Good morning. My name is Sylvie, and I will be your conference operator. I would like to welcome everyone to Bridgemarq Real Estate Services 2024 Q4 Results Conference Call. Note that this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. For those who dialed in to the conference call, if you would like to ask a question, simply press star, then the number one on your telephone keypad.
If you would like to withdraw from the question queue, please press star, then two on your keypad. For those of you joining us via webcast, if you would like to ask a question, simply type it in the Q&A box on your screen. We will answer these questions following the dial-in questions after the presentation, time permitting. I would like to introduce Mr. Spencer Enright, CEO of Bridgemarq Real Estate Services. Mr. Enright, you may begin.
Thank you, Operator. Good morning, everyone, and thanks for joining us on the call today. With me today is our Chief Financial Officer, Glen McMillan. I'll turn it over to Glen in a moment to talk about our financial results and summarize what the real estate markets did in 2024. I will then provide some remarks on operational highlights, company updates, and broader market developments. Following our remarks, Glen and I would be happy to take your questions. I want to remind you that some of the remarks expressed during this call may contain forward-looking statements. You should not place reliance on these forward-looking statements because they involve known and unknown risks and uncertainties that may cause the actual results and performance of the company to differ materially from the anticipated future results expressed or implied by such forward-looking statements.
I encourage everyone to review the cautionary language found in our news release and on our regulatory filings. These can be found on our website and on SEDAR+. 2024 was an exciting year for Bridgemarq. The expansion of our business into real estate Brokerage Operations and the internalization of management of our Franchise business opens the door to future growth for the company. Revenue for 2024 amounted to CAD 350.7 million, compared to CAD 48.5 million in 2023, which is reflective of the addition of the Brokerage Operations we acquired on March 31st. At its meeting yesterday, our Board of Directors approved a dividend payable on April 30th of CAD 11.25 per share to shareholders of record on March 31st. This indicates an annualized dividend of CAD 1.35 per share. With that, I'll turn the call over to Glen for a closer look at our full-year financial performance.
Thank you, Spencer, and good morning, everyone. As Spencer mentioned, revenue for 2024 was up significantly year- over- year due to the inclusion of the operating results of our brokerage business. In the Q4, revenues amounted to CAD 101.5 million compared to CAD 10.8 million in the Q4 of last year. The number of realtors in our franchise network currently sits at 20,283. This includes approximately 2,000 agents operating at the Royal LePage and Via Capitale brokerages, which we acquired as part of the transaction. Including the Quebec-based Proprio Direct brokerage, our corporately owned brokerages are comprised of approximately 2,700 realtors operating in the Greater Toronto and Vancouver areas and in the province of Quebec. In 2024, the company generated a net loss of CAD 10.3 million compared to net earnings of CAD 4 million last year.
The lower net earnings are largely driven by a non-cash accounting loss on the fair valuation of the exchangeable units, higher interest expense on our debt, and increased depreciation and amortization expenses associated with the acquired brokerage business. Now, starting last quarter, we introduced the concept of adjusted net earnings in an effort to remove some of the accounting noise and provide users with a measure that better reflects the operating results of the company. Adjusted net earnings represents our after-tax operating income before giving effect to certain non-cash and non-operating adjustments, including the loss on the fair value of exchangeable units, which I spoke about a moment ago, and also excluding payments to exchangeable unit holders. In 2024, adjusted net earnings amounted to CAD 7.3 million, down from CAD 12.4 million in the prior year.
The reduction is largely due to higher interest expense on third-party debt, an increase in non-cash amortization of intangible assets acquired as part of the acquisition, and other non-cash impairment charges, partly offset by the positive impacts of the acquired brokerage businesses. Cash provided by operating activities increased by CAD 3.4 million in the year compared to last year, due primarily to the inclusion of the results of the Brokerage Operations, a reduction in working capital, partly offset by higher interest costs. The company generated CAD 16.8 million in free cash flow in 2024, down from the CAD 18.1 million generated in 2023, with the driver due to increased interest expenses. Up until the end of 2023, we had a favorable fixed-rate interest rate swap, which matured at the end of that year. As a result, interest expense on our debt increased by CAD 1.7 million in 2024.
Despite periods of weak activity in certain markets last year, the overall Canadian market showed positive growth, closing at CAD 338 billion, an increase of 12% compared to 2023. This was driven by an 11% increase in unit sales and a 2% rise in average selling price. The Greater Toronto real estate market expanded by a modest 2% year-over-year compared to 2023, as prices remained flat and unit sales increased by 2%. The Greater Vancouver real estate market also recorded modest gains of 2%, driven by a 1% increase in both unit sales and average price.
