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TORONTO, Aug. 10, 2022 /CNW/ – Flagship Communities Actual Property Funding Belief (“Flagship” or the “REIT”) (TSX: MHC.U) (TSX: MHC.UN) in the present day launched its outcomes for the three and 6 months ended June 30, 2022 (“Q2”). The monetary outcomes of the REIT are introduced under in accordance with Worldwide Monetary Reporting Requirements (“IFRS”), besides the place in any other case famous. Outcomes are proven in U.S. {dollars} except in any other case famous.
Abstract of Second Quarter 2022 Outcomes:
Quarterly Monetary Highlights
- Income was $14.4 million, roughly $4.5 million greater than Q2 2021
- Identical Neighborhood Income[1] was $10.1 million, a rise of $0.7 million from Q2 2021
- Internet Revenue and Complete Revenue was $26.0 million, a $28.0 million improve from Q2 2021
- Internet Working Revenue (“NOI”) was $9.5 million, a rise of $3.0 million from Q2 2021
- Identical Neighborhood NOI1 was $6.7 million, a rise of $0.5 million from Q2 2021
- NOI Margin1 elevated to 65.9%, in comparison with 65.4% for Q2 2021
- Funds from Operations2 (“FFO”) have been $5.4 million or $0.277 per unit, in comparison with $3.3 million and $0.255 per unit in Q2 2021
- Adjusted Funds from Operations2 (“AFFO”) have been $4.7 million or $0.240 per unit, in comparison with $2.7 million and $0.210 per unit in Q2 2021
- Identical Neighborhood Occupancy1 was 82.4% as of June 30, 2022, in comparison with 81.3% as of March 31, 2022
- Hire Collections1 for the three months ended June 30, 2022, have been 98.2%, which was a slight lower from 98.8% for the three months ended June 30, 2021
Yr-to-date Monetary Highlights
- Income was $28.1 million, roughly $8.6 million greater than the six months ended June 30, 2021
- Identical Neighborhood Income1 was $20.1 million, a rise of $1.3 million from the six months ended June 30, 2021
- Internet Revenue and Complete Revenue was $28.5 million, a $23.8 million improve from the six months ended June 30, 2021
- NOI was $18.8, a rise of $5.8 million from the six months ended June 30, 2021
- Identical Neighborhood NOI1 was $13.5 million, a rise of $0.9 million from the six months ended June 30, 2021
- NOI Margin1 elevated to 66.7%, in comparison with 66.1% for the six months ended June 30, 2021
- FFO2 have been $11.0 million or $0.561 per unit for the six months ended June 30, 2022, in comparison with $6.8 million and $0.528 per unit for the six months ended June 30, 2021
- AFFO2 have been $9.6 million or $0.488 per unit for the six months ended June 30, 2022, in comparison with $5.8 million and $0.446 per unit for the six months ended June 30, 2021
- Hire Collections1 for the six months ended June 30, 2022 was 98.6%, which is barely down from 99.2% for the six months ended June 30, 2021.
“Since inception, we’ve utilized a method of rising our portfolio of high-quality MHCs and working them to a excessive customary that will increase dwelling possession in our communities and generates long-term dependable money stream. Our second quarter and year-to-date outcomes show that technique is efficient,” stated Kurt Keeney, President and CEO of the REIT. “Now we have a number of consolidation alternatives into account within the fragmented MHC market to construct on this success.”
