Our roundup of Canadian small-caps of between $100-million and $2.5-billion in market capitalization making news and on the move today.
New Gold Inc.’s (NGD-T) $150-million stock issue has met with a frosty reception from investors as underwriters remain stuck with about a third of the shares despite bullion’s big run this year, the Globe and Mail reports.
Late last week, Toronto-based New Gold said a syndicate of underwriters had purchased the issue from the company and was offering close to 94 million new shares at $1.60 apiece to investors, a discount of 7 per cent to the market close at the time.
In such “bought deal” transactions, underwriters attempt to resell shares to third-party investors, preferably in a matter of hours. For assuming the risk, brokers are paid a flat commission, in this case 4.5 per cent.
But nearly a week after the underwriters purchased the shares about a third of deal remains on their books, according to sources, who were not authorized to speak publicly. Sources cited the relatively slim deal discount given New Gold’s risk profile, uneven interest in the sector and questions over the miner’s long-term prospects as factors.
New Gold, whose market value is about $890-million, is carrying about US$780-million in long-term debt, largely incurred by big cost overruns at its low-grade Rainy River mine in Ontario. New Gold said it intends to use proceeds from the bought deal in part to pay down that debt. New Gold receives the proceeds from the issue, minus a commission to the dealers, regardless of whether it sells out to third-party investors.
-Niall McGee and Tim Kiladze
The special committee of the board of Hudson’s Bay Co. (HBC-T) issued a statement Thursday morning commenting on the amended unsolicited offer made on Aug. 7 to shareholders by the Catalyst Capital Group Inc. to acquire up to 19,782,393 common shares of the company for $10.11 per common share in cash.
"The expiry date of the amended Catalyst offer is August 16, 2019, which is significantly earlier than the expected September completion of the formal valuation of HBC’s common shares being prepared under the supervision of the special committee," it stated. "In view of this, the special committee requested that Catalyst extend the expiry date of its offer to allow time for the special committee and its financial advisors to complete the valuation analysis and an evaluation of available strategic alternatives; however, Catalyst has declined to do so."
The special committee also reiterated its advice to shareholders to "exercise caution regarding a decision to tender to the amended Catalyst offer.
It also stated again that, based on the initial analysis completed by the its financial advisors and other factors, the price of $9.45 per common share proposed by the shareholder group “is inadequate.”
Labrador Iron Ore Royalty Corp. (LIF-T) reported second-quarter royalty revenue amounted to $52.6-million as compared to $5.1-million for the second quarter of 2018. Equity earnings from IOC [Iron Ore Company of Canada] amounted to $33.9-million or 53 cents per share in the second quarter as compared to a loss of $6.1-million or 9 cents per share in the second quarter of 2018, the company stated.
The company said it received a dividend from IOC in the second quarter of 2019 of $25.4-million or 40 cents per share, versus no dividend in the second quarter of 2018. "The 2018 production was negatively impacted by a nine-week work stoppage," the company stated.
Net income was $61.1-million or 95 cents per share compared to a net loss of $3.2-million or 5 cents per share for the same period in 2018.
Birchcliff Energy Ltd. (BIR-T) reported a net loss to common shareholders of $9.5-million or 4 cents per share as compared to the net income to common shareholders of $6.4-million or 2 cents per share a year ago. Revenue was $139.9-million down from $150.6-million a year earlier. Analysts were expecting revenue of $143.8-million.
Adjusted funds flow of $74-million or 28 cents per share, a 2 per cent increase and a 4-per-centt increase, respectively, from a year ago, the company stated.
StorageVault Canada Inc. (SVI-X) reported a net loss of $16.3-million in the second quarter versus a net loss of $9.2-million a year ago. The loss in the latest quarter is after $20.5-million of depreciation and amortization and $3.6-million in stock-based compensation, the company said, which was offset by a deferred tax recovery of $1.6-million, all non-cash items.
Revenue for the second quarter increased to $34.3-million compared to $23.2-million a year ago and ahead of expectations of $30.9-million.
Revenue for the quarter was $94-million up 46.3 per cent compared to the same quarter last year and below expectations of $100-million. Adjusted EBITDA came in at $14.4-million, up 43 per cent compared to a year ago and in line with expectations.
Net earnings were $5.5-million or 11 cents per share down 13.9 per cent and 21.4 per cent respectively, "due mainly to a one-time favourable insurance claim settlement of $1.6-million in 2018," the company stated.
Extendicare Inc. (EXE-T) reported second-quarter revenue of $284-million, up from $279.5 million a year ago, “driven by long-term care funding enhancements, growth in retirement living and the recognition of incremental home health care funding of $2.2-million to offset 2018 costs related to Bill 148.”
Analysts were expecting revenue of $273.2-million in the quarter.
Net earnings were $8.3-million or 10 cents per share down from $11.8-million or 14 cents a year earlier.
Sienna Senior Living Inc. (SIA-T) reported second-quarter revenue increased by 2.4 per cent to $166-million compared to a year earlier.
Net income was $2.2-million or 3.4 cents per share down from net income of $3.5-million or 5.5 cents a year ago.
The board also approved an increase in Sienna’s monthly dividend from $0.0765 per share to $0.078 per share ($0.936 per share annualized).
Invesque Inc. (IVQ.U-T) reported second-quarter revenue of US$28.8-million down from US$29.4-million a year ago. Its net loss was US$16.9-million versus a profit of US$10.5-million a year ago. Adjusted funds from operations per share came in at 18 cents US versus 25 cents US a year earlier. Analysts were expecting adjusted FFO per share to come in at 19 cents US.
The company also announced the transition of a majority of its Greenfield portfolio to Commonwealth Senior Living "to create a leading operator of seniors housing in the [U.S.] mid-Atlantic."
Automotive Properties Real Estate Investment Trust (APR.UN-T) announced second-quarter property rental revenue was $16.4-million, an increase of 44.4 per cent from the second quarter of 2018. Net Income was $8.4-million, compared to $5.3-million a year ago. Funds from operations increased 31.8 per cents $8.8-million. FFO per unit of the REIT 27.2 cents compared to 25.2 cents a year ago. Analysts were expecting FFO per uni of 28 cents and revenue of $16.4-million.