Terra Firma Capital Corporation (TSX VENTURE:TII) ("Terra Firma" or the
"Company"), a real estate finance company, today announced that net income for
the year ended December 31, 2011 increased 161% to $287,000, or $0.02 per basic
and diluted share, from $110,000, or $0.01 per basic and diluted share, in the
comparative period of 2010. Income from continuing operations grew to $480,000,
or $0.03 per basic and diluted share, in 2011 from $12,000, or $0.00 per basic
and diluted share, in 2010. Revenues grew 986% to $1,621,000 in 2011 from
$149,000 in 2010. The Company adopted International Financial Reporting
Standards ("IFRS") commencing January 1, 2011 and the comparative 2010 results
have been revised to conform to IFRS. All amounts are stated in Canadian
dollars.
The substantial growth in Terra Firma's revenues and net income in 2011 was
primarily as a result of nine new mortgage and loan investments originated and
funded during the year. The Company's loan portfolio increased to $16.7 million
(with a weighted average effective interest rate of 19.3%) as at December 31,
2011 versus $2.5 million a year prior. Terra Firma also recorded revenues and
earnings from its participation in the development and operation of a retail
development anchored by a national pharmacy store in Ottawa, Ontario.
"We are very pleased with our 2011 results," commented Mr. Y. Dov Meyer, Terra
Firma's CEO and President. "They reflect Terra Firma's increasing stature as a
viable alternative real estate lender in the market, one that has the ability to
arrange and participate in financings secured by both high quality investment
properties and commercial and residential real estate developments undertaken by
proven developers."
Terra Firma successfully completed several private placements in 2011 to enhance
its liquidity position, to fund its business activity needs and for other
general corporate purposes. These included increasing the Company's capital
stock to $10.7 million from $4.6 million through the issuance of 12,595,000
shares via two private placements; and issuing $10.1 million of 3-year, 7%
convertible debentures, convertible at $0.70 per share.
In 2011, Terra Firma also raised the syndicated portion of its loan portfolio by
$4.0 million to $4.8 million, with a weighted average effective interest rate of
14.0% as at December 31, 2011. Subsequent to year end, in January, the
syndication level was increased to $8.9 million. The Company engages in
syndication activities to provide additional funds to fuel the growth of its
loan portfolio and increase the return on its net investment, while limiting its
overall risk profile.
"Going forward, we plan to use our enhanced working capital to take advantage of
the increased deal flow we are seeing," concluded Mr. Meyer. "We believe we will
continue to grow our revenue and earnings in 2012."
2011 Operational Highlights:
-- In January, Terra Firma announced the completion of a mezzanine loan on
a development of luxury condominium townhomes being built at the corner
of Bayview Avenue and the Bridle Path in Toronto. The total commitment
provided by Terra Firma was $4 million of which $1.4 million was funded
by Terra Firma's internal cash and the balance syndicated to investors.
-- In May, the Company completed a land acquisition and construction loan
on a development that will contain a 29,000 square foot free-standing
food store being built at the corner of Queenston Road and Nash Road
North in Hamilton, Ontario. The total commitment provided by Terra Firma
was $4.6 million. Terra Firma partnered with a major institutional
lender on the transaction.
-- In December, Terra Firma announced the completion of three loans
totaling $13.4 million funded by the Company's own cash resources and by
syndications to third party investors. The loans included a construction
loan on a 205-unit student housing development in Waterloo, Ontario; a
loan on a 5-story building on Adelaide Street West in Toronto being
rezoned for condominium development; and a loan on a portfolio of five
condominium development projects in Toronto, of which two are on Queen
Street West and three are in the Leslieville area, that are in various
stages of development but over 80% pre-sold and expected to include more
than 800 units.
The Company's Management's Discussion & Analysis and Financial Statements as at
and for the year ended December 31, 2011 have been filed and are available on
SEDAR (www.sedar.com).
