Altus Group Limited (ʺAltus Groupʺ or “the Company”) (TSX: AIF), a
leading provider of software, data solutions and independent
advisory services to the global commercial real estate industry,
announced today its financial and operating results for the third
quarter ended September 30, 2021.
Unless otherwise indicated, all amounts are in
Canadian dollars and percentages are in comparison to the same
period in 2020. Non-IFRS measures and Altus Analytics selected
metrics are defined at the end of this press release.
Summary:
- Consolidated revenues were $151.8 million, up 12.5% (15.5% on a
constant currency basis).
- Consolidated profit from continuing operations, in accordance
with IFRS, was $(0.3) million, down from $9.3 million.
- Consolidated earnings per share from continuing operations, in
accordance with IFRS, was $(0.01) per share basic and diluted,
compared to $0.23 per share basic and $0.22 per share diluted.
- Consolidated Adjusted EBITDA was $24.4 million, up 1.5% (5.0%
on a constant currency basis).
- Adjusted EPS was $0.39 down 2.5% from $0.40.
- Altus Analytics revenues were $65.1 million, up 32.4% (38.5% on
a constant currency basis), of which Over Time revenues were $55.1
million, up 33.2% (38.2% on a constant currency basis), and
Adjusted EBITDA was $11.7 million, up 22.3% (29.2% on a constant
currency basis).
- Altus Analytics Bookings totaled $20.5 million, up 81.6% (88.7%
on a constant currency basis), of which organic growth in Bookings
was 70.0% (77.0% on a constant currency basis).
- CRE Consulting revenues were $86.8 million, up 1.1% (2.3% on a
constant currency basis) and Adjusted EBITDA was $22.5 million, up
1.4% (2.3% on a constant currency basis) reflecting revenue
variability at its Property Tax business.
- Subsequent to quarter end on October 4, Altus completed a
$172.5 million equity financing, including the issuance of
approximately 2.8 million shares priced at $62.00 per common
share.
- Subsequent to quarter end on November 4, Altus further amended
its bank credit facilities to increase borrowing capacity to $400
million, with certain provisions to further increase the limit to
$450 million.
- Subsequent to quarter end on November 11, Altus announced the
strategic acquisition of Scryer, Inc. (dba Reonomy) (“Reonomy”) for
US$201.5 million (approximately C$249.5 million) (on a
cash-free/debt-free basis) funded by cash on hand and borrowings
under its credit facilities, subject to adjustments. The
acquisition will strengthen the Company’s CRE data and analytics
capabilities and strategically position Altus for accelerated
transformative innovation in AI predictive data analytics.
- Full year 2021 consolidated revenue guidance increased to $621
– $626 million, while Adjusted EBITDA guidance was updated to $105
– $110 million.
- At the end of the quarter Bank debt was $246.9 million
(representing a funded debt to EBITDA leverage ratio of 2.05 times)
and cash and cash equivalents was $66.4 million. Factoring in the
acquisition of Reonomy, funded debt to EBITDA leverage is expected
to increase to approximately 3.0x.
Mike Gordon, Chief Executive Officer of
Altus Group said:
“Our solid sales execution and improving
operational efficiencies continue to drive strong results, enabling
us to deliver better than expected financial results for the third
quarter. We enjoyed another quarter of double-digit revenue growth,
including our Altus Analytics organic constant currency growth rate
rebounding to the highest level in 4 years. The exceptionally
strong growth in Bookings demonstrates the robust market demand
across our key end markets and validates the returns from the
investments we made this year in our go-to-market plans and product
innovation.
With our organic performance as strong as ever
and with the CRE industry at a pivotal inflection point in its
maturity, we are accelerating our plans to pursue transformative
innovation in AI predictive data analytics through the strategic
acquisition of Reonomy. As a result of exceeding our financial
guidance for the third quarter and factoring in the acquisition of
Reonomy, I’m pleased to raise our revenue outlook for the year,
reflecting year-over-year consolidated topline growth to a range of
10.5% - 11.5%.”
Summary of Q3 2021 Operating and
Financial Performance by Business Segment:
All amounts are unaudited, in Canadian dollars
and percentages are in comparison to the same period in 2020, as
applicable. Note that the quarterly 2020 Adjusted EBITDA results by
business segment have been restated to reflect accrued variable
compensation costs within the respective business units, versus the
former treatment of accruing under the Corporate segment and
reallocating in the fourth quarter. The selected financial
information included in this press release is qualified in its
entirety by, and should be read together with the unaudited interim
condensed consolidated financial statements and the MD&A for
the three and nine months ended September 30, 2021, which can be
found in the disclosure documents filed by the Company with the
securities regulatory authorities at sedar.com.
