TORONTO, May 15, 2019 (GLOBE NEWSWIRE) -- Difference Capital Financial Inc. (“DCF” or the “Company”) (TSX:DCF), today reports its financial results for the first quarter ended March 31, 2019.
Q1 2019 Highlights
- The portfolio produced a net gain of $4.1 million during the quarter, primarily driven by an increase in the fair market value of its shares in Ethoca Solutions Inc.
- Net asset value1 per share as at March 31, 2019 increased to $7.75, compared to $7.21 at December 31, 2018, and $7.07 at March 31, 2018.
- Net income for the quarter was $3.4 million or $0.59 per share, compared to net income of $3.6 million or $0.62 per share for the fourth quarter of 2018 and a loss of $4.0 million or $0.68 per share for the first quarter of 2018.
- Cash and cash equivalents at March 31, 2019 was $3.4 million, up from $6,000 at December 31, 2018.
| (figures are in $000 except per share amounts and shares outstanding) | Q1 2019 | Q4 2018 | Q1 2018 | |||
| Net gain (loss) on investments and marketable securities | 4,068 | 4,860 | (2,607) | |||
| Other income | 314 | 67 | 180 | |||
| Total Portfolio Contribution | 4,382 | 4,927 | (2,427) | |||
| Total expenses | (1,003) | (1,317) | (1,534) | |||
| Net income (loss) | 3,379 | 3,610 | (3,961) | |||
| Earnings (loss) per share | 0.59 | 0.62 | (0.68) | |||
| Total assets | 60,139 | 64,466 | 72,496 | |||
| Total liabilities | 15,726 | 22,519 | 31,362 | |||
| Net asset value | 44,413 | 41,947 | 41,134 | |||
| Shares outstanding | 5,726 | 5,816 | 5,817 | |||
| Net asset value(1) per share | 7.75 | 7.21 | 7.07 | |||
| Share price | 4.61 | 3.30 | 2.85 | |||
First Quarter Financial Results
Net gain for the quarter ended March 31, 2019 was $3.4 million, or $0.59 per share compared to net income of $3.6 million, or $0.62 per share for the quarter ended December 31, 2018, and a net loss of $4.0 million, or $0.68 per share for the quarter ended March 31, 2018.
For the three months ended March 31, 2019, the Company had a net realized gain on disposition of investments and marketable securities of $9.3 million, compared to a realized loss on disposition of $0.2 million during the same period last year and a realized loss of $0.1 million during the fourth quarter of 2018. The net realized gain during the recent quarter was primarily due to the sale of the majority of the Company’s position in Vena.
For the three months ended March 31, 2019, the Company recorded $5.2 million of unrealized loss on investments and marketable securities, compared to a net unrealized loss of $2.4 million during the same period last year and a net unrealized gain of $5.0 million during the fourth quarter of 2018. The significant changes in unrealized gain (loss) of the Company’s investments and marketable securities during the quarter were as follows:
- a reversal of unrealized gains of $9.3 million (and transfer to realized gains) upon disposal of Vena common shares, partially offset by
- an increase of $4.3 million in the unrealized gain in Ethoca Solutions Inc.
Other income during the three months ended March 31, 2019 included interest and dividend income of $15,000 and net change in unrealized FX gain on liabilities of $0.3 million, compared to $0.2 million of interest and dividend income in the same period of 2018 and $27,000 in the previous quarter.
Total expenses for the quarter ended March 31, 2019 were $1.0 million, compared to $1.5 million in the same quarter of 2018 and $1.3 million in the previous quarter. The expenses for each of the quarters ended March 31, 2019 and December 31, 2018 included $0.4 million of interest on the Private Debentures and nil for the Convertible Debentures, which matured in July 2018. Expenses for the quarter ended March 31, 2018 included $0.8 million of interest on the Convertible Debentures but nil for the Private Debentures, which were not issued until June 2018.
Combination with Mogo Finance Technology Inc.
On April 15, 2019, DCF announced its intent to merge with Mogo Finance Technology Inc., its largest single investment, representing approximately 25% of the Company’s equity value. The Company will soon mail a circular to all shareholders with disclosure on the proposed transaction. Shareholders will consider the proposal at the Annual General and Special Shareholders’ meeting to be held on June 18, 2019, 4:30 p.m. Toronto time, at the registered office of the Company, 365 Bay Street, Suite 800, Toronto, Ontario, M5H 2V1.
Please refer to the section regarding forward-looking statements which form an integral part of this release. These results, along with the audited financial statements and the company's MD&A, are available on the company's website at www.differencecapital.com and on SEDAR at www.sedar.com.
About Difference Capital Financial Inc.
Difference Capital Financial Inc. invests in and advises growth companies. We leverage our capital market expertise to help unlock value in technology, media and healthcare companies as they approach important milestones in their business lifecycle.
Caution Regarding Forward-Looking Statements
Certain statements contained in this press release may be deemed “forward-looking statements.” Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects,” “plans,” “anticipates,” “believes,” “intends,” “estimates,” “projects,” “potential,” “scheduled,” “will seek,” and similar expressions, or that events or conditions “will,” “would,” “may,” “could” or “should” occur. Although DCF believes that the expectations reflected in those forward-looking statements are reasonable, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this press release should not be unduly relied upon. These statements speak only as of the date of this press release. DCF undertakes no obligation to publicly update or revise any forward looking statements, whether as a result of new information, future events or otherwise, other than as required by applicable law.
1 Net asset value (“NAV”) is a non-IFRS financial measure and is calculated by subtracting the aggregate fair value of the liabilities of the Company from the aggregate fair value of its assets. Net asset value per share is calculated by dividing NAV by the number of common shares outstanding as at the measurement date. The term net asset value per share does not have any standardized meaning according to IFRS and therefore may not be comparable to similar measures presented by other companies.
Contact Information
Tom Liston
Chief Investment Officer
(416) 649-5016
www.differencecapital.com