Home Capital Group achieves another year of record growth
Above average returns and above average growth at below average risk
Performance exceeds all targets for 1999
TORONTO, Feb. 8 /CNW/ - Home Capital Group Inc. (TSE:HCG.B) today
announced the unaudited results for the fourth quarter and for the year ended
December 31, 1999. These results were achieved through the Company's wholly
owned subsidiary, Home Savings & Loan Corporation.
Three months ended Twelve months ended
December 31 December 31
1999 1998 1999 1998
Revenue $15,078,035 $11,982,641 $53,020,998 $42,069,017
Net Income $2,165,569 $1,998,034 $8,081,108 $6,067,432
Net Income/Share
-Basic $0.15 $0.13 $0.55 $0.46
-Fully Diluted $0.14 $0.12 $0.52 $0.39
Return on Equity 21.9% 24.4% 21.8% 20.70%
Assets $738,135,137 $538,875,715 $738,135,137 $538,875,715
Avg. No. shares
outstanding 14,818,682 13,333,893 14,818,682 13,333,893
- 1999 saw earnings growth of 33.2%, asset growth of 37.0% and return
on equity of 21.8%.
- The Company exceeded all objectives for 1999 as set out in the 1998
Annual Report.
- Lehman Brothers Inc. retained as strategic advisor on corporate
financing and new products.
- Continued above average return on equity, and growth in assets and
earnings are anticipated for 2000.
Home Capital Group Inc. is a holding company, publicly traded on the
Toronto Stock Exchange (HCG.B), operating through its principal subsidiary,
Home Savings & Loan Corporation. Home Savings & Loan was incorporated in 1977
and is a regulated financial institution that offers deposit and mortgage
lending services. The Company operates in Ontario, Alberta and British
Columbia, and is commencing operations in Nova Scotia.
HOME CAPITAL GROUP INC.
TO OUR SHAREHOLDERS
I am delighted to report that your Company has enjoyed another record
breaking year. This performance was marked by the achievement of above average
returns on above average growth at below average risk.
Our principal subsidiary, Home Savings & Loan Corporation, is firmly
established in the marketplace as Canada's leading alternative provider of
first residential mortgages, serving customers who do not meet the particular
criteria of conventional providers. This niche consists in large measure of
self-employed people and those with limited credit histories. And it is a
market that has grown significantly in recent years. In December of 1999, for
example, Statistics Canada reported that the number of self-employed now
represents 18% of the total employed workforce, having risen from 1.2 million
Canadians in 1976 to 2.5 million. There is no evidence that this trend has
abated, and we are extremely well positioned to grow right along with it.
Results for the fourth quarter and for the year ended December 31, 1999
reflect this sound strategic positioning. The Company recorded net income of
$2,165,569, an 8.4% increase over the $1,998,034 reported for the same period
in 1998. However, the 1998 fourth quarter included a positive pre-tax year-end
adjustment of approximately $300,000. Basic earnings per share rose to $0.15
from $0.13 and to $0.14 from $0.12 on a fully diluted basis.
For the year 1999, net earnings rose to $8,081,108 from $6,067,432, an
increase of 33.2%, resulting in a return on equity of 21.8%. Basic earnings
per share increased from $0.46 to $0.55 and from $0.39 to $0.52 on a fully
diluted basis. Total assets grew from $538,875,715 to $738,135,137, an
increase of 37.0%.
In other areas of corporate performance, our risk weighted Tier 1 and
Total Capital ratios exceeded regulatory standards. At the same time, the
number of net impaired loans at year end represented 0.21% of our mortgage
portfolio, down from 0.26% the previous year.
At the operating level, we continued the prudent expansion of our
activities in other provinces. In both Calgary and Vancouver we opened offices
and added personnel. These operations are contributing positively to our
results.
The Company made significant strides in positioning itself to benefit
from future e- business opportunities. The visibility of Home Savings &
Loan's own website has been increased and traffic to the site is rising
rapidly. In addition, the Company entered into a strategic agreement with
Basis 100 Inc. which enables Home Savings & Loan to originate mortgage
applications through their national multi-lender website, as well as through
E-Trade Canada's popular portal.
As you know, the Company had successfully completed all necessary year
2000 readiness preparations well before the end of 1999. No untoward
occurrences were experienced as we entered the new millennium with our
customers.
Your Company recently declared a dividend of 1.5 cents per share payable
on February 11, 2000 to shareholders of record at the close of business on
January 14, 2000.
The Company also announced on October 25, 1999, a Normal Course Issuer
Bid as a means of ensuring that the market price of the Class `B' shares
accurately reflects the current value and future prospects of our business.
Under the bid, the Company repurchased 10,000 shares up to December 31, 1999.
We are pleased to welcome Lehman Brothers Inc. as a strategic advisor to
the Company. Lehman Brothers will provide the Company with advisory services
on a range of matters including new financial products and services,
exploration of e-business opportunities, counsel on corporate financing and
consideration of joint ventures and other strategic alliances.
As we enter 2000, we are optimistic that the business foundations we have
built will enable your Company to continue to generate above average return on
equity, and growth in assets and earnings.
We continue to be highly confident about our prospects for solid growth
in 2000.
GERALD M. SOLOWAY
President and Chief Executive Officer
February 8, 2000 |