CONSOLIDATED |
Three months ended September 30, |
|
Nine months ended September 30, |
|
In thousands of dollars |
|
2021 |
|
|
2020 |
|
% Change |
|
Constant Currency % Change |
|
|
2021 |
|
|
2020 |
|
% Change |
|
Constant Currency % Change |
|
Revenues |
$ |
151,797 |
|
$ |
134,950 |
|
12.5% |
|
15.5% |
|
$ |
462,478 |
|
$ |
421,676 |
|
9.7% |
|
13.0% |
|
Adjusted EBITDA |
$ |
24,415 |
|
$ |
24,047 |
|
1.5% |
|
5.0% |
|
$ |
83,894 |
|
$ |
72,194 |
|
16.2% |
|
20.1% |
|
Adjusted EBITDA Margin |
|
16.1% |
|
|
17.8% |
|
|
|
|
18.1% |
|
|
17.1% |
|
|
|
Profit (loss) from continuing operations |
$ |
(295) |
|
$ |
9,297 |
|
|
|
$ |
18,683 |
|
$ |
22,387 |
|
|
|
Earnings (loss) per share from continuing operations: |
|
|
|
|
|
|
|
|
Basic |
$ |
(0.01) |
|
$ |
0.23 |
|
|
|
$ |
0.46 |
|
$ |
0.56 |
|
|
|
Diluted |
$ |
(0.01) |
|
$ |
0.22 |
|
|
|
$ |
0.44 |
|
$ |
0.54 |
|
|
|
Adjusted |
$ |
0.39 |
|
$ |
0.40 |
|
|
|
$ |
1.48 |
|
$ |
1.23 |
|
|
|
Dividends declared per share |
$ |
0.15 |
|
$ |
0.15 |
|
|
|
$ |
0.45 |
|
$ |
0.45 |
|
|
|
Altus Analytics |
Three months ended September 30, |
|
Nine months ended September 30, |
|
In thousands of dollars |
|
2021 |
|
|
2020 |
|
% Change |
|
Constant Currency % Change |
|
|
2021 |
|
|
2020 |
|
% Change |
|
Constant Currency % Change |
|
Revenues |
$ |
65,101 |
|
$ |
49,177 |
|
32.4% |
|
38.5% |
|
$ |
178,677 |
|
$ |
152,192 |
|
17.4% |
|
24.2% |
|
Adjusted EBITDA |
$ |
11,728 |
|
$ |
9,588 |
|
22.3% |
|
29.2% |
|
$ |
30,869 |
|
$ |
26,030 |
|
18.6% |
|
27.6% |
|
Adjusted EBITDA Margin |
|
18.0% |
|
|
19.5% |
|
|
|
|
17.3% |
|
|
17.1% |
|
|
|
Selected Metrics* |
|
|
|
|
|
|
Bookings |
$ |
20,525 |
|
$ |
11,303 |
|
81.6% |
|
88.7% |
|
$ |
63,946 |
|
$ |
39,122 |
|
63.5% |
|
74.1% |
|
Over Time revenues |
$ |
55,093 |
|
$ |
41,371 |
|
33.2% |
|
38.2% |
|
$ |
148,004 |
|
$ |
124,210 |
|
19.2% |
|
25.4% |
|
AE software maintenance retention rate |
|
95% |
|
|
94% |
|
|
|
|
94% |
|
|
95% |
|
|
|
Geographical revenue split |
|
|
|
|
|
|
|
|
North America |
|
73% |
|
|
81% |
|
|
|
|
75% |
|
|
83% |
|
|
|
International |
|
27% |
|
|
19% |
|
|
|
|
25% |
|
|
17% |
|
|
|
Cloud adoption rate (as at end of period) |
|
|
|
|
|
29% |
|
|
10% |
|
|
|
*Refer to the definitions of these Selected
Metrics below or on page 4 of the MD&A for the three and nine
months ended September 30, 2021
CRE Consulting |
Three months ended September 30, |
|
Nine months ended September 30, |
|
In thousands of dollars |
|
2021 |
|
|
2020 |
|
% Change |
|
Constant Currency % Change |
|
|
2021 |
|
|
2020 |
|
% Change |
|
Constant Currency % Change |
|
Revenues |
|
|
|
|
|
|
|
|
Property Tax |
$ |
58,488 |
|
$ |
58,215 |
|
0.5% |
|
2.0% |
|
$ |
199,851 |
|
$ |
187,685 |
|
6.5% |
|
8.6% |
|
Valuation and Cost Advisory |
|
28,283 |
|
|
27,634 |
|
2.4% |
|
3.0% |
|
|
84,176 |
|
|
82,028 |
|
2.6% |
|
2.1% |
|
Revenues |
$ |
86,771 |
|
$ |
85,849 |
|
1.1% |
|
2.3% |
|
$ |
284,027 |
|
$ |
269,713 |
|
5.3% |
|
6.6% |
|
Adjusted EBITDA |
|
|
|
|
|
|
|
|
Property Tax |
$ |
18,596 |
|
$ |
18,270 |
|
1.8% |
|
2.8% |
|
$ |
69,394 |
|
$ |
58,840 |
|
17.9% |
|
19.2% |
|
Valuation and Cost Advisory |
|
3,882 |
|
|
3,904 |
|
(0.6%) |
|
0.2% |
|
|
10,492 |
|
|
9,041 |
|
16.0% |
|
15.5% |
|
Adjusted EBITDA |
$ |
22,478 |
|
$ |
22,174 |
|
1.4% |
|
2.3% |
|
$ |
79,886 |
|
$ |
67,881 |
|
17.7% |
|
18.7% |
|
Adjusted EBITDA Margin |
|
25.9% |
|
|
25.8% |
|
|
|
|
28.1% |
|
|
25.2% |
|
|
|
Q3 2021 Review
On a consolidated basis, revenues were $151.8
million, up 12.5% year-over-year (15.5% on a constant currency
basis) and Adjusted EBITDA was $24.4 million, up 1.5% (5.0% on a
constant currency basis). Organic revenue growth was 4.9% (7.9% on
a constant currency basis) and organic Adjusted EBITDA growth was
negative 6.3% (negative 2.7% on a constant currency basis).
