HALIFAX,
NS, April 23, 2024 /CNW/ - (TSXV:
NXLV) – NexLiving Communities Inc. ("NexLiving" or the
"Company") announced operating and financial results for the three-
and twelve-month periods ended December 31,
2023.
Stavro Stathonikos, President
& CEO commented: "NexLiving has set an industry benchmark
for organic growth with a +24% increase in same-property
NOI in the quarter and +14% for the year. Our commitment to
operational improvement and organic growth has more than offset
any interest rate headwinds throughout the year. We achieved a
350 basis point margin increase year-over-year, which led to
an exceptional +37% growth in FFO per share. As we look forward to
2024, we are focused on closing the highly accretive Devcore
transaction, implementing operational efficiencies throughout the
combined portfolio and directing free cash flow towards
de-leveraging the balance sheet and highly accretive
opportunities."
Summary of Results
- Suite count increased year-over-year from 1,016 to 1,166 (+15%
Y/Y).
- Property revenue increased +46% to $4.8
million for the three-month period and +56% to $18.5 million for the twelve-month period ended
December 31, 2023.
- Net operating income ("NOI") increased +61% to $2.9 million (60.4% margin) for the three-month
period and +65% to $11.0 million
(56.2% margin) for the twelve-month period ended December 31, 2023.
- FFO per share increased +52% for the three-month period and
+37% for the twelve-month period, on a fully diluted basis.
- Same property NOI for the three-month period increased +24.0%
as revenue grew by +7.7% and same property expenses declined by
(11.5)%. The decrease in same property operating expenses was
related to lower property taxes, maintenance, and insurance
costs.
- Same property NOI for the twelve-month period increased +13.9%
as revenue grew by +7.5% and same property expenses declined by
(0.8)%. The decrease in same property operating expenses was
related to lower property taxes, maintenance, and insurance costs,
partially offset by higher cleaning and utility expenses.
- The portfolio remained highly occupied at 96.8% at December 31, 2023. New
Brunswick occupancy was 97.8% and Ontario occupancy was 88.1%, as approximately
one-third of the overall portfolio vacant units were attributable
to the Company's suite repositioning program in the Ontario market.
Q4 2023 Operating and Financial Highlights:
As at
|
31-Dec-23
|
31-Dec-22
|
Change
|
Number of
suites
|
1,166
|
1,016
|
150
|
Occupancy
|
96.8 %
|
96.8 %
|
-
|
Net Debt to
GBV*
|
68.6 %
|
65.6 %
|
304 bps
|
Weighted average term
to debt maturity (years)
|
4.6
|
2.8
|
1.8 yrs
|
Weighted average
contractual interest rate
|
3.71 %
|
2.99 %
|
72 bps
|
Net asset
value
|
74,633,442
|
69,896,825
|
6.8 %
|
Net asset value per
share
|
$
4.49
|
$
4.73
|
(5.1) %
|
For the three months
ended December 31
|
2023
|
2022
|
Change
|
Rental
income
|
4,811,070
|
3,300,364
|
45.8 %
|
NOI
|
2,905,709
|
1,808,085
|
60.7 %
|
NOI margin
|
60.4 %
|
54.8 %
|
561 bps
|
Net
income
|
(3,039,678)
|
2,366,603
|
(228.4) %
|
FFO*
|
856,708
|
499,818
|
71.4 %
|
FFO per share -
diluted*
|
$
0.05
|
$
0.03
|
52.3 %
|
Dividends declared (per
share)
|
$
0.01
|
$
0.01
|
-
|
FFO payout
ratio*
|
19 %
|
30 %
|
(1,019)
bps
|
Weighted average units
outstanding - diluted
|
16,683,850
|
14,825,879
|
12.5 %
|
Same property
revenue*
|
2,817,323
|
2,616,259
|
7.7 %
|
Same property operating
expenses*
|
1,062,890
|
1,200,824
|
(11.5) %
|
Same property
NOI*
|
1,754,433
|
1,415,435
|
24.0 %
|
Same property NOI
margin*
|
62.3 %
|
54.1 %
|
817 bps
|
For the twelve
months ended December 31
|
2023
|
2022
|
Change
|
Rental
income
|
18,475,666
|
11,864,526
|
55.7 %
|
NOI
|
11,036,516
|
6,670,444
|
65.5 %
|
NOI margin
|
59.7 %
|
56.2 %
|
351 bps
|
Net
income
|
(2,203,803)
|
7,513,188
|
(129.3) %
|
FFO*
|
2,837,887
|
1,859,846
|
52.6 %
|
FFO per share -
diluted*
|
$
0.17
|
$
0.13
|
36.9 %
|
Dividends declared (per
share)
|
$
0.04
|
$
0.04
|
-
|
FFO payout
ratio*
|
23 %
|
32 %
|
(856) bps
|
Weighted average units
outstanding - diluted
|
16,455,802
|
14,763,052
|
11.5 %
|
Same property
revenue*
|
11,051,114
|
10,280,401
|
7.5 %
|
Same property operating
expenses*
|
4,435,168
|
4,472,885
|
(0.8) %
|
Same property
NOI*
|
6,615,946
|
5,807,516
|
13.9 %
|
Same property NOI
margin*
|
59.9 %
|
56.5 %
|
338 bps
|
*Refer to section
"Non-IFRS Financial Measures"
|
Fair Value of Investment Properties:
The Company's weighted average capitalization rate as at
December 31, 2023, increased to 4.79%
from 4.69% at December 31, 2022. The
increase in capitalization rates reflects the volatility in market
capitalization rates due to the decline in activity levels caused
by the uncertain macroeconomic environment and the current level of
interest rates. The loss in fair value recorded by the Company in
the three month and twelve month periods ended December 31, 2023, was due to higher
capitalization rates used to value the Company's investment
properties, partially offset by forecasted NOI growth due to
expected rent increases and operating expense efficiencies.
