CALGARY, Alberta--(BUSINESS WIRE)--Walton Edgemont Development Corporation (the “Corporation”) announced today its results for the second quarter of 2015. The Corporation was launched in 2011 to provide investors with the opportunity to participate in the acquisition and development of the approximately 201.5 acres comprising the “Edgemont” properties located in the southwest corner of Edmonton, Alberta.
Marketed under the name “Woodhaven Edgemont,” the community will be developed in four phases and upon completion, is anticipated to comprise 670 single-family lots, 5.1 acres of multi-family development, parks and natural areas. Phase 1, which is currently underway, consists of 181 lots and approximately 2.1 acres of multi-family development. The timing for the release of Phase 2 lots to the homebuilder group will be based on general economic and market conditions and specific activity in the sector. Based on current market conditions management anticipates the delivery of Phase 2 serviced lots to builders in 2016.
Second Quarter Highlights
During the second quarter of 2015, the Corporation undertook the following intiatives:
- installed permanent shallow utilities, walkways and landscaping in order to complete work on 199th Street;
- continued construction on the Edgemont Lift Station with completion anticipated in the fourth quarter of 2015; and
- received final approval on the Phase 2 onsite engineering drawings conditional on approval of the stormwater outfall design; and
- addressed comments received from City administration on the rezoning and subdivision applications for Phases 3B and 4.
Subsequent to the end of the second quarter, on August 5, 2015, the City of Edmonton issued final approval of the Environmental Screening Report to satisfy the remaining conditions for approval of the stormwater outfall design and Phase 2 onsite drawings.
Management continues to implement strategies to reduce costs, increase revenues and accelerate absorptions, including advancing preliminary design of the remaining phases to obtain greater certainty on the servicing costs, and creating opportunities for new builders to participate in a variety of housing products to expand consumer choice. In addition, the Board and management are actively investigating other strategies to enhance the return on investment for investors.
Second Quarter Financial Results
During the three and six months ended June 30, 2015 and June 30, 2014, the Corporation did not recognize any revenue from lot sales. Total other expenses decreased by $36,167 from $253,364 for the three months ended June 30, 2014 to $217,197 for the three months ended June 30, 2015. The decrease in other expenses is mainly due to a reduction in marketing expenses of $29,914 and an increase in interest income of $7,291 due to a higher cash balance in 2015. The decrease in marketing expense is consistent with management’s expectations based on the current marketing plan given the deferral of Phase 2.
Total other expenses decreased by $52,980 from $491,702 for the six months ended June 30, 2014 to $438,722 for the six months ended June 30, 2015. The decrease in other expenses is mainly due to a reduction in marketing expenses of $55,415 and an increase in interest income of $13,367 due to a higher cash balance in 2015 and was offset by an increase in professional fees of $10,607. The decrease in marketing expense is consistent with management’s expectations based on the current marketing plan given the deferral of Phase 2.
Issuance of Interest Debenture
The Corporation also announced that it has elected to pay its fourth interest payment on the Corporation’s 8% unsecured, subordinated, convertible, extendable debentures (“Offering Debentures”) by issuing to the holders of the Offering Debentures, on a pro rata basis and on or before September 30, 2015, that principal amount of interest debentures (the “Interest Debentures”) that is equal to the amount of interest owing under the Offering Debentures, which is approximately $1,872,084.00, as of the June 30, 2015 determination date. In addition, the Corporation has elected to pay, at the same time, the interest obligation owing under the Interest Debentures that were issued in September 2013 (the “2013 Interest Debentures”) and September 2014 (the “2014 Interest Debentures”) by issuing additional Interest Debentures in the amount of $158,508.00 with respect to the 2013 Interest Debentures and $118,711.00 with respect to the 2014 Interest Debentures.
The Interest Debentures to be issued on or before September 30, 2014, are 8% unsecured, subordinated, convertible, extendable debentures of the Corporation and have the same terms as the Offering Debentures. The issuance of the Interest Debentures will be in accordance with the terms of the trust indenture governing the Offering Debentures which was disclosed in the Corporation’s June 27, 2011 prospectus.
In March of 2016, each investor will receive, by mail, a T5 from the Corporation’s transfer agent or the investor’s brokerage firm. The T5 will indicate the amount of interest that the holders of the Offering Debentures, 2013 Interest Debentures and 2014 Interest Debentures are required to report as a result of the issuance of the Interest Debentures.
Additional Information
The Corporation is managed by Walton Asset Management L.P. and the development of the project is managed by Walton Development and Management LP, both of which are members of the Walton Group of Companies.
The Walton Group of Companies (“Walton”) is a multinational real estate investment, planning, and development group concentrating on the research, acquisition, administration, planning and development of strategically located land in major North American growth corridors.
Walton has been in business for over 30 years and takes a long-term approach to land planning and development. Walton’s industry-leading expertise in real estate investment, land planning and development uniquely positions Walton to responsibly transition land into sustainable communities where people live, work and play.
Its communities are comprehensively designed in collaboration with local residents for the benefit of community stakeholders. Its goal is to build communities that will stand the test of time: hometowns for present and future generations.
For more information about Walton Edgemont Development Corporation, please visit www.sedar.com. For more information about Walton, visit www.Walton.com.
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This news release, required by Canadian laws, does not constitute an offer of securities, and is not for distribution or dissemination outside Canada. This news release contains forward looking information, and actual future results may differ from what is disclosed in this news release. The risks, uncertainties and other factors that could influence results are described in the prospectus and other documents filed with Canadian securities regulatory authorities and available online at www.sedar.com.
Except as otherwise noted, all amounts are in Canadian dollars, and are based on unaudited financial statements for the three and six months ended June 30, 2015 and related notes, prepared in accordance with International Financial Reporting Standards.