Adjusted EPS was $0.39, compared to $0.40 in the third quarter of
2020.
Consolidated profit from continuing operations,
in accordance with IFRS, was $(0.3) million, down from $9.3 million
in the same period in 2020. In addition to the higher Adjusted
EBITDA performance, profit from continuing operations was impacted
by additional costs related to the June
13, 2021 cybersecurity incident net of insurance proceeds
received or receivable, acquisition and related transition
costs, share-based compensation costs, amortization of
acquisition-related intangibles, and lower gains on
equity derivatives and foreign exchange. This was offset by lower
restructuring costs related to the 2020 global restructuring
program and additional gains on the Company’s partnership
investments. Profit from continuing operations was $(0.01) per
share, basic and diluted, compared to $0.23 per share basic and
$0.22 per share diluted, in the same period in 2020.
Altus Analytics revenues increased by 32.4% to
$65.1 million (38.5% on a constant currency basis). Organic
revenues were up 14.5% (20.6% on a constant currency basis). The
acquisitions of Finance Active and StratoDem Analytics represented
17.9% of the 32.4% revenue growth. Over Time revenues were $55.1
million, up 33.2% (38.2% on a constant currency basis). Adjusted
EBITDA was $11.7 million, up 22.3% (29.2% on a constant currency
basis), of which organic growth was 6.0% (12.9% on a constant
currency basis).
- The healthy growth in Over Time revenues benefitted from
double-digit organic revenue growth from software, data and
Appraisal Management solutions and also benefitted from the
acquisition of Finance Active. Sequentially, Over Time revenues
grew 9.9% (8.2% on a constant currency basis) from $50.1 million in
the second quarter of 2021.
- In addition to the Over Time revenue growth, total revenue
growth in the third quarter also benefitted from increased
year-over-year revenues from strong performance in software
consulting services.
- Bookings in the third quarter increased by 81.6% year-over-year
to $20.5 million (88.7% on a constant currency basis). Organic
growth in Bookings was 70.0% (77.0% on a constant currency basis).
- The transition of ARGUS Enterprise (“AE”) to cloud
subscriptions progressed at a healthy pace throughout the third
quarter with continued momentum in migrating existing customers
from the on-premise product and selling cloud-enabled AE to new
customers. As at the end of the third quarter, 29% of Company’s
total AE user base had been contracted on ARGUS Cloud, compared to
26% the previous quarter, 14% at the start of the year, and 10% at
the end of the third quarter of 2020.
- Adjusted EBITDA improved on higher revenues, however was
impacted by the purchase price accounting adjustment of $1.0
million to Finance Active’s deferred revenues as well as higher
investment related to accelerating the Company’s data strategy. The
purchase price accounting adjustment had a 1% impact to Adjusted
EBITDA margin.
CRE Consulting revenues were $86.8 million, up
1.1% (2.3% on a constant currency basis) and Adjusted EBITDA was
$22.5 million, up 1.4% (2.3% on a constant currency basis),
reflecting revenue variability at its Property Tax business.
- Property Tax revenues were $58.5 million, up 0.5% (2.0% on a
constant currency basis) and Adjusted EBITDA was $22.5 million, up
1.8% (2.8% on a constant currency basis). COVID-related disruptions
and appeal settlement delays in the U.S. and in the U.K. caused
some revenue variability, causing anticipated third quarter
revenues to be deferred into future quarters. As a result, revenues
in the U.S. and the U.K. were impacted (on par with the prior year
on a constant currency basis), offset by healthy growth in Canada
driven by strong performance in Ontario and Alberta.
- Valuation and Cost Advisory revenues were $28.3 million, up
2.4% (3.0% on a constant currency basis) and Adjusted EBITDA was
$3.9 million, down 0.6% (up 0.2% on a constant currency
basis).
Corporate Costs were $9.8 million, compared to
$7.7 million (restated to reflect accrued variable compensation
costs within the respective business units) in the same period in
2020. Corporate costs increased primarily due to higher consulting
fees for professional advisory.
At the end of the third quarter, bank debt stood
at $246.9 million, representing a funded debt to EBITDA leverage
ratio of 2.05 times (well below its maximum limit of 4.00 times)
and cash and cash equivalents was $66.4 million. During the
quarter, the Company amended its bank credit facilities to increase
borrowing capacity to $315 million from $275 million, with certain
provisions to further increase the limit to $365 million.
Subsequent to quarter end on October 4, the Company completed a
$172.5 million equity financing to strengthen its financial
flexibility to pursue its growth strategy, including the issuance
of approximately 2.8 million shares priced at $62.00 per common
share. Subsequent to quarter end on November 4, the Company further
amended its bank credit facilities to increase borrowing capacity
to $400 million from $315 million, with certain provisions to
further increase the limit to $450 million.
