DREAM Reports 2014 First Quarter Results
13 May 2014 - 5:43AM
Marketwired Canada
This news release contains forward-looking information that is based upon
assumptions and is subject to risks and uncertainties as indicated in the
cautionary note contained within this press release.
DREAM Unlimited Corp. (TSX:DRM)(TSX:DRM.PR.A) ("DREAM") today announced its
financial results for the three months ended March 31, 2014. Basic earnings per
share (EPS) for the first quarter of 2014 was $0.12.
Although the first quarter is not typically a significant period for DREAM's
overall core business and development activities, it was a very eventful start
to the year for the company. During and subsequent to the quarter we:
- completed our first ever bought-deal equity offering of $57.8 million
(gross proceeds, including over-allotment) through the issuance of 3.68
million Class A subordinate voting shares, which closed on April 29,
2014;
- entered into an agreement to acquire an interest in a development project
in Ottawa's National Capital Region consisting of 37 acres - the
development of these lands represents one of the largest urban
redevelopment opportunities in either Ottawa or Gatineau; and
- entered into an agreement to complete the re-organization of four funds
currently managed by Return on Innovation Advisors Ltd. ("ROI"), pursuant
to which approximately $700 million of net assets will be transferred to
a newly formed trust called the Dream Hard Asset Alternatives Trust
(Dream Alternatives). Provided certain conditions are satisfied, upon
successful completion of the reorganization, Dream Alternatives will be
managed by the asset management division of DREAM. A preliminary long-
form prospectus for Dream Alternatives is expected to be filed on SEDAR
on or about May 15, 2014.
"In the first quarter we have demonstrated how we can leverage both our land and
asset management divisions with our existing platform, capabilities and
expertise," commented Michael Cooper, Chief Executive Officer. "We have had a
strong start to the year, with our first quarter earnings results also exceeding
our internal expectations."
A summary of our 2014 first quarter results is included in the table below.
Three months ended March 31,
------------------------------
(in thousands of CDN dollars, except per share
amounts) 2014 2013
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Revenue $ 83,924 $ 121,907
Net margin (1) $ 23,769 $ 31,371
Net margin % (1) 28.3% 25.7%
Earnings for the period before tax $ 20,730 $ 30,550
Earnings for the period $ 13,627 $ 22,054
Basic earnings per share $ 0.12 $ 0.20
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(1) "Net margin" represents revenue less direct operating costs and asset
management and advisory services expenses; including selling, marketing
and other operating costs.
Note: Basic EPS is computed by dividing DREAM's earnings attributable to owners
of the parent by the weighted average number of DREAM Subordinate Voting Shares
and DREAM Class B shares outstanding during the year.
Other Key Highlights:
- In the three month period ended March 31, 2014, we completed 100 lot
sales, 15 acre sales, 38 housing unit occupancies and 140 condominium
unit occupancies (71 condominium unit occupancies at DREAM's share).
- We continue to advance approvals for approximately 2,000 acres of
development land in Regina and 665 acres in Saskatoon.
- Land acquisitions in the three months ended March 31, 2014 totalled $15.1
million, representing 235 acres of additional land in Edmonton.
- Development of the Toronto 2015 Pan/Parapan American Games Athletes'
Village project that will evolve after the Games into a mixed use
neighbourhood known as the Canary District, is now approximately 78%
complete and is on time and on budget.
Each year, the BILD Awards (Building Industry Land Development
Association) recognize the very best of the GTA's developments. We are
proud to announce that the Canary District Condominiums, as part of the
Toronto 2015 Pan/Parapan American Athletes' Village won for Best
Community of The Year - High Rise. The award recognizes the unique mixed-
use urban village being developed in the heart of downtown Toronto.
- Effective today, we are launching the new Dream brand across our
divisions. As a result, the names of some of our divisions and funds will
change.
- Land Development: Dundee Developments is now Dream Development
- Housing Development: Homes by Dundee is now Homes by Dream
- Asset Management and Advisory Services: Dundee REIT is Dream Office
REIT, Dundee Industrial REIT is Dream Industrial REIT and Dundee
International REIT is Dream Global REIT.
Selected financial operating metrics for the three months ended March 31, 2014
are summarized below.
Traditionally, our highest sales volume quarter for our land and housing
divisions has been the fourth quarter, while our lowest has been the first
quarter. In the first quarter of 2013, we experienced higher lot sales than
would be typical within our business, due to a significant amount of delayed lot
sales recorded in that period. Therefore we note that there is limited direct
comparability in the year over year results within the land development business
segment.
