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TORONTO, August 26, 2022 /CNW/ – Cliffside Capital Ltd. (“Cliff” or the “Company“) (TSXV: CEP) is pleased to announce its financial results for the second quarter ended June 30, 2022.
The Company recorded an increase of $90.2 million i.e. 98.2% in financial receivables, net, of $91.9 million like a June 30, 2021 to a record of $182.1 million like a June 30, 2022which generated:
$0.9 million net income before tax for the six months ended June 30, 2022;
$3.2 million or 55.6% increase in net interest income for the six months ended June 30, 2022, compared to the same period of the previous year; and
$1.3 million adjusted net income before tax for the six months ended June 30, 2022
(refer to the Reconciliation of Non-IFRS Measures section on page 12 of the Q2 2022 MD&A available at www.sedar.com for an explanation of this measure).
During the quarter, the Company also declared a quarterly cash dividend on the outstanding common shares of $0.0025 per ordinary share ($0.01 on an annualized basis), which was paid on August 2, 2022. Each of these dividends is qualified as an “eligible” dividend as defined in the income tax law (Canada). Dividends were subject to customary Canadian withholding tax for non-resident shareholders of Canada.
Despite the challenging global macroeconomic environment, the Company’s partnerships continue to have access to efficient financing from various Canadian lenders for the purchase of new auto loan receivables. Two of these facilities should be renewed for an equal or greater amount. The financing facility used to purchase loans receivable in another of the Company’s partnerships, known as CAR LP I, was extended to January 2023. As the mezzanine lender that participated in this financing structure does not wish to renew its financing beyond this point, Cliffside does not expect to fund any further loans receivable in this partnership and does not expect that the current CAR LP I facility is available beyond January 2023., Cliffside will use its other facilities in its other partnerships for normal monthly purchases of loan receivables.
Global Macroeconomic Challenges
Recent and ongoing global macroeconomic events, including COVID-19, global supply chain delays, war in Ukraine, rising global inflation along with the expectation of a continued inflationary environment coupled with rising interest rates has led alternative and non-bank financial companies, such as Cliffside, to face a challenging environment in which to raise equity for growth. Although Cliffside maintains access to adequate sources of financing and capital to enable it to continue its ongoing operations in a manner consistent with its business plan, management believes that these recent macroeconomic challenges could adversely affect on the company’s ability to raise new equity to finance future growth. Accordingly, management believes that the recent strong growth pattern the Company has experienced may be difficult to sustain. Management and the Board of Directors are actively monitoring and adapting to the current environment and will continue to explore all options available to the Company.
Further information on Cliffside’s financial results is available at www.cliffsidecapital.ca.
Cliffside is focused on investing in strategic partnerships with parties that have specialized expertise and proven experience in originating and servicing loans and similar types of financial assets. Cliffside’s strategy is to generate income as an investor, providing its shareholders with the opportunity to invest in the growing alternative lending industry with the potential for attractive returns and minimal operational risk while achieving a reliable total return. For more information, see Cliffside’s filings on SEDAR at www.sedar.com.
CAUTION REGARDING FORWARD-LOOKING INFORMATION: This press release contains certain “forward-looking statements” under applicable Canadian securities laws. Forward-looking statements include, but are not limited to, statements regarding the business and operations of Cliffside and its partnerships, statements regarding the company’s ability to raise equity in the future, statements regarding renewals expected terms of certain debt financing facilities, the expected terms of such renewals and the intended use of proceeds, and management’s ability to effectively protect and grow the Company’s business in light of recent macroeconomic risks and uncertainties and In progress. Forward-looking statements are necessarily based on a number of estimates and assumptions which, while believed to be reasonable, are subject to known and unknown risks, uncertainties and other factors which may cause actual results to differ. and future events differ materially from those expressed or implied. by such forward-looking statements. These factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; the results of operations; potential for conflicts of interest; the availability of suitable financial claims that can be purchased by the Company’s limited partnerships under existing financing facilities; and the volatility of the price and volume of the Common Shares. There can be no assurance that such statements will prove to be accurate or complete, 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. Cliffside disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Cliffside Capital Ltd.
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