Factoring in the acquisition of Reonomy (as
disclosed by a separate press release issued today), the Company’s
funded debt to Adjusted EBITDA leverage ratio is expected to
increase to approximately 3.0x. Given the expected synergies
and existing strong cash flows, Altus expects to de-lever to a
funded debt to EBITDA leverage ratio in the low 2.0x range by the
end of 2022.
Updated Financial Guidance
Including the anticipated results of Reonomy,
Management updated its one-time financial guidance for FY2021:
FY 2021 |
Altus Analytics: |
CRE Consulting: |
Consolidated: |
Revenue (Original) |
$247 - $249 million |
$370 - $374 million |
$617 - $623 million |
Revenue (Updated) |
$250 - $252 million |
$371 - $374 million |
$621 - $626 million |
Adjusted EBITDA (Original) |
$42 - $44 million |
$101 - $104 million |
$108 - $113 million |
Adjusted EBITDA (Updated) |
$39 - $41 million |
$101 - $104 million |
$105 - $110 million |
|
Q3 2021 Results Conference Call & Webcast |
|
|
Date: |
Thursday, November 11, 2021 |
|
|
Time: |
5:00 p.m. (ET) |
|
|
Webcast: |
altusgroup.com (under Investor Relations) |
|
|
Live Call: |
1-800-319-4610 (toll-free North America) or 416-915-3239 (Toronto
area) |
|
|
Replay: |
available via webcast at altusgroup.com |
|
|
About Altus Group Limited
Altus Group Limited is a leading provider of
software, data solutions and independent advisory services to the
global commercial real estate industry. Our businesses, Altus
Analytics and Altus Commercial Real Estate Consulting, reflect
decades of experience, a range of expertise, and technology-enabled
capabilities. Our solutions empower clients to analyze, gain
insight and recognize value on their real estate investments.
Headquartered in Canada, we have approximately 2,600 employees
around the world, with operations in North America, Europe and Asia
Pacific. Our clients include many of the world’s largest commercial
real estate industry participants. Altus Group pays a quarterly
dividend of $0.15 per share and our shares are traded on the
Toronto Stock Exchange under the symbol AIF.
For more information on Altus Group, please visit:
www.altusgroup.com.
Non-IFRS Measures and Altus Analytics
Selected Metrics Definitions
Altus Group uses certain non-IFRS measures as
indicators of financial performance. Readers are cautioned that
they are not defined performance measures, and do not have any
standardized meaning under IFRS and may differ from similar
computations as reported by other similar entities and,
accordingly, may not be comparable to financial measures as
reported by those entities. The Company believes that these
measures are useful supplemental measures that may assist investors
in assessing an investment in its shares and provide more insight
into its performance. These non-IFRS measures should not be
considered in isolation or as a substitute for financial measures
prepared in accordance with IFRS. For further discussion of these
measures and metrics and for reconciliations of these non-IFRS
measures to their closest IFRS measures, see the MD&A for the
three and nine months ended September 30, 2021, which can be found
in the disclosure documents filed by the Company with the
securities regulatory authorities at sedar.com.
- Adjusted EBITDA (Adjusted Earnings before
Interest, Taxes, Depreciation and Amortization), represents profit
(loss) from continuing operations before income taxes, adjusted for
the effects of: occupancy costs calculated on a similar basis prior
to the adoption of IFRS 16, finance costs (income), net - other,
depreciation of property, plant and equipment and amortization of
intangibles, depreciation of right-of-use assets, finance costs
(income), net – leases, acquisition and related transition costs
(income), unrealized foreign exchange (gains) losses, (gains)
losses on disposal of right-of-use assets, property, plant and
equipment and intangibles, share of (profit) loss of joint venture,
impairment charges, non-cash share-based compensation costs,
(gains) losses on equity derivatives net of mark-to-market
adjustments on related restricted share units (“RSUs”) and deferred
share units (“DSUs”) being hedged, (gains) losses on derivatives,
restructuring costs (recovery), (gains) losses on investments,
(gains) losses on hedging transactions, and other costs or income
of a non-operating and/or non-recurring nature. Adjusted EBITDA
margin represents the percentage factor of Adjusted EBITDA to
revenues.
- Adjusted EPS (Adjusted Earnings (Loss) Per
Share), represents basic earnings (loss) per share from continuing
operations adjusted for the effects of: occupancy costs calculated
on a similar basis prior to the adoption of IFRS 16, depreciation
of right-of-use assets, finance costs (income), net - leases,
amortization of intangibles of acquired businesses, unrealized
foreign exchange losses (gains), (gains) losses on disposal of
right-of-use assets, property, plant and equipment and intangibles,
non-cash share-based compensation costs, losses (gains) on equity
derivatives net of mark-to-market adjustments on related RSUs and
DSUs being hedged, interest accretion on contingent consideration
payables, restructuring costs (recovery), losses (gains) on hedging
transactions and interest expense (income) on swaps, acquisition
and related transition costs (income), losses (gains) on
investments, share of (profit) loss of joint venture, impairment
charges, (gains) losses on derivatives, and other costs or income
of a non-operating and/or non-recurring nature. The basic weighted
average number of shares is adjusted for the effects of weighted
average number of restricted shares. All of the adjustments are
made net of tax.
