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TORONTO, Nov. 23,
2022 /CNW/ - Cliffside Capital Ltd.
("Cliffside" or the "Company") (TSXV: CEP) is pleased
to announce financial results for the third quarter ended
September 30, 2022. The Company
continued to pursue its long-term strategy of disciplined growth
and is reporting:
- 37% increase in net finance receivables from $135.7 million as at September 30, 2021
- to a record high of $185.9
million as at September 30,
2022;
- $14.0 million in net interest
income, a 51.1% increase compared to the same period in the prior
year;
- $7.2 million in net financial
revenue before credit losses and excluding mark to market gains on
derivative financial instruments, resulting in a 38.5% increase
compared to the same period in the prior year; and
- $0.4 million in net loss before
income taxes, due to the amortization of financing costs in one of
its partnerships, an increase in net interest expense consistent
with the growth of its finance receivables in the current rate
environment and an increase in its provision for credit losses. In
light of the overall challenging global business environment,
continued high inflation, growth in finance receivables and the
prospect of further interest rate increases, the Company's
provision for credit losses increased by $6
million compared to the same period in the prior year when
macroeconomic conditions were more favourable.
Subsequent to the quarter, the Company also declared a quarterly
cash dividend on the outstanding common shares of $0.0025 per common share ($0.01 on an annualized basis), which was paid on
November 10, 2022. Each such dividend
qualified as an "eligible" dividend as defined in the Income Tax
Act (Canada). The dividends
were subject to customary Canadian withholding tax for shareholders
that are non-resident of Canada.
Business Update
The Company's partnerships continue to enjoy access to market
financing from various Canadian lenders for any purchase of new
auto loan receivables. One facility was renewed in October 2022 for $100
million, a $25 million
increase. The funding facility used for CAR LP I will not be
renewed past January 2023. Consistent
with its original loan terms, and market practice for similar loan
facilities, all cash flow from the partnership will repay the
senior lender first, then flow to the mezzanine lender with the
remaining balance flowing to the partnership equity.
Global Macroeconomic Challenges
Recent and ongoing macroeconomic global events, including global
supply chain delays, the war in Ukraine, higher global inflation as well as
the expectation of a continued inflationary environment coupled
with rising interest rates have resulted in alternative and
non-bank financial companies, such as Cliffside, facing a
challenging environment in which to raise equity capital for
growth. While Cliffside maintains access to funding sources,
management believes that these recent macroeconomic challenges
could have an adverse effect on the Company's ability to raise new
equity capital to fund future growth. Accordingly, the recent
pattern of strong growth which the Company has experienced may be
difficult to maintain. Management and the Board of Directors are
actively monitoring and considering available options to adjust to
the current environment and will continue to explore all
possibilities available to the Company.
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 and its partnerships, statements with respect to the
Company's ability to raise equity capital in the future, statements
with respect to the expected renewals of certain debt financing
facilities, the expected terms of such renewals and the anticipated
use of proceeds, and the ability of management to effectively
protect and grow the Company's business in light of recent and
ongoing macroeconomic risks and uncertainties. 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; the
availability of appropriate finance receivables that may be
purchased by the Company's limited partnerships under existing
funding facilities; and volatility of 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.