Monetary Abstract
($000s besides per share quantities) |
||||||
For the three |
For the three months ended June 30, 2021 |
Variance |
For the six months ended June 30, 2022 |
For the six months ended June 30, 2021 |
Variance |
|
Income, Whole Portfolio |
14,363 |
9,835 |
4,528 |
28,056 |
19,484 |
8,572 |
Income, Identical Neighborhood1 |
10,085 |
9,381 |
703 |
20,088 |
18,836 |
1,252 |
Income, Acquisitions1 |
4,278 |
454 |
3,825 |
7,968 |
648 |
7,320 |
Internet Revenue and Complete Revenue, Whole Portfolio |
26,024 |
(1,945) |
27,969 |
28,456 |
4,686 |
23,770 |
NOI, Whole Portfolio |
9,460 |
6,430 |
3,030 |
18,718 |
12,870 |
5,848 |
NOI, Identical Neighborhood1 |
6,723 |
6,199 |
524 |
13,506 |
12,642 |
863 |
NOI, Acquisitions1 |
2,737 |
231 |
2,506 |
5,212 |
228 |
4,985 |
NOI Margin1, Whole Portfolio |
65.9 % |
65.4 % |
0.5 % |
66.7 % |
66.1 % |
0.7 % |
NOI Margin1, Identical Neighborhood1 |
66.7 % |
66.1 % |
0.5 % |
67.2 % |
67.1 % |
0.1 % |
NOI Margin1, Acquisitions1 |
64.0 % |
50.9 % |
13.1 % |
65.4 % |
35.2 % |
30.3 % |
FFO2 |
5,434 |
3,342 |
2,092 |
10,999 |
6,840 |
4,159 |
FFO Per Unit2 |
0.277 |
0.255 |
0.022 |
0.561 |
0.528 |
0.033 |
AFFO2 |
4,716 |
2,754 |
1,962 |
9,572 |
5,782 |
3,790 |
AFFO Per Unit2 |
0.240 |
0.210 |
0.030 |
0.488 |
0.446 |
0.042 |
AFFO Payout Ratio2 |
55.7 % |
60.7 % |
-5.0 % |
54.8 % |
57.1 % |
-2.3 % |
1. See “Different Actual Property Business Metrics” for extra data. 2. A non-IFRS monetary measure. See “Non-IFRS Monetary Measures” for extra data. |
“In addition to contributions from acquisitions, the outcomes present our progress at enhancing Identical Neighborhood efficiency,” added Eddie Carlisle, CFO of the REIT. “This contains rising Identical Neighborhood Occupancy, making use of prudent lease will increase and attaining value containment and labor efficiencies.”
Monetary Efficiency Overview
Income within the second quarter of 2022 and for the six months ended June 30, 2022 have been $14.4 million and $28.1 million, roughly $4.5 million and $8.6 million greater in comparison with the identical intervals within the prior yr, respectively, primarily as a result of acquisitions, lot lease will increase, and occupancy will increase throughout the portfolio.
Internet Revenue and Complete Revenue within the second quarter of 2022 and for the six months ended June 30, 2022 have been $26.0 million and $28.5 million, a $28.0 million and $23.8 million improve in comparison with the identical intervals within the prior yr, respectively, primarily because of the honest worth acquire on B-Models for the three months ended June 30, 2022 being considerably bigger than in the identical interval in 2021.
NOI and NOI Margin for the second quarter of 2022 have been $9.5 million and 65.9%, respectively, which is $3.0 million and 0.5% greater than the second quarter of 2021. NOI and NOI Margin for the six months ended June 30, 2022 have been $18.7 million and 66.7%, respectively, which is $5.8 million and 0.6% greater than the six months ended June 30, 2021. These will increase have been primarily pushed by the REIT’s accretive acquisition technique throughout 2021, in addition to lot lease development and occupancy development.
AFFO and AFFO per Unit for the second quarter of 2022 have been $4.7 million and $0.240 per unit, a 71.2% and 14.3% improve, respectively, from the second quarter of 2021. AFFO and AFFO per Unit for the six months ended June 30, 2022 have been 9.6 million and $0.488, a 65.5% and 9.4% improve, respectively, from the six months ended June 30, 2021. These will increase have been primarily pushed by the REIT’s accretive acquisition technique throughout 2021 and continued Identical Neighborhood NOI development.
Identical Neighborhood Revenues in Q2 2022 and for the six months ended June 30, 2022 exceeded Q2 2021 and the six months ended June 30, 2021 by $0.7 million and $1.3 million, respectively. These will increase have been pushed by lot lease will increase applied throughout the interval, occupancy development all year long, and will increase in utility revenues.
Identical Neighborhood Occupancy of 82.4% elevated by 1.1% as of June 30, 2022, in comparison with March 31, 2022. The constant and rising occupancy price displays the REIT’s dedication to resident satisfaction and making certain its communities are fascinating places.
Hire Collections for Q2 2022 have been 98.2%, a slight lower from 98.8% in Q2 2021.
On April 13, 2022, the REIT borrowed $18.0 million, for which one MHC was the collateral. The rate of interest on the observe is 3.80%, fastened for 20 years, with the primary 60 month-to-month funds being curiosity solely. These funds have been used to fund acquisitions and for normal enterprise functions.