- Over Time revenues, are consistent with IFRS
15, Revenue from Contracts with Customers. These Over Time revenues
are comprised of subscription revenues recognized on an over time
basis in accordance with IFRS 15, maintenance revenues from legacy
perpetual licenses, Appraisal Management revenues, and data
subscription revenues.
- AE software maintenance retention rate, is
calculated as a percentage of ARGUS Enterprise (“AE”) software
maintenance revenue retained upon renewal; it represents the
percentage of the available renewal opportunity in a fiscal period
that renews, calculated on a dollar basis, excluding any growth in
user count or product expansion.
- Cloud adoption rate, is a metric that
represents the percentage of the total AE user base contracted on
the ARGUS Cloud platform. It includes both new AE cloud users as
well as those who have migrated from the legacy AE on-premise
software.
- Bookings, is a metric introduced in the first
quarter of 2021 for the Altus Analytics business segment. Altus
Group defines Bookings as the annual contract value (“ACV”) for new
sales of its recurring offerings (software, Appraisal Management
solutions and data subscriptions) and the total contract value
(“TCV”) for one-time engagements (consulting, training and due
diligence). The contract value of renewals is excluded from this
metric, with the exception of additional capacity or products
purchased at the time of renewal.
- Constant currency allows for current financial
and operational performance to be understood against comparative
periods without the impact of fluctuations in foreign currency
exchange rates against the Canadian dollar. The financial results
and non-IFRS measures presented at constant currency within Altus
Group’s MD&A and press release are obtained by translating
monthly results denominated in local currency (US dollars, British
pound, Euro, Australian dollars, and other foreign currencies) at
the foreign exchange rates of the comparable month.
Forward-Looking Information
Certain information in this press release may
constitute “forward-looking information” within the meaning of
applicable securities legislation. All information contained in
this press release, other than statements of current and historical
fact, is forward-looking information. Forward-looking information
includes, but is not limited to, the discussion of our business and
our objectives, goals, strategies, priorities, intentions, plans,
beliefs, expectations and estimates, and our expectations of the
business, its operations, financial performance and condition.
Generally, forward-looking information can be identified by use of
words such as “believe, “expect”, “anticipate”, “estimate”,
“intend”, “may”, “will”, “would”, “could”, “should”, “continue”,
“plan”, “goal”, “objective”, “remain” and other similar expressions
and the negative of such expressions, although not all
forward-looking information contain these identifying words. All of
the forward-looking information in this press release is qualified
by this cautionary statement.
Forward-looking information is not, and cannot
be, a guarantee of future results or events. Forward-looking
information is based on, among other things, opinions, assumptions,
estimates and analyses that, while considered reasonable by us at
the date the forward-looking information is provided, inherently
are subject to significant risks, uncertainties, contingencies and
other factors that may cause actual results, performance or
achievements, industry results or events to be materially different
from those expressed or implied by the forward-looking information.
The material factors or assumptions that we identified and applied
in drawing conclusions or making forecasts or projections set out
in the forward-looking information include, but are not limited to:
our ability to meet its “Revenue” and “Adjusted EBITDA” targets,
including assumptions on Altus Analytics Bookings growth,
subscription and maintenance renewal rates, client retention rates,
growth in its Data Solutions and Appraisal Management businesses,
assumptions on the Argus Software revenue model, license sales,
cloud conversion (including timing and rate), the 2021
post-acquisition financial results of Reonomy being in line with
historical results, expected revenue, cost, and cost avoidance
synergies will be realized, and assumptions on other Altus
Analytics contributors, expenses, operating leverage, and foreign
exchange; having available cash on hand to repay debt on our
expected timelines; engagement and product pipeline
opportunities in Altus Analytics will result in associated
definitive agreements; settlement volumes in the Property Tax
business will occur on a timely basis and that assessment
authorities will process appeals in a manner consistent with
expectations; the successful execution of our business strategies;
consistent and stable economic conditions or conditions in the
financial markets; consistent and stable legislation in the various
countries in which we operate; no disruptive changes in the
technology environment; the opportunity to acquire accretive
businesses and the absence of negative financial and other impacts
resulting from strategic investments or acquisitions on short terms
results; the successful integration of acquired businesses; and the
continued availability of qualified professionals. Projections may
also be impacted by macroeconomic factors, in addition to other
factors not controllable by the Company. We have also made certain
macroeconomic and general industry assumptions in the preparation
of such forward-looking information. We believe that the
expectations reflected in forward-looking information are based
upon reasonable assumptions; however, we can give no assurance that
actual results will be consistent with the forward-looking
information. Not all factors which affect the forward-looking
information are known, and actual results may vary from the
projected results in a material respect, and may be above or below
the forward-looking information presented in a material
respect.
The COVID-19 pandemic has cast additional
uncertainty on each of these factors and assumptions. There can be
no assurance that they will continue to be valid. Given the rapid
pace of change with respect to the COVID-19 pandemic, it is
difficult to make further assumptions about these matters. The
duration, extent and severity of the impact the COVID-19 pandemic,
including measures to prevent its spread, will have on our business
is uncertain and difficult to predict at this time. As of the date
of this press release, many of our offices and clients remain
subject to limitations and restrictions set to reduce the spread of
COVID-19, and a significant portion of our employees continue to
work remotely.
