TORONTO, Aug. 08, 2018 (GLOBE NEWSWIRE) — Wilmington Capital Management Inc. (“Wilmington” or the “Corporation”) reported net income attributable to shareholders for the three months ended June 30, 2018 of $0.1 million or $0.01 per share compared to a net income of $28,000 or $0.00 per share for the same period in 2017. For the six months ended June 30, 2018, the Corporation generated a net loss attributable to shareholders of $0.5 million or ($0.05) per share compared to net income of $40,000 or $0.00 per share for the same period in 2017.
SECOND QUARTER 2018 HIGHLIGHTS
The financial highlights of the Corporation and those of its associated entities are set out below. Investments in associated entities, where the Corporation is deemed to have significant influence account for the majority of the financial results and are accounted for using the equity method of accounting. Investments in entities where the Corporation does not have significant influence, are recorded at fair market value and the results of the investees are not recorded by the Corporation.
Self-storage facilities
- Real Storage Private Trust (42.5% owned – the “Trust”) generated net operating income of $2.9 million for the three months ended June 30, 2018, a 7% increase over the comparable period of 2017. The Ontario properties continued to perform well and occupancy levels and operating margins continued to stabilize in Alberta.
- In June 2018, the Trust acquired a facility in Alberta for total consideration of $4.0 million.
Private equity
- Northbridge’s assets under management amounted to approximately $39.0 million; an increase of $1.4 million from March 31, 2018, resulting from improved valuations of the underlying investments in the Northbridge 2016 Fund.
- The most recent energy fund raised in late 2016 amounted to $32.4 million of which approximately $12.6 million remains to be deployed.
Special Situations
- On November 30, 2017, the Corporation acquired an 18.15% ownership interest in the Maple Leaf Partnerships for $3.5 million. The Maple Leaf Partnerships own and operate 5 marinas, with over 100 acres of waterfront land, approximately 2,000 boat slips and development land, situated a 1.5-hour drive north of Toronto, Ontario.
- In June 2018, the Maple Leaf Partnerships made a $0.6 million semi-annual distribution to the limited partners (Wilmington’s share – $0.1 million), representing an annual return of 6% of invested capital.
- The Corporation received $38,000 in management fees from the Maple Leaf Partnerships during Q2 2018.
As at June 30, 2018, Wilmington had assets under management in its operating platforms of approximately $212.6 million ($69.0 million representing Wilmington’s share).
OPERATIONS REVIEW
Self-Storage Facilities
Real Storage Private Trust
The Trust’s revenues increased 9% and 10% during the three and six months ended June 30, 2018, respectively when compared to the same period in 2017. The increase was primarily due to a 2% increase in rents, contributions from recently acquired properties and increased ancillary revenues. Funds from operations for the three months ended June 30, 2018 decreased 4%, when compared to the same period in 2017, primarily due to a 27% increase in financing costs related to the refinancing of the eastern property portfolio completed in September 2017.
The Trust remains focused on organic growth and accretive acquisitions of properties located in areas where the Trust is active.
Private Equity
Northbridge Capital Partners Ltd. (“Northbridge”) and Northbridge Fund 2016 Limited Partnership
The Corporation subscribed for $1.0 million in Northbridge Fund 2016, of which $0.8 million had been funded as at June 30, 2018
The Corporation’s expects the Network 2012 Fund maturity date to be extended up to December 31, 2019, with its remaining share of invested capital of $1.0 million to be realized within that timeframe.
Special Situations
Maple Leaf Partnerships
On November 30, 2017, the Corporation acquired an 18.15% interest in Maple Leaf Partnerships for $3.5 million. The marina portfolio acquired by the Maple Leaf Partnerships is an historically known group of assets to the principals of the Marina Asset Manager, whose executives have a 20-year history of operating and developing marinas. While well maintained, the operations were not a core asset of the previous owner and consequently under performed. The Corporation believes that with renewed focus there is significant upside in these cash generating assets.
For the six months ended June 30, 2018, the Maple Leaf Partnerships have successfully leased approximately 82% of its marina slips (under previous ownership/management – 66%). Maple Leaf Partnerships are also focused on improving its service department performance.
A re-development plan for the Bay Moorings Marina was initiated which calls for the former 344-boat slip marina to be re-developed into a water-front residential community. Over 80% of boaters at Bay Moorings Marina have relocated to marinas owned by the Maple Leaf Partnerships.
The Corporation owns 33.3% interest in Marina Asset Manager, which has entered into an asset management agreement with the Maple Leaf Partnerships. The Marina Asset Manager is responsible for oversight of the operations of and strategic planning for the Maple Leaf Partnerships. The Corporation has received $79,000 in management fees during the six months ended June 30, 2018.
OUTLOOK
The Corporation’s focus remains on growing its two core businesses, the self-storage business and the private equity platform as well as seeking out additional opportunities where assets are undervalued. The Corporation is pleased with the turnaround achieved in the first 7 months since its acquisition of the marina portfolio in Ontario and looks forward to realizing superior returns from this investment as well as the self-storage and private equity platforms.
