Bridgemarq Real Estate Services Inc.

Good morning. My name is Sylvie, and I would like to welcome everyone to the Bridgemark Real Estate Services, Inc. 2021 Fourth Quarter Results Conference Call. Note that all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, simply press star then number one on your telephone keypad. And if you would like to withdraw your question, please press star then two. Thank you. I would like to introduce to you Mr. Phil Soper, President and CEO of Bridgemark Real Estate Services, Inc. Mr. Soper, you may begin the conference.

Thank you, Sylvia, and good morning, everyone. With me today is our Chief Financial Officer, Glenn McMillan. We appreciate you joining us on the call. Today, following our usual format, I will begin with a brief overview of the company's recent financial results and business updates. Glenn will then discuss our financials in more detail, and I'll conclude by providing some remarks, more detail on operational highlights and market developments. Following this, both Glenn and I would be happy to take your questions. I want to remind everyone that some of the remarks expressed during the call may contain forward-looking statements. You should not place reliance on these forward-looking statements. because they involve known and unknown risks and uncertainties that may cause the actual results and performance of the company to differ materially from the anticipated future results expressed or implied by such forward-looking statements. I encourage everyone to review the cautionary language found in our news release and all of our regulatory filings, which can be found on our Bridgemark website and on CDAR. With the lifting of health restrictions, pandemics hold onto the economy and day-to-day life seems to be further loosening its grip. However, it remains important to consider the potential future impact of the COVID-19 pandemic on the economy, real estate market, and even company performance. We remain optimistic that the worst of COVID-19 is behind us, however, There's one lesson we can take away from the past two years. It is that a global health crisis such as this is full of unpredictable turns and twists. News uncertainly has merged, sadly, with the unprovoked invasion of Ukraine by Russia. Commodity crises have risen sharply, and there may be an impact to global inflation, further supply disruptions, and all of this could weigh on global growth. However, we do not believe at this stage that the situation in Eastern Europe poses a material risk to the Canadian housing market. 2021 was a very strong year for the Canadian real estate market and for the company. We are very pleased with our financial and operational results. Revenue for 2021 was $50.2 million compared to $40.3 million in 2020. which is an impressive 25% improvement. Distributable cash flow for the year was 21.4 million compared to 13.9 million in the previous year. The increases were driven by the company's growing network, and we'll talk more about that later, strong real estate markets, and the expiry of the pandemic fee release plan on December 31st, 2020. Regular listeners will be familiar with the unprecedented support we showed our realtors in 2020 during the challenging early days of the pandemic through the pandemic fee relief plan. Glenn will discuss this briefly, and both of us would be happy to review the plan, what it meant, what it was about during the Q&A if there are people on the call who are new to following the company. We are delighted that the company's network of realtors grew by over 1,100 agents during 2021. That's almost a 6% increase over 2020 and a near record year of growth for us. Certainly the kind of growth that is very pleasing to stakeholders, shareholders. Growth in 2021, is a testament to our brand's ability to attract and retain high performing real estate professionals. I will speak to our investments in leading technologies as well as best in class business services later in the call. At our board meeting yesterday, the board of directors approved a dividend payment in April 29th of 11.25 cents per share to shareholders of record on March 31st. This indicates an annualized dividend of $1.35 per share. I'll now turn things over to Glenn for a look at our fourth quarter and full year financial performance.

Thank you, Phil, and good morning, everyone. Revenue in the fourth quarter of 2021 was $10.7 million compared to $7.1 million in Q4 of 2020. The improvement was as a result of stronger real estate markets, growth in our agent base, and the expiry of the pandemic fee relief plan on December 31st, 2020. As Phil mentioned earlier, we implemented the relief plan at the onset of the pandemic to provide support to our network of realtors at a time when there was significant uncertainty as to how the pandemic could affect Canadian housing markets and the economy in general. For the fourth quarter, the company generated earnings of $2.6 million compared to a net loss of $8 million in the fourth quarter of last year. Fourth quarter earnings included a gain on the fair valuation of the company's exchangeable units of $1.1 million compared to a loss of $6.6 million in the fourth quarter of last year. These non-cash adjustments required under generally accepted accounting principles are determined with reference to the share price of the company's restricted voting shares. These gains or losses do not impact the cash flow of the company. For the fourth quarter, distributable cash flow amounted to $4.1 million compared to $1.9 million in the fourth quarter of last year. For the full year, as Phil mentioned, we achieved our highest revenue ever, generating $50.2 million compared to $40.3 million last year. The company benefited from the strength of the Canadian market. 2021 was the strongest year on record at $459 billion in transactional dollar volume. This is a 47% year-over-year increase. Net earnings for 2021 were $4.1 million, or 51 cents per share, compared to earnings of $0.8 million, or 8 cents a share, in 2020. These results included a $1.9 million non-cash gain, resulting from a decrease in the fair value of the interest rate swap the company has designated as a hedge, against its variable interest rate debt. In 2020, the company recorded a $2.2 million loss on the fair valuation of the swap. For the full year, the company recorded a $5 million loss on the fair valuation of the exchangeable units compared to a loss of $300,000 in 2020. Distributable cash flow for the year amounted to $21.4 million, or $1.67 per share, improving by $7.4 million compared to last year. The increase in distributable cash flow was driven by higher revenues, partly offset by higher management fees and higher current income taxes. As I mentioned, the Canadian market increased 47% in 2021 relative to 2020. This increase is the result of a 21% increase in average selling price and a 21% increase in unit sales. For the quarter, the national market increased 9.9% over the fourth quarter of last year, rising to just under $100 billion. The Greater Toronto Area real estate market was up 50.7% for the year, increasing to $133.3 billion. This was driven by an 18% increase in average selling price and a 28% increase in the number of units sold. And just as a point of reference, the GTA represents just under 30% of the national housing market. The Greater Vancouver market closed up 58% in 2020, driven by an 11% increase in average selling price and a 42% increase in units sold. The Greater Montreal area was up 16% at $29.4 billion. This reflects an 18% increase in average selling price, partly offset by a 1.7% decrease in unit sales. Phil will now provide additional insights into the market and an update on our operations. Thanks, Glenn.