TORONTO, March 8, 2012 /CNW/ - Xceed Mortgage Corporation [TSX: XMC] ("Xceed" or the "Company") today reported its first quarter results for the three month period ended January 31, 2012.
THE RESULTS OF THE FIRST QUARTER WERE PREPARED USING INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS"), WITH A TRANSITION DATE OF NOVEMBER 1, 2011. CONSEQUENTLY, PRIOR PERIOD COMPARATIVE RESULTS, THE INFORMATION CONTAINED IN THIS NEWS RELEASE, THE COMPANY'S MANAGEMENT DISCUSSION & ANALYSIS AND FINANCIAL STATEMENTS HAVE ALL BEEN RESTATED TO CONFORM WITH IFRS REQUIREMENTS.
The following are highlights of the first quarter:
- Net income of $0.3 million for the 3 months ended January 31, 2012.
- Basic and diluted earnings per share of $0.01.
- Return on equity of 2.6%.
- Book value per share of $1.97 as at January 31, 2012.
- Net income before tax from ongoing operations (ie. excluding the Company's legacy trust operations that are in wind down) was $0.9 million demonstrating profitability within Xceed's core operating business.
- In Q1, 2012, the Company entered into a sale agreement with a financial partner for uninsured mortgages. This arrangement enables the Company to renew uninsured mortgages, and then sell them to the financial partner, for onward sale to third party investors. These mortgages are sold on a whole loan basis by the Company with ultimate proceeds of sale shared equally with the financial partner. In Q1, 2012, the Company originated and sold $3.1 million of mortgages under this new arrangement.
- The Company's primary source of revenue continues from the sale of pools of insured mortgages to third parties. In Q1, 2012, the company sold $29.7 million of insured mortgages for a net gain of $1.2 million and the Company continues to develop its presence in the broker channel for this asset class signing new brokers on a daily basis.
One of the impacts, as at January 31, 2012, of converting the Company's financial reporting to IFRS is the consolidation of the financial results of Xceed Mortgage Trust 2 ("XMT2") to which the Company sold mortgages.
Because XMT2 trust has a deficit of $7.3 million as at January 31, 2012 (which deficit will be borne by the trust's subordinated note holder once the trust is finally dissolved), the consolidation of the trust results in Xceed reducing its consolidated equity by the amount of the trust's deficit. This reduction will reverse in the quarter XMT2 is finally dissolved and the loss taken by the note holder.
The Company has filed its financial statements and management's discussion and analysis for 2011 with SEDAR and they will be posted on the company's website.
These filings provide additional details on the above noted items along with additional information regarding results for the quarter and cautions regarding forward-looking statements. The materials can be accessed at www.sedar.com or on the Company's website at www.xceedmortgage.com.
Management Comments on Results
"During the first quarter of fiscal 2012, management continued to focus on the ongoing repayment and refinancing of its legacy uninsured mortgage portfolios", said Michael Jones, President & CEO.
"To assist with this, we entered into a sale agreement with a third party financial institution, whereby maturing mortgages can be renewed for terms up to three years and then sold to an investor", Mr. Jones continued.
"The Company also continued to redevelop its presence in the mortgage broker channel for insured residential mortgages." he concluded.
Annual General Meeting
As a reminder, the Company will be holding its Annual General Meeting of shareholders today at 2pm at the Novotel Hotel Toronto (located at 45 The Esplanade).
Michael Jones, President and Chief Executive Officer, and Jeff Bouganim, Chief Financial Officer will be available from Thursday, March 8, 2012 onwards to respond to investor inquiries regarding these results.
About Xceed Mortgage
Xceed Mortgage Corporation, based in Toronto, is a Canadian provider of residential mortgages that it originates in Canada. The company has approximately $1.0 billion of mortgages and other assets under administration. The company's shares are traded on the Toronto Stock Exchange (TSX: XMC). To find out more about Xceed Mortgage Corporation, visit our website at www.xceedmortgage.com.
Forward-looking statements in this document are based on current expectations that are subject to significant risks and uncertainties. Actual results might differ materially due to various factors such as the competitive nature of the mortgage industry, the ability of the company to continue to execute its growth and development strategy, and the reliance of the company on key personnel. The company and the company's management assume no obligation to update these forward-looking statements, or to update the reasons why actual results could differ from those reflected in these. Additional information identifying risks and uncertainties is contained in the company's regulatory filings available on its website and at www.sedar.com.
For further information:
Michael Jones can be reached at:
Jeff Bouganim can be reached at: