/NOT FOR DISTRIBUTION TO
Summary of Second Quarter 2022 Results:
Quarterly Financial Highlights
- Revenue was
$14.4 million , approximately$4.5 million higher than Q2 2021 - Same Community Revenue[1] was
$10.1 million , an increase of$0.7 million from Q2 2021 - Net Income and Comprehensive Income was
$26.0 million , a$28.0 million increase from Q2 2021 - Net Operating Income ("NOI") was
$9.5 million , an increase of$3.0 million from Q2 2021 - Same Community NOI1 was
$6.7 million , an increase of$0.5 million from Q2 2021 - NOI Margin1 increased to 65.9%, compared to 65.4% for Q2 2021
- Funds from Operations2 ("FFO") were
$5.4 million or$0.277 per unit, compared to$3.3 million and$0.255 per unit in Q2 2021 - Adjusted Funds from Operations2 ("AFFO") were
$4.7 million or$0.240 per unit, compared to$2.7 million and$0.210 per unit in Q2 2021 - Same Community Occupancy1 was 82.4% as of
June 30, 2022 , compared to 81.3% as ofMarch 31, 2022 - Rent Collections1 for the three months ended
June 30, 2022 , were 98.2%, which was a slight decrease from 98.8% for the three months endedJune 30, 2021
Year-to-date Financial Highlights
- Revenue was
$28.1 million , approximately$8.6 million higher than the six months endedJune 30, 2021 - Same Community Revenue1 was
$20.1 million , an increase of$1.3 million from the six months endedJune 30, 2021 - Net Income and Comprehensive Income was
$28.5 million , a$23.8 million increase from the six months endedJune 30, 2021 - NOI was
$18.8 , an increase of$5.8 million from the six months endedJune 30, 2021 - Same Community NOI1 was
$13.5 million , an increase of$0.9 million from the six months endedJune 30, 2021 - NOI Margin1 increased to 66.7%, compared to 66.1% for the six months ended
June 30, 2021 - FFO2 were
$11.0 million or$0.561 per unit for the six months endedJune 30, 2022 , compared to$6.8 million and$0.528 per unit for the six months endedJune 30, 2021 - AFFO2 were
$9.6 million or$0.488 per unit for the six months endedJune 30, 2022 , compared to$5.8 million and$0.446 per unit for the six months endedJune 30, 2021 - Rent Collections1 for the six months ended
June 30, 2022 was 98.6%, which is slightly down from 99.2% for the six months endedJune 30, 2021 .
"Since inception, we have applied a strategy of growing our portfolio of high-quality MHCs and operating them to a high standard that increases home ownership in our communities and generates long-term reliable cash flow. Our second quarter and year-to-date results prove that strategy is effective," said
Financial Summary
($000s except per share amounts) | ||||||
For the three | For the three months ended | Variance | For the six months ended | For the six months ended | Variance | |
Revenue, Total Portfolio | 14,363 | 9,835 | 4,528 | 28,056 | 19,484 | 8,572 |
Revenue, | 10,085 | 9,381 | 703 | 20,088 | 18,836 | 1,252 |
Revenue, Acquisitions1 | 4,278 | 454 | 3,825 | 7,968 | 648 | 7,320 |
Net Income and Comprehensive Income, Total Portfolio | 26,024 | (1,945) | 27,969 | 28,456 | 4,686 | 23,770 |
NOI, Total Portfolio | 9,460 | 6,430 | 3,030 | 18,718 | 12,870 | 5,848 |
NOI, | 6,723 | 6,199 | 524 | 13,506 | 12,642 | 863 |
NOI, Acquisitions1 | 2,737 | 231 | 2,506 | 5,212 | 228 | 4,985 |
NOI Margin1, Total Portfolio | 65.9 % | 65.4 % | 0.5 % | 66.7 % | 66.1 % | 0.7 % |
NOI Margin1, | 66.7 % | 66.1 % | 0.5 % | 67.2 % | 67.1 % | 0.1 % |
NOI Margin1, Acquisitions1 | 64.0 % | 50.9 % | 13.1 % | 65.4 % | 35.2 % | 30.3 % |
FFO2 | 5,434 | 3,342 | 2,092 | 10,999 | 6,840 | 4,159 |
FFO Per Unit2 | 0.277 | 0.255 | 0.022 | 0.561 | 0.528 | 0.033 |
AFFO2 | 4,716 | 2,754 | 1,962 | 9,572 | 5,782 | 3,790 |
AFFO Per Unit2 | 0.240 | 0.210 | 0.030 | 0.488 | 0.446 | 0.042 |
AFFO Payout Ratio2 | 55.7 % | 60.7 % | -5.0 % | 54.8 % | 57.1 % | -2.3 % |
1. See "Other Real Estate Industry Metrics" for more information. 2. A non-IFRS financial measure. See "Non-IFRS Financial Measures" for more information. |
"As well as contributions from acquisitions, the results show our progress at improving
Financial Performance Overview
Revenue in the second quarter of 2022 and for the six months ended
Net Income and Comprehensive Income in the second quarter of 2022 and for the six months ended
NOI and NOI Margin for the second quarter of 2022 were
AFFO and AFFO per Unit for the second quarter of 2022 were
Same Community Revenues in Q2 2022 and for the six months ended
Same Community Occupancy of 82.4% increased by 1.1% as of
Rent Collections for Q2 2022 were 98.2%, a slight decrease from 98.8% in Q2 2021.
