Diversified Royalty Corp. (TSX: DIV and DIV.DB) (the
“Corporation” or “DIV”) announced today that it has filed, and
received receipt for, a preliminary short form base shelf
prospectus (the “Prospectus”). The Prospectus was filed with the
securities regulatory authorities in each of the Provinces of
Canada, other than Quebec. The Prospectus was filed to provide DIV
with financial flexibility and efficient access to Canadian capital
markets to pursue strategic initiatives, which may include
acquisitions of additional royalties. A copy of the Prospectus is
available under DIV’s profile on SEDAR at www.sedar.com.
Once a receipt for the final Prospectus is
received from the applicable securities regulators, the final
Prospectus will be valid for a 25-month period during which time
DIV may, from time to time, issue common shares, warrants,
subscription receipts, debt securities, convertible securities or
rights or any combination thereof, including in the form of units
(collectively, the “Securities”), having an aggregate offering
price up to Cdn$200 million. The specific terms of any offering of
Securities will be described in one or more shelf prospectus
supplements which will be filed at the time of the offering of such
Securities.
Mr. Lube First Quarter Results
Mr. Lube Canada Limited Partnership (“Mr. Lube”)
has reported its financial results for the three months ended March
31, 2021, which are available on SEDAR at www.sedar.com. Mr. Lube
reported same-store-sales-growth (“SSSG”) of 3.9% for the Mr. Lube
stores in the royalty pool for Q1 2021, an improvement compared to
SSSG of -7.2% for the three months ended March 31, 2020, which
results are consistent with the amounts reported in DIV’s news
release dated April 29, 2021.
About Diversified Royalty Corp.
DIV is a multi-royalty corporation, engaged in
the business of acquiring top-line royalties from well-managed
multi-location businesses and franchisors in North America. DIV’s
objective is to acquire predictable, growing royalty streams from a
diverse group of multi-location businesses and franchisors.
DIV currently owns the Mr. Lube, AIR MILES®,
Sutton, Mr. Mikes, Nurse Next Door and Oxford Learning Centres
trademarks. Mr. Lube is the leading quick lube service business in
Canada, with locations across Canada. AIR MILES® is Canada’s
largest coalition loyalty program with approximately two-thirds of
Canadian households actively participating in the AIR MILES®
Program. Sutton is among the leading residential real estate
brokerage franchisor businesses in Canada. Mr. Mikes currently
operates casual steakhouse restaurants primarily in western
Canadian communities. Nurse Next Door is one of North America’s
fastest growing home care providers with locations across Canada
and the United States as well as in Australia. Oxford Learning
Centres is one of Canada’s leading franchised supplemental
education services in Canada and the United States.
DIV intends to increase cash flow per share by
making accretive royalty purchases and through the growth of
purchased royalties. DIV expects to pay a predictable and stable
dividend to shareholders and increase the dividend as cash flow per
share increases allow.
Forward Looking Statements
Certain statements contained in this news
release may constitute “forward-looking information” within the
meaning of applicable securities laws that involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking information. The use
of any of the words “anticipate”, “continue”, “estimate”, “expect”,
“intend”, “may”, “will”, ”project”, “should”, “believe”,
“confident”, “plan” and “intends” and similar expressions are
intended to identify forward-looking information, although not all
forward-looking information contains these identifying words.
Specifically, forward-looking information in this news release
includes, but is not limited to, statements made in relation to:
the Prospectus being filed to provide DIV with financial
flexibility and efficient access to Canadian capital markets to
pursue strategic initiatives, which may include acquisitions of
additional royalties; the specific terms of any offering of
Securities will be described in one or more shelf prospectus
supplements which will be filed at the time of the offering of such
Securities; DIV’s intention to pay monthly dividends to
shareholders; and DIV’s corporate objectives. These statements
involve known and unknown risks, uncertainties and other factors
that may cause actual results or events, performance, or
achievements of DIV to differ materially from those anticipated or
implied by such forward-looking information. DIV believes that the
expectations reflected in the forward-looking information included
in this news release are reasonable but no assurance can be given
that these expectations will prove to be correct. In particular
there can be no assurance that: DIV will receive regulatory
approval for the final Prospectus; DIV will complete any offerings
of securities under the Prospectus; DIV will complete any future
royalty acquisitions; DIV will be able to make monthly dividend
payments to the holders of its common shares; or DIV will achieve
any of its corporate objectives. Given these uncertainties, readers
are cautioned that forward-looking information included in this
news release are not guarantees of future performance, and such
forward-looking information should not be unduly relied upon. More
information about the risks and uncertainties affecting DIV’s
business and the businesses of its royalty partners can be found in
the “Risk Factors” section of its Annual Information Form dated
March 11, 2021 and in its most recent Management’s Discussion and
Analysis, copies of each of which are available under DIV’s profile
on SEDAR at www.sedar.com.