Meanwhile, in the province of Quebec, the residential real estate market recorded a healthy 28% increase compared to the previous year, reflecting a 19% increase in unit sales and an 8% increase in average selling price. Now I'll turn it over to Spencer to provide additional insights into the market and an update on our operations.
Thanks, Glen. In the final quarter of 2024, we saw an increase in sales activity in major markets across the country compared to the end of 2023, when interest rates were significantly higher. In Toronto and Vancouver, the country's most expensive real estate markets, we've seen inventory continue to build while prices have remained stable. Although buyer confidence remains tentative, these improved conditions, combined with declining interest rates, will prove favorable for buyers. More choice and greater affordability will offer first-time buyers an entryway into the market. On Wednesday this week, the Bank of Canada cut its key lending rate by another 25 basis points to land at 2.75%. This marks the seventh consecutive cut and a total of 225 basis points since last June.
The Central Bank's Governing Council has noted that it will proceed carefully with any further changes to interest rates as it assesses both the upward pressures of inflation from higher costs and the downward pressures from weaker demand. Notwithstanding the hesitation due to economic uncertainty, declining borrowing rates should encourage more buyers off the sidelines as their borrowing power continues to improve. Now I'd like to give you a few updates on the company's operations. 2024 was a year of positive growth with the acquisition of several brokerages, including Via Capitale and Proprio Direct, as well as the corporately owned Royal LePage branches. Bridgemarq is proud to be an all-Canadian company whose success is rooted firmly in the domestic brands that make up our dynamic portfolio.
This is led, of course, by our 112-year-strong flagship national brand, Royal LePage, which continues to attract and retain top real estate professionals from across the country. We also added close to 700 agents in the province of Quebec last year, operating under the Proprio Direct banner. In 2024, we continue to demonstrate our commitment to innovation and technological advancement focused on leveraging such things as artificial intelligence tools to support our networks of real estate professionals. All of our brands have incorporated various tailored AI tools into their respective service offerings. For example, Proprio Direct launched a series of tools that provide data-driven insights to agents and enhance the virtual staging of homes to better serve their clients. We continue to interact with Canadians every day through our industry-leading websites and social media profiles. royallepage.ca remains the most visited real estate company website in Canada.
Our commitment to innovation and continuous improvement in our service offerings enables us to continue to attract and support top talented realtors and, in turn, deliver greater value to our shareholders. As I've mentioned, 2024 marked a historic year for the company, and we are very excited to explore the growth opportunities that lie ahead, both in 2025 and beyond. With our stable cash flows and multiple pathways to expansion, Bridgemarq's unique operating model is well-positioned for continued success. With that, I will turn the call back to our operator and open the call to questions.
Thank you, sir. Ladies and gentlemen, as stated, if you do have any questions on the phone, please press star followed by one on your touch-tone phone. You will hear a prompt that your hand has been raised. If you are using a speakerphone, you will need to lift the handset first before pressing any keys. If over the webcast, please type in your questions on your screen. Your first question will be from Fernando Torrealba at Cormark Securities. Please go ahead.
Thank you and good morning, everyone. This is Fernando on for Jeff Fenwick. I was hoping that maybe we could get a bit more commentary on the commission rate for the quarter. It looks like it's been on a bit of an uptrend for the past couple of months, and just wondering what moves that around and whether we should think of the current commission rate as a run rate moving forward or if maybe there's seasonality in that.
Yeah, sorry. Is this Fernando or Jeff?
Fernando. On for Jeff.
Fernando.
It's Fernando, yeah.
Yeah, okay, great. Fernando, I think it's probably better for you to look at the full-year numbers. There is some seasonality that's built into those commission rates, and it's really a function of a number of things. Market is one thing, but also there's the seasonality over the course of the year. I think you really need to look at the full-year numbers to get a better sense.
Gotcha. Excellent. Maybe just one follow-up there on OpEx. I think there looks like there was maybe a little bit of a pickup on operating expenses for the quarter. Basically the same question. What's driving that? I'm guessing as well, maybe a bit of seasonality there?
Yeah, there's really nothing significant there. I think when you're looking at comparing seasonality, there are some challenges with the addition of the brokerage businesses that it does make it certainly difficult to compare a year-over-year basis. Other than maybe some year-end catch-up adjustments, there's really nothing from an operating perspective that would drive that.
Gotcha. Okay, thank you. I'll requeue for now.
Thank you. Once again, for those on the phone, please press star one if you have any questions. A follow-up from Fernando.
All right, perfect. Maybe just turning to 2025, I have to ask the tariff question. Just wondering if you have any insights as to whether, in your experience, tariffs are keeping people on the sidelines for transacting so far in 2025, or if it's maybe keeping people on the sidelines for joining the industry as brokers? Any thoughts there on the macro level and potential derivative impacts there from tariffs?
