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NexLiving Communities Reports Record Q1 2024 Operating and Financial Results and Declares Quarterly Dividend

NexLiving Communities Reports Record Q1 2024 Operating and Financial Results and Declares Quarterly Dividend

May 16 2024

HALIFAX, NS, May 16, 2024 /CNW/ - (TSXV: NXLV) – NexLiving Communities Inc. ("NexLiving" or the "Company") announced operating and financial results for the three month period ended March 31, 2024.

Stavro Stathonikos, President & CEO commented: "NexLiving has had a strong start to 2024, showcasing another quarter with double digit same property NOI at 13.6%. Revenue growth remains robust due to persistent supply-demand imbalances and operating expenses growth remains constrained as we focus on operational improvements. Looking ahead, our priority remains the closing of the highly accretive and transformational Devcore transaction, which remains on track for closing by the end of the second quarter."

Summary of Results

  • Property revenue increased +17% to $4.9 million for the three-month period ended March 31, 2024.
     
  • Net operating income ("NOI") increased +23% to $2.9 million (58.5% margin) for the three-month period ended March 31, 2024.
     
  • FFO per share increased +34% for the three-month period ended March 31, 2024, on a fully diluted basis.
     
  • Same property NOI for the three-month period increased +13.6% as revenue grew by +6.2% and same property expenses declined by -2.7%. The decrease in same property operating expenses was related to lower insurance, property maintenance and utility costs, which were partially offset by higher property taxes in New Brunswick.
     
  • The portfolio remained highly occupied at 96.4% at March 31, 2024. New Brunswick occupancy was 97.1% and Ontario occupancy was 89.9%, as approximately one-third of the overall portfolio vacant units were attributable to the Company's suite repositioning program in the Ontario market.

Q1 2024 Operating and Financial Highlights:

As at

31-Mar-24

31-Dec-23

Change

Number of suites

1,166

1,166

-

Occupancy

96.4 %

96.8 %

(40) bps

Net Debt to GBV*

68.4 %

68.6 %

(22) bps

Weighted average term to debt maturity (years)

4.3

4.6

(0.3) yrs

Weighted average contractual interest rate

3.71 %

3.71 %

-

Net asset value 

75,563,697

74,633,442

1.2 %

Net asset value per share

$                4.54

$                4.49

1.2 %

For the three months ended March 31

2024

2023

Change

NOI

2,872,187

2,329,164

23.3 %

NOI margin

58.5 %

55.4 %

314 bps

FFO*

804,181

555,613

44.7 %

FFO per share - diluted*

0.05

0.04

33.8 %

FFO payout ratio*

21 %

28 %

 (704) bps

Same property revenue*

4,201,542

3,954,811

6.2 %

Same property operating expenses*

1,735,977

1,785,054

(2.7) %

Same property NOI*

2,465,565

2,169,757

13.6 %

Same property NOI margin*

58.7 %

54.9 %

382 bps

*Refer to section "Non-IFRS Financial Measures"


Fair Value of Investment Properties:

The Company's weighted average capitalization rate as at March 31, 2024, was unchanged at 4.79% from December 31, 2023. The gain in fair value recorded by the Company in the three month period ended March 31, 2024, was due to forecasted NOI growth from expected rent increases and operating expense efficiencies.

Transaction Update:

On April 3, 2024, approximately 93.5% of the Company's shareholders voted in favour of the resolution in connection with the Company's previously announced transaction to acquire from Devcore Group Inc. and its related entities ("Devcore") a portfolio of multi-family assets in eastern Ontario and Quebec consisting of 16 properties and 991 units in exchange for share consideration and the assumption of existing mortgages (collectively, the "Transaction").

The Company and Devcore continue to make progress towards closing the Transaction and subject to receipt of final approval from the TSXV and all other conditions being satisfied or waived, including certain regulatory and lender approvals, the Company expects that the Transaction will close during the second quarter of 2024.

Refinancing Activity:

On April 3, 2024, the Company refinanced its mortgage on the 5 Woodhollow Park property and entered into a new $9.3 million CMHC-insured mortgage for a 10-year term with a fixed interest rate of 4.40%. The new mortgage replaced the maturing $7.5 million mortgage.

