Cliffside Capital Ltd. Reports Growth in Assets and Net Financial Revenue in First Quarter of 2019 and CFO Transition
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TORONTO, May 15, 2019 /CNW/ - Cliffside Capital Ltd. ("Cliffside") (TSXV:CEP) is pleased to report results for the first quarter ended March 31, 2019.
In the first quarter of 2019, Cliffside acquired $22 million in finance receivables resulting in portfolio growth of 7% from December 31, 2018. Net interest income increased by $1.6 million, or 100%, to $3.1 million from the first quarter of 2018 to the first quarter of 2019. Similarly, Cliffside reported net financial revenue before credit losses of $2.3 million during the quarter, which is up $0.7 million, or 47%, from the same quarter prior year.
During the quarter, Cliffside, through its limited partnerships, negotiated new reduced terms with CanCap Management Inc. ("CCMI"), originator and servicer of the loans, which resulted in a one-time gain of $0.8 million. The new terms apply to all of the loans owned by the partnerships as of January 1, 2019, as well as all loans acquired going forward.
During the quarter, Cliffside successfully completed its rights offering, raising $3.1 million of gross proceeds to further invest in the limited partnerships and fund working capital requirements. Thus far, $2 million of these proceeds have been invested in the partnerships bringing Cliffside's total investment in the partnerships to $5.9 million. Cliffside will continue to invest in the partnerships as required to allow them to continue to grow their portfolios of fully serviced non-prime automobile loans.
Cliffside reported a net loss after taxes of $0.1 million for the quarter, compared to net income of $0.5 million for the same quarter prior year. The net loss was primarily a result of increase in allowance for credit losses as well as one-time stock-based compensation expense related to stock warrants issued to the individuals who provided a guarantee for the rights offering.
Cliffside is targeting growth in assets under management and growth in returns, while maintaining an acceptable level of credit risk to ultimately deliver attractive yields to shareholders.
Cliffside is pleased to announce the appointment of Praveen Gupta as Chief Financial Officer and Secretary effective as of June 20, 2019, the date of Cliffside's annual general meeting of shareholders ("AGM"). Mr. Gupta will replace Yazdi Bharucha, who will be retiring from the position, however will remain as an advisor to the Board of Directors as required.
Mr. Gupta is a seasoned finance professional and is the Chief Financial Officer of CCMI where he is responsible for leading and managing the finance, compliance and infrastructure IT functions. Prior to joining CCMI, he worked at Citibank in Canada (Citi) for nearly twelve years, most recently, as Chief Financial Officer of Citigroup Finance Canada, whose subsidiaries were engaged in consumer finance and fund/investor services businesses.
"We are excited to welcome Praveen to Cliffside's executive leadership team. His financial acumen, industry knowledge and extensive experience make him well qualified for the role of CFO. On behalf of the Board of Directors, we express our sincere appreciation to Yazdi for the contributions he has made to Cliffside and we wish him an enjoyable retirement." said Michael Stein, Chairman of Cliffside's Board of Directors.
"I am looking forward to taking the reins from Yazdi and working with the team at Cliffside to help grow the business." commented Mr. Gupta.
Cliffside will be holding its AGM on June 20, 2019 at 10:00am in Toronto, Ontario. For more information, please see Cliffside's management information circular dated May 15, 2019 filed on SEDAR at www.sedar.com.
Mr. Gupta's appointment as CFO of Cliffside is subject to review and approval by the TSX Venture Exchange.
About Cliffside
Cliffside is focused on investing in strategic partnerships with parties who have specialized expertise and a proven track record in originating and servicing loans and similar types of financial assets. Cliffside's strategy is to generate revenue as an investor, affording its shareholders an opportunity to invest in the growing alternative lending sector with the potential for attractive yields and minimal operational risk while earning a reliable total return. For more information, visit www.cliffsidecapital.ca.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to the business and operations of Cliffside. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; the results of operations; potential for conflicts of interests; as well as volatility of Cliffside's common share price and volume. There can be no assurance that such statements will prove to be accurate or complete, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cliffside disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
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 release.
SOURCE Cliffside Capital Ltd.
Yazdi Bharucha, CFO, (647) 226-4894, [email protected]
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