TORONTO, Nov. 9, 2012 /CNW/ - Brookfield Real Estate Services Inc. (the Company) (TSX: BRE), a leading provider of services to residential real estate brokers and their REALTORS®¹, today announced that cash flow from operations ("CFFO") for the three and nine months ended September 30, 2012 was $7.1 million or $0.55 per restricted voting share ("Share") and $20.0 million or $1.56 per Share, respectively, as compared to $7.3 million or $0.57 per Share and $19.9 million or $1.55 per Share, respectively, for the same period in 2011.
CFFO for the rolling 12 month period ended September 30, 2012 was $1.98 per Share as compared to $1.97 for the 12 months ended December 31, 2011. Royalties for the three and nine months ended September 30, 2012 were $10.2 million and $28.4 million, respectively, compared to $10.3 million and $28.3 million, respectively for the same period in 2011. Net loss and net earnings for the three and nine months ended September 30, 2012 was $2.5 million and $2.1 million, or $0.26 loss and $0.22 earnings per Share, respectively, as compared to net income of $8.1 million and $11.2 million or $0.85 and $1.18 per Share, respectively, for the same period in 2011.
OVERVIEW OF THIRD QUARTER OPERATING RESULTS During the Quarter the Company generated CFFO of $7.1 million as compared to $7.3 million for the same period in 2011 due primarily to a $0.3 million bad debt provision associated with the writedown of the remaining receivable balance of a distressed franchisee. Management continues to work with this franchisee and will record the associated royalties and receivable recoveries as received.
On a rolling twelve-month basis, the Canadian market transactional dollar volume of $168.0 billion increased by 3% from September 30, 2011, driven by a 1% and 2% increase in selling price and home sale activity, respectively. For the three months ended September 30, 2012, the Canadian market transactional dollar volume was down 7% over the same period in 2011, driven solely by a decrease in home sale activity."Early in the year, we had forecast a cyclical slowing in transaction volumes, a natural market reaction after a period of strong home price appreciation, which saw affordability eroded," said Phil Soper, President and Chief Executive Officer. "Changes to mortgage regulations, which took effect on July 9 th, accelerated the correction." On a rolling twelve-month basis, the GTA Market increased by 7% from September 30, 2011, driven solely by an increase in selling price. For the three months ended September 30, 2012, the GTA Market experienced a 10% decrease on a 5% increase in selling price and 15% decrease in home sale activity, respectively over the same period in 2011. The Company's revenue is primarily fixed in nature, based on the number of REALTORS® in the network. This structure provides revenue protection from the impact of revenue declines when the market cools, but also reduces the degree to which the Company participates in periods of rapid market expansion.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts