HALIFAX,
NS, March 8, 2023 /CNW/ - Clarke Inc.
("Clarke" or the "Company") (TSX: CKI) (TSX: CKI.DB) today
announced its results for the three months and year ended
December 31, 2022.
Results for the Year Ended December
31, 2022
Net income for the year ended December
31, 2022 was $3.2 million
compared to $16.4 million in
2021.
The Company's operating businesses were significantly more
profitable in 2022 compared to 2021 – in particular, the Company's
hotels. Hotel revenue for the year ended December 31, 2022 was $54.7 million compared to $32.0 million in 2021. The hospitality segment's
net income before taxes was $9.2
million for the year ended December
31, 2022 compared to $1.4
million in 2021. The improved results are due to the general
recovery of the tourism and hotel industries from the COVID-19
pandemic and the acquisition of one hotel in the year.
While net income for the year ended December 31, 2022 was fueled primarily by the
Company's operating businesses, in 2021, net income was primarily
driven by $22.3 million of net gains
on the Company's marketable securities. In 2022, these gains were
insignificant due to the significant liquidation of the Company's
marketable securities in 2021.
Comprehensive income for the year ended December 2022 was $10.1
million compared to $45.5
million in 2021. In addition to the impact of the marketable
securities gains in 2021, the subdued comprehensive income in the
year compared to 2021 is attributable mainly to the non-cash
reduction relating to the accounting treatment of the asset ceiling
on the Company's accrued pension assets – primarily due to an
increase in the estimated discount rate.
During 2022, the Company's book value per common
share1 increased by $0.80, or 6%. The increase is primarily due to
(i) hotel net operating income of $20.8
million, or $1.45 per common
share, (ii) the tax-effected increase of our accrued pension assets
of $16.5 million, or $1.14 per common share, and (iii) the after-tax
impact of fair value adjustments to our property and equipment, net
of depreciation recorded in the year of $18.1 million, or $1.26 per common share, offset by (iv) the
non-cash reduction relating to the accounting treatment of the
asset ceiling on our accrued pension assets, net of tax, of
$34.1 million, or $2.36 per common share, and (v) interest and
accretion of $6.5 million, or
$0.45 per common share.
Clarke's basic earnings per share ("EPS") and diluted EPS for
the year ended December 31, 2022 was
$0.23, compared to basic EPS of
$1.12 and diluted EPS of $0.96 for the year ended December 31, 2021.
Our book value per common share at the end of the year was
$15.28 while our common share price
was $12.48.
Results for the Fourth Quarter 2022
The Company had net income of $1.3
million in the fourth quarter of 2022 compared to
$5.8 million in the same period in
2021. Net realized and unrealized gains on investments for the
fourth quarter of 2022 were $0.1
million compared to $5.1
million for the same period in 2021. The gains on the
Company's marketable securities held in 2021 are primarily why net
income in the fourth quarter of 2021 outpaced 2022 despite the
significant rebound in hotel operations.
Comprehensive income for the fourth quarter was $20.4 million compared to $7.4 million for the same period in 2021. The
primary driver of the increase was the revaluation of hotels due to
their recovery and improved outlook.
For the three months ended December 31,
2022, Clarke's basic and diluted EPS was $0.10, compared to basic EPS of $0.40 and diluted EPS of $0.36 for the same period in 2021.
Additional commentary on our results can be found in our
Management's Discussion & Analysis for the year ended
December 31, 2022.
Highlights of the consolidated financial statements for the
three months and year ended December 31,
2022 compared to the three months and year ended
December 31, 2021 are as follows:
|
(in millions, except
per share amounts)
|
Three
months
ended
December
31,
2022
$
|
Three
months
ended
December 31,
2021
$
|
Year
ended
December
31,
2022
$
|
Year
ended
December 31,
2021
$
|
|
Hotel
revenue
|
15.2
|
9.3
|
54.7
|
32.0
|
|
Provision of
services
|
2.9
|
3.5
|
9.7
|
9.4
|
|
Investment and other
income*
|
1.5
|
7.7
|
2.8
|
24.6
|
|
Net income
|
1.3
|
5.8
|
3.2
|
16.4
|
|
Comprehensive
income
|
20.4
|
7.4
|
10.1
|
45.5
|
|
Basic EPS
|
0.10
|
0.40
|
0.23
|
1.12
|
|
Diluted EPS
|
0.10
|
0.36
|
0.23
|
0.96
|
|
Total assets
|
416.1
|
384.6
|
416.1
|
384.6
|
|
Total
liabilities
|
201.2
|
176.0
|
201.2
|
176.0
|
|
Long-term financial
liabilities
|
62.7
|
107.2
|
62.7
|
107.2
|
|
Book value per
share
|
15.28
|
14.48
|
15.28
|
14.48
|
|
* Investment and other income includes
unrealized and realized gains and losses on assets and liabilities,
fair value changes of property and equipment and investment
property presented in the statement of earnings, interest income,
pension expense/recovery and foreign exchange
gains/losses.
|
|
|
1Book value
per share and hotel net operating income are non-IFRS measures and
ratios. Refer to the "Cautionary Statement Regarding Use of
Non-IFRS Accounting Measures and Ratios" section of this press
release and our December 31, 2022 MD&A for more
information.
|
Other Information
Further information about Clarke, including Clarke's
Consolidated Financial Statements and Management's Discussion &
Analysis for the year ended December 31,
2022, is available at www.sedar.com and
www.clarkeinc.com.
About Clarke
Halifax-based Clarke is an
investment and real estate company with holdings in a diversified
group of businesses and across real estate sectors. Clarke's
securities trade on the Toronto Stock Exchange (CKI, CKI.DB); for
more information about Clarke Inc., please visit our website at
www.clarkeinc.com.
Cautionary Statement Regarding Use of Non-IFRS Accounting
Measures and Ratios
This press release makes reference to "book value per share" and
"net operating income" (or "hotel net operating income").
Book value per share and net operating income are not financial
measures or ratios calculated and presented in accordance with
International Financial Reporting Standards ("IFRS") and should not
be considered in isolation or as a substitute to any financial
measures or ratios of performance calculated and presented in
accordance with IFRS. These non-IFRS financial measures and ratios
are presented in this press release because management of Clarke
believes that such measures and ratios enhance the user's
understanding of our historical and current financial
performance.
Book value per share is measured by dividing shareholders'
equity of the Company at the date of the statement of financial
position by the number of common shares outstanding at that
date. Net operating income is defined as revenue less
expenses. Net operating income measures operating results before
interest, depreciation, and amortization. Clarke's method of
determining these amounts may differ from other companies' methods
and, accordingly, these amounts may not be comparable to measures
used by other companies.
Note on Forward-Looking Statements and Risks
This press release may contain or refer to certain
forward-looking statements relating, but not limited, to the
Company's expectations, intentions, plans and beliefs with respect
to the Company. Often, but not always, forward-looking statements
can be identified by the use of words such as "plans", "expects",
"does not expect", "is expected", "budgets", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate",
"believes", or equivalents or variations of such words and phrases,
or state that certain actions, events or results, "may", "could",
"would", "should", "might" or "will" be taken, occur or be
achieved. Forward-looking statements include, without limitation,
those with respect to the future or expected performance of the
Company's investee companies, the future price and value of
securities held by the Company, changes in these securities
holdings, the future price of oil and value of securities held by
the Company, changes to the Company's hedging practices, currency
fluctuations and requirements for additional capital.
Forward-looking statements rely on certain underlying assumptions
that, if not realized, can result in such forward-looking
statements not being achieved. Forward-looking statements involve
known and unknown risks, uncertainties and other factors that could
cause the actual results of the Company to be materially different
from the historical results or from any future results expressed or
implied by such forward-looking statements. Such risks and
uncertainties include, among others, the Company's investment
strategy, legal and regulatory risks, general market risk,
potential lack of diversification in the Company's investments,
interest rates, foreign currency fluctuations, the sale of Company
investments, the fact that dividends from investee companies are
not guaranteed, reliance on key executives, commodity market risk,
risks associated with investment in derivative instruments and
other factors. With respect to the Company's investment in hotel,
real estate and ferry operations, such risks and uncertainties
include, among others, weather conditions, safety, claims and
insurance, uninsured losses, changes in levels of business and
commercial travel and tourism, increases in the supply of
accommodations in local markets, the recurring need for renovation
and improvement of hotel properties, labour relations, and other
factors.
Although the Company has attempted to identify important factors
that could cause actions, events or results not to be as estimated
or intended, there can be no assurance that forward-looking
statements will prove to be accurate as actual results and future
events could differ materially from those anticipated in such
statements. Other than as required by applicable Canadian
securities laws, the Company does not update or revise any such
forward-looking statements to reflect events or circumstances after
the date of this document or to reflect the occurrence of
unanticipated events. Accordingly, readers should not place undue
reliance on forward-looking statements.
SOURCE Clarke Inc.