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CHC Student Housing Announces Results for the Three Months Ended June 30, 2020
August 26, 2020 6:27 PM EDT | Source: Bullet Exploration Inc.
Toronto, Ontario--(Newsfile Corp. - August 26, 2020) - CHC Student Housing Corp. (TSXV: CHC.H) ("CHC" or the "Company") announced today results for the three months ended June 30, 2020. The unaudited Condensed Consolidated Interim Financial Statements and related Management's Discussion and Analysis ("MD&A") for the three months ended June 30, 2020, are available under CHC's profile on SEDAR at www.sedar.com.
Highlights during the three months ended June 30, 2020:
- The company did not own any revenue producing properties during the three months ended June 30, 2020 following the sale of its last remaining property, the London property, on February 5, 2020.
- Property operating expense of $17,943 was mainly for remedial work carried out after the sale of the London Property as agreed to in the purchase and sale agreement.
- Net loss of $150,865 was mainly due to the ongoing general and administrative expenses of the Company for the three months ended June 30, 2020.
As previously disclosed, the Company generated sufficient funds from the sale of the London Property to settle its current debts. On August 5, 2020, the Company paid a special distribution of $0.30 per share, as a return of capital to its shareholders of record as of the close of business on July 28, 2020. Following the distribution, the remaining working capital of the Company is expected to be sufficient to fund the needs of the Company's continuing business operations for the near term while it searches for alternative business opportunities which could potentially result in additional value for shareholders.
Summary of Selected Financial and Operational Information
The selected financial information below is based on and derived from the condensed consolidated interim financial statements for the three months ended June 30. 2020.
| Statement of comprehensive loss | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Property revenues | $ | - | $ | 1,100,217 | $ | 328,694 | $ | 2,218,586 | ||||
| Property operating expenses | (17,943 | ) | (422,211 | ) | (261,901 | ) | (853,689 | ) | ||||
| Net Operating Income (NOI) | ($17,943 | ) | $ | 678,006 | $ | 66,793 | $ | 1,364,897 | ||||
| Depreciation | - | (13,094 | ) | (7,251 | ) | (25,032 | ) | |||||
| General & administrative expense | (132,922 | ) | (320,923 | ) | (264,807 | ) | (586,811 | ) | ||||
| Reversal of liabilities | - | - | 507,977 | - | ||||||||
| Fair value adjustment of equity-based compensation | - | 7,000 | (7,009 | ) | (1,000 | ) | ||||||
| Fair value adjustment on mortgage payable | - | 1,775 | - | (205,282 | ) | |||||||
| Loss on sale of investment property | - | - | (375,161 | ) | - | |||||||
| Interest | - | (705,429 | ) | (742,980 | ) | (1,407,813 | ) | |||||
| Net loss | ($150,865 | ) | ($352,665 | ) | ($822,438 | ) | ($861,041 | ) | ||||
| Net loss per share - basic and diluted | ($0.06 | ) | ($0.13 | ) | ($0.30 | ) | ($0.32 | ) | ||||
| Funds From Operations (FFO)(1) | ($150,865 | ) | ($354,440 | ) | ($955,254 | ) | ($655,759 | ) | ||||
| FFO per share | ($0.06 | ) | ($0.13 | ) | ($0.35 | ) | ($0.24 | ) | ||||
| Adjusted Funds From Operations (AFFO)(1) | ($150,865 | ) | ($336,960 | ) | ($868,469 | ) | ($606,400 | ) | ||||
| AFFO per share | ($0.06 | ) | ($0.12 | ) | ($0.32 | ) | ($0.22 | ) | ||||
| Weight average shares outstanding | 2,716,465 | 2,716,465 | 2,716,465 | 2,716,465 | ||||||||
| (1) | FFO and AFFO are non-IFRS performance measures. Please refer to definition in section Non-IFRS Performance Measures on page 3 of the MD&A as well as the reconciliation from net income(loss) and comprehensive income(loss) below. |
Property operating expenses of $17,943 were mainly for remedial work carried out after the sale of the London Property as agreed to in the purchase and sale agreement. General and administrative expenses decreased by 58.6% or $188,001 mainly due to lower wages and benefits as a result of lower staffing levels, lower board of directors' compensation and lower management fees and office costs for the three months ended June 30, 2020.
FFO & AFFO Reconciliation
The following table reconciles FFO and AFFO to IFRS net loss and comprehensive loss:
| Reconciliation from Net Loss to FFO & AFFO | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Net loss | ($150,865 | ) | ($352,665 | ) | ($822,438 | ) | ($861,041 | ) | ||||
| Add: | ||||||||||||
| Reversal of liabilities | - | - | (507,977 | ) | - | |||||||
| Loss on sale of investment property | - | - | 375,161 | - | ||||||||
| Fair value adjustment on mortgage payable | - | (1,775 | ) | - | 205,282 | |||||||
| Funds From Operations (FFO) | (150,865 | ) | (354,440 | ) | ($955,254 | ) | ($655,759 | ) | ||||
| Add (subtract): | ||||||||||||
| Fair value adjustment of equity-based compensation (1) | - | (7,000 | ) | 7,009 | 1,000 | |||||||
| Amortization of financing transaction costs | - | 21,534 | 55,012 | 43,068 | ||||||||
| Straight line rent | - | 2,946 | 24,764 | 5,291 | ||||||||
| Adjusted Funds From Operations | ($150,865 | ) | ($336,960 | ) | ($868,469 | ) | ($606,400 | ) | ||||
| (1). | The three months ended June 30, 2020 adjustment for stock-based compensation/(recovery) relates to the mark-to-market adjustment of the deferred share unit plan (DSU) granted on September 13, 2016 and October 12, 2017. |
FFO for the three months ended June 30, 2020, and 2019 amounted to ($150,865) or ($0.06) per share and ($354,440) or ($0.13) per share, respectively. AFFO for the three months ended June 30, 2020, and 2019 was ($150,865) or ($0.06) per share and ($336,960) or ($0.12) per share, respectively.
