VANCOUVER, BC, Aug. 21, 2024 /CNW/ - Montfort Capital Corporation ("Montfort" or the "Company") (TSXV:MONT) (OTCQB:MONTF), today announced financial results for the second quarter ended June 30, 2024. All figures are reported in Canadian dollars unless otherwise noted.
Second Quarter 2024 Highlights
For the three months ended June 30, 2024, the Company had the following highlights:
Total revenue of $11.3 million, a decrease of $2.0 million or 14.7% from $13.3 million in the three months ended June 30, 2023 (the "Prior Year Period"). The change was driven by a reduction in portfolio size and the return of a low-margin portfolio of loans under administration in July 2023, as well as a decrease in fee generating activities year over year.
Interest income from investments was $8.5 million, a decrease of $1.4 million or 13.8% from $9.8 million in the Prior Year Period, driven by a smaller portfolio overall.
Income from transaction and other fees of $2.6 million, a decrease of $0.6 million or 19.5% from $3.2 million in the Prior Year Period, a result of fewer loan originations.
Total expenses of $14.4 million, an increase of $0.5 million or 3.9% from $13.9 million in the Prior Year Period. The change was driven by increases in interest and financing expense (increase of $0.4 million) as well as expected credit loss expense (accounts receivable) (increase of $0.7 million) year over year, offset by a reduction in share-based payments, marketing and administrative & management costs (total decrease of $0.4 million).
Net loss of $3.2 million or four cent loss per common share compared to net loss of $1.1 million or two cent loss per common share in the Prior Year Period, largely driven by a decline in year over year revenue.
As at June 30, 2024, the Company's cash balance was $7.8 million compared to $8.3 million as at December 31, 2023, while working capital was $16.3 million compared to negative $21.4 million as at December 31, 2023.
Total assets of $432.3 million as at June 30, 2024 compared to $402.5 million at December 31, 2023.
Montfort's loan investment portfolio (loans receivable) increased to $348.8 million in the second quarter 2024 compared to $320.6 million as of December 31, 2023.
Adjusted net income (loss) (a non-GAAP measure)1 attributable to shareholders and adjusted net income (loss) per common share (a non-GAAP measure)2 were a loss of $2.6 million and $0.04 loss per share in the three months ending June 30, 2024 compared to adjusted net loss attributable to shareholders of $0.3 million and $0.01 adjusted net loss per share in the Prior Year Period.
On a comprehensive basis:
Reported net comprehensive loss of $3.2 million for the three months ended June 30, 2024, compared to net comprehensive loss of $1.1 million for the three months ending June 30, 2023.
"While not yet fully evident in our Q2 results, we made significant changes to our cost structure in the second quarter" said Ken Thomson, CEO of Montfort "These cost cuts, combined with growth in our loan portfolios and reductions in the benchmark interest rate, will all contribute to profitability moving forward. Further, we are executing a plan to reduce our debt that is not directly supported by loan investments which will further reduce our interest expense and contribute to equity value. "
Detailed Financial Review
The Company originates, underwrites and manages secured loans through the following operating divisions:
Brightpath Capital, one of Canada's leading providers of alternative residential mortgages.
Langhaus Financial, provides insurance policy-backed lending solutions to high-net-worth individuals and entrepreneurs in Canada.
Nuvo Financial, is focused on providing net asset value (NAV) loans to small and mid-sized investment funds in Canada.
Pivot Financial which specializes in asset-backed private credit targeting mid-market borrowers in Canada.
TIMIA Capital, a technology lending platform that offers revenue-based investment to fast growing, business-to-business Software-as-a-Service (or SaaS) businesses in North America.
Montfort's overall Assets Under Management and Administration ("AUMA")3 includes assets under management plus loans managed on behalf of third ...
