Dream Unlimited Corp. Presents at Dream Investor Day
Dream Unlimited Corp. (TSX: DRM) (“Dream”, “the Company” or “we”) looks forward to presenting its business today at its head office at 30 Adelaide Street East, Suite 301 at 10:00 a.m. ET, as part of the Dream group of companies’ Investor Day.
A copy of the presentation will be archived and available on our website here.
The Company also announced today:
- an updated net asset value (“NAV”) per share(1) of $57.84 as of June 30, 2023, compared to $60.22 per share as of December 31, 2021 and $24.02 per share as of June 30, 2013; and
- standalone shareholders’ equity per share in the capital of the Company (“share”) of $34.30 as of June 30, 2023, compared to $33.97 per share as of December 31, 2021 and $8.29 per share as of June 30, 2013.
At the Investor Day, the Company’s senior management team will discuss its business plan and strategy, target capital allocation and future growth business drivers to generate returns and improve the quality of the Company’s income in the future, including the Company’s target plans to sell land in western Canada in the normal course, build multi-residential rental units in western Canada, Toronto and Zibi, complete the projects in the Company’s current urban development pipeline, grow net margin from net asset management, and to reduce the company’s outstanding share count through use of its normal course issuer bid program.
About Dream Unlimited Corp.
Dream is a leading developer of exceptional office and residential assets in Toronto, owns stabilized income generating assets in both Canada and the U.S., and has an established and successful asset management business, inclusive of $24 billion of assets under management(1) across four Toronto Stock Exchange ("TSX") listed trusts, our private asset management business and numerous partnerships. We also develop land, residential and income generating assets in Western Canada. Dream expects to generate more recurring income in the future as its urban development properties are completed and held for the long term. Dream has a proven track record for being innovative and for our ability to source, structure and execute on compelling investment opportunities. A comprehensive overview of our holdings is included in the "Summary of Dream's Assets and Holdings" section of our most recent MD&A.
Non-GAAP Measures and Other Disclosures
In addition to using financial measures determined in accordance with IFRS, we believe that important measures of operating performance include certain financial measures that are not defined under IFRS. Throughout this press release, there are references to certain non-GAAP financial measures and ratios including Dream Impact Trust, consolidation and fair value adjustments, net asset value and net asset value per share, which management believes are relevant in assessing the economics of the business of Dream. These performance and other measures are not financial measures under IFRS, and may not be comparable to similar measures disclosed by other issuers. However, we believe that they are informative and provide further insight as supplementary measures of financial performance, financial position or cash flow, or our objectives and policies, as applicable.
Non-GAAP Ratios and Financial Measures
"Dream Impact Trust & Consolidation and fair value adjustments" are two separate non-GAAP financial measures and represent certain IFRS adjustments required to reconcile Dream standalone and Dream Impact Trust results to the consolidated results as at June 30, 2023 and December 31, 2021. Management believes Dream Impact Trust & Consolidation and fair value adjustments provides investors useful information in order to agree it to the Dream Impact Trust financial statements.
Consolidation and fair value adjustments relate to business combination adjustments on acquisition of Dream Impact Trust on January 1, 2018 and related amortization, elimination of intercompany balances including the investment in Dream Impact Trust units, adjustments for co-owned projects, fair value adjustments to the Dream Impact Trust units held by other unitholders, and deferred income taxes.
"Net asset value" or “NAV” is a non-GAAP financial measure and represents the intrinsic value for the Company excluding the consolidation of Dream Impact Trust. Due to the nature of our holdings, NAV is calculated to reflect various factors including the progression of our developments, fair market value of our land holdings, fair value of our unit holdings in Dream Impact Trust, Dream Office REIT and Dream Residential REIT, and the fair value of our ski hill and asset management businesses. The Company believes that incorporating market value adjustments is a more useful measure to value our business that would not ordinarily be captured under IFRS and the Company’s consolidated financial statements which reflect the consolidation of Dream Impact Trust and Dream Impact Fund. In calculating the market value adjustments reflected in NAV, the Company uses certain market assumptions to fair value items held at cost.
