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TORONTO, Aug. 30, 2021 /CNW/ - Cliffside Capital Ltd.
("Cliffside" or the "Company") (TSXV: CEP) presents
its results for the second quarter ended June 30, 2021.
Cliffside is pleased to announce strong financial results,
despite the continued market challenges from COVID-19:
- Net income of $0.9 million for
the second quarter ended June 30,
2021.
- $2 million year-over-year
increase in net income compared to a net loss of $0.3 million for the six months ended
June 30, 2020, driven by better
performance and consistent with the expected profitability of the
portfolio over its life.
- 100 basis points improvement in delinquency rate (i.e. finance
receivables greater than 30 days past due) from 4.09% in the second
quarter of 2020 to 3.09% as at June 30,
2021.
- Provision for credit losses reduced year-over-year to
$1 million compared to $4 million for the six months ended June 30, 2020, through a combination of slower
acquisition of new finance receivables, government's economic
support for individuals and closely managing borrower
performance.
Cliffside continues to monitor and respond accordingly to
ongoing uncertainties created by COVID-19, a global pandemic.
Management monitored its portfolio proactively for performance and
credit quality, which is reflected in the Company's strong
financial results throughout this pandemic. Cliffside's primary
business of acquiring non-prime auto finance receivables remains
well positioned.
Subsequent to the quarter-end, on July
14, 2021, the Company raised $4.5
million in gross proceeds through a private placement of its
common shares, at $. 20 per share, of which it invested
$3.75 million in a newly formed
special purpose private limited partnership, C.A.R. LP. As a result
of the private placement, the Company issued 22,500,000 units
consisting of one common share and one-quarter of one common share
purchase warrant. Each full warrant is exercisable for a three-year
period at $0.20 per common share. The
limited partnership was formed to acquire non-prime consumer auto
loan receivables and obtained funding from a Schedule 1 Bank, a
private Canadian asset management firm, and limited partners'
capital. The funding structure will result in better funding costs
and improved cash flows for the limited partnership.
"I am very pleased with our second quarter and year-to-date 2021
results amid uncertainties created by COVID-19. Net income,
year-over-year, improved significantly, and our limited
partnerships continue to perform strongly, consistent with our
expectations. As evidenced by our new investment in C.A.R. LP, our
focus remains on acquiring new receivables with strong
risk-adjusted returns to drive long-term value for our
shareholders" said CEO Steve
Malone.
Cliffside also announces today that its Board of Directors has
declared a quarterly cash dividend on the outstanding Common Shares
of $0.0025 per Common Share (or
$0.01 on an annualized basis). The
dividend is payable on November 1,
2021 to holders of Common Shares of record at the close of
business on Oct 1, 2021. The dividend
on Common Shares is an "eligible dividend" for Canadian income tax
purposes.
Cliffside looks to grow its asset base and net interest margin
by closely managing its credit exposure, costs, and net interest
expense.
Further information on Cliffside's financial results can be
found at www.cliffsidecapital.ca.
About Cliffside
Cliffside is focused on investing in
strategic partnerships with parties who have specialized expertise
and a proven track record in originating and servicing loans and
similar types of financial assets. Cliffside's strategy is to
generate revenue as an investor, affording its shareholders an
opportunity to invest in the growing alternative lending sector
with the potential for attractive yields and minimal operational
risk while earning a reliable total return. For more information,
see Cliffside's filings on SEDAR at www.sedar.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
INFORMATION: This news release includes certain
"forward-looking statements" under applicable Canadian securities
legislation. Forward-looking statements include, but are not
limited to, statements with respect to the business and operations
of Cliffside. Forward-looking statements are necessarily based upon
a number of estimates and assumptions that, while considered
reasonable, are subject to known and unknown risks, uncertainties,
and other factors which may cause the actual results and future
events to differ materially from those expressed or implied by such
forward-looking statements. Such factors include, but are not
limited to: general business, economic, competitive, political and
social uncertainties; the results of operations; potential for
conflicts of interests; as well as volatility of Cliffside's common
share price and volume. There can be no assurance that such
statements will prove to be accurate or complete, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Cliffside disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by law.
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 release.
SOURCE Cliffside Capital Ltd.
