TORONTO, May 6, 2014 /CNW/ - Brookfield Real Estate Services Inc. (the Company) (TSX: BRE), a leading provider of services to residential real estate brokers and their REALTORS ® today announced that cash flow from operations ("CFFO") for the three months ended March 31, 2014 was $5.7 million or $0.44 per Restricted Voting Share ("Share"), up $0.1 million as compared to $5.6 million or $0.44 per for the same period in 2013.
OVERVIEW OF FIRST QUARTER OPERATING RESULTSCFFO for the rolling 12 month period ended March 31, 2014 was $1.98 per Share as compared to $1.97 for the 12 months ended December 31, 2013. Royalties for the three months ended March 31, 2014 was $8.15 million or $0.64 per Share, up from $8.06 million or $0.63 per Share for the same period in 2013. Net loss for the three months ended March 31, 2014 was $4.8 million or $0.51 loss per as compared to net loss of $0.5 million or $0.06 loss per for the same period in 2013.
During the Quarter, the Company generated CFFO of $5.7 million, up 1.9% from $5.6 million for the same period of 2013 driven primarily by an increase in year-over-year royalty fees resulting from a larger Agent base, the implementation of the previously announced $2 increase in the monthly Royal LePage fixed franchise fee, and a modest increase in market activity. Partially offsetting the increase in royalties was the non-recognition of $0.2 million of fees associated with non-performing franchisees that are experiencing financial challenges.For the rolling twelve months ended March 31, 2014, the Canadian Market, as defined by Market transactional dollar volume, closed up 11.7%, at $179 billion, compared to the same period of 2013, driven by an increase of 6.7% in selling price and 4.8% increase in units sold. For the three months ended March 31, 2014, the Canadian market transactional dollar volume was up 11.1% over the same period in 2013, driven by an 8.2% increase in selling price and a 2.7% increase in home sale activity. On a rolling twelve-month basis, the GTA Market experienced a quarter-over-same-quarter increase of 13.2% driven by a 6.1% increase in selling price, and a 6.7% increase in home sale activity. For the three months ended March 31, 2014, the GTA Market experienced an 8.4% increase on an 8.1% increase in selling price and a 0.3% increase in home sale activity over the same period in 2013. 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. "The company began 2014 on solid footing," said Phil Soper, President and Chief Executive Officer, Brookfield Real Estate Services Inc. "Royalties edged up, year-over-year, against a backdrop of weather-stifled housing activity. It is common for winter to negatively impact home sales somewhere in Canada during the first quarter of any given year. What made the first months of 2014 stand out was the wide geographic span and staying power of the severe cold and snowstorms across the country." "As the worst of the inclement weather subsided in the final weeks of the quarter, the market came to life, listing inventory began to grow and buyer demand was strong, particularly in the largest metropolitan markets in British Columbia, Alberta and Ontario," continued Soper. "The combination of pent-up demand, reasonable inventory levels and sound underlying economic fundamentals has set the stage for a robust 2014 spring market." The Company NetworkThe Company added 375 net agents in the first quarter. As at March 31, 2014, the Company Network was comprised of 15,685 REALTORS ®, operating under 313 franchise agreements providing services from 646 locations, with approximately one fifth share of the Market based on 2013 transactional dollar volume. Outlook "The Company has made significant enhancements to our operating platforms during the past year," said Soper. "We are encouraged by the adoption of new mobile and web technologies by home buyers and sellers which should improve our ability to attract Brokers and Agents to our network." "We believe that the underlying fundamentals of the Canadian housing market remain sound. With the continuation of solid economic performance coupled with the persistently low interest rates, we expect to see growth in both sales volumes and price appreciation for the remainder of 2014," concluded Soper.