Mr. Phil Soper reports

BRIDGEMARQ REAL ESTATE SERVICES(TM) REPORTS SECOND QUARTER RESULTS AND MONTHLY DIVIDEND

Bridgemarq Real Estate Services Inc. has released its second quarter consolidated financial results and declared a monthly dividend to holders of the company's restricted voting shares.

Highlights:

• Revenue in the second quarter amounted to $12.8-million, compared with the $13.8-million generated in the second quarter of 2022, due to weakness in the Canadian market partly offset by an increase in the company's network of Realtors over the past year.
• The company generated net earnings of $1.1-million or 12 cents per share, compared with net earnings of $11.3-million or 36 cents per share in 2022, primarily due to a loss on the fair value of exchangeable units compared with a gain last year.
• Distributable cash flow was $4.5-million or 35 cents per share compared with $5.8-million or 46 cents per share recorded in the second quarter of 2022.
• The board of directors approved a dividend to shareholders of 11.25 cents per share payable on Sept. 29, 2023, to shareholders of record on Aug. 31, 2023.

Second quarter operating results

Revenues during the second quarter were $12.8-million, compared with the $13.8-million generated in Q2 of 2022. The change in revenues is primarily due to weakness in real estate markets across Canada partly offset by an increase in the number of agents in the company's network of Realtors over the past 12 months.

During the quarter, the company generated net earnings of $1.1-million or 12 cents per fully diluted restricted voting share, compared with net earnings of $11.3-million or 36 cents per share in the same quarter in 2022. Net earnings decreased primarily due to a loss of $500,000 on the fair value of the exchangeable units compared with a gain of $8.1-million in the second quarter last year. The fair valuation adjustment on the exchangeable units is directly related to changes in the market price of the company's shares. Lower revenues and higher administration expenses also contributed to the reduction in earnings for the quarter.

Distributable cash flow amounted to $4.5-million for the quarter, compared with $5.8-million in the same quarter last year, driven by lower revenues and higher administration expenses, partly offset by lower management fees and lower current income tax expense.

"Results for the second quarter were in line with our expectations: softer than the same quarter last year -- which marked the tail end of the pandemic-driven real estate boom -- but improved over the first quarter," said Phil Soper, president and chief executive officer, Bridgemarq Real Estate Services.

"Sales activity increased and property prices rose in the second quarter, as the Bank of Canada temporarily paused its interest rate increase program," added Mr. Soper. "Our company's reputable brands have continued to attract and retain high-producing agents. This is due, in no small part, to our ongoing commitment to results for our agents and their clients through continued investment in industry-leading technology platforms, including lead-generating and nurturing tools, and best-in-class training programs and support."

Market update

The Canadian market posted a national decline in transactional dollar volume of 4 per cent in the second quarter of 2023, compared with the same period last year. Compared with last quarter, however, the market grew by 74 per cent. In the second quarter of 2022, the Bank of Canada continued increasing interest rates to combat inflation, marking the start of sales and price declines after two years of pandemic-fuelled growth. According to the Canadian Real Estate Association, the national average selling price remained flat, increasing just 1 per cent in the second quarter of 2023 compared with the same period last year, and increased 9 per cent on a quarter-over-quarter basis.

Following two consecutive rate holds in March and April, the Bank of Canada raised interest rates by 25 basis points in June and again in July, bringing its key lending rate to 5 per cent. The central bank noted the continued strength of Canada's economy, including a pickup in the housing market. The bank also acknowledged that, while inflation has reduced, downward momentum is coming from lower energy prices, while core inflation remains elevated, due in part to newcomers to Canada adding both supply and demand to the economy, filling labour shortages and adding to real estate demand.

Despite the central bank's decision to reignite its campaign to increase interest rates, homebuyers continue to be active in the market. Meanwhile, some would-be sellers have put their plans to list on hold, waiting for interest rates and the economy to stabilize, further shrinking the low supply of housing and putting continued upward pressure on home prices.

Cash dividend

The company declared a cash dividend of 11.25 cents per restricted voting share payable on Sept. 29, 2023, to shareholders of record on Aug. 31, 2023. The dividend distribution represents a target annual dividend of $1.35 per restricted voting share.

The company network

As at June 30, 2023, the company network comprises 20,752 Realtors operating under 289 franchise agreements from 733 locations. This represents a 1-per-cent increase over the agent count as at June 30, 2022. Based on 2022 transactions, Realtors in the company network participate in approximately 28 per cent of all home resales in Canada.

Conference call

Bridgemarq Real Estate Services will host a conference call on Thursday, Aug. 10, 2023, at 10 a.m. Eastern Daylight Time to discuss its second quarter financial results.

To access the call by telephone, please dial 1-888-664-6383 or 416-764-8650.

Please connect approximately 10 minutes prior to the beginning of the call to ensure participation.

A recording of the conference call will be available in the investor centre section of the company's website by Monday, Aug. 14, 2023.

About Bridgemarq Real Estate Services Inc.

Bridgemarq is a leading provider of services to residential real estate brokers and a network of approximately 21,000 Realtors. Bridgemarq operates in Canada under the Royal LePage, Via Capitale, and Johnston & Daniel brands.

We seek Safe Harbor.