About Terra Firma
Terra Firma is a full service, publicly traded real estate finance company that
provides customized equity and debt solutions to the real estate industry. Our
focus is to arrange and provide financing with flexible terms to property owners
looking to improve or add to their existing real estate assets but who may be
limited by conventional bank financing, as well as to invest in quality
commercial and residential developments by proven real estate developers. Terra
Firma offers a full spectrum of real estate financing under the guidance of
strict corporate governance, clarity and transparency. Terra Firma is managed by
Counsel Asset Management, L.P., a wholly owned subsidiary of Counsel Corporation
(TSX:CXS). Counsel Corporation owned approximately 20.2% of the outstanding
common shares of Terra Firma as at December 31, 2011. For further information
please visit Terra Firma's website at www.terrafirmacapital.ca.
About Counsel Corporation
Counsel Corporation (TSX:CXS) is a financial services company that operates
through its individually branded businesses in residential mortgage lending,
distressed and surplus capital asset transactions, real estate finance and
private equity investment. For further information, please visit Counsel's
website at www.counselcorp.com.
This Press Release contains forward-looking statements with respect matters
concerning the business, operations, strategy and financial performance of Terra
Firma. These statements generally can be identified by use of forward looking
word such as "may", "will", "expects", "estimates", "anticipates", "intends",
"believe" or "could" or the negative thereof or similar variations. The future
business, operations and performance of Terra Firma could differ materially from
those expressed or implied by such statements. Such forward-looking statements
are qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations. Forward-looking statements are based on a
number of assumptions which may prove to be incorrect. Additional, important
factors that could cause actual results to differ materially from expectations
include, among other things, general economic and market factors, local real
estate conditions, competition, changes in government regulation, dependence on
tenants' financial conditions, interest rates, the availability of equity and
debt financing, environmental and tax related matters, and reliance on key
personnel. There can be no assurances that forward-looking statements will prove
to be accurate, as actual results and future events could differ materially from
those anticipated in such statements. Accordingly, readers should not place
undue reliance on forward-looking statements. The cautionary statements qualify
all forward-looking statements attributable to Terra Firma and persons acting on
its behalf. Unless otherwise stated, all forward looking statements speak only
as of the date of this Press Release and Terra Firma has no obligation to update
such statements except as required by law.
Terra Firma Capital Corporation
Statements of Operations
For the years ended December 31
(Audited)
2011 2010
$ $
----------------------------
Revenue
Interest 1,352,124 149,218
Earnings from joint venture 268,840 -
----------------------------
1,620,964 149,218
----------------------------
Expenses
General and administrative expense 245,327 169,214
Stock based compensation 284,998 -
Interest expense 413,265 13,540
----------------------------
943,590 182,754
----------------------------
Income (loss) before income taxes 677,374 (33,536)
Income tax provision (recovery) 197,210 (45,332)
----------------------------
Income from continuing operations 480,164 11,796
Income (loss) from discontinued operations (192,842) 98,416
----------------------------
Net income 287,322 110,212
----------------------------
----------------------------
Basic and diluted earnings (loss) per share
Continuing operations 0.03 (0.00)
Discontinued operations (0.01) 0.01
----------------------------
0.02 0.01
----------------------------
----------------------------
Weighted average number of common shares
outstanding - basic and diluted 19,120,808 14,261,644
Terra Firma Capital Corporation
Statements of Financial Position
As at December 31
(Audited)
December 31, December 31,
2011 2010
$ $
--------------------------
Assets
Cash and cash equivalents 8,662,505 2,746,859
Interest and sundry receivables 752,402 60,067
Prepaid expenses and deposits 7,365 2,700
Loan and mortgage investments 16,724,774 2,499,498
Interests in joint ventures 1,073,319 832,729
Assets of discontinued operations - 2,400
--------------------------
27,220,365 6,144,253
--------------------------
--------------------------
Liabilities
Accounts payable and accrued liabilities 682,186 662,413
Provision for discontinued operations 251,864 -
Unearned revenue 52,624 49,985
Income taxes payable 82,169 -
Deferred income taxes 10,260 -
Loans and mortgages payable 4,832,267 849,749
Debentures payable 10,061,869 -
Liabilities of discontinued operations - 23,159
--------------------------
15,973,239 1,585,306
Shareholders' equity 11,247,126 4,558,947
--------------------------
27,220,365 6,144,253
--------------------------
--------------------------
The notes contained in the Company's annual financial statements are an
integral part of these condensed financial statements.
Terra Firma Capital (TSXV:TII)
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