HALIFAX,
NS, Nov. 8, 2022 /CNW/ - Clarke Inc. ("Clarke"
or the "Company") (TSX: CKI) (TSX: CKI.DB) today announced its
results for the three and nine months ended September 30, 2022 and new construction
financing.
Third Quarter Results
Net income for the three and nine months ended September 30, 2022 was $3.9 million and $1.9
million, respectively compared to net income of $3.5 million and $10.6
million for the same periods in 2021.
The Company's operating businesses were significantly more
profitable during the quarter compared to the same period in 2021 –
in particular, the Company's hotels. Hotel operations in the
third quarter increased significantly compared to the same quarter
in the prior year and the first and second quarters of the current
year. Hotel revenue for the three and nine months ended
September 30, 2022 was $17.2 million and $39.4
million, respectively, compared to $11.0 million and $22.7
million for the same periods in 2021. The hospitality
segment's net income before taxes was $3.9
million and $5.8 million for
the three and nine months ended September
30, 2022, respectively, compared to net income of
$1.4 million and a net loss of
$1.6 million for the same periods in
2021.
In 2021, net income was primarily driven by net gains on the
Company's marketable securities. The Company had no marketable
security dispositions or significant unrealized gains in the three
and nine months ended September 30,
2022, compared to net gains of $3.0
million and $17.2 million in
the same periods in 2021.
During the third quarter of 2022, the Company's book value per
common share1 increased by $0.34, or 2.5%. The increase was primarily driven
by hotel net operating income of $7.2
million, or $0.50 per common
share, offset by depreciation and amortization of $2.4 million, or $0.17 per common share and interest expense of
$1.6 million, or $0.12 per common share. Our book value per common
share at the end of the quarter was $13.83 while our common share price was
$11.52.
Additional commentary on our third quarter results can be found
in our Management's Discussion & Analysis for the three and
nine months ended September 30,
2022.
1 Book value
per share and hotel net operating income are non-IFRS measures and
ratios. Refer to the "Cautionary Statement Regarding Use of
Non-IFRS Accounting Measures and Ratios" section of this press
release and our September 30, 2022 MD&A for more
information.
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Other Information
Highlights of the interim condensed consolidated financial
statements for the three and nine months ended September 30, 2022 compared to the three and nine
months ended September 30, 2021 are
as follows:
(in millions, except
per share amounts)
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|
Three months
ended
Sept 30,
2022
$
|
Three months
ended
Sept 30,
2021
$
|
Nine months
ended
Sept 30,
2022
$
|
Nine months
ended
Sept 30,
2021
$
|
Hotel
revenue
|
|
17.2
|
11.0
|
39.4
|
22.7
|
Provision of
services
|
|
4.5
|
4.3
|
6.7
|
5.9
|
Investment and other
income*
|
|
0.5
|
2.7
|
1.4
|
16.9
|
Net income
|
|
3.9
|
3.5
|
1.9
|
10.6
|
Comprehensive
income
|
|
4.5
|
5.4
|
(10.3)
|
38.1
|
Basic earnings per
share ("EPS")
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|
0.27
|
0.24
|
0.13
|
0.72
|
Diluted EPS
|
|
0.25
|
0.16
|
0.13
|
0.61
|
Total assets
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|
389.6
|
382.4
|
389.6
|
382.4
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Total
liabilities
|
|
194.7
|
181.0
|
194.7
|
181.0
|
Long-term financial
liabilities
|
|
87.6
|
116.2
|
87.6
|
116.2
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Book value per
share
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13.83
|
13.96
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13.83
|
13.96
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* Investment and other income includes
unrealized and realized gains and losses on assets and liabilities,
fair value changes of property and equipment and investment
property presented in the statement of earnings, interest income,
pension expense/recovery and foreign exchange
gains/losses.
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Further information about Clarke, including Clarke's Interim
Condensed Consolidated Financial Statements and Management's
Discussion & Analysis for the three and nine months ended
September 30, 2022, is available at
www.sedar.com and www.clarkeinc.com.
Construction Financing
The Company recently entered into an $85.0 million credit facility with a major
Canadian bank for the construction of phase one of its multi-unit
residential apartment complex on Carling Avenue in Ottawa, ON. The loan bears interest at the
lender's prime rate and has a three-year term.