On April 23, 2024, the Company refinanced its mortgage on the 49 Noel property and entered into a new $9.4 million CMHC-insured mortgage for a 10-year term with a fixed interest rate of 4.18%. The new mortgage replaced the maturing $8.7 million mortgage.

Dividend:

The Company's board of directors has approved and declared a dividend of $0.01 per common share for the quarter ending June 30, 2024, representing $0.04 per share on an annualized basis. The dividend is payable on, or after June 28, 2024, to shareholders of record at the close of business on June 7, 2024.

DSU Grants:

On May 15, 2024, the Board of Directors approved the issuance of 220,000 DSUs to directors and management of the Company. The DSUs vest over three years in accordance with the provisions of the Company's DSU Plan.

About the Company

The Company continues to execute on its plan to acquire recently built or refurbished, highly leased multi-residential properties in bedroom communities across Canada. The Company aims to deliver exceptional living experiences to our residents and provide comfortable, affordable housing solutions that cater to a wide range of demographics. The properties offer a range of modern and updated suites, with a variety of amenities and features that allow residents to experience a hassle-free and maintenance-free lifestyle. The Company is committed to investing in its properties to ensure that they are modern and up-to-date. For its recently acquired properties in Ontario, the Company has undertaken a targeted value-add capital program to modernize and reposition the large existing suites. The Company currently owns 1,166 units in New Brunswick and Ontario. NexLiving has also developed a robust pipeline of qualified properties for potential acquisition. By screening the properties identified to match the criteria set out by the Company (proximity to healthcare, amenities, services, and recreation), management has assembled a significant pipeline of potential acquisitions for consideration by the Company's Board of Directors.

For more information about NexLiving, please refer to our website at www.nexliving.ca and our public disclosure at www.sedarplus.ca.

Forward-Looking Statements

This news release forward-looking information within the meaning of applicable Canadian securities laws ("forward-looking statements"). All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "projects", "estimates", "forecasts", "intends", "continues", "anticipates", or "does not anticipate" or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements contained in this news release include, but are not limited to, management's expectations of additional rental increases to come into effect by year end and the further enhancement of the Company's financial results. Such forward-looking statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. These forward-looking statements reflect the current expectations of the Company's management regarding future events and operating performance, but involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Actual events could differ materially from those projected herein and depend on a number of factors. These risks and uncertainties are more fully described in regulatory filings, which can be obtained on SEDAR at www.sedarplus.ca, under NexLiving's profile, as well as under Risk Factors section of the MD&A released on May 15, 2024. Although forward-looking statements contained in this new release are based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this new release speak only as of the date of this news release. Except as required by applicable securities laws, the Company does not undertake, and specifically disclaims, any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law.

Non-IFRS Financial Measures

The Company prepares and releases unaudited consolidated interim financial statements and audited consolidated annual financial statements prepared in accordance with IFRS. In this and other earnings releases, as a complement to results provided in accordance with IFRS, NexLiving discloses financial measures not recognized under IFRS which do not have standard meanings prescribed by IFRS. These include FFO, FFO (cents per share) – diluted, FFO payout ratio, Debt to GBV and same-property metrics (collectively, the "Non-IFRS Measures"). These Non-IFRS Measures are further defined and discussed in the MD&A dated April 23, 2024, which should be read in conjunction with this news release. Since these measures are not recognized under IFRS, they may not be comparable to similar measures reported by other issuers. The Company presents the Non-IFRS measures because management believes these Non-IFRS measures are relevant measures of the ability of NexLiving to earn revenue and to evaluate its performance and cash flows. A reconciliation of these Non-IFRS measures is included in the MD&A dated May 15, 2024. The Non-IFRS measures should not be construed as alternatives to net income (loss) or cash flows from operating activities determined in accordance with IFRS as indicators of the Company's performance.

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 press release.

SOURCE NexLiving Communities Inc.

For further information: Stavro Stathonikos, sstathonikos@nexliving.ca, 416-876-6617

© 2024 NexLiving Communities Inc.