Inherent in the forward-looking information are
known and unknown risks, uncertainties and other factors that could
cause our actual results, performance or achievements, or industry
results, to differ materially from any results, performance or
achievements expressed or implied by such forward-looking
information. Those risks, uncertainties and other factors that
could cause actual results to differ materially from the
forward-looking information include, but are not limited to: the
general state of the economy; the COVID‐19 pandemic; currency; our
financial performance; our financial targets; the commercial real
estate market; industry competition; our acquisitions; our cloud
subscriptions transition; software renewals; professional talent;
third party information; enterprise transactions; new product
introductions; technological change; intellectual property;
technology strategy; information technology governance and
security; our product pipeline; property tax appeals; legislative
and regulatory changes; fixed-price and contingency engagements;
appraisal and appraisal management mandates; the Canadian
multi-residential market; customer concentration and the loss of
material clients; interest rates; credit; income tax matters;
health and safety hazards; our contractual obligations; legal
proceedings; our insurance limits; our ability to meet the solvency
requirements necessary to make dividend payments; leverage and
financial covenants; our share price; our capital investments; and
the issuance of additional common shares, as well as those
described in our annual publicly filed documents, including the
Annual Information Form for the year ended December 31, 2020 (which
are available on SEDAR at www.sedar.com). In addition, in respect
of the June 13, 2021 cybersecurity incident, while we have
implemented our cybersecurity and business continuity protocols and
adopted additional measures to enhance the security of our IT
systems to help detect and prevent future attempts or incidents of
malicious activity, we are subject to a number of risks and
uncertainties in connection with the incident. Such risks and
uncertainties include, but are not limited to: the outcome of the
ongoing investigation into the incident; costs related to the
investigation and any potential liabilities, regulatory
investigation or lawsuit resulting from the incident; costs related
to and the effectiveness of our mitigation and remediation efforts;
our ability to recover proceeds under our insurance policies; and
the potential loss of customer and other stakeholder confidence in
our ability to protect their information, and the potential adverse
financial impact such loss of confidence may have on our
business.
Given these risks, uncertainties and other
factors, investors should not place undue reliance on
forward-looking information as a prediction of actual results. The
forward-looking information reflects management’s current
expectations and beliefs regarding future events and operating
performance and is based on information currently available to
management. Although we have attempted to identify important
factors that could cause actual results to differ materially from
the forward-looking information contained herein, there are other
factors that could cause results not to be as anticipated,
estimated or intended. The forward-looking information contained
herein is current as of the date of this press release and, except
as required under applicable law, we do not undertake to update or
revise it to reflect new events or circumstances. Additionally, we
undertake no obligation to comment on analyses, expectations or
statements made by third parties in respect of Altus Group, our
financial or operating results, or our securities.
Certain information in this press release,
including sections entitled “Updated Financial Guidance” may be
considered as “financial outlook” within the meaning of applicable
securities legislation including the revenue and Adjusted EBITDA
guidance. The purpose of this financial outlook is to provide
readers with disclosure regarding Altus Group’s reasonable
expectations as to the anticipated results of its proposed business
activities for the periods indicated. Readers are cautioned that
the financial outlook may not be appropriate for other
purposes.
FOR FURTHER INFORMATION PLEASE CONTACT:
Camilla Bartosiewicz Vice President, Investor
