Mr. George Armoyan reports

CLARKE INC. REPORTS 2024 FOURTH QUARTER AND YEAR END RESULTS

Clarke Inc. has released its results for the three months and year ended Dec. 31, 2024.

Results for the year ended Dec. 31, 2024 (1)

The company's net income was $37.8-million, compared with $3.4-million in 2023. The increased earnings year over year were primarily a result of $37.9-million of fair value adjustment gains recorded within earnings. The $37.9-million was the aggregate of a $34.0-million fair value gain on the company's investment properties and $3.9-million of revaluation gains on certain hotel properties. The company also had $11.7-million of additional revaluation gains on certain hotel properties, which were recorded within other comprehensive income (OCI). Additionally, the results of 2023 included operating losses from the company's three vacant office buildings in Houston, Tex., and a former joint venture located at 1111 Atwater Ave., Montreal, Que. Each of those assets had been disposed of by March, 2024.

Comprehensive income for the year ended December, 2024, was $46.4-million, compared with $17.1-million in 2023. Comprehensive income in the year ended Dec. 31, 2024, exceeded 2023, due primarily to increased earnings and larger revaluation gains recorded in earnings and OCI in 2024, compared with those recorded in 2023.

During 2024, the company's book value per common share increased by $3.32 or 20.1 per cent. The change can be attributed primarily to: (i) fair value adjustments on investment properties of $34.0-million or $2.44 per share; (ii) revaluation gains on certain hotels of $15.6-million or $1.12 per share; and (iii) hotel net operating income of $22.9-million or $1.64 per share, offset by: (iv) depreciation of $10.6-million or 76 cents per share; and (v) interest and accretion of $7.5-million or 54 cents per share.

Clarke's basic and diluted earnings per share (EPS) for the year ended Dec. 31, 2024, were $2.71, compared with 24 cents for the year ended Dec. 31, 2023. The company's book value per common share at the end of the year was $19.85, while its common share price was $23.60.

Results for the fourth quarter of 2024

Hotel and rental revenue increased by $2.0-million, from $14.7-million to $16.7-million year over year, due to the increased rental revenue from the opening of the first phase of the company's Talisman residential development on Carling Avenue in Ottawa, Ont.

The company had a net income of $21.5-million in the fourth quarter of 2024, compared with $7.5-million in 2023. The $29.9-million fair value adjustment gains on investment properties is the largest factor in the increase year over year, offset by incremental deferred taxes in the fourth quarter of 2024, compared with the same period in 2023.

The company had other comprehensive losses of $200,000 in the fourth quarter of 2024, compared with OCI of $8.7-million in 2023. The primary reasons for the decrease year over year are the higher revaluation gains on certain hotel properties, as well as higher remeasurement gains on the pension asset in the fourth quarter of 2023, compared with 2024.

For the three months ended Dec. 31, 2024, Clarke's basic and diluted EPS was $1.54, compared with 54 cents for the same period in 2023.

Additional commentary on the company's results can be found in our management's discussion and analysis for the year ended Dec. 31, 2024.

(1) Book value per share and hotel net operating income are non-IFRS (international financial reporting standards) measures and ratios.

Other information

Highlights of the consolidated financial statements for the three months and year ended Dec. 31, 2024, compared with the three months and year ended Dec. 31, 2023, are provided in the attached table.

About Clarke Inc.

Halifax-based Clarke is a real estate company with holdings across real estate sectors, primarily residential, furnished suites and hospitality. Clarke's common shares (CKI) trade on the Toronto Stock Exchange. Further information about Clarke, including the consolidated financial statements and management's discussion and analysis for the year ended Dec. 31, 2024, is available on SEDAR+ and the company's website.

Cautionary statement regarding use of non-IFRS accounting measures and ratios

This news release makes reference to book value per share and net operating income. Book value per share and net operating income are not financial measures or ratios calculated and presented in accordance with IFRS, and should not be considered in isolation or as a substitute to any financial measures or ratios of performance calculated and presented in accordance with IFRS. These non-IFRS financial measures and ratios are presented in this news release because management of Clarke believes that such measures and ratios enhance the user's understanding of the company's historical and current financial performance.

Book value per share is measured by dividing shareholders' equity of the company at the date of the statement of financial position by the number of common shares outstanding at that date. Net operating income is defined as revenue less expenses. Net operating income measures operating results before interest, depreciation, amortization and income taxes. Clarke's method of determining these amounts may differ from other companies' methods and, accordingly, these amounts may not be comparable with measures used by other companies.

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