The floor is yours.
Thank you very much. Good morning, ladies and gentlemen, and welcome to the annual shareholder meeting for Melcor Developments. My name is Robyn Salik, and I'm pleased to act as moderator of this meeting. In the room with me today are Tim Melton, CEO and Chair of the Board, and Naomi Stefura, our COO and CFO. We are pleased to host this meeting entirely online. As all matters have achieved sufficient votes to be passed, we will move quickly through the formal requirements of the meeting, with Naomi and I acting as motioner and seconder. Following this formal component, Naomi will provide a brief company update. Before turning the meeting over to Tim to chair the formal portion of the meeting, we have a few housekeeping items to attend to. Melcor uses the notice and access model for delivery of meeting materials to our shareholders.
As such, shareholders receive instructions on how to access materials related to the meeting electronically. We also provide instructions on how to request a physical copy be sent to you. You will find meeting materials, including the information circular and annual financial statements, on our website at melcor.ca/2025AGM. When it comes to financial results, we report in CAD and in accordance with International Financial Reporting Standards. We supplement our financial reporting with nonstandard measures, including funds from operations and net operating income. We believe these metrics are important in evaluating our performance, but caution listeners that they may not be comparable to similar measures presented by other companies. These nonstandard measures are defined and reconciled in our annual management discussion and analysis. Note that proxy votes received in advance of the meeting are sufficient to pass all matters on the agenda, and we have reached quorum for the meeting.
If you voted your proxy in advance, you do not need to take any action today, as your shares have already been counted. That said, your vote does matter, and registered shareholders and those beneficial shareholders who followed the process noted in our information circular will be able to vote electronically while the polls are open. If you are logged in on the LUMI platform, the voting page will automatically appear in the left side window when we open the poll. The vote will remain open until the electronic polls are closed at the adjournment of the formal business. You may vote on any of the three matters at any time while the polls are open. Votes are submitted automatically when you select for, or withhold, or against on each resolution. Following management's presentation, there will be an opportunity to ask questions.
Shareholders and guests may ask a question at any time during the meeting by clicking on the messaging icon at the top of the LUMI window. Note that we may paraphrase questions for brevity and clarity and may aggregate responses where similar questions are asked. Finally, I remind you that certain statements made during this call may be forward-looking. For a complete discussion of items that may cause actual results to differ, please refer to the business environment and risk section of our annual MD&A. I'll now turn the meeting over to the Chief Executive Officer and Board Chair, Tim Melton, to chair the meeting.
Yes, thank you very much, Robyn. I warmly welcome our webcast audience to Melcor's 56th annual meeting of shareholders. I know this is a virtual meeting, but just to give you an idea of our setting, I'm in Edmonton in our boardroom, and I'm with Robyn and Naomi. For those of you that aren't Albertans, we enjoyed some very good rains, badly needed rains over the last few days, but this morning is a beautiful Alberta blue sky day, and I hope you're enjoying good weather wherever you are. The meeting is now called to order. I will chair this meeting, and Naomi Stefura will act as Secretary. Gloria Gherasim of Odyssey Trust Company will act as Scrutineer. I hereby instruct Odyssey Trust Company to open the polls for this meeting and to keep them open until the formal business of the meeting is adjourned.
The notice calling this meeting of shareholders was sent to all shareholders of record. I have the affidavit of mailing, which indicates the mailing date of May 21, 2025, as proof that the notice of this meeting has been properly served. It is certified by our transfer agent. As such, I request a motion dispensing with the reading of the notice.
Be dispensed with.
I second the motion.
Thank you, ladies. I will ask the Secretary to keep a copy of the notice and proof of the meeting with the records of this meeting. Our Scrutineer has provided a report on shareholder attendance at this meeting, and we do have a quorum with over 24 million shares, or approximately 80% of Melcor's total outstanding shares represented. I now declare this meeting regularly called and properly constituted to conduct business of the company. I now request a motion to dispense with the reading of the minutes of Melcor's last annual general meeting of shareholders, which was held on June 25th, 2024.
I move that the reading of the minutes of the last annual general meeting of shareholders be dispensed with and that the minutes be approved as written.
I second the motion.
Thank you, Robyn and Naomi. Next item of business is the presentation of financial statements for the period ending December 31st, 2024, and the related auditor's report. When you received notice of the meeting, you also received instructions for accessing Melcor's annual report online or requesting that a printed copy be sent to you. This information is also available on our website at melcor.ca or cedarplus.ca. It will be mailed to anyone who requests it. As you've had ample time and opportunity to review this material, I would request a motion dispensing with the reading of the financial statements and the auditor's report.