Selected Operating Metrics
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Three months ended March 31,
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(in thousands of Canadian dollars) 2014 2013
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LAND DEVELOPMENT
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Revenue(i) $ 20,550 $ 54,402
Net Margin(i) $ 6,357 $ 17,322
Net Margin 30.9% 31.8%
Lots Sold 100 380
Average selling price - lot units $ 116,300 $ 117,400
Acres Sold 15 19
Average selling price - acre units $ 611,000 $ 522,100
HOUSING DEVELOPMENT
----------------------------------------------
Housing units occupied 38 49
Backlog 58 126
Revenue(i) $ 15,850 $ 20,824
Net margin(i) $ 1,231 $ 3,168
Net margin 7.8% 15.2%
Average selling price - housing units $ 417,000 $ 425,000
(i) Results include land revenues and net margin on internal lot sales to
our housing division, as the homes have been sold to external customers by
the housing division during the period. Revenues (and net margin) results
of $2.1 million ($0.7 million) in Q1 2014 and $3.5 million ($1.1 million)
in Q1 2013, recognized in both the land and housing divisions have been
eliminated on consolidation.
CONDOMINIUM DEVELOPMENT
----------------------------------------------
Attributable to DREAM, excluding equity
accounted investments
Condominium occupancies (units) 71 78
Revenue $ 25,974 $ 28,577
Net margin $ 8,802 $ 3,190
Net margin 33.9% 11.2%
Average selling price of condominiums occupied
Per unit $ 320,600 $ 368,300
Per square foot $ 483 $ 484
Pre-sold condominiums (units) 400 459
ASSET MANAGEMENT AND ADVISORY SERVICES
----------------------------------------------
Fee earning assets under management - listed
funds $ 10,743,990 $ 9,238,912
Revenue $ 9,876 $ 11,184
Net margin $ 5,010 $ 7,464
Net margin 50.7% 66.7%
INVESTMENT AND RECREATIONAL PROPERTIES
----------------------------------------------
Revenue $ 13,782 $ 10,450
Net margin $ 3,093 $ 1,308
Net margin 22.4% 12.5%
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Capital Structure
At April 30, 2014, DREAM had 76.3 million shares Class A subordinate voting
shares outstanding. Including the non-controlling interest, the capitalization
was $1.7 billion and the enterprise value was $2.0 billion. Our
debt-to-enterprise value was approximately 18%.
We believe our capital structure remains conservative, which offers significant
flexibility to grow the business over time by seeking out new opportunities
where we can use our experience, expertise and relationships to achieve
attractive risk adjusted returns.
Other Information
Information appearing in this news release is a select summary of results. The
financial statements and management's discussion and analysis for the Company
are available at www.dream.ca and on www.sedar.com.
Conference Call
Senior management will host a conference call to discuss the results tomorrow,
May 13 at 9:00 a.m. (ET). To access the call, please dial 1-866-229-4144 in
Canada and the United States or 416-216-4169 elsewhere and use passcode 8674
239#.
To access the conference call via webcast, please go to DREAM's website at
www.dream.ca and click on the link for Investors, then click on Calendar of
Events. A taped replay of the conference call and the webcast will be available
for 90 days.
Annual General Meeting
Our annual general meeting will be held at our corporate offices in Toronto, at
30 Adelaide Street East, 3rd Floor on May 12, 2014 at 4:00 p.m. (ET).
About DREAM Unlimited Corp.
DREAM is one of Canada's leading real estate companies with approximately $13.5
billion of assets under management in North America and Europe. The scope of the
business includes residential land development, housing and condominium
development, asset management for three TSX-listed real estate investment
trusts, investments in and management of Canadian renewable energy
infrastructure and commercial property ownership. DREAM has an established track
record for being innovative and for its ability to source, structure and execute
on compelling investment opportunities.
Forward Looking Information
This press release may contain forward-looking information within the meaning of
applicable securities legislation. Forward-looking information is based on a
number of assumptions and is subject to a number of risks and uncertainties,
many of which are beyond DREAM's control, which could cause actual results to
differ materially from those that are disclosed in or implied by such
forward-looking information. These risks and uncertainties include, but are not
limited to general and local economic and business conditions, employment
levels, regulatory risks, mortgage rates and regulations, environmental risks,
consumer confidence, seasonality, adverse weather conditions, reliance on key
clients and personnel and competition. All forward looking information in this
press release speaks as of May 12, 2014 DREAM does not undertake to update any
such forward looking information whether as a result of new information, future
events or otherwise. Additional information about these assumptions and risks
and uncertainties is disclosed in filings with securities regulators filed on
SEDAR (www.sedar.com).
FOR FURTHER INFORMATION PLEASE CONTACT:
DREAM Unlimited Corp.
Michael J. Cooper
Chief Executive Officer
(416) 365-5145
mcooper@dream.ca
DREAM Unlimited Corp.
Pauline Alimchandani
Chief Financial Officer
(416) 365-5992
palimchandani@dream.ca
www.dream.ca
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