Pumpjacks at work pumping crude oil near Halkirk, Alta.Larry MacDougal/The Canadian Press
Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
Home Capital Group Inc. (HCG-T) says its subsidiary, Home Trust, has reached a non-binding agreement in principle with a major institutional investor for a credit line of $2-billion.
"It is expected that a firm commitment will be agreed to later today," the company said before markets opened on Wednesday.
It said the $2-billion loan facility would be secured against a portfolio of mortgages originated by Home Trust.
"Access to these funds is intended to mitigate the impact of a decline in Home Trust's High Interest Savings Account (HISA) deposit balances that has occurred over the past four weeks and that has accelerated since April 20," the company said.
It said HISA balances have fallen by $591-million in the period from March 28 to April 24 and stood at. $1.4-billion as at April 24.
"The company anticipates that further declines will occur, and that the credit line would also mitigate the impact of those."
However, Home Capital advised that the terms of the proposed agreement "would have a material impact on earnings, and would leave the company unable to meet previously announced financial targets."
The news slammed Home Capital's stock, which fell 50 per cent at the open, and was down 60 per cent, or $10.13, in mid-morning trading at $6.91.
**
Sears Canada Inc. (SCC-T; SRSC-Q) said fourth-quarter revenue came in at $744-million, down 16.2 per cent compared to the same quarter last year.
"The difference between this decline and the same stores sales increase of 1.3 per cent was primarily due to (1) store exits since last year and (2) the decline in revenues in the company's Direct business," the company said.
The net loss for the fourth quarter was $45.8-million or 45 cents per share compared to net earnings of $30.9-million or 30 cents per share in the fourth quarter a year earlier. The fourth quarter a year earlier included a gain on the termination of the credit card agreement of $170.7-million.
**
Canaccord Genuity Group Inc. (CF-T) says it expects fourth-quarter earnings "to be significantly higher than previous quarters in its most recent fiscal years."
It expects net income attributable to common shareholders will be more than $23-million or 23 cents per share.
On an IFRS basis, its expects to record net income attributable to common shareholders or more than $21-million or 21 cents per share.
Revenue is expected to exceed $260-million, up 30 per over the average for the first three quarters of fiscal 2017. "Increased new issue activity in all regions in the company's focus sectors during the quarter led to a significant increase in investment banking revenue," the company said in a release after markets closed on Tuesday.
Analysts are expecting earnings of 12 cents and revenue of $224-million for the quarter ended March 31. That compares to a loss of 6 cents and revenue of $200.9-million a year ago.
The company says it will report its official results on June 1.
**
Pengrowth Energy Corp. (PGF-T; PGH-N) says it's selling the remaining portion of its Swan Hills assets in north central Alberta for $185-million.
"This transaction essentially completes Pengrowth's exit from the Swan Hills area and provides the company with additional financial flexibility to further reduce indebtedness," the company said.
It didn't name the buyer.
**
DIRTT Environmental Solutions (DRT-T) says it has been awarded "a significant contract" from a large, unnamed international company for interior construction projects in multiple locations.
It said the value of the first phase could be more than $5-million (U.S.) and develop into a longer-term partnership.
**
Capstone Mining Corp. (CS-T) reported a net loss of $7.4-million or 2 cents per share in the first quarter, compared to a loss of $12.8-million or 3 cents a year earlier.
Its adjusted net loss was $2-million or a penny per share compared to a loss of $1.5-million or nil per share a year earlier.
Revenue was $128-million up from $126.2-million a year ago.
Analysts were expecting revenue of $131.7-million and earnings of a penny per share.
**
First National Financial Corp. (FN-T) reported revenue of $232.2-million in the first quarter, up 1 per cent from $231.4-million a year earlier.
Net income was $36.1-million or 58 cents per share compared to $37.3-million or 59 cents a year earlier.
Analysts were expecting earnings of 62 cents.
Mortgages under administration rose to $99.1-billion as of March 31, 2017 from $94.3-billion at March 31, 2016.
**
Fortress Paper Ltd. (FTP-T) says the World Trade Organization issued its panel report on Tuesday in favour of Canada in an anti-dumping dispute with China.
"Fortress Paper is of the view that a proper implementation of the panel decision should result in China removing anti-dumping duties on imports of Canadian dissolving pulp," the company said.
It said Canada and China now have to negotiate a timeline for China to comply with the decision.