In formulating the forward-looking information
contained herein, management has assumed that DIV will receive all
necessary regulatory approvals for the final Prospectus; DIV will
complete one or more offerings under the final Prospectus and one
or more prospectus supplements and DIV will successfully deploy the
proceeds therefrom; DIV will complete additional royalty
acquisitions; DIV will generate sufficient cash flows from its
royalties to service its debt and pay dividends to shareholders;
lenders will provide any necessary waivers required in order to
allow DIV to continue to pay dividends; the impacts of COVID-19 on
DIV and its royalty partners will be consistent with DIV’s
expectations and the expectations of management of each of its
Royalty Partners, both in extent and duration; DIV and its royalty
partners will be able to reasonably manage the impacts of the
COVID-19 outbreak on their respective businesses. These
assumptions, although considered reasonable by management at the
time of preparation, may prove to be incorrect.
All of the forward-looking statements made in
this news release are qualified by these cautionary statements and
other cautionary statements or factors contained herein, and there
can be no assurance that the actual results or developments will be
realized or, even if substantially realized, that they will have
the expected consequences to, or effects on, DIV. The
forward-looking information included in this news release is
presented as of the date of this news release and DIV assumes no
obligation to publicly update or revise such information to reflect
new events or circumstances, except as may be required by
applicable law.
Non-IFRS Financial Measures
Management believes that disclosing certain
non-IFRS financial measures provides readers with important
information regarding the Corporation’s financial performance and
its ability to pay dividends and the performance of its royalty
partners. By considering these measures in combination with the
most closely comparable IFRS measure, management believes that
investors are provided with additional and more useful information
about the Corporation and its royalty partners than investors would
have if they simply considered IFRS measures alone. The non-IFRS
financial measures do not have standardized meanings prescribed by
IFRS and therefore are unlikely to be comparable to similar
measures presented by other issuers. Investors are cautioned that
non-IFRS measures should not be construed as a substitute or an
alternative to cash flows from operating activities as determined
in accordance with IFRS.
“Same Store Sales Growth” or “SSSG” is used as a
non-IFRS measure in this news release. References to “same store
sales growth” or “SSSG” in this news release are to the percentage
increase in store sales over the prior comparable period that were
open in both the current and prior periods, excluding stores that
were permanently closed. Same store sales growth is a non-IFRS
financial measure and does not have a standardized meaning
prescribed by IFRS. However, the Corporation believes that same
store sales growth is a useful measure as it provides investors
with an indication of the change in year-over-year sales of Mr.
Lube locations. The Corporation’s method of calculating same store
sales growth may differ from those of other issuers or companies
and, accordingly, same store sales growth may not be comparable to
similar measures used by other issuers or companies. In addition,
see the “Description of Non-IFRS and Additional IFRS Measures” in
DIV’s most recently filed management’s discussion and analysis, a
copy of which is available on SEDAR at www.sedar.com.
THE TORONTO STOCK EXCHANGE HAS NOT
REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE
ACCURACY OF THIS RELEASE.
Additional Information
Additional information relating to the
Corporation and other public filings, is available on SEDAR at
www.sedar.com.
Contact: Sean Morrison, President and Chief
Executive Officer Diversified Royalty Corp. (604) 235-3146
Greg Gutmanis, Chief Financial Officer and VP
Acquisitions Diversified Royalty Corp. (604) 235-3146
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