Clarke Inc. Reports 2024 Fourth Quarter and Year End Results

HALIFAX, NS, March 10, 2025 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI) today announced its results for the three months and year ended December 31, 2024.

Results for the Year Ended December 31, 2024¹

The Company's net income was $37.8 million compared to $3.4 million in 2023. The increased earnings year-over-year were primarily a result of $37.9 million of fair value adjustment gains recorded within earnings. The $37.9 million was the aggregate of a $34.0 million fair value gain on the Company's investment properties, and $3.9 million of revaluation gains on certain hotel properties. The Company also had $11.7 million of additional revaluation gains on certain hotel properties, which were recorded within other comprehensive income ("OCI"). Additionally, the results of 2023 included operating losses from the Company's three vacant office buildings in Houston, TX, and a former joint venture located at 1111 Atwater Avenue in Montreal, QC. Each of those assets had been disposed of by March 2024.

Comprehensive income for the year ended December 2024 was $46.4 million compared to $17.1 million in 2023. Comprehensive income in the year ended December 31, 2024, exceeded 2023 due primarily to increased earnings and larger revaluation gains recorded in earnings and OCI in 2024 compared to those recorded in 2023. 

During 2024, the Company's book value per common share increased by $3.32, or 20.1%. The change can be attributed primarily to (i) fair value adjustments on investment properties of $34.0 million, or $2.44 per share, (ii) revaluation gains on certain hotels of $15.6 million, or $1.12 per share and (iii) hotel net operating income of $22.9 million, or $1.64 per share, offset by (iv) depreciation of $10.6 million, or $0.76 per share and (v) interest and accretion of $7.5 million, or $0.54 per share.

Clarke's basic and diluted earnings per share ("EPS") for the year ended December 31, 2024 was $2.71, compared to $0.24 for the year ended December 31, 2023. Our book value per common share at the end of the year was $19.85 while our common share price was $23.60.

Results for the Fourth Quarter of 2024

Hotel and rental revenue increased by $2.0 million, from $14.7 million to $16.7 million year-over-year due to the increased rental revenue from the opening of the first phase of our Talisman residential development on Carling Avenue in Ottawa, ON.

The Company had net income of $21.5 million in the fourth quarter of 2024 compared to $7.5 million in 2023. The $29.9 million fair value adjustment gains on investment properties is the largest factor in the increase year-over-year, offset by incremental deferred taxes in the fourth quarter of 2024 compared to the same period in 2023.

The Company had other comprehensive losses of $0.2 million in the fourth quarter of 2024 compared to OCI of $8.7 million in 2023. The primary reasons for the decrease year-over-year are the higher revaluation gains on certain hotel properties as well as higher remeasurement gains on the pension asset in the fourth quarter of 2023 compared to 2024.

For the three months ended December 31, 2024, Clarke's basic and diluted EPS was $1.54, compared to $0.54 for the same period in 2023.

Additional commentary on our results can be found in our Management's Discussion & Analysis for the year ended December 31, 2024.

Other Information

Highlights of the consolidated financial statements for the three months and year ended December 31, 2024 compared to the three months and year ended December 31, 2023 are as follows:

About Clarke

Halifax-based Clarke is a real estate company with holdings across real estate sectors – primarily residential, furnished suites and hospitality. Clarke's common shares (CKI) trade on the Toronto Stock Exchange. Further information about Clarke, including the Consolidated Financial Statements and Management's Discussion & Analysis for the year ended December 31, 2024, is available on SEDAR+ at www.sedarplus.ca and www.clarkeinc.com. 

Cautionary Statement Regarding Use of Non-IFRS Accounting Measures and Ratios

This press release makes reference to "book value per share" and "net operating income".  Book value per share and net operating income are not financial measures or ratios calculated and presented in accordance with International Financial Reporting Standards ("IFRS") and should not be considered in isolation or as a substitute to any financial measures or ratios of performance calculated and presented in accordance with IFRS. These non-IFRS financial measures and ratios are presented in this press release because management of Clarke believes that such measures and ratios enhance the user's understanding of our historical and current financial performance.

Book value per share is measured by dividing shareholders' equity of the Company at the date of the statement of financial position by the number of common shares outstanding at that date.  Net operating income is defined as revenue less expenses. Net operating income measures operating results before interest, depreciation, amortization, and income taxes.  Clarke's method of determining these amounts may differ from other companies' methods and, accordingly, these amounts may not be comparable to measures used by other companies.

Note on Forward-Looking Statements and Risks

This press release may contain or refer to certain forward-looking statements relating, but not limited, to the Company's expectations, intentions, plans and beliefs with respect to the Company. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "does not expect", "is expected", "budgets", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "believes", or equivalents or variations of such words and phrases, or state that certain actions, events or results, "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements include, without limitation, those with respect to the future or expected performance of the Company's underlying assets, changes in the property holdings, changes to the Company's hedging practices, currency fluctuations and requirements for additional capital. Forward-looking statements rely on certain underlying assumptions that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to be materially different from the historical results or from any future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the Company's investment strategy, legal and regulatory risks, general market risk, potential lack of diversification in the Company's investments, interest rates, foreign currency fluctuations, the sale of Company assets, the expectation that the Company's redeployment of capital from its asset dispositions, renovations and repurposes will be accretive to the Company's shareholders, the anticipated timing for completion of the second phase of the Talisman residential redevelopment, reliance on key executives and other factors.  The real estate industry is subject to various risks that could impact on our financial performance and asset values. These risks include fluctuations in property values, changes in market demand, interest rate volatility, and broader economic conditions such as inflation, employment levels, and consumer confidence. Tourism levels, economic activity and changing competition in our markets can have a significant impact on the underlying results of our assets. Competition from new developments and alternative accommodation options could affect occupancy rates and rental pricing. Regulatory and legislative changes, including zoning laws, rent control measures and environmental policies, may impose additional costs or restrictions on operations. Additionally, unforeseen capital expenditures, rising maintenance costs, and disruptions in supply chains may impact profitability. Our ability to successfully acquire, develop, and manage real estate assets depends on effective risk mitigation strategies, financial flexibility, and market adaptability. With respect to the ferry operations, such risks and uncertainties include, among others, weather conditions, safety, claims and insurance, uninsured losses, changes in levels of business and commercial travel and tourism and other factors.

Although the Company has attempted to identify important factors that could cause actions, events or results not to be as estimated or intended, there can be no assurance that forward-looking statements will prove to be accurate as actual results, and future events could differ materially from those anticipated in such statements. Other than as required by applicable Canadian securities laws, the Company does not update or revise any such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements.

SOURCE Clarke Inc.