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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Information Services Corporation | TSX:ISV | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.02 | 0.08% | 25.66 | 23.01 | 25.80 | 25.70 | 25.65 | 25.70 | 2,596 | 21:00:02 |
REGINA, Aug. 13, 2014 /CNW/ - Information Services Corporation (TSX:ISV) ("ISC" or "the Company"), Saskatchewan's exclusive provider of key registry information services, today reported on the Company's financial results for the second quarter ended June 30, 2014, and provided revised capital expenditure guidance for 2014.
Highlights of ISC's Q2 2014 financial results
Management's Discussion of ISC's Summary Quarterly Financial Results
(Thousands of CAD dollars, except earnings per share and where noted) |
Three months ended June 30, | |
2014 |
2013 | |
Revenue |
||
Land Titles Registry, Land Survey and Geomatics |
$ 17,310 |
$ 16,410 |
Personal Property Registry |
$ 2,677 |
$ 2,702 |
Corporate Registry |
$ 2,028 |
$ 2,058 |
Other |
$ 1 |
$ 12 |
Total Revenue1 |
$ 22,016 |
$ 21,182 |
Operating, general and administrative expenses |
$ 13,460 |
$ 12,694 |
EBITDA2 |
$ 8,556 |
$ 8,119 |
EBITDA Margin2 (% of Revenues) |
38.9% |
37.4% |
Adjusted EBITDA2 |
$ 8,556 |
$ 10,653 |
Adjusted EBITDA Margin2 |
38.9% |
50.3% |
Net Income and total comprehensive income |
$ 5,308 |
$ 63,190 |
Earnings per share, basic3 |
$ 0.30 |
$ 3.61 |
Earnings per share excluding tax, basic |
$ 0.42 |
$ 0.40 |
Free cash flow2 |
$ 7,917 |
$ 7,395 |
Outlook
The majority of our revenues are linked to economic conditions. The Saskatchewan economy continues to show solid economic performance for 2014, albeit at a slower rate of growth than originally projected. This has resulted in a number of analysts revising their economic forecasts down slightly.
According to Bank of Montreal ("BMO") Capital Markets'1 most recent economic forecast for Saskatchewan, the provincial economy is expected to post real gross domestic product ("GDP") growth of 2.4 per cent growth in 2014, down from 2.5 per cent earlier in their April projection. Royal Bank of Canada's Economics Research2 projection for 2014 is currently 1.4 per cent, down from 2.0 per cent in March.
_________________________________
1 BMO Capital Markets Economics – Provincial Economic Outlook – July 2014
Employment growth in Saskatchewan was up 3.4 per cent in 2013, but is expected to only reach 1.7 per cent in 2014.3 Average weekly earnings for the month of April in 2014 were up 4.3 per cent compared to April of 2013,4 while manufacturing sales rose 11 per cent for the first quarter of 2014 compared to the same period in 2013.5
The housing and mortgage markets are important components of our Land Titles Registry. Canada Mortgage and Housing Corporation ("CMHC") Housing Market Outlook currently forecasts a modest increase in existing home sales volumes in Saskatchewan for 2014, revised down slightly from their first quarter report.6 Average home resale prices are expected to increase by 3.0 per cent in 2014, revised from 2.4 per cent from the same report. While mortgage rates began increasing at the beginning of 2013, they then started to decline at the end of the third quarter but have since steadied, with some lenders offering below 3.0 per cent.
Saskatchewan housing starts for January to June of 2014 were up 12.1 per cent over the same period in 2013, while the number of completions is up 18.9 per cent.7 Despite this increase, the number of building permits issued from January to May of 2014 was down 15.9 per cent compared to the same period in 2013, while the value of building permits has declined by 12.5 per cent8. In addition, the new housing price index for Saskatchewan (as well as Regina and Saskatoon) has been trending up consistently since mid-2009, with an occasional minor month-over-month decline
While we continued to see a large number of high-value property registrations during the first six months of 2014 (which generate a high fee per transaction), we expect the volume and resulting revenue to subside somewhat for the remainder of 2014.
For the Personal Property Registry, retail trade and new vehicle sales can be a gauge for expected revenues in the PPR. For January to April 2014, retail sales increased by 6.5 per cent over the same period in 2013 in Saskatchewan.9 The number of units of new vehicles sold decreased by 2.2 per cent in the first four months of 2014 compared to the same period in 2013, although the total value of sales increased by 0.8 per cent.10 Despite this decline, Scotiabank is currently forecasting slight increases in annual motor vehicles sales for 2014 over 201311.
At the end of June, heavy rains resulted in severe flooding in a number of communities across Saskatchewan. Approximately 8.0 per cent of the land expected to produce crops12 and a number of highways were submerged, and damage claims continue to be filed with various insurers.13 While the long-term economic effect of this extreme weather event is unknown at this time, any change to the projected provincial growth could impact ISC's revenues.
