Re: March 31, 2020 Quarter-End Results and Dividends Distribution
COVID-19 has presented the entire world with an extraordinary and ever-evolving situation, Physical Distancing is a very real and necessary preventative measure that we are currently respecting and practicing in order to keep ourselves, our loved ones, and you as safe as possible.
With this in mind we have temporarily closed the office and are working from home to reduce our interaction with others, as we do have the technology to easily accommodate this adjustment.
This has also necessitated the CANCELLATION of our Annual Shareholder’s Information Meeting scheduled to take place Thursday May 14, 2020 and instead, we will simply deliver in mid-late May the written summary we have always provided in the past for our annual meetings.
Moving forward we want to deliver as much of our reporting as possible via email, thus reducing how much material we send out we’ve physically handled and, as another benefit, save on avoidable postage costs, which costs do add up notably over the year.
To facilitate this we ask that you each email Rebecca at email@example.com with your name, phone numbers, email and home address so we may ensure our records are up-to-date and accurate.
If you receive your quarterly dividends as cash with a cheque being mailed to you, then please also provide your banking information in your email to Rebecca by attaching a copy of a void blank cheque or, if you don’t have cheques or it’s a savings account you want your dividends direct deposited to, then include in the body of your email: the name and address of your financial institution; the transit number for the branch; and your account number and henceforth your quarterly dividends will automatically be direct deposited to your bank account for you.
If you don’t have an email address, do not fret, give us a call and we can discuss alternatives!
For some time now the rate at which loans in the portfolio have been getting repaid has pretty much matched the rate at which we have been able to source new loan opportunities that meet our stringent lending guidelines. This has resulted in us continuing to hold more cash than we would prefer in order to maximize your yield.
Now, however, with the effects from COVID-19 having an impact on all aspects of the economy including real estate, we have seen the availability of new lending opportunities slow to a snail’s pace but conversely, we also expect to see a reduction in the rate of loan repayments due to individuals and businesses practicing Physical Distancing.
Regardless, you can rest assured we remain and always will be committed to our guiding principle of capital preservation over yield. In our mind, it is better to earn a yield reduced by a dilution from holding temporary excess cash rather than risking a loss of capital from chasing yield. As a result, our cash position is likely to remain higher for the foreseeable future.
We have also reached out to those Borrowers whose incomes and circumstances we feel are most likely to be impacted by these measures necessary to fight COVID-19 and are confident we can work with these few individuals, should it become necessary, to get both of us through this period with minimal impact. The emergency benefits introduced by the federal and provincial governments plus the equity position of our loans gives us the best opportunity to achieve this.
A brief snap-shot of the results and our financial position for the three months ended March 31, 2020, with comparative figures for the previous quarter in brackets, is provided as follows:
Net Income (3 months): $145,907 ($144,208)
Net Annualized Yield: 5.72% (5.59%)
Share Capital: $10,237,970 ($10,234,250)
Mortgage Loan Portfolio: $7,568,706 (32 loans) ($7,610,856) (37 loans)
Cash on-hand: $3,442,029 ($3,360,625)