Relations, Altus Group Limited (416) 641-9773
camilla.bartosiewicz@altusgroup.com
Interim Condensed Consolidated Statements
of Comprehensive Income (Loss) For the Three and
Nine Months Ended September 30, 2021 and 2020
(Unaudited) (Expressed in Thousands of
Canadian Dollars, Except for Per Share Amounts)
|
Three months ended September 30 |
|
Nine months ended September 30 |
|
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Revenues |
|
$ |
151,797 |
|
$ |
134,950 |
|
$ |
462,478 |
|
$ |
421,676 |
|
Expenses |
|
|
|
|
|
Employee compensation |
|
|
99,274 |
|
|
84,889 |
|
|
294,121 |
|
|
265,882 |
|
Occupancy |
|
|
1,922 |
|
|
1,712 |
|
|
5,818 |
|
|
5,697 |
|
Office and other operating |
|
|
36,041 |
|
|
23,383 |
|
|
90,769 |
|
|
76,626 |
|
Depreciation of right-of-use assets |
|
|
3,100 |
|
|
2,818 |
|
|
8,910 |
|
|
8,504 |
|
Depreciation of property, plant and equipment |
|
|
1,419 |
|
|
1,451 |
|
|
3,867 |
|
|
4,178 |
|
Amortization of intangibles |
|
|
7,293 |
|
|
5,840 |
|
|
20,781 |
|
|
18,715 |
|
Acquisition and related transition costs (income) |
|
|
1,032 |
|
|
72 |
|
|
8,112 |
|
|
(1,104) |
|
Share of (profit) loss of joint venture |
|
|
(927) |
|
|
(442) |
|
|
(442) |
|
|
(450) |
|
Restructuring costs (recovery) |
|
|
32 |
|
|
1,155 |
|
|
253 |
|
|
8,610 |
|
(Gain) loss on investments |
|
|
(1,336) |
|
|
68 |
|
|
(1,839) |
|
|
(22) |
|
Finance costs (income), net - leases |
|
|
552 |
|
|
619 |
|
|
1,704 |
|
|
1,910 |
|
Finance costs (income), net - other |
|
|
1,297 |
|
|
835 |
|
|
2,808 |
|
|
3,422 |
|
Profit (loss) from continuing operations before income
taxes |
|
|
2,098 |
|
|
12,550 |
|
|
27,616 |
|
|
29,708 |
|
Income tax expense (recovery) |
|
|
2,393 |
|
|
3,253 |
|
|
8,933 |
|
|
7,321 |
|
Profit (loss) for the period from continuing
operations |
|
$ |
(295) |
|
$ |
9,297 |
|
$ |
18,683 |
|
$ |
22,387 |
|
Profit (loss) for the period from discontinued operations |
|
|
- |
|
|
(130) |
|
|
- |
|
|
(5,300) |
|
Profit (loss) for the period attributable to
shareholders |
|
$ |
(295) |
|
$ |
9,167 |
|
$ |
18,683 |
|
$ |
17,087 |
|
Other comprehensive income (loss): |
|
|
|
|
|
Items that may be reclassified to profit or loss in subsequent
periods: |
|
|
|
|
|
Currency translation differences |
|
|
4,717 |
|
|
(250) |
|
|
(3,425) |
|
|
8,422 |
|
Items that are not reclassified to profit or loss in subsequent
periods: |
|
|
|
|
|
Change in fair value of FVOCI investments, net of tax |
|
|
173 |
|
|
- |
|
|
2,272 |
|
|
(987) |
|
Other comprehensive income (loss), net of tax |
|
|
4,890 |
|
|
(250) |
|
|
(1,153) |
|
|
7,435 |
|
Total comprehensive income (loss) for the period, net of
tax, attributable to shareholders |
|
$ |
4,595 |
|
$ |
8,917 |
|
$ |
17,530 |
|
$ |
24,522 |
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to the shareholders
of the Company during the period |
|
|
|
|
|
Basic earnings (loss) per share: |
|
|
|
|
|
Continuing operations |
|
$ |
(0.01) |
|
$ |
0.23 |
|
$ |
0.46 |
|
$ |
0.56 |
|
Discontinued operations |
|
$ |
0.00 |
|
$ |
0.00 |
|
$ |
0.00 |
|
$ |
(0.13) |
|
Diluted earnings (loss) per share: |
|
|
|
|
|
Continuing operations |
|
$ |
(0.01) |
|
$ |
0.22 |
|
$ |
0.44 |
|
$ |
0.54 |
|
Discontinued operations |
|
$ |
0.00 |
|
$ |
0.00 |
|
$ |
0.00 |
|
$ |
(0.13) |
|
Interim Condensed Consolidated Balance
Sheets As at September 30, 2021 and December 31,
2020 (Unaudited) (Expressed in
Thousands of Canadian Dollars)
|
September 30, 2021 |
|
December 31, 2020 |
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
|
$ |
66,368 |
|
$ |
69,637 |
|
Trade receivables and other |
|
|
223,504 |
|
|
193,072 |
|
Income taxes recoverable |
|
|
1,653 |
|
|
3,385 |
|
Derivative financial instruments |
|
|
4,613 |
|
|
2,477 |
|
|
|
|
296,138 |
|
|
268,571 |
|
Non-current assets |
|
|
|
Trade receivables and other |
|
|
1,546 |
|
|
1,370 |
|
Derivative financial instruments |
|
|
12,179 |
|
|
8,800 |
|
Investments |
|
|
18,869 |
|
|
10,356 |
|
Investment in joint venture |
|
|
15,751 |
|
|
15,309 |
|
Deferred tax assets |
|
|
19,979 |
|
|
19,930 |
|
Right-of-use assets |
|
|
59,874 |
|
|
51,690 |
|
Property, plant and equipment |
|
|
20,275 |
|
|
20,376 |
|
Intangibles |
|
|
176,105 |
|
|
77,928 |
|
Goodwill |
|
|
338,292 |
|
|
261,070 |
|
|
|
|
662,870 |
|
|
466,829 |
|
Total Assets |
|
$ |
959,008 |
|
$ |
735,400 |
|
Liabilities |
|
|
|
Current liabilities |
|
|
|
Trade payables and other |
|
$ |
167,186 |
|