On
On
On
On
As of
Operations Overview
On
On
On
As at
As of | As of | ||
Total communities | (#) | 66 | 55 |
Total lots | (#) | 11,913 | 8,960 |
Weighted Average Lot Rent1 | (US$) | 384 | 359 |
Occupancy | ( %) | 83.3 | 80.7 |
1. See "Other Real Estate Industry Metrics" below |
Outlook
The REIT was formed to provide investors with the opportunity to invest in the MHC industry in
The REIT believes the MHC sector to be a prudent investment strategy that will create long-term value for the following reasons:
- Defensive investment characteristics relative to other real estate asset classes;
- Consistent track record of outperformance irrespective of economic cycles;
- High barriers to entry for any competitors and new supply;
- Stable occupancy and growing rents;
- Lower capital expenditure requirements than many other real estate asset classes;
- Growing public sentiment toward a detached home relative to a multi-family apartment.
The REIT believes that macro characteristics and trends in
- Increasing household formations;
- Lower housing affordability;
- Declining single-family residential homeownership rates;
- Lack of new manufactured housing supply.
- The REIT believes it is well-positioned to benefit from these residential real estate and housing industry dynamics.
Non-IFRS Financial Measures
The REIT uses certain non-IFRS financial measures (including ratios), including FFO, FFO Per Unit, AFFO, AFFO Per Unit, AFFO Payout Ratio to measure, compare and explain the operating results, financial performance and financial condition of the REIT. The REIT also uses AFFO in assessing its distribution paying capacity. These measures are commonly used by entities in the real estate industry as useful metrics for measuring performance. However, they do not have any standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other publicly traded entities. These measures should be considered as supplemental in nature and not as a substitute for related financial information prepared in accordance with IFRS.
FFO is defined as IFRS Net Income and Comprehensive Income adjusted for items such as distributions on redeemable or exchangeable units recorded as finance cost under IFRS (including distributions on the class B units of the REIT's subsidiary, Flagship Operating, LLC ("Class
AFFO is defined as FFO adjusted for items such as maintenance capital expenditures, and certain non-cash items such as amortization of intangible assets, premiums and discounts on debt and investments. The REIT's method of calculating AFFO is substantially in accordance with REALPAC's recommendations. The REIT uses a capital expenditure reserve of
AFFO Payout Ratio is defined as total cash distributions of the REIT (including distributions on Class
Other Real Estate Industry Metrics
Additionally, this news release contains several other real estate industry metrics that are not disclosed in the REIT's financial statements:
- "Acquisitions" means the REIT's properties, excluding Same Communities (as defined below) and such measures (i.e.: Revenue, Acquisitions; NOI, Acquisitions; and NOI Margin, Acquisitions) are used by management to evaluate period-over-period performance of such investment properties throughout both respective periods. These results reflect the impact of acquisitions of investment properties.
- "NOI margin" is defined as NOI divided by total revenue. Refer to section "Calculation of Other Real Estate Industry Metrics – NOI and NOI Margin".
- "Rent Collections" is defined as the total cash collected in a period divided by total revenue charged in that same period.