I move that the reading of the financial statements for the period ending December 31, 2024, and the auditor's report be dispensed with.
I second the motion.
Thank you, Naomi and Robyn. Next item of business is to fix the number of directors to be elected at this meeting.
I move that eight directors be elected at this meeting.
I second the motion.
Thank you. Next up, we have the election of the directors. All directors elected today will hold office until the next annual general meeting unless his or her office is earlier vacated. The eight nominees as listed in the information circular are proposed for election. They are Douglas Goss, Andrew Melton, Kathleen Melton, Timothy Melton, Bruce Pennock, Janet Riopel, Catherine Roozen , and Ralph Young. We have received sufficient proxies to individually elect these nominees and will not be seeking nominations from the floor.
I move that Douglas Goss, Andrew Melton, Kathleen Melton, Timothy Melton, Bruce Pennock, Janet Riopel, Catherine Roozen , and Ralph Young be individually elected to serve as directors of Melcor.
I second the motion.
Thank you again, ladies. We're now on the final item of business, after which we will check for questions related to the motions prior to closing of the board. Final item of business is to appoint external auditors and to authorize the directors to set their remuneration, and I ask for a resolution in this regard.
I move that PricewaterhouseCoopers be appointed as Melcor's auditor until the next annual meeting or until a successor is appointed, at remuneration to be determined by Melcor's board of directors.
I second the motion.
Thank you. The vote on these matters will close in 60 seconds. If you are voting live today, please vote on all matters now. While we give everyone a final moment to complete their votes, I'll check to see if there's any questions about any of the motions. Bear with me for a few seconds. Thank you. The moderator has confirmed that there are no questions. This concludes the formal part of the annual general meeting as described in the notice of meeting. I hereby instruct Odyssey Trust Company to close the vote in 30 seconds. As indicated, all motions presented today have passed. May I now have a motion to adjourn?
I move that the meeting be terminated.
I second the motion.
Thank you. I can now declare that the formal portion of the meeting is terminated. Just a few general comments prior to turning the meeting over to Naomi. I would just like to share a few comments. I'm very proud to reflect on another year where we had balance between strong operational results and also observed disciplined financial stewardship of our business. The Melcor team delivered record revenue, continued to invest in our communities, and took strategic steps to position Melcor for a sustainable long-term growth in the future, including the successful acquisition of the REIT, which really simplifies our structure and strengthens our balance sheet. Going forward, we're very confident about the future.
We're also honored to be named by the Globe and Mail as a woman's lead benchmark for the third consecutive year, recognition of the exceptional contributions that women make at all levels within our company. I want to thank the Melcor Board of Directors and our executive team and our employees and our shareholders for your continued trust and support as we build on our successful record, and we look forward with cautious optimism. I will now turn the meeting over to Naomi, who is Melcor's very capable CFO and Chief Operating Officer for her management's presentation on company activities. Thank you very much.
Thank you, Tim. Before I start with the presentation, I'd also like to take a moment to introduce you to the rest of our team. These are the people who make everything happen. I'm truly proud to call all of them colleagues and friends. They're an exceptionally talented group of individuals. Our senior leadership team is comprised of Randy Ferguson, Senior Vice President of Properties, Susan Keating, VP of Land for Edmonton Region, Leah Margiotta, VP of Properties, Graeme Melton, VP of Land in our Calgary Region, Sinead O'Meara, VP of Finance, and Robyn Salik, VP of Accounting and Corporate Services. Thanks to each of you and your teams for contributing to our excellent results for 2024. Speaking of excellent results for 2024, this was a record year for the company. Our performance was driven by strong land sales, where Alberta, our primary market, experienced significant population growth.
We achieved record revenue just shy of CAD 350 million with a 45% gross margin. Net income was CAD 33.5 million, and funds from operations, or FFO, was a record high, CAD 93.8 million, or CAD 3.08 per share. We also paid out dividends to shareholders of CAD 0.44 per share. This was a decrease from dividends paid in 2023, as we took steps during 2024 to reduce our credit utilization in advance of the REIT transaction. There are several non-cash accounting items that can skew our IFRS net income numbers. As a result, management focuses on funds from operations as a better measurement of our performance. We believe FFO is a clearer measure of true operating performance and reflects the strength of our core business. As you can see on this graph, it was a record year for FFO with a steady increase in the past two years.