Tom Casey, Clarke's Chief
Financial Officer, stated "We were very pleased with the strong
lender interest in financing phase one of this development. We
received multiple extremely competitive offers from lenders across
Canada. We would like to thank all
of the interested lenders, in particular, our chosen lending
partner for the confidence they have shown in our assets, our
organization and this project in particular." Phase one of the
Carling Avenue development broke ground in May 2021 and has been self-financed to date.
About Clarke
Halifax-based Clarke invests in
a variety of private and publicly-traded businesses and
participates actively where necessary to enhance the performance of
such businesses and increase its return. The Company also has a
diverse and significant portfolio of direct real estate holdings
across the hospitality, commercial, industrial, and residential
sectors. Clarke's securities trade on the Toronto Stock Exchange
(CKI, CKI.DB); for more information about Clarke Inc., please visit
our website at www.clarkeinc.com.
Cautionary Statement Regarding Use of Non-IFRS Accounting
Measures and Ratios
This press release makes reference to "book value per share" and
"net operating income" (or "hotel net operating income").
Book value per share and net operating income are not financial
measures or ratios calculated and presented in accordance with
International Financial Reporting Standards ("IFRS") and should not
be considered in isolation or as a substitute to any financial
measures or ratios of performance calculated and presented in
accordance with IFRS. These non-IFRS financial measures and ratios
are presented in this press release because management of Clarke
believes that such measures and ratios enhance the user's
understanding of our historical and current financial
performance.
Book value per share is measured by dividing shareholders'
equity of the Company at the date of the statement of financial
position by the number of common shares outstanding at that
date. Net operating income is defined as revenue less
expenses. Net operating income measures operating results before
interest, depreciation, and amortization. Clarke's method of
determining these amounts may differ from other companies' methods
and, accordingly, these amounts may not be comparable to measures
used by other companies.
Note on Forward-Looking Statements and Risks
This press release may contain or refer to certain
forward-looking statements relating, but not limited, to the
Company's expectations, intentions, plans and beliefs with respect
to the Company. Often, but not always, forward-looking statements
can be identified by the use of words such as "plans", "expects",
"does not expect", "is expected", "budgets", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate",
"believes", or equivalents or variations of such words and phrases,
or state that certain actions, events or results, "may", "could",
"would", "should", "might" or "will" be taken, occur or be
achieved. Forward-looking statements include, without limitation,
those with respect to the future or expected performance of the
Company's investee companies, the future price and value of
securities held by the Company, changes in these securities
holdings, the future price of oil and value of securities held by
the Company, changes to the Company's hedging practices, currency
fluctuations and requirements for additional capital.
Forward-looking statements rely on certain underlying assumptions
that, if not realized, can result in such forward-looking
statements not being achieved. Forward-looking statements involve
known and unknown risks, uncertainties and other factors that could
cause the actual results of the Company to be materially different
from the historical results or from any future results expressed or
implied by such forward-looking statements. Such risks and
uncertainties include, among others, the Company's investment
strategy, legal and regulatory risks, general market risk,
potential lack of diversification in the Company's investments,
interest rates, foreign currency fluctuations, the sale of Company
investments, the fact that dividends from investee companies are
not guaranteed, reliance on key executives, commodity market risk,
risks associated with investment in derivative instruments and
other factors. With respect to the Company's investment in hotel,
real estate and ferry operations, such risks and uncertainties
include, among others, weather conditions, safety, claims and
insurance, uninsured losses, changes in levels of business and
commercial travel and tourism, increases in the supply of
accommodations in local markets, the recurring need for renovation
and improvement of hotel properties, labour relations, and other
factors.
Although the Company has attempted to identify important factors
that could cause actions, events or results not to be as estimated
or intended, there can be no assurance that forward-looking
statements will prove to be accurate as actual results and future
events could differ materially from those anticipated in such
statements. Other than as required by applicable Canadian
securities laws, the Company does not update or revise any such
forward-looking statements to reflect events or circumstances after
the date of this document or to reflect the occurrence of
unanticipated events. Accordingly, readers should not place undue
reliance on forward-looking statements.
SOURCE Clarke Inc.