The following table reconciles IFRS cash used in operating activities to AFFO:
| Reconciliation from cash used in operating activity to AFFO | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| Cash used in operating activities | ($815,147 | ) | ($138,486 | ) | ($5,317,782 | ) | ($247,419 | ) | ||||
| Add (subtract): | ||||||||||||
| Net changes in working capital | 664,282 | (77,564 | ) | 3,529,417 | (126,750 | ) | ||||||
| Depreciation | - | (13,094 | ) | (7,251 | ) | (25,032 | ) | |||||
| Interest expense on mortgages payable | - | (683,895 | ) | (687,968 | ) | (1,364,745 | ) | |||||
| Cash interest paid | - | 576,079 | 1,615,115 | 1,157,546 | ||||||||
| Adjusted Funds From Operations | ($150,865 | ) | ($336,960 | ) | ($868,469 | ) | ($606,400 | ) | ||||
Financial Position
The Company had cash on hand of $1,444,613 as at June 30, 2020, an increase of $1,163,297 from December 31, 2019 following the sale of the London Property. Total assets as at June 30, 2020, were $ 1,473,767 compared to $55,619,225 at December 31, 2019, a decrease of $54,145,458. This decrease was mainly due to the sale of the London Property.
About CHC Student Housing Corp.
CHC Student Housing (TSXV: CHC.H) was previously Canada's only publicly traded company that invested in multi-residential student housing properties.
Following the sale of the Company's London Property on February 5, 2020, the Company ceased to have active operations and no longer met the continued listing requirements for the TSX Venture Exchange ("TSXV"). Therefore, effective February 10, 2020, the Company's listing was transferred from the TSXV to the NEX. The NEX is a separate board of the TSXV that provides a trading forum for listed companies that have fallen below the TSXV's continued listing requirements.
The trading symbol for the Company was changed from CHC to CHC.H. There was no change in the Company's name, no change in its CUSIP number and no consolidation of capital. The symbol extension differentiates NEX symbols from Tier 1 or Tier 2 symbols within the TSX Venture market. The Company is classified as a 'Real Estate' company.
As previously disclosed, the Company generated sufficient funds from the sale of the London Property to settle its current debts. On August 5, 2020, the Company paid a special distribution of $0.30 per share, as a return of capital to its shareholders of record as of the close of business on July 28, 2020. Following the distribution, the remaining working capital of the Company is expected to be sufficient to fund the needs of the Company's continuing business operations for the near term while it searches for alternative business opportunities which could potentially result in additional value for shareholders.
Non-IFRS Performance Measures
The Company's consolidated financial statements are prepared in accordance with International Financial Reporting Standards ("IFRS"). The following measures: net operating income (or "NOI"), funds from operations (or "FFO"), FFO per share, adjusted funds from operations (or "AFFO") and AFFO per share, are not measures recognized under IFRS and do not have standardized meanings prescribed by IFRS, and should not be compared to or construed as alternatives to profit/loss, cash flow from operating activities or other measures of financial performance determined in accordance with IFRS. However, these non-IFRS measures are recognized supplemental measures of performance for real estate issuers widely used by the real estate industry, particularly by those publicly traded entities that own and operate income-producing properties, and the Company believes they provide useful supplemental information to both management and readers in measuring the financial performance of the Company. Further details on non-IFRS measures are set out in the Company's Management's Discussion and Analysis for the three months ended June 30, 2020 and the year ended December 31, 2019 and are available on the Company's profile on SEDAR at www.sedar.com.
Forward Looking Information
This press release contains forward-looking information within the meaning of Canadian securities laws. Forward-looking information is provided for the purposes of assisting the reader in understanding the Company's financial performance, financial position and cash flows as at and for the periods ended on certain dates and to present information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. Such information includes, without limitation, information regarding the business strategies of CHC. Although CHC believes that such information is reasonable, it can give no assurance that such expectations will prove to be correct. Forward looking information is typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or are those, which, by their nature, refer to future events. CHC cautions investors that any forward-looking information provided by CHC is not a guarantee of future results or performance, and that actual results may differ materially from those in forward looking information as a result of various factors, including, but not limited to: CHC's ability to complete proposed or contemplated transactions; the state of the real estate sector generally; recent market volatility; CHC's ability to secure the necessary financing or to be fully able to implement its business strategies; and other risks and factors that CHC is unaware of at this time. A variety of factors, many of which are beyond CHC's control, affect the operations, performance and results of the Company and its business, and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to, the risks discussed in CHC's materials filed with Canadian securities regulatory authorities from time to time, copies of which may be accessed through CHC's profile on SEDAR at www.sedar.com. The reader is cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking information, as there can be no assurance that actual results will be consistent with such forward-looking information
The forward-looking information included in this press release relate only to events or information as of the date hereof. Except as specifically required by applicable Canadian law, CHC undertakes no obligation to update or revise publicly any forward-looking information, whether because of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.
This news release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Neither the TSX Venture Exchange ("TSXV") nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
For further information please contact:
CHC Student Housing Corp.
Simon Nyilassy
President and CEO
(416) 504-9380
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/62617