Brookfield Real Estate Services CEO Philip Soper.Frank Gunn
Brookfield Real Estate Services Inc. has reported a near doubling of its net loss in the three months ended March 31.
The company, which generates cash flow from franchise royalties and services from residential real estate brokers and realtors, said its first-quarter net loss was $3.2-million or 34 cents per restricted voting share. That compared with a net loss of $1.8-million in the same 2011 period.
Royalties were $8.2-million, unchanged from the year-earlier period, Brookfield said in a news release.
During the quarter, the company generated cash flow from operations of $5.6-million compared with $5.7-million for the same period in 2011.
It said an increase in variable franchise fees due to increased market activity was offset by a decrease in fixed royalty fees as a result of a decrease in the underlying agent network in 2011 as well as a decrease in other revenue and services.
At the end of March, the agent network was comprised of 15,250 realtor operating under 414 franchise agreements providing services from 668 locations, with an approximate 22 per cent share of the market based on 2011 transactional dollar volume.
Other revenue and services decreased by 10 per cent quarter over quarter – equal to 1.2 per cent of overall revenue – as the company discontinued an agent website program it described as "no longer relevant."
Brookfield said price appreciation and housing sales are expected to modestly increase in 2012.
"While the pace of appreciation is slowing in some regions across Canada as higher home prices negatively impact affordability, the positive impact of a gradually improving domestic and U.S. economy, and a gentle upward pressure on wages and salaries, should support the residential real estate market through 2012," it said.