TSX Stock Symbol: GDC
CALGARY, Nov. 14 /CNW/ - Genesis Land Development Corp. ("Genesis" or the "Company") is pleased to report financial results for the nine months ended September 30, 2008. Over the first three quarters of the year, Genesis recorded total revenues of $80,233,310 as compared to $76,382,712 over the same period in 2007. This produced after-tax earnings in 2008 of $17,651,556 or $0.38 basic and fully diluted earnings per share vs. $18,850,298 and $0.41 basic and fully diluted earnings per share during the first nine months of 2007.
As at September 30, 2008, Genesis had a cash balance of $9,718,832 compared to $11,007,142 at December 31, 2007. Amounts receivable at September 30, 2008 were $55,100,888 compared to $47,587,450 at December 31, 2007. The balance of debt/financings at September 30, 2008 was $111,853,054 compared to $85,159,905 at December 31, 2007. At September 30, 2008 Genesis maintained a debt to equity ratio of 1.16 exclusive of non-controlling interest and 1.66 inclusive of non-controlling interest.
Land Development ----------------
During the nine months ended September 30, 2008, Genesis sold a total of 206 lots to external builders resulting in revenues of $36,532,608 before accounts receivable write-downs. In the third quarter of 2008, Genesis wrote down a total of $5,794,837 of accounts receivable on 32 lot sales which have been deemed uncollectible. Genesis retains ownership of these lots and the 15% deposit paid by the purchaser. During the third quarter of 2008, Genesis sold a total of 140 lots, of which, 107 lot sales were sold to a third party non-builder corporation for total proceeds of $23 million. Due to the nature of this sale to a new corporate entity in the current economic environment, only 21 of the 107 lot sales have been recorded in the current quarter. Revenue for this sale has been recognized using the instalment method of revenue recognition, whereby revenues recorded are based on the cash received to date ($4.5 million). Gross margins on lots sales during the first nine months of 2008 were $23,167,255 (63%) as compared to gross margins of $26,249,000 (65%) over the first nine months of 2007. The average price per lot sold during the first three quarters of 2008 was $177,340 as compared to an average price per lot in the same period last year of $201,432. The reduced price per lot is primarily a result of a different sales mix whereby fewer amenity lots were sold in 2008.
Single-Family Home Building ---------------------------
Genesis Builders Group closed the sale on a total of 92 single-family homes in the nine months ended September 30, 2008. Total revenues from single-family home sales for the first three quarters were $37,906,869 compared to $34,845,145 for the first three quarters of 2007. The average price of a single-family home sold in the first three months of 2008 was $412,031, significantly up from the average price of $351,971 for the first three quarters of 2007. This rise is a reflection of the increases in house prices that were experienced during 2007 and 2008 in the Calgary real estate market. While prices in the Calgary residential housing market have softened in the latter part of 2008, prices still remain well above pre-2006 levels in the Calgary region.
Multi-Family Home Building --------------------------
A total of 77 units of a multi-family project in Taralake, in which Genesis Limited Partnerships 6 & 7 ("LP's 6/7") shares in 50% of the profits, were sold in the third quarter. LP's 6/7 share of the sales revenue from these units was $4,232,074.
Generations Group of Companies continues construction on The Breeze, a 125 unit condo/town home development in Airdrie, Alberta with completion of the project scheduled for April 2009. Pre-sales for this project to date have exceeded $5.98 million. Additionally, planning and approvals are underway for five additional multi-family projects totaling 1,630 units but these projects are on hold due to a presently oversupplied multi-family market.
Commercial ----------
Genesis has signed a purchase and sale agreement for the sale of commercial land to a large anchor store at its Sage Hill Crossing shopping center site for total proceeds exceeding $22 million. This transaction is now forecast to close during the first quarter of 2009. Additionally, another large anchor store has signed a letter of intent ("LOI") to purchase a retail land site at Sage Hill Crossing for total proceeds of approximately $20 million. Numerous LOIs and offers to lease ("OTL") have been signed with national and international retailers for the Sage Hill Crossing shopping centre. The Company's two other active commercial projects, Taralake Plaza and Bayside Village are also experiencing excellent demand with LOIs and OTLs signed with retailers that include major pharmaceutical, grocery and restaurant chains.
Outlook -------
Genesis remains committed to adding shareholder value despite currently challenging markets. The Company has not been spared in the recent slide of stock prices of publicly traded companies worldwide. The depressed stock price has allowed the Company to repurchase 1,434,655 of its shares under the provisions of the NCIB announced on September 19, 2008. The Company intends to continue to buy back shares at these market levels up to the maximum levels prescribed under the NCIB. Genesis remains confident that the Alberta economy will overcome any shorter term challenges and improve to more normal conditions. Energy prices are expected to rebound as supplies begin to decline in response to lower prices while demand is expected to ultimately increase as well. The Company is focused on adding shareholder value while carefully monitoring its business environment on a go-forward basis.
UNAUDITED FINANCIAL SUMMARY
Nine Months Ended 30th of September, 2008 and 2007 (in $CAN)
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2008 2007
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Assets 366,004,196 241,491,523
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Liabilities 228,589,943 127,358,273
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Shareholders' Equity 137,414,253 114,113,250
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Revenue 80,233,310 76,382,712
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Expenses 53,402,299 49,573,482
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Earnings before taxes and
non-controlling interest 26,831,011 26,809,230
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Net earnings 17,651,556 18,850,298
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Earnings per share
(basic & fully diluted) 0.38 0.41
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Common Shares Outstanding 46,035,690 46,019,190
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Genesis Land Development Corp. is a Calgary based land development company with an inventory of more than 24,000 future residential building sites (single-family and multi-family) and over 300 acres of commercial/ industrial lands in Western Canada, of which more than 14,000 residential lots and over 300 acres of commercial/industrial lands are located in the Calgary metropolitan area.
Certain statements in this news release could constitute forward-looking statements. The Corporation's line of business involves risk, uncertainties and other factors which may cause actual results, performance or achievements of Genesis to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such factors include the number of dwelling sites that Genesis will actually develop and sell.