The closest IFRS measure to NAV is shareholders’ equity. The table below provides the reconciliation of NAV to shareholders’ equity:
As at June 30, 2013 |
As at December 31, 2021 |
As at June 30, 2023 |
|
Consolidated shareholders’ equity |
$455,603 |
$1,422,213 |
$1,509,354 |
Less: Dream Impact Trust(1) |
- |
(536,931) |
(468,761) |
Less: Consolidation and fair value adjustments(1) |
- |
569,997 |
427,536 |
Standalone shareholders’ equity |
455,603 |
1,455,279 |
1,468,129 |
Adjustment for Dream Impact Trust’s non-controlling interest
|
- |
(134,003) |
(151,889) |
Adjusted Standalone NAV |
455,603 |
1,321,276 |
1,316,240 |
Recreational properties market value adjustment(i) |
- |
105,514 |
162,493 |
Land inventory market value adjustment(ii) |
549,466 |
385,500 |
475,765 |
Condominium inventory market value adjustment(iii) |
65,000 |
145,942 |
114,320 |
Asset management market value adjustment(iv) |
250,000 |
532,153 |
634,088 |
Dream Group unit holdings market value adjustment(v) |
- |
89,025 |
(227,266) |
Total market value adjustments |
864,466 |
1,258,134 |
1,159,400 |
Net asset value |
$1,320,069 |
$2,579,410 |
$2,475,640 |
i. |
|
Investment properties are held at fair value and externally appraised while recreational assets are held at cost; Arapahoe Basin valued based on 13x EBITDA and the hotels are valued at a 7.5% cap rate. |
|
ii. |
|
9,000 acres in Alberta & Saskatchewan at an average fair value of $90,000/acre for land held for development and a 1.4x multiple for land under development. |
|
iii. |
|
Development lands and condominium inventory include 1.5 million sf of density at our share in downtown Toronto with land valued at $180 psf for residential. |
|
iv. |
|
Value of asset management business based on 18x multiple of Q2 2023 QTD FFO. |
|
v. |
|
Units adjusted to trading price as of June 30, 2023 ($12.94 for Dream Office REIT, $9.08 for Dream Impact Trust and $10.59 for Dream Residential REIT); As of December 31, 2021, units were adjusted to book value per share ($31.49 for Dream Office REIT and $33.00 for Dream Impact Trust). |
“Net asset value per share” or “NAV per share” is a non-GAAP ratio. NAV per share is calculated as net asset value divided by the number of Class A subordinate voting shares and Class B common shares of Dream outstanding as of that date. We use this ratio to assess the relative value of our businesses on a per share basis. NAV per share as of June 30, 2023, December 31, 2021 and June 30, 2013 is calculated as follows:
As at June 30, 2013 |
As at December 31, 2021 |
As at June 30, 2023 |
|
Net asset value |
$1,320,069 |
$2,579,410 |
$2,475,640 |
Shares issued and outstanding |
54,967,492 |
42,836,031 |
42,801,680 |
NAV per share |
$24.02 |
$60.22 |
$57.84 |
Forward-Looking Information
This press release may contain forward-looking information within the meaning of applicable securities legislation, including, but not limited to, statements regarding our objectives and strategies to achieve those objectives; our beliefs, plans, estimates, projections and intentions, and similar statements concerning anticipated future events, future growth, expected net proceeds from sales or transactions, results of operations, performance, business prospects and opportunities, acquisitions or divestitures, tenant base, future maintenance and development plans and costs, capital investments, financing, the availability of financing sources, income taxes, vacancy and leasing assumptions, litigation and the real estate industry in general. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dream’s control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These assumptions include, but are not limited to: assumptions relating to the general economy; that no unforeseen changes in the legislative and operating framework for our business will occur; that we will meet our future objectives, priorities and growth targets; that we receive the licenses, permits or approvals necessary in connection with our projects; that we will have access to adequate capital to fund our future projects, plans and any potential acquisitions; that we are able to identify high quality investment opportunities and find suitable partners with which to enter into joint ventures or partnerships; that we do not incur any material environmental liabilities; that inflation and interest rates will not materially increase beyond current market expectations; our valuation assumptions; assumptions relating to the availability of equity and debt financing; assumptions relating to foreign exchange rates; that conditions within the real estate market remain in line with management’s expectations; competition for and availability of acquisitions; assumptions regarding population growth and rental demand in Canada and across the Company’s key markets; assumptions relating to the nature of development lands held and the development potential of such lands; anticipated positive general economic and business conditions, including low unemployment, positive net migration, oil and gas commodity prices. Risks and uncertainties include, but are not limited to, the risk of adverse global market, economic and political conditions and health crises; general and local economic and business conditions; risks associated with unexpected or ongoing geopolitical events, including disputes between nations, terrorism or other acts of violence, international sanctions and the disruption of movement of goods and services across jurisdictions; the risk of inflation or stagflation; regulatory risks; risks relating to mortgage and interest rates and regulations; risks inherent in the real estate industry; risks relating to investment in development projects; impact investing strategy risk; risks relating to geographic concentration; risks relating to access to capital; risks related to a potential economic slowdown in certain of the jurisdictions in which we operate and the effect inflation and any such economic slowdown may have on market conditions and lease rates; environmental risks; consumer confidence; risks relating to seasonality and adverse weather conditions; reliance on key clients and personnel; and competition. All forward-looking information in this press release speaks as of September 6, 2023. Dream does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required by law. Additional information about these assumptions and risks and uncertainties is disclosed in filings with securities regulators filed on SEDAR+ (www.sedarplus.ca).
Endnotes:
(1) |
NAV per share is a non-GAAP ratio. Dream Impact Trust, consolidation and fair value adjustments and net asset value are non-GAAP financial measures. The most directly comparable financial measures to Dream Impact Trust, consolidation and fair value adjustments and net asset value is shareholders’ equity. Assets under management is a supplementary financial measure. Refer to the “Non-GAAP Measures and Other Disclosures” section of this press release for further details. |
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Dream Unlimited Corp.
Deb Starkman
Chief Financial Officer
(416) 365-4124
[email protected]
Kim Lefever
Director, Investor Relations
(416) 365-6339
[email protected]
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