Bridgemarq Real Estate Services Inc.

Good morning. My name is Gerry Howell, and I would like to welcome everyone to the Bridgemark Real Estate Services Inc. 2023 Third 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 and then the number one on your telephone keypads. If you would like to withdraw your question, press star and then two. Thank you. I would now like to introduce Mr. Phil Soper, President and CEO of Bridgemark Real Estate Services, Inc. Mr. Soper, you may begin your call.

Thank you, Jerry, and good morning, everyone. With me today is our Chief Financial Officer, Glenn McMillan. We appreciate you joining us on the call. I will begin with a brief overview of the company's third quarter results and business updates. Glenn will then discuss our financial results in more detail, and I'll conclude today's session by providing some remarks on operational highlights, company updates, and market developments. Following our remarks, 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 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 on all our regulatory filings. These can be found on the Bridgemark website and on CDAR. During the third quarter, Canada's housing market cooled compared to the stronger than anticipated results recorded in the spring, in the second quarter. Total transactional dollar volume has declined since the second quarter, driven primarily by a reduction in sales volume, the number of homes trading hands. I will reflect more on home price changes later in the call. It's worth noting that on a year-over-year basis, home sales and average prices increased. During the third quarter of 2022, Canadian real estate was in the middle of a very significant market correction in the wake of a series of rapid interest rate increases by the Bank of Canada following those two years of record-setting real estate activity that we saw in Canada and around the world during the pandemic. Most importantly, we are pleased with our performance over the last quarter and the company's ability to weather the ups and downs of the market cycles. While activity continued to cool over the summer months, our revenues were up year over year and in line with the second quarter. Revenue for the third quarter of 2023 was $12.8 million compared to $12.2 million in 2022, a 5% increase. While real estate markets have been volatile over the last past two years, our revenues have been relatively stable. A significant portion of our revenues are fixed in nature, which provides investors with exposure to the Canadian real estate market while also mitigating the impact of market volatility on cash flows. I am pleased to report that we continue to see positive agent growth in our network despite softening in the markets. At the end of the third quarter, the network realtor count sat at 20,796. That's a modest increase over last year. At its meeting yesterday, the Board of Directors approved a dividend payable on December 29th of 11.25 cents per share to shareholders of record on November 30th. This indicates an annualized dividend of $1.35 per share, which is consistent with 2022. And with that, I will turn the call over to Glenn for a look at our second quarter financial performance in more detail.

Thank you, Phil, and good morning, everyone. As Phil mentioned, revenue during the first nine months of the year was $37.6 million, down from $39.4 million recorded in the same period last year. However, during the third quarter, revenue was $12.8 million, up 5% from the $12.2 million we recorded in the third quarter of 2022. The company's network of realtors was just under 20,800, which reflects net growth of 110 agents since the start of the year. Since the beginning of 2021, we've grown our network by 9%. In the third quarter, the company generated net earnings of $8.6 million, or $0.91 per share, compared to a net loss of $1.1 million or $0.12 per share last year. The results reflect a gain on the fair value of the exchangeable units of $6.8 million in the third quarter compared to a loss of $3 million last year. Distributable cash flow amounted to $5.1 million in the quarter, up from $4.8 million in the third quarter of 2022, reflecting an increase in revenues lower cost of sales, and lower current income taxes, partly offset by higher administration costs and management fees. For the rolling 12-month period ended September 30th, 2023, distributable cash flow amounted to $18.2 million or $1.42 per share compared to $20.5 million or $1.60 per share for the same period ending September 30th, 2022. During the third quarter, the Canadian residential real estate market closed almost 10% above Q3 2022 levels at almost $77 billion, driven by a 6% increase in unit sales and a 3% increase in average selling price. The Greater Toronto Area real estate market remained virtually flat year over year at $16.6 billion, with unit sales down marginally and average selling price up 3%. However, on a quarter-over-quarter basis, total transaction dollar volume was down 41%, driven by a 37% drop in unit sales. The Greater Vancouver market was up year-over-year at $8.4 billion. It was up 27%, driven by a 20% increase in unit sales, but again, quarter-over-quarter, were lower by about 29%, driven primarily by lower unit sales. And the Greater Montreal market grew by 10% year over year, and like other major urban centres, was lower quarter over quarter due to lower unit sales. Bill will now provide additional insights into the markets and an update on our operations.