On Might 17, 2022, the REIT filed a complement to its base shelf prospectus, dated Might 7, 2021, and entered into an fairness distribution settlement for the aim of finishing an at-the-market providing (the “ATM Providing”). Pursuant to the ATM Providing, the REIT might problem Models, now and again, as much as an mixture quantity of $50 million. As of June 30, 2022, the REIT has not issued any Models below the ATM Providing.
On June 30, 2022, the REIT borrowed $14.4 million as a supplemental borrowing on its Fannie Mae Credit score Facility for which ten communities are the collateral. The rate of interest on this observe is 5.79% for 12 years with all funds being curiosity just for the complete time period. These funds will probably be used to fund future acquisitions and for normal enterprise functions.
On July 7, 2022, subsequent to quarter finish, the REIT borrowed $10.7 million from a life insurance coverage lender, for which one MHC was the collateral. The rate of interest on the observe is 4.98% for 20 years with the primary 60 month-to-month funds being curiosity solely. These funds will probably be used to fund future acquisitions and for normal enterprise functions.
As of June 30, 2022, the REIT’s complete money and money equivalents have been $4.0 million with no near-term debt obligations.
Operations Overview
On April 29, 2022, the REIT acquired an MHC in Riverton Illinois which included 103 tons and 74 rental houses for $6.3 million. The group was 89% occupied as of time of the acquisition and is the REITs second group in Illinois.
On Might 18, 2022, the REIT additionally, acquired two MHCs in Florence Kentucky which included 345 tons for $22.5 million. The group was 70% occupied as of time of the acquisition and additional will increase the REIT focus in core states which reinforces efficiencies and achieves economies of scale.
On June 28, the REIT obtained the Kentucky Manufactured Housing Institute’s (KMHI) highest award for Neighborhood of the Yr for Suburban Pointe in Lexington, Kentucky.
As at June 30, 2022, the REIT owned a 100% curiosity in a portfolio of 66 MHCs with 11,913 tons. The desk under supplies a abstract of the REIT’s portfolio as of June 30, 2022, in comparison with June 30, 2021:
As of June 30, 2022 |
As of June 30, 2021 |
||
Whole communities |
(#) |
66 |
55 |
Whole tons |
(#) |
11,913 |
8,960 |
Weighted Common Lot Hire1 |
(US$) |
384 |
359 |
Occupancy |
( %) |
83.3 |
80.7 |
1. See “Different Actual Property Business Metrics” under |
Outlook
The REIT was shaped to offer buyers with the chance to spend money on the MHC trade in the USA whereas benefiting from the funding and operational experience of the REIT’s vertically built-in administration platform.
The REIT believes the MHC sector to be a prudent funding technique that can create long-term worth for the next causes:
- Defensive funding traits relative to different actual property asset courses;
- Constant monitor document of outperformance no matter financial cycles;
- Excessive limitations to entry for any opponents and new provide;
- Steady occupancy and rising rents;
- Decrease capital expenditure necessities than many different actual property asset courses;
- Rising public sentiment towards a indifferent dwelling relative to a multi-family condo.
The REIT believes that macro traits and tendencies in the USA actual property and housing trade and the MHC trade particularly supply buyers important upside potential. These traits and tendencies embody:
- Rising family formations;
- Decrease housing affordability;
- Declining single-family residential homeownership charges;
- Lack of recent manufactured housing provide.
- The REIT believes it’s well-positioned to learn from these residential actual property and housing trade dynamics.
Non-IFRS Monetary Measures
The REIT makes use of sure non-IFRS monetary measures (together with ratios), together with FFO, FFO Per Unit, AFFO, AFFO Per Unit, AFFO Payout Ratio to measure, examine and clarify the working outcomes, monetary efficiency and monetary situation of the REIT. The REIT additionally makes use of AFFO in assessing its distribution paying capability. These measures are generally utilized by entities in the true property trade as helpful metrics for measuring efficiency. Nonetheless, they don’t have any standardized which means prescribed by IFRS and should not essentially corresponding to related measures introduced by different publicly traded entities. These measures needs to be thought of as supplemental in nature and never as an alternative choice to associated monetary data ready in accordance with IFRS.
FFO is outlined as IFRS Internet Revenue and Complete Revenue adjusted for gadgets akin to distributions on redeemable or exchangeable models recorded as finance value below IFRS (together with distributions on the category B models of the REIT’s subsidiary, Flagship Working, LLC (“Class B Models”), unrealized honest worth changes to funding properties, loss on extinguishment of acquired mortgages payable, acquire on disposition of funding properties and depreciation. The REIT’s technique of calculating FFO is considerably in accordance with the suggestions of the Actual Property Affiliation of Canada (“REALPAC”). FFO per Unit (diluted) is outlined as FFO for the relevant interval divided by the diluted weighted common Unit depend (together with Class B Models and Deferred Belief Models (“DTUs”)) throughout the interval. Confer with part “Reconciliation of Non-IFRS Monetary Measures – FFO, FFO per Unit, AFFO and AFFO per Unit” for a reconciliation of FFO to AFFO to Internet Revenue and Complete Revenue.
AFFO is outlined as FFO adjusted for gadgets akin to upkeep capital expenditures, and sure non-cash gadgets akin to amortization of intangible belongings, premiums and reductions on debt and investments. The REIT’s technique of calculating AFFO is considerably in accordance with REALPAC’s suggestions. The REIT makes use of a capital expenditure reserve of $60 ({dollars}/annual) per lot and $1,000 ({dollars}/annual) per rental dwelling within the AFFO calculation. This reserve is predicated on administration’s finest estimate of the fee that the REIT might incur, associated to sustaining the funding properties. This may occasionally differ from different issuers’ strategies and, accordingly, will not be corresponding to AFFO reported by different issuers. Confer with part “Reconciliation of Non-IFRS Monetary Measures – FFO, FFO per Unit, AFFO and AFFO per Unit” for a reconciliation of AFFO to web earnings (loss).
AFFO Payout Ratio is outlined as complete money distributions of the REIT (together with distributions on Class B Models) divided by AFFO. AFFO per Unit (diluted) is outlined as AFFO for the relevant interval divided by the diluted weighted common Unit depend (together with Class B Models and DTUs) throughout the interval.
Different Actual Property Business Metrics
Moreover, this information launch comprises a number of different actual property trade metrics that aren’t disclosed within the REIT’s monetary statements:
- “Acquisitions” means the REIT’s properties, excluding Identical Communities (as outlined under) and such measures (i.e.: Income, Acquisitions; NOI, Acquisitions; and NOI Margin, Acquisitions) are utilized by administration to guage period-over-period efficiency of such funding properties all through each respective intervals. These outcomes mirror the affect of acquisitions of funding properties.
- “NOI margin” is outlined as NOI divided by complete income. Confer with part “Calculation of Different Actual Property Business Metrics – NOI and NOI Margin”.
- “Hire Collections” is outlined as the full money collected in a interval divided by complete income charged in that very same interval.
- “Identical Neighborhood” means all properties which have been owned and operated repeatedly since January 1, 2021, by the REIT and such measures (i.e.: Identical Neighborhood Income or Income, Identical Neighborhood; Identical Neighborhood NOI or NOI, Identical Neighborhood; NOI Margin, Identical Neighborhood; and Identical Neighborhood Occupancy) are utilized by administration to guage period-over-period.
- “Weighted Common Lot Hire” means the lot lease for every particular person group multiplied by the full tons in that group summed for all communities divided by the full variety of tons for all communities.
