TWC Enterprises Limited (TSX: TWC)
Consolidated
Financial
Highlights
(unaudited)
(in thousands of dollars except per share amounts) |
Three
months
ended |
Year
ended |
December
31,
20212018 |
December
31,
20202018 |
December
31, 2021 |
December
31, 2020 |
Net earnings |
61,963 |
8,359 |
89,647 |
971 |
Basic and diluted earnings per share |
2.52 |
0.33 |
3.64 |
0.04 |
Operating
Data
|
Three
months
ended |
Year
ended |
|
December
31, 2021 |
December
31, 2020 |
December
31, 2021 |
December
31, 2020 |
ClubLink |
Canadian Full Privilege Golf Members |
|
|
15,545 |
14,861 |
Championship rounds – Canada |
198,000 |
232,000 |
1,191,000 |
1,223,000 |
18-hole equivalent championship golf courses – Canada |
|
|
39.5 |
39.5 |
18-hole equivalent managed championship golf courses – Canada |
|
|
2.0 |
1.0 |
Championship rounds – U.S. |
68,000 |
58,000 |
261,000 |
249,000 |
18-hole equivalent championship golf courses – U.S. |
|
|
8.0 |
8.0 |
The following is an analysis of net earnings:
|
|
Year
Ended |
Year Ended |
|
(thousands of Canadian dollars) |
|
December 31,
2021 |
December 31,
2020 |
|
|
|
|
|
|
Operating revenue |
|
$ |
174,013 |
|
$ |
127,216 |
|
|
Direct operating expenses (1) |
|
|
121,601 |
|
|
83,305 |
|
|
Net
operating income (1) |
|
|
52,412 |
|
|
43,911 |
|
|
Amortization
of membership fees |
|
|
4,404 |
|
|
4,585 |
|
|
Depreciation
and amortization |
|
|
(19,440 |
) |
|
(19,249 |
) |
|
Interest,
net and investment income |
|
|
(1,204 |
) |
|
(3,609 |
) |
|
Other
items |
|
|
74,763 |
|
|
(21,458 |
) |
|
Income taxes |
|
|
(21,288 |
) |
|
(3,209 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
89,647 |
|
$ |
971 |
|
|
|
|
|
|
|
|
|
|
|
|
The following is a breakdown of net operating income (loss) by
segment:
|
|
Year
Ended |
|
Year Ended |
|
|
(thousands of Canadian dollars) |
|
December 31,
2021 |
|
December 31,
2020 |
|
|
|
|
|
|
|
Net
operating income (loss) by segment |
|
|
|
|
Canadian golf club operations |
|
$ |
54,660 |
|
$ |
46,213 |
|
|
US golf club operations |
|
|
|
|
(2021 - US $1,854,000; 2020 - US $449,000) |
|
|
2,354 |
|
|
567 |
|
|
Corporate and other - including Highland Gate |
|
|
(4,602 |
) |
|
(2,869 |
) |
|
|
|
|
|
|
Net operating income (1) |
|
$ |
52,412 |
|
$ |
43,911 |
|
|
|
|
|
|
|
Operating revenue is calculated as follows:
|
|
Year
Ended |
Year Ended |
|
(thousands of Canadian dollars) |
|
December 31, 2021 |
December 31, 2020 |
|
|
|
|
|
|
Annual dues |
|
$ |
62,460 |
$ |
54,296 |
|
Golf |
|
|
45,599 |
|
42,673 |
|
Corporate
events |
|
|
3,542 |
|
2,327 |
|
Food and
beverage |
|
|
19,400 |
|
16,070 |
|
Merchandise |
|
|
11,647 |
|
8,544 |
|
Real estate
sales |
|
|
26,572 |
|
- |
|
Rooms and
other |
|
|
4,793 |
|
3,306 |
|
|
|
|
|
|
|
|
$ |
174,013 |
$ |
127,216 |
|
|
|
|
|
|
Direct operating expenses are calculated as follows:
|
|
Year
Ended |
Year Ended |
|
(thousands of Canadian dollars) |
|
December 31, 2021 |
December 31, 2020 |
|
Operating cost of sales |
|
$ |
14,543 |
$ |
11,236 |
|
Real estate
cost of sales |
|
|
28,338 |
|
- |
|
Labour and
employee benefits |
|
|
44,387 |
|
39,358 |
|
Utilities |
|
|
6,970 |
|
7,049 |
|
Selling, general and administrative expenses |
|
4,574 |
|
3,906 |
|
Property
taxes |
|
|
1,189 |
|
3,401 |
|
Repairs and
maintenance |
|
|
4,051 |
|
3,184 |
|
Insurance |
|
|
3,103 |
|
2,970 |
|
Turf
eoperating expenses |
|
|
3,953 |
|
3,179 |
|
Fuel and
oil |
|
|
1,233 |
|
908 |
|
Other operating expenses |
|
|
9,260 |
|
8,114 |
|
|
|
|
|
|
|
|
Direct Operating Expenses (1) |
|
$ |
121,601 |
$ |
83,305 |
|
|
|
|
|
|
(1) Please see Non-IFRS Measures on following page
2021
Consolidated
Highlights
As required by IFRS, ClubLink recognizes its
annual dues revenue on a straight-line basis throughout the year
based on when its properties are allowed to open and services are
provided. As a result of COVID-19 lockdowns in both 2020 and 2021,
annual dues revenue was not recognized during certain periods early
in both years. Canadian annual dues revenue increased to
$56,508,000 in 2021 from $48,081,000 in 2020 due to an increase in
members. Any displaced revenue from the closure period was
recognized into revenue throughout the remainder of the year on a
straight-line basis.
Operating revenue increased 36.8% to 174,013,000
in 2021 from $127,216,000 in 2020 due to higher annual dues revenue
along with the ability to operate in 2021 with less restrictions as
compared to 2020 in addition to the revenue earned from 17 Highland
Gate home sales.
Direct operating expenses increased 46.0% to
$121,601,000 in 2021 from $83,305,000 in 2020 due to costs
associated to higher revenue and activity levels in 2021 in
addition to the cost of Highland Gate sales.
Net operating income for the Canadian golf club
operations segment increased 18.3% to $54,660,000 in 2021 from
income of $46,213,000 in 2020.
Interest, net and investment income decreased
66.6% to an expense of $1,204,000 in 2021 from $3,609,000 in 2020
due to a decrease in operational borrowings and an increase in
investment income from the Company’s investment in Automotive
Properties REIT.
Other items consist of the following income
(loss) items:
|
|
Year
Ended |
|
Year Ended |
|
(thousands of Canadian dollars) |
|
Deember 31,
2021 |
|
Deember 31, 2020 |
|
|
|
|
|
Gain on sale of property, plant and equipment |
$ |
40,304 |
|
$ |
1,416 |
|
Unrealized gain (loss) on investment in marketable securities |
|
30,360 |
|
|
(7,311 |
) |
Unrealized gain on real estate fund investments |
|
9,311 |
|
|
- |
|
Insurance proceeds |
|
|
3,812 |
|
|
- |
|
Equity income from investments in joint ventures |
|
1,270 |
|
|
115 |
|
Foreign
exchange gain (loss) |
|
|
(207 |
) |
|
1,256 |
|
Glen Abbey
redevelopment charge |
|
|
(9,785 |
) |
|
- |
|
Loss on sale of common shares in Carnival plc |
|
- |
|
|
(16,240 |
) |
Other |
|
|
(302 |
) |
|
(694 |
) |
|
|
|
|
Other
items |
|
$ |
74,763 |
|
$ |
(21,458 |
) |
|
|
|
|
On October 8, 2021, the Company sold Heron Bay
Golf Club for net proceeds of $40,235,000 (US$31,736,000). A gain
of $39,425,000 (US$31,661,000) was recorded on the sale. This
represents the vast majority of the total gain on property, plant
and equipment recorded for the year.
At December 31, 2021, the Company recorded
unrealized gains of $30,360,000 on investment in marketable
securities (December 31, 2020 - loss of $7,311,000). This gain is
attributable to the Company's investment in Automotive Properties
REIT. The Company also recorded unrealized gains of $9,311,000
(December 31, 2020 - nil) on real estate fund investments in
relation to Florida and southeastern US real estate.
The exchange rate used for translating US
denominated assets has changed from 1.2732 at December 31, 2020 to
1.2678 at December 31, 2021. This has resulted in a foreign
exchange loss of $207,000 in 2021 on the translation of the
Company’s US denominated financial instruments.
Net earnings increased to $89,647,000 in 2021
from $971,000 in 2020 due to the other items as described above and
the improved golf results. Basic and diluted earnings per share
increased to $3.64 per share in 2021, compared to 4 cents in
2020.
Non-IFRS Measures
TWC uses non-IFRS measures as a benchmark
measurement of our own operating results and as a benchmark
relative to our competitors. We consider these non-IFRS measures to
be a meaningful supplement to net earnings. We also believe these
non-IFRS measures are commonly used by securities analysts,
investors and other interested parties to evaluate our financial
performance. These measures, which included direct operating
expenses and net operating income do not have standardized meaning
under IFRS. While these non-IFRS measures have been disclosed
herein to permit a more complete comparative analysis of the
Company’s operating performance and debt servicing ability relative
to other companies, readers are cautioned that these non-IFRS
measures as reported by TWC may not be comparable in all instances
to non-IFRS measures as reported by other companies.
The glossary of financial terms is as
follows:
Direct
operating
expenses
= expenses that are directly attributable to company’s business
units and are used by management in the assessment of their
performance. These exclude expenses which are attributable to major
corporate decisions such as impairment.
Net
operating
income = operating revenue –
direct operating expenses
Net operating income is an important metric used
by management in evaluating the Company’s operating performance as
it represents the revenue and expense items that can be directly
attributable to the specific business unit’s ongoing operations. It
is not a measure of financial performance under IFRS and should not
be considered as an alternative to measures of performance under
IFRS. The most directly comparable measure specified under IFRS is
net earnings.
Eligible
Cash
Dividend
Today, TWC Enterprises Limited announced an
eligible cash dividend of 2 cents per common share to be paid on
March 31, 2022 to shareholders of record as at March 15, 2022.
Corporate
Profile
TWC is engaged in golf club operations under the
trademark, “ClubLink One Membership More Golf.” TWC is Canada’s
largest owner, operator and manager of golf clubs with 49.5 18-hole
equivalent championship and 3 18-hole equivalent academy courses
(including two managed properties) at 37 locations in Ontario,
Quebec and Florida
For further information please contact:
Andrew Tamlin Chief Financial Officer 15675
Dufferin StreetKing City, Ontario L7B 1K5Tel: 905-841-5372 Fax:
905-841-8488atamlin@clublink.ca
Management’s discussion and analysis, financial
statements and other disclosure information relating to the Company
is available through SEDAR and at www.sedar.com and on the Company
website at www.twcenterprises.ca
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