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DLC Releases Q3-2023 Results; YTD Funded Volumes of $42.3 Billion; Management Change

VANCOUVER, British Columbia, Nov. 07, 2023 (GLOBE NEWSWIRE) -- Dominion Lending Centres Inc. (TSX:DLCG) ("DLCG" or the "Corporation") is pleased to report its financial results for the three ("Q3-2023") and nine months ended September 30, 2023. For complete information, readers should refer to the interim financial statements and management discussion and analysis which are dated November 7, 2023 and available on SEDAR at www.sedar.com and on the Corporation's website at www.dlcg.ca. All amounts are presented in Canadian dollars unless otherwise stated.

DLCG includes the Corporation and its three main subsidiaries: MCC Mortgage Centres Canada Inc. ("MCC"), MA Mortgage Architects Inc. ("MA"), and Newton Connectivity Systems Inc. ("Newton").

Q3-2023 Summary

  • Q3-2023 funded volumes of $17.7 billion, representing a 9% decrease as compared to the three months ended September 30, 2022 ("Q3-2022");
  • Q3-2023 revenue of $19.6 million, representing a 9% increase as compared to Q3-2022, primarily from an increase in Newton revenues from lender renewals and increased Velocity adoption;
  • Q3-2023 Adjusted EBITDA of $10.1 million as compared to $9.4 million during Q3-2022, representing an 8% increase over the prior year period;
  • The Corporation recorded net income for Q3-2023 of $5.3 million as compared to net income of $29.4 million in Q3-2022, primarily due to a non-cash finance expense on the Preferred Share Liability of $0.9 million compared to a recovery of $27.8 million in Q3-2022;
  • The Corporation declared a quarterly dividend of $0.03 per class A common share ("Common Share"), resulting in a dividend payment of $1.4 million in Q3-2023; and
  • During Q3-2023, the Corporation made repurchases under the normal-course issuer bid ("NCIB") of 15,550 Common Shares at an average price of $2.15 per share.

Gary Mauris, Executive Chairman and CEO, commented, "With our continued focus to onboard our brokers onto our connectivity platform Velocity, we have seen an increase in revenues and adjusted EBITDA in Q3-2023. This increase in revenues resulted in an increase in our adjusted EBITDA margins to 52% in Q3-2023, due to our fixed cost structure. However, our funded mortgage volumes remain lower than Q3-2022 by 9%. While we are seeing improvements in our funded mortgage volumes in Q3-2023, the Canadian real estate market continues to face headwinds largely caused by increased interest rates contributing to lower housing transactions. We anticipate seeing further recovery in our margins and mortgage volumes, as we expect the market to stabilize over the next 12-18 months."

Selected Consolidated Financial Summary:
Below is the summary of our financial results for the three and nine months ended September 30, 2023 and September 30, 2022.

  Three months ended Sept. 30,
  Nine months ended Sept. 30,
 
(in thousands, except KPIs)   2023     2022   Change     2023     2022   Change  
Revenues $ 19,578   $ 17,934   9%   $ 46,759   $ 56,786   (18%)  
Operating expenses   10,699     9,283   15%     32,362     31,954   1%  
Income from operations   8,879     8,651   3%     14,397     24,832   (42%)  
Other (expense) income, net   (1,434)     22,829   NMF(4)     (9,364)     (5,089)   (84%)  
Income before tax   7,445     31,480   (76%)     5,033     19,743   (75%)  
Add back:                    
Depreciation and amortization   939     951   (1%)     2,848     3,014   (6%)  
Finance expense   832     678   23%     2,329     1,710   36%  
Finance expense (recovery) on the Preferred Share liability   880     (27,758)   NMF(4)     7,991     492   NMF(4)  
Gain on sale of an equity-accounted investment   -     (525)   NMF(4)     -     (525)   NMF(4)  
Non-cash impairment of an equity-accounted investment   -     4,778   NMF(4)     -     4,778   NMF(4)  
Other adjusting items   20     (208)   NMF(4)     (288)     (185)   (56%)  
Adjusted EBITDA(1) $ 10,116   $ 9,396   8%   $ 17,913   $ 29,027   (38%)  
Adjusted EBITDA margin(1)   52%     52%   -%     38%     51%   (25%)  
Key Performance Indicators ("KPIs")                                
Funded mortgage volumes(2)   17.7     19.4   (9%)     42.3     57.2   (26%)  
Number of franchises(3)   526     539   (2%)     526     539   (2%)  
Number of brokers(3)   8,081     8,221   (2%)    

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