Reconciliation of Non-IFRS Monetary Measures
FFO, FFO Per Unit, AFFO and AFFO per Unit
($000s, besides per unit quantities) |
For the three months ended June 30, 2022 |
For the three months ended June 30, 2021 |
For the six months ended June 30, 2022 |
For the six months ended June 30, 2021 |
Internet earnings and complete earnings |
26,024 |
(1,945) |
28,456 |
4,686 |
Changes to reach at FFO
|
||||
Depreciation
|
66
|
41
|
133
|
74
|
Honest worth adjustments-Class B models
|
(24,821)
|
12,455
|
(21,637)
|
14,737
|
Distributions on Class B models
|
732
|
692
|
1,462
|
1,385
|
Honest worth adjustment – funding properties
|
3,512
|
(8,085)
|
2,662
|
(14,278)
|
Honest worth adjustment – unit primarily based compensation
|
(79)
|
(77)
|
||
Transaction prices |
– |
184 |
– |
236 |
FFO |
5,434 |
3,342 |
10,999 |
6,840 |
FFO per Unit (diluted) |
0.277 |
0.255 |
0.561 |
0.528 |
Changes to reach at AFFO
|
||||
Accretion of mark-to-market changes on mortgage payable
|
(258)
|
(258)
|
(515)
|
(515)
|
Capital Expenditure Reserves |
(460) |
(330) |
(912) |
(543) |
AFFO |
4,716 |
2,754 |
9,572 |
5,782 |
AFFO per Unit (diluted) |
0.240 |
0.210 |
0.488 |
0.466 |
Calculation of Different Actual Property Business Metrics
NOI and NOI Margin
($000s) |
For the three months ended June 30, 2022 |
For the three months ended June 30, 2021 |
For the six months ended June 30, 2022 |
For the six months ended June 30, 2021 |
Rental income and associated earnings
|
14,363
|
9,835
|
28,056
|
19,484
|
Property working bills |
4,903 |
3,405 |
9,338 |
6,614 |
NOI |
9,460 |
6,430 |
18,718 |
12,870 |
NOI Margin |
65.9 % |
65.4 % |
66.7 % |
66.1 % |
Ahead-Wanting Statements
This press launch comprises statements that embody forward-looking data inside the which means of Canadian securities legal guidelines. These forward-looking statements mirror the present expectations of the REIT concerning future occasions, together with statements below “Outlook”, in addition to plans for acquisitions and the anticipated outcomes therefrom, and the potential issuance and sale of Models pursuant to the ATM Providing. In some circumstances, forward-looking statements could be recognized by phrases akin to “might”, “will”, “might”, “happen”, “count on”, “anticipate”, “imagine”, “intend”, “estimate”, “goal”, “venture”, “predict”, “forecast”, “proceed”, or the unfavorable thereof or different related expressions regarding issues that aren’t historic details. Materials elements and assumptions utilized by administration of the REIT to develop the forward-looking data embody, however should not restricted to, the REIT having enough money to pay its distributions and that the gadgets listed below “Outlook” proceed to be true. Whereas administration considers these assumptions to be affordable primarily based on presently out there data, they could show to be incorrect.
Though administration believes the expectations mirrored in such forward-looking statements are affordable and characterize the REIT’s inside expectations and beliefs right now, such statements contain recognized and unknown dangers and uncertainties and will not show to be correct and sure targets and strategic objectives will not be achieved. A wide range of elements, a lot of that are past the REIT’s management, might trigger precise leads to future intervals to vary materially from present expectations of occasions or outcomes expressed or implied by such forward-looking statements, such because the dangers recognized within the REIT’s annual data type and administration’s dialogue and evaluation (“MD&A”) for the yr ended December 31, 2021 or any subsequently filed interim MD&A, in every case out there below the REIT’s profile at www.sedar.com, together with below the heading “Threat Elements” or “Threat and Uncertainties” therein. Readers are cautioned towards inserting undue reliance on forward-looking statements. Besides as required by relevant Canadian securities legal guidelines, the REIT undertakes no obligation to replace or revise publicly any forward-looking statements, whether or not because of new data, future occasions or in any other case, after the date on which the statements are made.
Second Quarter 2022 Outcomes Convention Name and Webcast
About Flagship Communities Actual Property Funding Belief
Flagship Communities Actual Property Funding Belief is a newly created, internally managed, unincorporated, open-ended actual property funding belief established pursuant to a declaration of belief below the legal guidelines of the Province of Ontario. The REIT has been shaped to personal and function a portfolio of income-producing MHCs situated in Kentucky, Indiana, Ohio, Tennessee, Arkansas, Illinois and Missouri, together with a fleet of manufactured houses for lease to residents of such housing communities.
__________________________ |
|
1 |
See “Different Actual Property Business Metrics” for extra data. |
2 |
A non-IFRS monetary measure. See “Non-IFRS Monetary Measures” for extra data. |
SOURCE Flagship Communities Actual Property Funding Belief
For additional data: Eddie Carlisle, Chief Monetary Officer, Flagship Communities Actual Property Funding Belief, Tel: +1 (859) 568-3390