Yeah, sure. Thanks. It's Spencer. I'll take that. Happy thanks for the question. Look, first of all, what actually happens with actual tariffs is completely uncertain at this point. There's a threat of tariffs. I know that this week some tariff decisions were actually made and put in place. As we're all in the same boat, it's very difficult to predict what we'll expect to actually see in tariffs, not just from our country's government, but from others around the world. It's very unprecedented. We've never really seen this experience here in Canada in recent memory, certainly. It's very difficult to understand how everyday Canadians are reacting to that. We don't really have a pulse on how the population as a whole is doing. We can only really look at what is happening with actual activity in the market.
It's reasonable to suspect that when people's confidence is lower, they'll be a little bit more reluctant to make new commitments in terms of purchases. Certainly, home purchases are a significant one. We're monitoring it very closely. If there is a change in buyer behavior, then our business is well set up to succeed through any of those changes. As we've seen in the past, our market is cyclical to begin with, and there are peaks and troughs even over multi-years. We've seen other external shocks to the market as well. The business, the way we set it up, is set up to do very well from a cash flow standpoint, even in periods where we're at a bottom from a volume activity.
In terms of realtors, we actually really see not a lot of change in the number of realtors in the industry that are registered. Certainly, in our networks, the over 20,000 realtors we have are very productive people. Even in down cycles, they're still very successful and can be very successful with the number of transactions they do, the commissions they generate. Short-term issues rarely influence their career decisions when this is a career decision for them. We're monitoring that very closely. I think that as we look forward to the balance of the year, again, we don't really know what will actually transpire with tariffs. There could be challenges in local communities where there's more of a vulnerability to export industries than others. Overall, nationally, we're not seeing anything at this point.
Okay, thank you. That's wonderful, color. Maybe I'll just finish off with the tail end of that about the realtor count on the franchise network. Is there anything that maybe you would highlight as to what moves that count around? I mean, I know over the past couple of quarters, it has moved around a little bit. Not by a lot. I don't really expect much other than maybe attrition, but just wanted to get your thoughts as to whether there's anything there that you want to highlight as to the move in the realtor count.
Sure. First of all, just in terms of our realtor count and population, we grow the number of realtors in our network in various different ways. We have a very large franchise network. The franchisees, those brokerages, those broker-owner operators, recruit on a daily basis and look to bring in new talent everywhere across the country. That organic growth is happening all the time. In addition to that, we sign new franchise agreements with companies, individuals from time to time where it makes sense. We can grow the realtor count by what we call re-flagging and creating new franchisee contracts. There are different ways of growing. There is always turnover within the industry itself, but we also have a very stable realtor population because they are productive and they have proven to be very loyal to our brand.
On the whole, in the quarter, you may see some fluctuations at different times, quarter- by- quarter in terms of realtor count. When we sign new franchisees, we typically highlight when we do that, when we do larger ones. You can definitely look to those as significant step function increases in our count. Other than that, it's really just normal course, daily recruiting, and typical turnover that we might have seen in past years with our franchise networks.
Okay, perfect. That's it for me. Thank you.
Thank you. At this time, Mr. Enright, we have no other questions on the phone.
Thank you. We do have one, I believe, via webcast. Glen, do you want to read it out?
Yeah, there's actually two there. The first one is, in the previous 2025 presentations, the combined Franchise Operations and Brokerage Operations EBITDA is more than the total year-to-date EBITDA. Does that mean that Proprio loses money, negative EBITDA? That's not what it means. Proprio's EBITDA is included as part of the Brokerage Operations. The difference between the sum of the Franchise Operations EBITDA and the Brokerage Operations EBITDA is there are costs that we do not allocate to those segments. It is a corporate cost segment. Those costs are comprised mainly of senior management expenses that are not allocable to one segment or the other. Public company-related costs, as you know, we are a public company, and there are costs associated with that. We don't burden the segments with those costs. There are also Director's fees and Audit-related costs that are not allocated back to those segments. Okay.
The second question is that the dividend payments appear to exceed free cash flow. Will there be a need to reduce the dividend payments? The company has a history of repaying or paying a significant amount of its free cash flow out to its shareholders and is committed to doing that. The dividends themselves are actually determined on a monthly basis and are determined by the board of directors and approved, as I say, on a monthly basis. The company at this point does have a significant amount of resources in order to support those dividends in the short term. We also do believe that the current year, we are expecting free cash flow to improve as markets start to improve over the next little while. Those are all the questions.
All right. Thanks, Glen. Thank you, Operator. I'd like to thank everyone once again for joining us on today's call and look forward to speaking to you again after we release our Q1 results in May. Thank you very much, everyone.
Thank you, sir. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. At this time, we ask that you please disconnect your lines. Have a good weekend.