First Capital, Inc.

Good afternoon and thank you for standing by. Welcome to the Q1 2024 conference call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question and answer session. At that time, if you have a question, please press star 1 on your telephone keypad. I would like to turn the conference over to Alison. Please proceed with your presentation.

Thank you and good afternoon, everyone. In discussing our financial and operating performance and in responding to your questions during today's call, we may make forward-looking statements. These statements are based on our current estimates and assumptions, many of which are beyond our control and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in these forward-looking statements. A summary of these underlying assumptions, risks, and uncertainties is contained in our various securities filings, including our Q1 MD&A, our MD&A for the year ended December 31, 2023, and our current AIF, which are available on CDAR and on our website. These statements are made as of today's date, and except as required by securities law, we undertake no obligation to publicly update or revise any such statements. During today's call, we will also be referencing certain financial measures that are known IFRS. These do not have standardized meanings prescribed by IFRS and should not be construed as alternatives to net income or cash flow from operating activities determined in accordance with IFRS. Management provides these measures as a complement to IFRS measures to aid in assessing the REITs performance. These non-IFRS measures are further defined and discussed in our MD&A which should be read in conjunction with this conference call. I'll now turn the call over to Adam.

Hey, thank you very much, Alison. Good afternoon, everyone, and thank you for joining us today for our quarterly conference call. We've had a busy start to the year, and I'll start today by touching on our investor day that we held during the first quarter. We spent the first part of the day covering our current business operations, including an overview of First Capital's core competencies and competitive advantages. These primarily relate to both our capabilities and portfolios in two areas. The first is our defining strength as a leader in acquiring, owning, operating and developing grocery-anchored shopping centers. With an IFRS value of over $7 billion, our portfolio of open-air, Grocery Anchorage Centers represents over 80% of the real estate we own today. This core component of our portfolio has a current NOI yield of roughly 5.5% and an NOI CAGR of between 3% and 4% as we look ahead. The second area relates to our rezoning capability and consequently our large portfolio of high-quality development sites. The non-core portion of our portfolio, in which many of our development sites are held, represents nearly 20% of our total portfolio and has a current yield of only 2%. This portion of our asset base continues to be a meaningful source of value creation. We expect to create incremental value of approximately $450 million, which equates to over $2 per unit over the next three years from rezonings alone. But these properties are currently dilutive to FFO and negatively impact our debt metrics. So striking the right balance in terms of how many of them we hold is key. It's also important to note that by applying our expertise in this area, we continue to expand the value of this group of assets with very little additional capital through our entitlements program. Manufacturing or creating more development sites through rezoning and then monetizing some of them and reallocating the proceeds continues to be an important part of our strategy. Next, we covered where we're taking the FCR business and how we're going to get there. The most important part of the day was reviewing the key objectives that our strategy is specifically designed to deliver. These key objectives are stability and growth in FFO per unit, NAB per unit and distributions per unit. So in terms of where we're taking FCR, that is what we're trying to achieve for our investors. Part of delivering those is an even stronger balance sheet. We made significant progress on this front. Our unsecured debt spreads are in roughly 100 basis points since the beginning of this year. A little less than half of that is attributable to the market, meaning our peers have seen similar spread compression. But over half of it is FCR-specific. And this is a good news story for all of our investors, particularly our equity investors, as this lower cost of capital accrues directly to unit holders. During the first quarter, following our investor day and the significant improvement in FCR's credit spreads, we issued $300 million of seven-year unsecured debentures Our offering was more than eight times oversubscribed, with over 60 institutional investors purchasing our bonds. Our all-in coupon was roughly 5.5%. During our investor day, Neil laid out several key operating and financial metrics that we expect to achieve for both this year and over the next three years. Progress towards achieving these goals will be driven by the same strategic approach that we first announced over 18 months ago as the Optimization Plan, which had an initial two-year timeframe. Our successful execution since that time and the positive impact on FCR's key metrics has only strengthened our conviction that this is the best path forward to deliver on our stated objectives. It is our capital allocation strategy, and we remain well on track. An important part of achieving our goals is, of course, our real estate and ensuring that we have a portfolio that will deliver what Neil presented at our investor day. This includes continuing to grow the NOI generated from our core portfolio of gross ranker shopping centers. We also spoke about our development program. and specifically the types of development we will undertake. This includes our entitlements program, development or more typically redevelopment of core grocery-anchored shopping centers, and mixed-use development with FCR typically holding a 25% to 50% equity interest. Dispositions comprise a critical part of our strategy to achieve our objectives. Our dispositions will continue to be focused on the non-grocery-anchored portion of our portfolio. It's important to note that each property we've sold and continue to sell has the dual benefit of simultaneously improving our balance sheet and increasing our FFO, given how low the yields are. This is a rare combination that remains a short-term competitive advantage for First Capital. We will continue to use the proceeds from these sales to pay off maturing debt, make strategic real estate investments, and potentially more purchases under our NCIB. For those who are not able to attend, our investor day remains available to watch on our website. So now moving to Q1. It was another active and successful quarter, and there are really two elements I'd like to discuss. The first stems back to over 18 months ago when we announced our optimization plan, which I noted has become our ongoing capital allocation strategy. We remain laser focused and very disciplined. Our entire team is fully bought into the strategy and we are all unit holders, which creates alignment. I'm very proud of our team for the successful execution to date and for what we have in the pipeline. Our activities in this regard continue to set FCR apart, and that came through in Q1 with solid earnings growth and a stronger balance sheet, exactly the combination our strategy is designed to deliver. The second element contributing to our solid quarterly results are the strong fundamentals for grocery-anchored retail, which I discussed in more detail last quarter. The increase to our tenants' customer base from significant population growth, combined with next to no supply, continues to decrease the square footage per capita of grocery anchored centers in FCR's trade areas. As well, the positive impact of inflation on our tenants' top line sales, together with profit margins largely being maintained, has resulted in improved store profitability and therefore better positions our tenants to pay higher market rents. So, it should come as no surprise that our leasing pipeline remains deep across all tenant categories. Owing to these solid fundamentals and the quality of our portfolio, we continue to expect strong operating performance as we look ahead. And with that, I will now pass it over to Neil, who will review our first quarter metrics. Neil?