TORONTO, May 15, 2024 /CNW/ - Bridgemarq Real Estate Services Inc. ("Bridgemarq" or the "Company") (TSX:BRE) today released its first quarter consolidated financial results and announced a monthly dividend to holders of the Company's restricted voting shares. HIGHLIGHTS On March 31, 2024, the Company completed a transaction with Brookfield Business Partners ("Brookfield") whereby the Company acquired certain real estate brokerages, internalized its management team and settled deferred distributions owing to Brookfield for total proceeds of $40.8 million. Revenue in the first quarter amounted to $11.8 million, compared to the $12.0 million generated in the first quarter of 2023, as a result of lower average agent count in the quarter compared to the prior year, partly offset by fee increases implemented during the quarter.  During the quarter, the Company generated a net loss $2.0 million or $0.21 per share, compared to a net loss of $4.7 million or $0.50 per share in 2023, primarily driven by a loss of $2.7 million on the fair valuation of the Exchangeable Units and a charge for impairment of intangibles in the first quarter, partly offset by a gain of $1.3 million on the settlement of deferred payments. In the first quarter of 2023, Bridgemarq generated a loss of $6.0 million on the fair valuation of the Exchangeable Units. Cash provided by operating activities amounted to $2.1 million in the first quarter of 2024, compared to $3.2 million in 2023, due to higher administration and interest expenses associated with the transaction. The Board of Directors approved a dividend to shareholders of $0.1125 per Restricted Voting Share payable June 28, 2024, to shareholders of record on May 31, 2024. The Company's annual shareholders' meeting will be held virtually on May 15th, 2024, at 10 a.m. Eastern Daylight Time. FIRST QUARTER OPERATING RESULTS Revenues during the first quarter were $11.8 million, compared to the $12.0 million generated in the same quarter in 2023. The change in revenues is primarily due to lower average agent counts in the Company's network of REATORS®, partly offset by an increase in the fees paid by REALTORS® operating under the Royal LePage® and Johnston & Daniel® brands.     During the quarter, the Company generated a net loss of $2.0 million or $0.21 per share, compared to a net loss of $4.7 million or $0.50 per share in 2023. The lower net loss is largely driven by a loss of $2.7 million on the valuation of the Exchangeable Units in the quarter (compared to a loss of $6.0 million in the prior year), and a charge related to impairment of intangibles of $1.6 million partly offset by a gain of $1.3 million on the settlement of deferred payments. The fair valuation adjustment on the Exchangeable Units is directly related to changes in the market price of the Corporation's Restricted Voting Shares. As a result of the acquisition, the Company changed the methodology by which they allocate expenses in determining the net recoverable amount of the franchise agreements from which they earn their revenue. This change resulted in an impairment charge of $1.6 million in the quarter. The internalization of the management of the Company resulted in the settlement of deferred payments and other obligations owing to the acquired entities. The Company recorded a gain of $1.3 million on settlement of these obligations. Cash provided by operating activities amounted to $2.1 million in the first quarter of 2024, compared to $3.2 million in the same quarter last year, due to the impact of higher administration costs as a result of the expenses associated with the evaluation of the acquisition of brokerage operations and internalization of the management company. In addition, interest expenses were higher in the quarter as the interest rate swap entered into by the Company in 2019 matured in December 2023.  "The Company has shown its ability to grow while the number of agents in the industry dropped during the quarter. Conversions completed in BC and Ontario highlight the strength of our brands' reputations as the proven choice among real estate professionals in Canada," said Spencer Enright, Chief Executive Officer, Bridgemarq Real Estate Services Inc. "Looking ahead, we are thrilled at the possibilities presented by our recent acquisition. The addition of brokerage operations to our respected franchise business will provide long-term value for our shareholders, and truly set us apart as a progressive industry innovator focused on meeting Canadians' ever evolving home-related needs and preferences." MARKET UPDATE  The Canadian residential real estate market showed signs of renewal at the start of this year, growing by 17% in the first quarter of 2024, compared to same quarter in 2023.1 According to the Canadian Real Estate Association, the national average selling price increased 3% in the first quarter, compared to the same period last year, while transactions increased 13%. On a quarter-over-quarter basis, the average selling price rose 5% and total unit sales were up 21%. The Bank of Canada held its overnight lending rate at 5% on April 10, 2024.2 The central bank said it expects the Canadian economy to continue stabilizing throughout this year, as employment gains slow and the unemployment rate ticks modestly upward. In April, Canada's unemployment rate sat at 6.1% for the second consecutive month.3 The market is broadly expecting that the Bank of Canada will begin cutting rates later this year, possibly prompting additional activity in the real estate market. __________________________________ 1 CREA Canadian Housing Market Statistics 2 Bank of Canada maintains policy rate, continues quantitative tightening, April 10, 2024 3 Labour Force Survey, April 2024, May 10, 2024 ACQUISITION OF BROKERAGE OPERATIONS AND INTERNALIZATION OF MANAGEMENT On March 31, 2024, Bridgemarq completed the acquisition of certain real estate brokerages and the external management company from Brookfield Business Partners. Additional details describing the Transaction can be found at www.bridgemarq.com. As a result of the acquisition of the brokerage operations, beginning in the second quarter of this year the Company will benefit from a broader revenue base and will earn revenues from the gross commission income earned directly by our owned brokerages operating under the Royal LePage, Via Capitale®, Proprio Direct® and Johnston and Daniel banners, in addition to the franchise fees and ancillary revenues it currently generates from its franchise network. In addition, the outstanding deferred payments owing to Brookfield have been settled and the requirement to pay management fees to a third party has ceased. ORGANIZATIONAL AND GOVERNANCE CHANGES The Board of Directors approved the appointment of Mr. Spencer Enright as Chief Executive Officer of Bridgemarq. Mr. Enright has stepped down as the Chair of the Board and Ms. Lorraine Bell, a director since 2003 and ...