
expenses*
|
1,259,116
|
1,275,527
|
(1.3) %
|
Same property
NOI*
|
1,446,339
|
1,277,818
|
13.2 %
|
Same property NOI
margin*
|
53.5 %
|
50.0 %
|
342 bps
|
*Refer to section
"Non-IFRS Financial Measures"
|
Acquisition Activity:
On February 28, 2023, the Company
completed the acquisition of a 100% interest in Northpoint
Management Inc. ("Northpoint") from Sheaco Holdings Inc. for
$40.0 million. Northpoint's assets
consist of two multi-family buildings comprising 75 units each
located at 2251 Mountain Rd. and 2261 Mountain Rd., Moncton, New Brunswick. The purchase price for
the acquisition was satisfied with the issuance of 37.5 million
common shares at a price of $0.20 per
share, approximately $31.7 million in
mortgage debt and cash on hand.
Findlay Estates Refinancing:
On May 25, 2023, the Company
refinanced its maturing mortgage on the Findlay Estates property
and entered into a new $18.2 million
CMHC insured mortgage for the property at a 5-year fixed interest
rate of 3.78%. The new mortgage replaced the maturing $15.2 million mortgage.
Fair Value of Investment Properties:
The Company's weighted average capitalization rate as at
March 31, 2023, decreased to 4.67%
from 4.69% at December 31, 2022. The
decrease was primarily due to the acquisition of new properties.
For the Company's same property portfolio, there was no change to
the weighted average capitalization rate of 4.74%. The gain in fair
value recorded by the Company in the three month period primarily
reflects forecasted NOI growth due to expected rent increases.
Normal Course Issuer Bid:
The Company announced today that the TSX Venture Exchange (the
"Exchange") has conditionally accepted a notice filed by the
Company of its intention to make a Normal Course Issuer Bid (the
"NCIB"). The notice provides that the Company may purchase up to
26,000,000 Common Shares ("Shares") in total, being approximately
9.8% of the Company's Public Float (as that term is defined in the
policies of the Exchange), during the 12-month period commencing
May 30, 2023 and ending May 30, 2024.
The price which the Company will pay for any such Shares will be
the prevailing market price at the time of acquisition. The actual
number of Shares which may be purchased pursuant to the NCIB and
the timing of any such purchases will be determined by management
of the Company and will be facilitated by Independent Trading Group
(ITG), Inc. All Share purchases under the NCIB will be made on the
open market through the facilities of the Exchange, other
designated exchanges and/or alternative Canadian trading systems,
and will be purchased for cancellation. The funding for any
purchase pursuant to the NCIB will be financed out of the working
capital of the Company.
The Board of Directors believes that, from time to time, the
trading price of the Common Shares does not reflect the value of
its business and its future prospects. Accordingly, depending upon
future price movements and other factors, the Board believes that
its Common Shares are an attractive investment (and an appropriate
use of available corporate funds), and that the NCIB is in the best
interests of the Company and represents an opportunity to enhance
value for its shareholders.
A copy of the Company's notice filed with the Exchange may be
obtained, by any shareholder without charge, by contacting
info@nexliving.ca.
Dividend:
The Company's board of directors has approved and declared a
dividend of $0.0005 per common share
for the quarter ending June 30, 2023,
representing $0.002 per share on an
annualized basis. The dividend is payable on, or after June 30 to shareholders of record at the close of
business on June 6.
The Company designates these taxable dividends to be paid to its
holders as eligible dividends and will notify the holders such
dividends are being paid as eligible dividends for the purposes of
the Income Tax Act (Canada) and
corresponding provincial legislation.
DSU Grants:
On May 25, 2023, the board of
directors, in accordance with the terms of the company's DSU plan,
approved the issuance of 2,779,000 DSUs to directors, management
and consultants of the company. The DSUs vest over three years in
accordance with the provisions of the company's DSU plan.
About the Company
The Company continues to execute on its plan to acquire recently
built or refurbished, highly leased multi-residential properties in
bedroom communities in Atlantic
Canada and Ontario. The
Company aims to deliver exceptional living experiences to our
residents and provide comfortable, affordable housing solutions
that cater to a wide range of demographics. The properties offer a
range of modern and updated suites, with a variety of amenities and
features that allow residents to experience a hassle-free and
maintenance-free lifestyle. The Company is committed to investing
in its properties to ensure that they are modern and up-to-date.
For its recently acquired properties in Ontario, the Company has undertaken a targeted
value-add capital program to modernize and reposition the large
existing suites. The Company currently owns 1,166 units in
New Brunswick and Ontario. NexLiving has also developed a robust
pipeline of qualified properties for potential acquisition. By
screening the properties identified to match the criteria set out
by the Company (proximity to healthcare, amenities, services and
recreation), management has assembled a significant pipeline of
potential acquisitions for consideration by the Company's Board of
Directors.
For more information about NexLiving, please refer to our
website at www.nexliving.ca and our public disclosure at
www.sedar.com.
Forward-Looking Statements
This news release forward-looking information within the meaning
of applicable Canadian securities laws ("forward-looking
statements"). All statements other than statements of
historical fact are forward-looking statements. Often, but not
always, forward-looking statements can be identified by the use of
words such as "plans", "expects", "is expected", "budget",
"scheduled", "projects", "estimates", "forecasts", "intends",
"continues", "anticipates", or "does not anticipate" or "believes"
or variations (including negative variations) of such words and
phrases, or state that certain actions, events or results "may",
"could", "should", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements contained in this news release
include, but are not limited to, management's expectations of
additional rental increases to come into effect by year end and the
further enhancement of the Company's financial results. Such
forward-looking statements are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations.
These forward-looking statements reflect the current expectations
of the Company's management regarding future events and operating
performance, but involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Actual events could differ
materially from those projected herein and depend on a number of
factors. These risks and uncertainties are more fully described in
regulatory filings, including the Company's Annual Information
Form, which can be obtained on SEDAR at www.sedar.com, under
NexLiving's profile, as well as under Risk Factors section of the
MD&A released on April 13,
2023. Although forward-looking statements contained in this
new release are based upon what management believes are reasonable
assumptions, there can be no assurance that actual results will be
consistent with these forward-looking statements. Accordingly,
readers should not place undue reliance on forward-looking
statements. The forward-looking statements in this new release
speak only as of the date of this news release. Except as required
by applicable securities laws, the Company does not undertake, and
specifically disclaims, any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future developments or otherwise, except as required by applicable
law.
Non-IFRS Financial Measures
The Company prepares and releases unaudited consolidated interim
financial statements and audited consolidated annual financial
statements prepared in accordance with IFRS. In this and other
earnings releases, as a complement to results provided in
accordance with IFRS, NexLiving discloses financial measures not
recognized under IFRS which do not have standard meanings
prescribed by IFRS. These include FFO, FFO (cents per share) –
diluted, Debt to GBV and same-property metrics (collectively, the
"Non-IFRS Measures"). These Non-IFRS Measures are further
defined and discussed in the MD&A dated April 13, 2023, which should be read in
conjunction with this news release. Since these measures are not
recognized under IFRS, they may not be comparable to similar
measures reported by other issuers. The Company presents the
Non-IFRS measures because management believes these Non-IFRS
measures are relevant measures of the ability of NexLiving to earn
revenue and to evaluate its performance and cash flows. A
reconciliation of these Non-IFRS measures is included in the
MD&A dated April 13,
2023. The Non-IFRS measures should not be construed as
alternatives to net income (loss) or cash flows from operating
activities determined in accordance with IFRS as indicators of the
Company's performance.
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 press release.
SOURCE NexLiving Communities Inc.