CALGARY, Alberta--(BUSINESS WIRE)--Walton Big Lake Development L.P. (the “Partnership”), and its general partner Walton Big Lake Development Corporation (the “General Partner”), announced today the Partnership’s results for the second quarter of 2015. Launched in 2010, the Partnership owns a 136.5-acre residential project in northwest Edmonton, Alberta. The project is being developed in three phases and marketed under the name “Hawks Ridge at Big Lake.”
Second Quarter Highlights
During the second quarter of 2015, the Partnership undertook the following initiatives:
- continued construction on the sanitary lift station required to service both the Hawks Ridge project and future development on adjacent lands, including the completion of the sewer connection to the existing sanitary mains in the neighbouring community;
- continued work on the 215th Street arterial roadway including the wildlife crossing bridge (“Hawks Ridge Pass”) with completion and opening of the road anticipated in the third quarter of 2015;
- completed inspections of surface work in Phase 1 and undertook maintenance work required for the issuance of Final Acceptance Certificates from the City of Edmonton;
- received and executed the Phase 2A Servicing Agreement from the City of Edmonton to allow the installation of underground utilities and the registration of the subdivision;
- received preliminary comments from the City of Edmonton on the Phase 2B engineering drawings required to facilitate the next phase of development in the project; and
- closed on the sale of the two mixed-use sites during the second quarter with revenues of $3,187,500 and $2,875,032 being recognized.
Subsequent to the end of the second quarter, on July 29, 2015, the sale of the multi-family site in Phase 1 closed for a sale price of $2,589,650 with the transaction to be recognized during the third quarter of 2015. On August 19, 2015, the 215th Street arterial roadway, including the wildlife crossing bridge, was opened for public traffic to Hawks Ridge at Big Lake.
The Partnership has been advised by one of the builders that it will be withdrawing from its commitment to acquire 13 lots in Phase 2A of the project (out of a total of 130 Phase 2A committed lots). Under the terms of the agreement between the Partnership and the builder, as a result of that withdrawal, the Partnership will have any and all remedies available to it under the law including but not limited to the forfeiture of the deposits paid to date as well as any future loss recognized at the time of any future sale of those lots. Management is of the view that a suitable replacement will be found given the current interest in the community by other builders.
Management continues to implement strategies to reduce costs, increase revenues and accelerate lot absorptions including providing new lot types in Phase 2 to diversify housing designs, introducing new builders to participate in the community and implementing an enhanced marketing campaign to better position the project in the Edmonton market. 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 periods ended June 30, 2015 and June 30, 2014, the Partnership recognized revenue of $3,187,500 and $nil, respectively, from lot sales. The cost of sales relating to the lot sales was $2,875,032 and $nil, resulting in a gross margin of $312,468 and $nil. The revenue and cost of sales recognized in 2015 was in respect of the two mixed-use sites which closed in April and May of 2015.
For the three months ended June 30, 2015, total other expenses increased by $148,349 from $314,796 for the three months ended June 30, 2014 to $463,145 for the three months ended June 30, 2015. The increase in other expenses is mainly due to an increase of $33,801 in interest expenses and $26,435 in accretion of financing expenses relating to additional funding obtained in the prior quarter (“Additional Funding”). Marketing expenses increased by $79,982 due to the re-launch of the website in order to generate interest in Phase 2 of the Project in anticipation of the spring market, as well as additional directional signage required during the construction of 215th Street.
For the six months ended June 30, 2015, total other expenses increased by $267,296 from $616,692 for the six months ended June 30, 2014 to $883,988 for the six months ended June 30, 2015. The increase in other expenses is mainly due to an increase of $63,069 in interest expenses and $51,085 in accretion of financing expenses relating to the Second Mortgage Loan Facility. Professional fees also increased by $33,020 mainly due to increased legal fees relating to the Second Mortgage Loan Facility and increased audit fees. Marketing expenses increased by $115,748 due to the re-launch of the website in order to generate interest in Phase 2 of the Project in anticipation of the spring market, as well as additional directional signage required during the construction of 215th Street.
Additional Information
The Partnership is managed by Walton Asset Management L.P. and the development of the Property 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 Big Lake Development L.P., please visit www.sedar.com. For more information about Walton, visit www.Walton.com. For information about Hawks Ridge at Big Lake visit www.hawksridge.ca.
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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.