NCIB Activity:
During the three month period ended December 31, 2023, the Company purchased for
cancellation 10,000 shares at a cost of $16,463, representing a weighted average price of
$1.65. During the twelve month period
ended December 31, 2023, the Company
purchased for cancellation 74,650 shares at a cost of $167,924, representing a weighted average price
of $2.25 per share.
Transaction Update:
On April 3, 2024, approximately
93.5% of the Company's shareholders voted in favour of the
resolution in connection with the Company's previously announced
transaction to acquire from Devcore Group Inc. and its related
entities ("Devcore") a portfolio of multi-family assets in eastern
Ontario and Quebec consisting of 16 properties and 991
units in exchange for share consideration and the assumption of
existing mortgages (collectively, the "Transaction").
The Company and Devcore continue to make progress towards
closing the Transaction and subject to receipt of final approval
from the TSXV and all other conditions being satisfied or waived,
including certain regulatory and lender approvals, the Company
expects that the Transaction will close during the second quarter
of 2024.
Refinancing Activity:
On April 3, 2024, the Company
refinanced its mortgage on the 5 Woodhollow Park property and
entered into a new $9.3 million
CMHC-insured mortgage for a ten-year term with a fixed interest
rate of 4.40%. The new mortgage replaced the maturing $7.5 million mortgage.
On April 23, 2024, the Company
refinanced its mortgage on the 49 Noel property and entered into a
new $9.4 million CMHC-insured
mortgage for a ten-year term with a fixed interest rate of 4.18%.
The new mortgage replaced the maturing $8.7
million mortgage.
About the Company
The Company continues to execute on its plan to acquire recently
built or refurbished, highly leased multi-residential properties in
bedroom communities across Canada.
The Company aims to deliver exceptional living experiences to our
residents and provide comfortable, affordable housing solutions
that cater to a wide range of demographics. The properties offer a
range of modern and updated suites, with a variety of amenities and
features that allow residents to experience a hassle-free and
maintenance-free lifestyle. The Company is committed to investing
in its properties to ensure that they are modern and up-to-date.
For its recently acquired properties in Ontario, the Company has undertaken a targeted
value-add capital program to modernize and reposition the large
existing suites. The Company currently owns 1,166 units in
New Brunswick and Ontario. NexLiving has also developed a robust
pipeline of qualified properties for potential acquisition. By
screening the properties identified to match the criteria set out
by the Company (proximity to healthcare, amenities, services, and
recreation), management has assembled a significant pipeline of
potential acquisitions for consideration by the Company's Board of
Directors.
For more information about NexLiving, please refer to our
website at www.nexliving.ca and our public disclosure at
www.sedarplus.ca.
Forward-Looking Statements
This news release forward-looking information within the meaning
of applicable Canadian securities laws ("forward-looking
statements"). All statements other than statements of
historical fact are forward-looking statements. Often, but not
always, forward-looking statements can be identified by the use of
words such as "plans", "expects", "is expected", "budget",
"scheduled", "projects", "estimates", "forecasts", "intends",
"continues", "anticipates", or "does not anticipate" or "believes"
or variations (including negative variations) of such words and
phrases, or state that certain actions, events or results "may",
"could", "should", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements contained in this news release
include, but are not limited to, management's expectations of
additional rental increases to come into effect by year end and the
further enhancement of the Company's financial results. Such
forward-looking statements are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations.
These forward-looking statements reflect the current expectations
of the Company's management regarding future events and operating
performance, but involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance, or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Actual events could differ
materially from those projected herein and depend on a number of
factors. These risks and uncertainties are more fully described in
regulatory filings, which can be obtained on SEDAR at
www.sedarplus.ca, under NexLiving's profile, as well as under Risk
Factors section of the MD&A released on April 23, 2024. Although
forward-looking statements contained in this new release are based
upon what management believes are reasonable assumptions, there can
be no assurance that actual results will be consistent with these
forward-looking statements. Accordingly, readers should not place
undue reliance on forward-looking statements. The forward-looking
statements in this new release speak only as of the date of this
news release. Except as required by applicable securities laws, the
Company does not undertake, and specifically disclaims, any
obligation to update or revise any forward-looking statements,
whether as a result of new information, future developments or
otherwise, except as required by applicable law.
Non-IFRS Financial Measures
The Company prepares and releases unaudited consolidated interim
financial statements and audited consolidated annual financial
statements prepared in accordance with IFRS. In this and other
earnings releases, as a complement to results provided in
accordance with IFRS, NexLiving discloses financial measures not
recognized under IFRS which do not have standard meanings
prescribed by IFRS. These include FFO, FFO (cents per share) –
diluted, FFO payout ratio, Debt to GBV and same-property metrics
(collectively, the "Non-IFRS Measures"). These Non-IFRS
Measures are further defined and discussed in the MD&A dated
April 23, 2024, which should be read
in conjunction with this news release. Since these measures are not
recognized under IFRS, they may not be comparable to similar
measures reported by other issuers. The Company presents the
Non-IFRS measures because management believes these Non-IFRS
measures are relevant measures of the ability of NexLiving to earn
revenue and to evaluate its performance and cash flows. A
reconciliation of these Non-IFRS measures is included in the
MD&A dated April 23,
2024. The Non-IFRS measures should not be construed as
alternatives to net income (loss) or cash flows from operating
activities determined in accordance with IFRS as indicators of the
Company's performance.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this press release.
SOURCE NexLiving Communities Inc.