Bridgemarq Real Estate Services Inc.

Good morning. My name is Vanessa, and I would like to welcome everyone to the Bridgemark Real Estate Services Incorporated 2023 Second Quarter Results Conference Call. This call is being recorded. 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 the number one on your telephone keypad. If you would like to withdraw your question, please press star 2, thank you. I would now like to introduce Mr. Phil Sofer, President and CEO of Bridgemark Real Estate Services Incorporated. Mr. Sofer, you may begin.

Thank you, Vanessa. And good morning, everybody. With me today is our Chief Financial Officer, Glenn McMillan. We appreciate you joining us on this call this morning. I'll meet with a brief overview of the company's second quarter results and updates. Glenn will then discuss our financial results and I'll conclude by providing some marks on operational highlights and market developments. Following our remarks, as Vanessa mentioned, Glenn and I would be happy to take your questions. I want to remind you that some of the remarks expressed during this 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 or 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, finding their news release, and on all of our regulatory findings. These can also be found on the Bridgemark website and on CDARP. Over the last quarter, Canada's housing market has been trending upward again, following a significant market correction that began in the spring of 2022. The correction followed two years of record-breaking growth fueled by the pandemic. Total transactional dollar volume has risen since the first quarter, driven by an increase in both sales volumes and home prices. In some regions, home prices have not yet returned. to the levels reached at the market's peak in February of last year, yet property values are significantly higher than pre-pandemic levels. We're talking about early 2020 or 2019 because of the continued strong demand, a strong economy and a chronic shortage of housing inventory. Results for the second quarter were in line with our expectations, softer than the same period last year, the tail end of the pandemic boom. but improved over the last quarter. The company's business structure showed considerable resilience during the quarter, with revenues down just 6.9% compared to the second quarter last year. A substantial portion of our revenue is driven by fixed fees. This allows investors to participate in the growth of the Canadian real estate market, while also mitigating the impact of market volatility on cash flows. I'm pleased to report that despite this significant market correction, we have continued to see positive agent growth in our network. The end of the second quarter, the company's network count sat at 20,752 practitioners, an increase of 1% over last year. Glenn will discuss this in more detail in a moment. At its board meeting yesterday, directors approved a dividend payable on September 29th of 11.25 cents per share to shareholders of record on August 31st. This is $1.35 per share, which is consistent with 2022. And with that, I'll turn the call over to Glenn for a look at our second quarter financial performance.

Thank you, Phil, and good morning, everyone. As Phil mentioned, revenue during the first six months of the year was $24.8 million, down from $27.2 million recorded in the same period last year. During the second quarter, revenue was $12.8 million, down slightly from $13.8 million last year. The company's network of realtors sits at 20,752, which reflects the net growth of 214 agents, or just over 1%, compared to June of last year. Since the start of 2021, however, we have grown our network by 9%. In the second quarter, the company generated net earnings of $1.1 million, or 12 cents per share, compared to net earnings of $11.3 million, or 36 cents per share last year. The results reflect the loss on the fair valuation of our exchangeable units of $500,000 in the second quarter compared to a gain of $8.1 million last year. Distributable cash flow amounted to $4.5 million in the second quarter, down from $5.8 million in Q2 of last year, reflecting a decline in sales activity and an increase in administration costs, partly offset by continued network growth. For the rolling 12-month period ended June 30th, 2023, Distributable cash flow amounted to $17.9 million, or $1.39 per share, compared to $20.9 million, or $1.63 per share, for the same period ending June 30, 2022. During the quarter, the Canadian residential real estate market closed down 4% at $107 billion compared to Q2 of last year, driven by a 5% decrease in unit sales partly offset by a modest increase in the average selling price of 1%. The Greater Toronto Area real estate market saw a year-over-year increase of 8% at $28 billion in the second quarter, driven by an 8% increase in unit sales. While we did see a modest price decline in the average selling price of homes in Toronto compared to last year, average selling prices in Toronto were up 8% compared to Q1, and up by 10% compared to Q4 of 2022. The Greater Vancouver market was up 6% at $11.8 billion in the second quarter compared to 2022, driven by a 5% increase in unit sales and a 1% increase in the average selling price. The Greater Montreal area market decreased 19% to $6.8 billion in the second quarter driven by a 16% decrease in unit sales and a 4% decline in average selling price. The market correction in the Montreal region began later than in the other two major urban centers, and as a result, the rebound there is lagging. Bill will now provide additional insights into the markets and an update on our operations.