$ |
140,294 |
|
Income taxes payable |
|
|
2,666 |
|
|
1,190 |
|
Lease liabilities |
|
|
13,065 |
|
|
11,700 |
|
|
|
|
182,917 |
|
|
153,184 |
|
Non-current liabilities |
|
|
|
Trade payables and other |
|
|
22,323 |
|
|
17,206 |
|
Lease liabilities |
|
|
58,044 |
|
|
51,883 |
|
Borrowings |
|
|
246,425 |
|
|
122,432 |
|
Deferred tax liabilities |
|
|
30,624 |
|
|
7,246 |
|
Non-controlling interest |
|
|
2,798 |
|
|
- |
|
|
|
|
360,214 |
|
|
198,767 |
|
Total Liabilities |
|
|
543,131 |
|
|
351,951 |
|
Shareholders’ Equity |
|
|
|
Share capital |
|
|
556,245 |
|
|
529,866 |
|
Contributed surplus |
|
|
37,681 |
|
|
30,428 |
|
Accumulated other comprehensive income (loss) |
|
|
39,638 |
|
|
40,791 |
|
Retained earnings (deficit) |
|
|
(217,687) |
|
|
(217,636) |
|
Total Shareholders’ Equity |
|
|
415,877 |
|
|
383,449 |
|
Total Liabilities and Shareholders’ Equity |
|
$ |
959,008 |
|
$ |
735,400 |
|
Interim Condensed Consolidated Statements
of Cash Flows For the Nine Months Ended September
30, 2021 and 2020 (Unaudited)
(Expressed in Thousands of Canadian Dollars)
Nine months ended September 30 |
|
|
|
2021 |
|
|
2020 |
|
Cash flows from operating activities |
|
|
|
Profit (loss) from continuing operations before income taxes |
|
$ |
27,616 |
|
$ |
29,708 |
|
Profit (loss) from discontinued operations before income taxes |
|
|
- |
|
|
(5,300) |
|
Profit (loss) before income taxes |
|
$ |
27,616 |
|
$ |
24,408 |
|
Adjustments for: |
|
|
|
Depreciation of right-of-use assets |
|
|
8,910 |
|
|
8,556 |
|
Depreciation of property, plant and equipment |
|
|
3,867 |
|
|
4,289 |
|
Amortization of intangibles |
|
|
20,781 |
|
|
18,716 |
|
Finance costs (income), net - leases |
|
|
1,704 |
|
|
1,975 |
|
Finance costs (income), net - other |
|
|
2,808 |
|
|
3,408 |
|
Share-based compensation |
|
|
16,596 |
|
|
12,140 |
|
Unrealized foreign exchange (gain) loss |
|
|
1,249 |
|
|
(217) |
|
(Gain) loss on investments |
|
|
(1,839) |
|
|
(22) |
|
(Gain) loss on disposal of right-of-use assets, property, plant and
equipment and intangibles |
|
|
(248) |
|
|
69 |
|
(Gain) loss on derivatives |
|
|
(5,515) |
|
|
(6,803) |
|
Share of (profit) loss of joint venture |
|
|
(442) |
|
|
(450) |
|
Impairment charge - leases |
|
|
- |
|
|
36 |
|
Fair value loss (gain) on net assets directly associated with
discontinued operations |
|
|
- |
|
|
5,224 |
|
(Gain) loss on sale of the discontinued operations |
|
|
- |
|
|
(483) |
|
Net changes in operating working capital |
|
|
(13,895) |
|
|
(19,449) |
|
Net cash generated by (used in) operations |
|
|
61,592 |
|
|
51,397 |
|
Less: interest paid on borrowings |
|
|
(2,313) |
|
|
(2,898) |
|
Less: interest paid on leases |
|
|
(1,704) |
|
|
(1,975) |
|
Less: income taxes paid |
|
|
(14,834) |
|
|
(9,249) |
|
Add: income taxes refunded |
|
|
2,794 |
|
|
2,331 |
|
Net cash provided by (used in) operating
activities |
|
|
45,535 |
|
|
39,606 |
|
Cash flows from financing activities |
|
|
|
Proceeds from exercise of options |
|
|
11,950 |
|
|
11,317 |
|
Financing fees paid |
|
|
(136) |
|
|
(710) |
|
Proceeds from borrowings |
|
|
148,113 |
|
|
38,135 |
|
Repayment of borrowings |
|
|
(22,606) |
|
|
(22,765) |
|
Payments of principal on lease liabilities |
|
|
(8,671) |
|
|
(10,974) |
|
Dividends paid |
|
|
(15,971) |
|
|
(16,628) |
|
Treasury shares purchased for share-based compensation |
|
|
(6,150) |
|
|
(4,017) |
|
Net cash provided by (used in) financing
activities |
|
|
106,529 |
|
|
(5,642) |
|
Cash flows from investing activities |
|
|
|
Purchase of investments |
|
|
(3,512) |
|
|
(259) |
|
Cash contribution to investment in joint venture |
|
|
- |
|
|
(1,190) |
|
Purchase of intangibles |
|
|
(3,208) |
|
|
(66) |
|
Purchase of property, plant and equipment |
|
|
(3,374) |
|
|
(2,648) |
|
Proceeds from disposal of property, plant and equipment and
intangibles |
|
|
- |
|
|
96 |
|
Proceeds from investment |
|
|
307 |
|
|
- |
|
Acquisitions, net of cash acquired |
|
|
(143,850) |
|
|
- |
|
Net cash provided by (used in) investing
activities |
|
|
(153,637) |
|
|
(4,067) |
|
Effect of foreign currency translation |
|
|
(1,696) |
|
|
951 |
|
Net increase (decrease) in cash and cash
equivalents |
|
|
(3,269) |
|
|
30,848 |
|
Cash and cash equivalents, beginning of period |
|
|
69,637 |
|
|
60,262 |
|
Cash and cash equivalents, end of period |
|
$ |
66,368 |
|
$ |
91,110 |
|
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