(TheNewswire)
Edmonton, Alberta – TheNewswire - April 20, 2023 – Yorkton Equity Group Inc. (“Yorkton”or the “Company”) (TSXV:YEG) is pleased to announce its financialresults for the year ended December 31, 2022 and provide a corporateupdate.
Mr. Ben Lui, Presidentand CEO of Yorkton stated that, “We are pleased to announce ourfinancial results for the year ended December 31, 2022. Yorkton’snet rental income has more than tripled to $1.8 million in 2022 and weachieved positive cash flow from operating activities of $0.8 million.These accomplishments are a result of our continued organic growth andaccretive investment property acquisitions in strategic markets acrossBritish Columbia and Alberta resulting in Yorkton’s total aggregateinvestment property portfolio being valued at $54.6 million as ofDecember 31, 2022. Our strategic investments are beginning to yieldstrong returns, and we are optimistic that we can continue to executeon our growth strategy and deliver strong positive results and driveshareholder value in 2023. ”
2022 Financial Highlights
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Total rental revenue increased by $1,916,418 or 178% to$2,993,334 in 2022 compared to $1,076,916 in 2021 and net rentalincome increased by $1,284,507 or 229% to $1,845,211 in 2022 ascompared to $560,704 in 2021. These increases were due primarily tothe acquisition of multi-family rental properties in 2021 and early2022 and were partially offset by a decrease in rental revenue and netrental income from the Pacific Mall, acquired in 2020 (Edmonton, AB),due to financial hardship the tenants of the Pacific Mall faced in2022 from government imposed COVID-19 health mandates which have nowbeen fully lifted. The Company believes that the rental revenue andnet rental income from the Pacific Mall will begin to improve in 2023.
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The Company achieved income before income taxes of$69,445 in 2022 compared to a loss before income taxes of $1,219,050in 2021. Due to the recognition of non-cash deferred income taxexpense of $231,418 arising primarily from the increase in the fairmarket value of the investment properties, as measured in compliancewith IFRS, which exceeds their cost base for tax purposes, the Companyrecorded an overall net and comprehensive loss of $161,973 in 2022,which is a significant improvement from the overall net andcomprehensive loss of $1,256,526 in 2021.
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Net cash generated from operating activities in 2022was $781,186 as compared to net cash spent on operating activities of$976,475 in 2021. This increase of cash generated from operatingactivities of $1,757,661 from 2021 to 2022 is driven primarily by theacquisition of multi-family rental properties in 2021 and early 2022,which are now fully integrated into Yorkton’s operations.
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During 2022, the Company acquired four (4) newmulti-family rental properties in Fort St. John, British Columbia fora total aggregate purchase price, including acquisition costs, ofapproximately $11.4 million. These purchases were funded withmortgage financing of approximately $9.5 million and cash of hand ofapproximately $1.9 million. As at December 31, 2022, the value ofthe Company’s total investment property portfolio was approximately$54.6 million.
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During 2022, the Company issued approximately $3million of convertible debentures which mature 5 years from the dateof issuance and are convertible, at the option of the holder, intocommon shares of the Company at a price of $0.60 per common share. Approximately $2.8 million of the convertible debentures have aninterest rate of 7% per annum and approximately $0.2 million have aninterest rate equal to the higher of 7% per annum or the Bank ofCanada Prime Rate plus 3.5% per annum as determined on the lastbusiness day of the calendar year, to be applied to the subsequentcalendar year.
Corporate Update
Below is a summary of certain events that have occurredsince the December 31, 2022 year end:
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The Company completed one (1) non-brokered privateplacement of unsecured convertible debentures for total aggregategross proceeds of $258,000. The convertible debentures bear interest at arate of 8% per annum, payable annually only in cash without anyconversion of that interest component into common shares and mature onthe date that is five (5) years from the date of issuance. Theprincipal amount of each convertible debenture may, at the option ofthe convertible debenture holder, be converted, in whole or in part,into common shares at a conversion price of $0.30 per common share.
