~Monfort delivers record Q2 revenue and record net comprehensive income; also recently completes acquisition of Brightpath Capital~
VANCOUVER, BC – August 24, 2022 – Montfort Capital Corporation (“Montfort” or the “Company”) (TSX-V:MONT/OTCQB:MONTF), a leading innovator of technology in private credit, is pleased to report consolidated interim financial results for the second quarter ended June 30, 2022. All figures are reported in Canadian dollars unless otherwise noted.
Second Quarter 2022 Highlights
For the three months ended June 30, 2022, the Company had the following highlights:
- Record revenue of $5.3 million, an increase of $3.4 million or 186% from $1.8 million in the three months ended May 31, 2021,
- Interest income from investments was $3.7 million, an increase of $2.6 million or 224% from $1.2 million in the prior comparable period,
- Net income increased 134% to $1.4 million from $0.6 million in the second quarter 2021,
- Record income from the settlement of loans and transaction and other fees increased from $0.7 million in the prior year period to $1.4 million in the three months ending June 30, 2022,
- Total assets of $138.3 million as at June 30, 2022 compared to $125.1 million at December 31, 2021. Cash balance, as part of assets, for the second quarter was $3.4 million compared to $9.3 million as at December 31, 2021, and
- TIMIA’s loan investment portfolio (loans receivable) increased to $126.9 million in the second quarter 2022 compared to $106.1 million as of December 31, 2021.
On a comprehensive basis:
- Reported record net comprehensive income of $2.4 million for the three months ended June 30, 2022, compared to consolidated net comprehensive loss of $0.4 million for the three months ending May 31, 2021.
“With record revenue and record net comprehensive income we continue to see opportunities to fund strong organic growth in our technology and asset backed businesses,” said Mike Walkinshaw, CEO of Montfort Capital Corporation. “Having recently announced the completion of our acquisition of Brightpath Capital, one of Canada’s leading private providers of residential mortgages, we look to leverage the technical strength of our loan origination platform and the expertise of our personnel to expand into additional market verticals.”
“The general market backdrop and related uncertainty has created opportunities for capital providers that can think outside the box and bring creative financing solutions,” added Walkinshaw. “Given this backdrop, I remain positive about the continued growth in private credit and feel that we have the right team and processes in place to successfully execute on our business strategy.”
Detailed Financial Review
The Company utilizes a proprietary loan origination platform to originate, underwrite and service private-market, high-yield loan opportunities through two operating divisions: TIMIA Capital technology lending which offers revenue-based investment to fast growing, business-to-business Software-as-a-Service (or SaaS) businesses in North America, and Pivot Financial which specializes in asset-backed private credit targeting mid-market borrowers in Canada.
TIMIA technology loan portfolio includes 29 unique deals with current disbursements extended under those facilities totaling $46.0 million. During the second quarter 2022 TIMIA continued to expand its loan portfolio completing 2 new and 7 follow-on loan transactions, disbursing funds of $18 million.
Loans on Pivot’s balance sheet include 14 unique deals with a value of $80.2 million. The most significant investment was a loan due from a related party in the amount of $60.5 million.
Total consolidated revenue for the three months ended June 30, 2022, increased $3.2 million or 174% to $5.3 million from $1.8 million in the three months ended May 31, 2021.
Interest income for the 3 months ended June 30, 2022, was $3.7 million compared to $1.2 million in the three months ended May 31, 2021; income from transaction and other fees was $0.6 million in the second quarter 2022 compared to $0.1 million in the prior fiscal quarter; income from the settlement of loans and performance fee income was $0.8 million versus $0.5 million in the prior period, resulting in total revenue of $5.3 million.
During the second quarter ended June 30, 2022, TIMIA benefited from increased payments (combined principal and interest) as a result of the continued revenue growth of its underlying portfolio and the acquisition of Pivot in the third quarter of 2021.
Total expenses for the 3 months ended June 30, 2022, were $3.6 million compared with
$0.9 million for the prior year. The majority of the increase in total expenses is due to additional headcount, interest expense related to the loans payable, and other related fees attributable to the acquisition of Pivot.
During the three months ended June 30, 2022, the Company posted net income of $1.4 million compared with $0.6 million for the three months ended May 31, 2021.
As posted in the Company’s MD&A, please see the table below reflecting the progression of the attribution of income (loss) between the shareholders of the Company and non-controlling interests over the last eight quarters.
As at June 30, 2022, the Company’s cash balance was $3.4 million and working capital was
negative $20.3 million compared to $9.3 million and $1.8 million respectively as at December 31, 2021.
This news release is qualified in its entirety by the Company’s financial statements for the three months ended June 30, 2022 and for the three months ended May 31, 2021, and the associated Management’s Discussion & Analysis respecting the same periods, which can be downloaded from the Company’s profile on SEDAR at http://www.sedar.com.
About Montfort Capital Corporation
Montfort manages a diversified family of specialized private credit brands that utilize focused strategies and experienced management teams combined with advanced technology to improve fee related performance. Montfort facilitates transparency for all of its investors through public company reporting. For further information, please visit www.montfortcapital.com.
For more information, please contact:
Tim McNulty / Darren Seed
Incite Capital Markets
Mike Walkinshaw, CEO
Montfort Capital Corporation
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 news release.
Certain information and statements in this news release contain and constitute forward-looking information or forward-looking statements as defined under applicable securities laws (collectively, “forward-looking statements”). Forward-looking statements normally contain words like ‘believe’, ‘expect’, ‘anticipate’, ‘plan’, ‘intend’, ‘continue’, ‘estimate’, ‘may’, ‘will’, ‘should’, ‘ongoing’ and similar expressions, and within this news release include any statements (express or implied) respecting the future growth of the Company, the Company’s future financial performance and the completion of the Company’s previously announced acquisitions.
Forward-looking statements are not guarantees of future performance, actions, or developments and are based on expectations, assumptions and other factors that management currently believes are relevant, reasonable and appropriate in the circumstances, including, without limitation, the following assumptions: that the Company and its investee companies are able to meet their respective future objectives and priorities, assumptions concerning general economic growth and the absence of unforeseen changes in the legislative and regulatory framework for the Company; assumptions regarding the Company’s ability to complete its previously announced acquisitions on terms favourable to the Company.