- "
Same Community " means all properties which have been owned and operated continuously sinceJanuary 1, 2021 , by the REIT and such measures (i.e.: Same Community Revenue or Revenue,Same Community ; Same Community NOI or NOI,Same Community ; NOI Margin,Same Community ; and Same Community Occupancy) are used by management to evaluate period-over-period. - "Weighted Average Lot Rent" means the lot rent for each individual community multiplied by the total lots in that community summed for all communities divided by the total number of lots for all communities.
Reconciliation of Non-IFRS Financial Measures
FFO, FFO Per Unit, AFFO and AFFO per Unit
($000s, except per unit amounts) | For the three months ended | For the three months ended | For the six months ended | For the six months ended |
Net income and comprehensive income | 26,024 | (1,945) | 28,456 | 4,686 |
Adjustments to arrive at FFO
| ||||
Depreciation
| 66
| 41
| 133
| 74
|
Fair value adjustments-Class B units
| (24,821)
| 12,455
| (21,637)
| 14,737
|
Distributions on Class B units
| 732
| 692
| 1,462
| 1,385
|
Fair value adjustment – investment properties
| 3,512
| (8,085)
| 2,662
| (14,278)
|
Fair value adjustment – unit based compensation
| (79)
| (77)
| ||
Transaction costs | - | 184 | - | 236 |
FFO | 5,434 | 3,342 | 10,999 | 6,840 |
FFO per Unit (diluted) | 0.277 | 0.255 | 0.561 | 0.528 |
Adjustments to arrive at AFFO
| ||||
Accretion of mark-to-market adjustments on mortgage payable
| (258)
| (258)
| (515)
| (515)
|
Capital Expenditure Reserves | (460) | (330) | (912) | (543) |
AFFO | 4,716 | 2,754 | 9,572 | 5,782 |
AFFO per Unit (diluted) | 0.240 | 0.210 | 0.488 | 0.466 |
Calculation of Other Real Estate Industry Metrics
NOI and NOI Margin
($000s) | For the three months ended | For the three months ended | For the six months ended | For the six months ended |
Rental revenue and related income
| 14,363
| 9,835
| 28,056
| 19,484
|
Property operating expenses | 4,903 | 3,405 | 9,338 | 6,614 |
NOI | 9,460 | 6,430 | 18,718 | 12,870 |
NOI Margin | 65.9 % | 65.4 % | 66.7 % | 66.1 % |
Forward-Looking Statements
This press release contains statements that include forward-looking information within the meaning of Canadian securities laws. These forward-looking statements reflect the current expectations of the REIT regarding future events, including statements under "Outlook", as well as plans for acquisitions and the expected results therefrom, and the potential issuance and sale of Units pursuant to the ATM Offering. In some cases, forward-looking statements can be identified by terms such as "may", "will", "could", "occur", "expect", "anticipate", "believe", "intend", "estimate", "target", "project", "predict", "forecast", "continue", or the negative thereof or other similar expressions concerning matters that are not historical facts. Material factors and assumptions used by management of the REIT to develop the forward-looking information include, but are not limited to, the REIT having sufficient cash to pay its distributions and that the items listed under "Outlook" continue to be true. While management considers these assumptions to be reasonable based on currently available information, they may prove to be incorrect.
Although management believes the expectations reflected in such forward-looking statements are reasonable and represent the REIT's internal expectations and beliefs at this time, such statements involve known and unknown risks and uncertainties and may not prove to be accurate and certain objectives and strategic goals may not be achieved. A variety of factors, many of which are beyond the REIT's control, could cause actual results in future periods to differ materially from current expectations of events or results expressed or implied by such forward-looking statements, such as the risks identified in the REIT's annual information form and management's discussion and analysis ("MD&A") for the year ended
Second Quarter 2022 Results Conference Call and Webcast
DATE: | |
TIME: | |
DIAL-IN NUMBER: | 416-764-8650 or 1-888-664-6383 |
CONFERENCE ID: | 98409770 |
LIVE WEBCAST: | https://produceredition.webcasts.com/starthere.jsp?ei=1518374&tp_key=9611ca9231 |
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1 | See "Other Real Estate Industry Metrics" for more information. |
2 | A non-IFRS financial measure. See "Non-IFRS Financial Measures" for more information. |
SOURCE
© Canada Newswire, source