FINANCIAL RESULTS
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
| For the three months ended | For the six months ended | ||||||||
| June 30, | June 30, | ||||||||
| (CDN $ Thousands, except per share amounts) (unaudited) | 2018 | 2017 | 2018 | 2017 | |||||
| Revenues | 163 | 21 | 217 | 43 | |||||
| Share of net income (loss) from equity accounted investees: | |||||||||
| Real Storage Private Trust | 210 | 223 | 185 | 425 | |||||
| Northbridge Capital Partners Ltd. | 2 | (15 | ) | 3 | (43 | ) | |||
| Network 2012 Limited Partners | (6 | ) | (9 | ) | (400 | ) | (17 | ) | |
| Marina Asset Manager Inc. | — | — | (11 | ) | — | ||||
| Expenses | |||||||||
| General and administrative | (214 | ) | (247 | ) | (439 | ) | (451 | ) | |
| Stock-based compensation | (72 | ) | (23 | ) | (144 | ) | (46 | ) | |
| Income (loss) from continuing operations before income tax | 83 | (50 | ) | (589 | ) | (89 | ) | ||
| Income tax recovery (expense) | 21 | (4 | ) | 96 | (3 | ) | |||
| Net income (loss) from continuing operations | 104 | (54 | ) | (493 | ) | (92 | ) | ||
| Net income from discontinued operations, net of tax | — | 138 | — | 223 | |||||
| Net income (loss) | 104 | 84 | (493 | ) | 131 | ||||
| Net income (loss) from continuing operations attributable to: | |||||||||
| Owners of the Corporation | 104 | (54 | ) | (493 | ) | (92 | ) | ||
| Non-controlling interest | — | — | — | — | |||||
| 104 | (54 | ) | (493 | ) | (92 | ) | |||
| Net income from discontinued operations attributable to: | |||||||||
| Owners of the Corporation | — | 82 | — | 132 | |||||
| Non-controlling interest | — | 56 | — | 91 | |||||
| — | 138 | — | 223 | ||||||
| Net income (loss) per share from continuing operations: | |||||||||
| Basic | 0.01 | (0.01 | ) | (0.05 | ) | (0.01 | ) | ||
| Diluted | 0.01 | (0.01 | ) | (0.05 | ) | (0.01 | ) | ||
CONSOLIDATED BALANCE SHEETS
| (unaudited) | (audited) | ||
| As at | June 30, | December 31, | |
| (CDN $ Thousands) | 2018 | 2017 | |
| Assets | |||
| NON-CURRENT ASSETS | |||
| Investment in Real Storage Private Trust | 13,758 | 13,884 | |
| Investment in Northbridge Capital Partners Ltd. | 236 | 233 | |
| Investment in Northbridge Fund 2016 Limited Partnership | 821 | 600 | |
| Investment in Network 2012 Limited Partnership | 1,031 | 1,304 | |
| Investment in Maple Leaf Partnerships | 3,530 | 3,530 | |
| Deferred income tax assets | 664 | 623 | |
| 20,040 | 20,174 | ||
| CURRENT ASSETS | |||
| Accounts receivables and other assets | 143 | 1,637 | |
| Cash | 3,221 | 1,642 | |
| 3,364 | 3,279 | ||
| Total assets | 23,404 | 23,453 | |
| Liabilities | |||
| CURRENT LIABILITIES | |||
| Accounts payable and accrued liabilities | 580 | 633 | |
| Total liabilities | 580 | 633 | |
| Equity | |||
| Shareholders’ equity | 22,824 | 22,820 | |
| Total equity | 22,824 | 22,820 | |
| Total liabilities and equity | 23,404 | 23,453 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| For the three months ended | For the six months ended | |||||||
| June 30, | June 30, | |||||||
| (CDN $ Thousands) (unaudited) | 2018 | 2017 | 2018 | 2017 | ||||
| Net income (loss) | 104 | 84 | (493 | ) | 131 | |||
| Items that may be reclassified to net income (loss) | ||||||||
| Share of other comprehensive income (loss) from equity accounted investees | — | (37 | ) | 387 | (70 | ) | ||
| Change in fair value of Northbridge Fund 2016 | 37 | — | 21 | — | ||||
| Deferred income tax recovery (expense) | (5 | ) | 7 | (55 | ) | 5 | ||
| Other comprehensive income (loss) | 32 | (30 | ) | 353 | (65 | ) | ||
| Comprehensive income (loss) | 136 | 54 | (140 | ) | 66 | |||
| Comprehensive income (loss) attributable to: | ||||||||
| Owners of the Corporation | 136 | (2 | ) | (140 | ) | (25 | ) | |
| Non-controlling interest | — | 56 | — | 91 | ||||
| 136 | 54 | (140 | ) | 66 | ||||
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Certain statements included in this news release may constitute forward-looking statements or information under applicable securities legislation. Forward-looking statements that are predictive in nature, depend upon or refer to future events or conditions, include statements regarding the operations, business, financial conditions, expected financial results, performance, opportunities, priorities, ongoing objectives, strategies and outlook of the Corporation and its investee entities and contain words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “propose”, or similar expressions and statements relating to matters that are not historical facts constitute “forward-looking information” within the meaning of applicable Canadian securities legislation.
While the Corporation believes the anticipated future results, performance or achievements reflected or implied in those forward-looking statements are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond the Corporation’s control, which may cause the actual results, performance and achievements of the Corporation to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.
These risks and uncertainties include but are not limited to: the ability of management of Wilmington and its investee entities to execute its and their business plans; health, safety and environmental risks; uncertainties as to the availability and cost of financing; general economic and business conditions; the possibility that government policies or laws may change or governmental or regulatory approvals may be delayed or withheld; risks associated with existing and potential future law suits and regulatory actions against Wilmington; and other risks and uncertainties described in Wilmington’s filings with Canadian securities regulatory authorities.
The foregoing list of important factors that may affect future results is not exhaustive. When relying on the forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law, the Corporation undertakes no obligation to publicly update or revise any forward-looking statements or information, that may be as a result of new information, future events or otherwise. These forward-looking statements are effective only as of the date of this document.
Executive Officers of the Corporation will be available at 403-705-8038
to answer any questions on the Corporation’s financial results.