"Our relationships with viscose producers in China remain strong despite the challenges these duties presented to our business, and we are encouraged that, following implementation of this decision, our dissolving pulp sales channels will benefit through the expansion of business opportunities in China. In the meantime, we continue our efforts to optimize customer mix and geographical diversification," stated CEO Yvon Pelletier.
**
Canacol Energy Ltd. (CNE-T) says it has purchased Pacific Exploration and Production's 50-per-cent operated interest in the SSJN7 Exploration and Production Contract.
It said the deal includes the assumption of contractual exploration obligations to the Agencia Nacional de Hidrocarburos (ANH), Colombia's resource administrator.
The agreement is subject to approval by the ANH, expected in the next three-to-six months.
"The low-cost acquisition of the SSJN7 block continues the consolidation of our core operated gas exploration and production area in the Lower Magdalena Valley basin," said CEO Charle Gamba.
**
Kingsway Financial Services Inc. (KFS-T; KFS-N) reported first-quarter revenue of $32.9-million (U.S.) up from $29.4-million a year ago.
The company reported a net loss attributable to common shareholders of $1.7-million or 8 cents per share compared to net loss attributable to common shareholders of $1.5-million or 8 cents per share a year ago.
**
Calfrac Well Services Ltd. (CFW-T) reported first-quarter revenue of $268.8-million, an increase of 24 per cent from the same period in 2016.
The company said its fracturing job count increased by 67 per cent "mainly due to higher activity in Canada and the United States."
The net loss attributable to shareholders was $19.5-million or 14 cents per share compared to a net loss of $54.1-million or 47 cents per share in the same period last year.
Analysts were expecting a loss of 26 cents and revenue of $239.5-million.
Calfrac also said it's increasing its 2017 capital budget to $45-million from $25-million, "largely focused on sustaining capital for the company's North American fracturing operations."
Calfrac said the first quarter "marked the beginning of a transition away from unsustainable pricing and very low activity in our key operating geographies."
It reactivated equipment and "achieved modest pricing gains" in the quarter, "which both contributed to the improvement in reported results."
**
Sandstorm Gold Ltd. (SAND-T; SSL-T) is buying the rest of Mariana Resources Ltd. (MARL-T) it does not already own.
Sandstorm said it owns about 7 per cent of the company now.
"The combination is expected to transform the combined group into a leading mid-tier streaming and royalty company," said Sandstorm CEO Noel Watson in a release.
"Our focus will be growth by acquisition with the primary objective being to add streams and royalties on quality projects with exploration upside, with the balance of Mariana's exploration portfolio contributing to this."
The proposed deal sees Mariana shareholders receive 28.75 pence in cash and 0.2573 of a Sandstorm share for each one Mariana share held. The combination values Mariana at approximately 110 pence per share based on the closing price of $4.04 (U.S.) per Sandstorm share on the NYSE.
Sandstorm said the terms of the deal represent a premium of approximately 84 per cent to the closing price of 59.50 pence per Mariana share on April 25.
Mariana shareholders would own about 19 per cent of the combined company.
Mariana is an exploration and development company with a portfolio of gold, silver, and copper projects in Turkey, South America, and Côte d'Ivoire.
**
Canfor Pulp Products Inc. (CFX-T) reported net income of $24.1-million, or 36 cents per share in the first quarter compared to $23.1-million, or 34 cents per share a year earlier.
Analysts were expecting earnings of 39 cents per share.
Sales were $309.2-million up from $295.3-million a year ago.
"Despite several weather-related challenges early in the quarter, Canfor Pulp delivered another solid financial performance, as the company benefited from stronger-than-expected global softwood pulp demand as well as productivity gains," said CEO Don Kayne.
**
Canada's biggest licensed marijuana producer plans to subject its products to enhanced testing for pesticides and other contaminants, as the industry seeks to restore consumer confidence amid a tainted cannabis scare.
Canopy Growth Corp. (WEED-T) which owns the Tweed, Bedrocan, and Mettrum brands, will unveil a new testing regime on Wednesday that it hopes will reassure customers that the products haven't been exposed to dangerous chemicals. The move comes after The Globe and Mail revealed in December that a recall of medical marijuana at Mettrum was due to the discovery of myclobutanil, a banned pesticide that is not permitted for use on cannabis because it emits hydrogen cyanide when heated and can lead to serious health problems. A similar recall was announced at rival producer Organigram soon after.
Canopy, which purchased Mettrum in January, said it would implement new measures to ensure such a recall doesn't happen again.
-- Grant Robertson
**