CALGARY, Alberta--(BUSINESS WIRE)--Walton Edgemont Development Corporation (the “Corporation”) announced today its results for the fiscal year ended December 31, 2015 and the fourth 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 southwest Edmonton, Alberta.
Marketed under the name “Woodhaven-Edgemont,” the community will be developed in four phases and upon completion, is anticipated to comprise 656 single-family lots and two acres of multi-family development and parks and natural areas. Phase 1, consisting of 181 single-family lots and two acres of multi-family development, is substantially complete and received the awards for Best New Community and Best Show Home Parade at the Canadian Home Builders’ Association – Edmonton Region Awards of Excellence in Housing.
During 2015, the Corporation undertook the following initiatives:
- achieved substantial completion of the 199th Street arterial roadway including installation and energization of permanent shallow utilities, construction of walkways and commencement of landscaping thus providing upgraded access to the project and opened the roadway to public traffic.
- received a Phase 1 recovery from ATCO in the amount of $470,778 for the 199th Street gas line relocation rebate which was consistent with the anticipated recoveries for the project;
- received $2.9 million in recoveries from a participating developer for mutually beneficial infrastructure to be constructed by the Corporation in the Edgemont neighbourhood pursuant to the Edgemont Cost Sharing Agreement;
- continued construction on the Edgemont Lift Station structural masonry components and mechanical preliminary preparation including completion of the wet well for anticipated operation commencing in Q2 2016;
- received final approval on Phase 2 engineering design and the stormwater outfall design from the City of Edmonton on August 5, 2015;
- continued negotiations on contract construction rates to obtain greater cost certainty in current market conditions;
- advanced approvals for subsequent phases of development by receiving unanimous approval from Edmonton City Council on March 16, 2015 for the rezoning for Phase 3A and by circulating the subdivision application with City administration;
- prepared and submitted supporting documentation, reports and plan amendments to address City administration comments on the rezoning and subdivision applications for Phases 3B and 4 respectively, including revised concept plan layouts; and
- received AltaLink’s agreement on Phases 3B and 4 storm pond encroachment into the AltaLink right-of-way as per revised concept plan layouts.
With the slowdown of Edmonton’s economy as a result of global oil prices, overall market conditions for suburban single-family residential housing were adversely affected in the latter half of 2015. Notwithstanding the short term forecast for 2016, the fundamental economic indicators such as Gross Domestic Product (“GDP”), net migration, housing starts and oil prices are predicted to recover to positive levels in 2017. Management continues to actively negotiate with homebuilders and is optimistic that commitments for lot inventory in Phase 2 can be obtained to allow construction of Phase 2 to commence in 2016 for serviced lot delivery to the builders in 2017. Management will continue to monitor and assess the economic conditions in the Edmonton market to determine any significant changes that may impact the ultimate timing for delivery of Phase 2.
On October 30, 2015, the Corporation received approval from the shareholders of Class “B” Non-Voting Common Shares of a non-binding, advisory resolution authorizing potential vertical development on all or any portions of the properties. Management is actively pursuing opportunities to partner with builders to participate in the construction of single-family housing within the remaining phases of the community.
The Corporation remains optimistic that there will be continued demand for new housing in Edmonton. Current activity in the community is 169 third-party sales of single-family homes as of March 8, 2016. This is behind the targeted sales pace for the project and, subject to the timing and extent of the projected economic recovery for Edmonton, may extend the overall eight-year hold period as previously reported. The Corporation will continue to provide regular updates on market conditions and project performance based on the key economic indicators for Edmonton.
Year-End and Fourth Quarter Financial Results
During the year ended December 31, 2015, and consistent with expectations, the Corporation did not recognize any revenue from lot sales. During the year ended December 31, 2014, the Corporation had recognized revenue on a multi-family site resulting in a margin on those revenues of $1,304,196. Total other expenses decreased by $123,523 from $999,712 for the year ended December 31, 2014 to $876,189 for the year ended December 31, 2015. The decrease in other expenses is mainly due to a reduction in marketing expenses of $107,209. The decrease in marketing expenses is consistent with current expectations given the deferral of the Phase 2 lot draw.
The Corporation did not recognize any revenue or associated cost of sales from lot sales during the fourth quarter of 2015 and during the fourth quarter of 2014. The Corporation also incurred other expenses during the fourth quarter of 2015 of $210,199, a decrease of $10,939 from $248,446 recorded as at December 31, 2014. The nature and amount of expenses incurred during the fourth quarter of 2015 was comparable to the total expenses incurred during the fourth quarter of 2014 and consistent with Management’s expectation.
The net loss before tax of $210,199 (December 31, 2014 - $248,446) was partially offset by a deferred tax recovery of $56,754 (December 31, 2014 - $62,111), resulting in an overall net loss of $153,445 (December 31, 2014 – $186,335) for the fourth quarter of 2015.
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 35 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 Walton.com. For information about Woodhaven-Edgemont visit www.woodhavenedgemont.com.
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 audited financial statements for the year ended December 31, 2015 and related notes, prepared in accordance with International Financial Reporting Standards.