(TSX: GDC)
CALGARY, April 30 /CNW/ - Genesis Land Development Corp. ("Genesis" or the "Company") today announced its financial results for the fiscal year ended December 31, 2008.
Total revenue for the fiscal year was $83.8 million (2007-$99.0 million) with net earnings of $9.3 million (2007-$23.2 million) or $0.20 per share (2007-$0.50 per share). Residential home sales increased by 4% to $50.8 million and residential lot sales declined 35% to $31.8 million. Gross margin on residential home sales was 38% (2007-29%) and gross margin before provision on residential lot sales 63% (2007-63%). Net earnings for the year were adversely affected by $13.4 million in provisions on third party builder agreements receivable.
Total revenue for the fourth quarter was $8.1 million (2007-$22.6 million) with net loss of $6.5 million or $0.15 per share (2007-net earnings of $4.4 million or $0.09 per share). Substantially all revenue in the fourth quarter was derived from residential home sales. Gross margins on residential home sales were 43% (2007-35%). The financial results were adversely impacted by provisions on third party builder agreements receivable of $10.3 million. Under those receivable agreements, in the event of overdue collections the residential lots may be reclaimed by Company and the builder forfeits its deposit, generally equal to 15% of the selling price.
Residential Land Development
During the 2008 fiscal year, Genesis completed the sale of 173 residential lots to third party builders (234-2007), representing revenue of $31.8 million (2007-$49.1 million). Due to the recent slowdown in residential housing sales in Alberta and elsewhere, certain third party builders were unable to meet their building obligations under lot sale agreements pertaining to 97 lots, resulting in an agreements receivable provision of $18.5 million of which $13.4 million was charged to earnings.
Single Family Home Building
The Company closed 113 sales of single family homes during the fiscal year (135-2007). Revenue from the sale of single family homes was $50.8 million compared to $48.7 million in the previous year, an increase of 4%. Average selling price for single family homes was $403,000 compared to $361,000 in the previous year.
Multi-Family Home Building
The Company's multi family home building division did not generate sales in 2008 but will contribute to revenue in 2009. Construction at the Breeze, a 125 unit condominium project in Airdrie, Alberta is expected to be completed in the second quarter of 2009. Presales for this project represent approximately 25% of available units.
Commercial Development
As reported previously, the Company has signed a $22 million agreement of purchase and sale with an anchor store to be located at its Sage Hill Crossing shopping centre site. Progress continues to be made to satisfy the development conditions under this agreement.
Subsequent Events to Financial Reporting Period
Following the fiscal year end, the Company closed several transactions:
- The purchase of 1,476 acres in Delacour (north east Calgary).
- The purchase of 319 acres west of Airdrie.
- A loan agreement for $5.6 million to finance the closing of the
Delacour purchase.
- Renewal and extension of $12 million of financing to mature in May
2010.
- A loan agreement representing new borrowings of $6.3 million due
April 2010.
Corporate Update
- On April 9, 2009, a cease trade order was issued prohibiting trading
of the Company's shares for failure to file the Company's December
31, 2008 financial statements within the specified timeframe.
- The Chief Executive Officer and Chief Financial Officer of the
Company have been replaced with interim: Chief Executive, Chief
Operating and Chief Financial Officers.
- Certain of the Company's financing agreements have material adverse
change clauses that could cause the lender to demand immediate
payment in an event of default. Furthermore, loans in the aggregate
amount of $28.5 million owing to two lenders mature between April 30,
2009 and May 1, 2009, for which there is no renewal or extension
agreement in place and the Company does not, to date, have the funds
to repay these obligations.
About Genesis Land Development Corp.
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 sites and over 300 acres of commercial/industrial lands are located in the Calgary metropolitan area.
This news release contains certain statements or disclosures that may constitute forward-looking information under applicable securities laws. All statements and disclosures, other than those of historical fact, which address activities, events, outcomes, results or developments that the Company anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. In some cases, forward-looking information can be identified by terms such as "forecast", "future", "may", "will", "expect", "anticipate", "believe", "potential", "enable", "plan", "continue", "contemplate", "pro forma" or other comparable terminology. Forward-looking information presented in such statements or disclosures may, among other things, relate to: sources of income; forecasts of capital expenditures and the sources of the financing thereof; expectations regarding the ability of the Company to raise capital; movements in currency exchange rates; anticipated income taxes; the Company's business outlook; plans and objectives of management for future operations; forecast business results; and anticipated financial performance.