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The Companyreceived approval from the TSX Venture Exchange to commence a normalcourse issuer bid (the “NCIB”) to repurchase, for cancellation, upto an aggregate of 5,633,871 common shares of the Company. The fundsto repurchase the common shares of the Company pursuant to the NCIBwill only come from cash provided by operating activities of theCompany. The NCIB will expire on January 26, 2024. In March 2023,the Company repurchased 20,000 common shares under the NCIB for atotal cost of $3,090.
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On February 27, 2023, the Company acquired The Dwell, a188 unit multi-family rental complex, with construction completed in2022, comprising of two luxury condominium grade buildings located inthe Schonsee neighborhood in Edmonton (Alberta) for a purchase priceof approximately $42 million. The acquisition was financed with aCanada Mortgage and Housing Corporation (“CMHC”) insured mortgageof approximately $40 million at a fixed rate of 3.617% per annum andamortized over 50 years, maturing on June 1, 2028. The Dwell iscomprised of 32 one-bedroom with one-bathroom suites, 9 one-bedroomplus den with one-bathroom suites, 143 two-bedroom with two-bathroomsuites, and 4 three-bedroom with two-bathroom suites. Each suite isequipped with in-suite laundry, 6-piece energy efficientstainless-steel appliances, designer cabinetry with quartzcountertops, air conditioning in select units, 9-foot ceilings in allsuites, energy efficient windows throughout, together with one hundredand ninety-one (191) heated underground parking stalls andseventy-three (73) surface parking stalls. The buildings are equippedwith elevators serving all levels, with a designated elevator andloading zone for move in/out access and featuring extra wide corridorsand spacious lobby for ease of wheelchair access. The Dwell alsoincludes amenities such as a social room in each building, fitnesscenter, two pet wash stations, a bicycle storage room, heated storagelockers on each floor, and enhanced security and safety features.
About Yorkton
Yorkton Equity Group Inc. is a growth-oriented real estate investmentcompany committed to providing shareholders with growing assetsthrough accretive acquisitions, organic growth, and the activemanagement of multi-family rental properties with significant upsidepotential. Our current geographical focus is in markets in Alberta andBritish Columbia with diversified and growing economies, and strongpopulation in-migration. Our business objectives are to achievegrowing Net Operating Income (“NOI”) as well as Net Asset Value(“NAV”) in our multi-family rental property portfolio in strategicmarkets across Canada.
The management team at Yorkton Equity Group Inc. has well over 30years of real estate experience in acquiring and managing rentalassets.
Further information about Yorkton is available on the Company’swebsite at www.yorktonequitygroup.com and the SEDAR website at www.sedar.com.
Neither the TSX Venture Exchange norits Regulation Services Provider (as that term is defined in thepolicies of the TSX Venture Exchange) accepts responsibility for theadequacy or accuracy of this release.
For further information on Yorkton,please contact:
Ben Lui, CEO - Corporate Office: (780) 409-8228
Yorkton Equity Group Inc. – Shareholder Communications: (780)907-5263
Email: investors@yorktonequitygroup.com
Forward-looking information
This press release may include forward-looking information within themeaning of Canadian securities legislation concerning the business ofYorkton. Forward-looking information is based on certain keyexpectations and assumptions made by the management of Yorkton.Although Yorkton believes that the expectations and assumptions onwhich such forward-looking information is based are reasonable, unduereliance should not be placed on the forward-looking informationbecause Yorkton can give no assurance that they will prove to becorrect. Forward-looking statements contained in this press releaseare made as of the date of this press release. Yorkton disclaims anyintent or obligation to update publicly any forward-lookinginformation, whether as a result of new information, future events orresults or otherwise, other than as required by applicable securitieslaws.
This press release does not constitute an offer to sell or asolicitation of an offer to buy any of the securities described hereinin the United States. The securities described herein have not beenand will not be registered under the United States Securities Act of1933, as amended, or any applicable securities laws or any state ofthe United States and may not be offered or sold in the United Statesor to the account or benefit of a person in the United States absentan exemption from the registration requirement.
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