___________________________________
2 RBC Economics Provincial Outlook – June 2014
3 CMHC Housing Market Outlook – Canadian Edition – Second Quarter 2014.
4 Statistics Canada CANSIM Table 281-0063: Employment and average weekly earnings including overtime (SEPH), seasonally adjusted, for all employees by industries classified using the NAICS, monthly (persons unless otherwise noted) – July 2014.
5 Statistics Canada CANSIM Table 304-0015: Manufacturing Sales by NAICS and Province – June 2014.
6 CMHC Housing Market Outlook – Canadian Edition – Second Quarter 2014.
7 Statistics Canada CANSIM Table 027-0001: Canada Mortgage and Housing Corporation, housing starts, under construction, and completions in centres 10,000 and over – July 2014.
8 Statistics Canada CANSIM Table 026-0001: Building permits, residential values and number of units, by type of dwelling – July 2014.
9 Statistics Canada CANSIM Table 080-0020: Retail trade, sales by NAICS – July 2014.
10 Statistics Canada CANSIM Table 079-0003: New motor vehicle sales, Canada, provinces and territories –July 2014.
11 Scotiabank Global Economics – Global Forecast Update – June 2014.
12 CBC News. "Up to 3 Million Saskatchewan Farm Acres Flooded." – July 2014.
13 The Star Phoenix: "Disaster Assistance Claims Pile Up." July 10, 2014.
Based on the moderate economic growth expectations for Saskatchewan, the Company continues to expect revenue to remain stable in 2014 and annual EBITDA margins to return to the normalized level of approximately 35 per cent. ISC also continues to anticipate a modest increase in operating, general and administrative expenses based on inflation as well as the costs associated with being a publicly traded company.
During the first six months of 2014, the Company focused more on operational initiatives than expected (some of which had been deferred from 2013 because of the IPO), as opposed to capital initiatives. As such, the Company has revised its expected capital expenditure spend for 2014 to be in the range of $5.0 million to $7.0 million, down from the planned $8.0 million to $10.0 million.
Note to Readers:
This news release provides a general summary of Information Services Corporation's results for the second quarters ended June 30, 2013 and 2014. Readers are encouraged to download the Company's complete financial disclosures. Links to ISC's financial statements and related notes and Management's Discussion and Analysis for the period are available on ISC's website in the Investor section of the site at http://isc.investorroom.com/index.php?s=63. All figures are in Canadian dollars unless otherwise noted.
Copies can also be obtained at www.sedar.com by searching Information Services Corporation's profile or by contacting Information Services Corporation at investor.relations@isc.ca
Conference Call And Webcast
The Company is hosting a conference call and webcast at 9:00 a.m. Saskatchewan Time; 11:00 a.m. Eastern Time on August 14, 2014 to discuss these results. Dial-in numbers for the conference call are:
1-416-764-8688 or toll-free at 1-888-390-0546.
A live audiocast of the conference call is available at the following link: http://www.newswire.ca/en/webcast/detail/1388941/1541045
About ISC
ISC is a provider of registry and information services to the Province of Saskatchewan. The Company is the exclusive provider of the Land Titles Registry, Land Surveys Directory, Personal Property Registry and Corporate Registry in Saskatchewan, which are key supporters of economic activity in the province.
Cautionary Note Regarding Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable Canadian securities legislation, including certain assumptions with respect to the Saskatchewan economy, consumer confidence, interest rates, level of unemployment, inflation, real estate market in Saskatchewan, claim liabilities, income taxes, our ability to attract and retain skilled staff, employee future benefits, goodwill and intangibles are material factors in preparing forward-looking statements and management's expectations. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those expressed or implied by such forward-looking information. Although ISC believes the forward-looking information contained in this release is based upon reasonable assumptions, readers are cautioned not to place undue reliance on forward-looking information as it is inherently uncertain and no assurance can be given that the expectations reflected in such information will prove to be correct. Many factors and risks could cause our actual results to differ materially from those expressed or implied by forward-looking information including those detailed in ISC's Annual Information Form, dated March 19, 2014, ISC's unaudited condensed Consolidated Financial Statements and Notes and Management's Discussion and Analysis for the quarter ended June 30, 2014 as well as other documents filed by ISC with Canadian securities regulators through SEDAR (www.sedar.com) from time to time. Investors and others should carefully consider the above-noted factors and risks and other uncertainties and potential events. The forward-looking information in this release is made as of the date hereof and, except as required under applicable securities legislation, ISC assumes no obligation to update or revise such information to reflect new events or circumstances.
SOURCE Information Services Corporation
Copyright 2014 Canada NewsWire
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