Looking at some of our key operating metrics, we had a busy year. Our land division sold 1,296 single-family lots in Canada, and we also sold over 95 acres of multifamily paper lots and commercial acres in 2024. This includes nearly 38 acres of multifamily land across our regions for just over CAD 40 million in revenue in response to strong market demand for multi-unit housing options. In the U.S., while we sold no completed lot inventory, we continue to market and sell paper lots, which are titled land parcels in approved plans, allowing Melcor to monetize land earlier in the planning cycle before physical construction begins. In 2024, we sold over 42 acres of paper lots in Arizona, adding CAD 11.5 million to land revenue.
Our properties team completed the construction on over 95,000 sq ft of new retail space, comprised of five retail buildings at two neighborhood shopping centers, Woodbend in Leduc and Winterburn Point in West Edmonton. Our committed occupancy at the end of the year was 93% in our Canadian wholly owned properties. Over 122,000 rounds were played at our four golf courses, down slightly from the prior year due to unfavorable weather conditions in the spring. At December 31, 2024, Melcor had CAD 2.1 billion in assets. Our land portfolio is comprised of approximately 9,400 acres of raw land, 437 fully developed single-family lots, and 129 acres of developed land ready for multifamily or commercial sale. Our properties division, which included the REIT at year-end, owns and manages 4.76 million sq ft of commercial property and 452 residential units.
Finally, we have four golf courses, all of which add significant amenity value to our surrounding Melcor communities. Now let's break down how each division contributes to our overall performance. The golf division's revenue is stable and constrained by the daily availability of tee times and the length of the playing season. Favorable weather conditions typically lead to stronger performance for golf courses. All of Melcor's golf courses are positive cash contributors to the company. Our properties and REIT divisions generate steady rental income. Because of this stability, we can rely on this predictable revenue stream from our properties without much fluctuation. Changes over time reflect growth in our portfolio over the same period. GLA grew by close to 1.5 million sq ft from 2014 to 2024 as a result of new commercial properties built and third-party acquisitions.
Where golf and properties are more stable by nature, the land division can be dynamic. The revenue and margins from this division can vary significantly based on factors like market demand, timing of sales, and development cycles. Because of this variability, the land division has the potential to significantly boost our overall results. While properties and golf provide a stable foundation of revenue and margin, it's our land division that acts as the swing factor. Land was that swing factor again in 2024, with CAD 227 million in revenue generated. Over 200,000 people moved to Alberta in 2024, adding 4.4% to our province's population. Melcor's land portfolio, especially in the key markets of Edmonton and Calgary, was strategically positioned to benefit from this growth. We sold 1,296 lots in Canada compared to 1,149 lots last year.
Edmonton returned as our largest contributor, driven by increased single-family and multifamily sales, while Calgary maintained its solid performance with ongoing community buildouts and steady demand. Our properties, which are owned by Melcor directly, generated CAD 46 million in revenue and achieved a margin of 59%. The development arm completed five retail buildings of just over 95,000 sq ft and had a further five buildings under construction at year-end, representing over 81,000 sq ft. We continue our discipline of carefully selecting development sites and adding value to existing assets, particularly service-focused regional retail centers, which remain relatively resilient in the commercial sector. The REIT produced stable results in its final year of operation and contributed revenue of CAD 72 million with a gross margin of 57% and 87% occupancy. These results will be part of the properties division going forward now that Melcor has successfully completed the acquisition of the REIT.
Last but not least, our golf courses had another solid year, posting record revenue for the second consecutive year. The weather was mostly cooperative. However, rounds were down at some courses in Edmonton, while Edmontonians opted to watch playoff hockey instead of golfing in June. Throughout Melcor's 56-year history as a public company, we've paid dividends in all but three of those years, and we've had a normal course issuer bid or share buyback program in place for much of the past decade as well. We view buying back our own shares as one of the best investments, given the large discount to book value that our shares trade at. In 2024, we focused on strengthening our balance sheet in preparation for the REIT transaction, which is why dividends paid per share were lower than the prior year.
Our NCIB purchases in 2024 were also limited by the trading blackout that the company was under throughout the year due to the consideration of strategic options for the REIT. All purchases made were executed under an automatic purchase plan, which resulted in fewer shares repurchased than prior years, where we were able to take advantage of block purchases. Block purchases were the only practical way for us to achieve a meaningful buyback, given the trading liquidity of our shares. 2023 was the only year in recent history where we were able to buy 100% of the shares available under the NCIB through block purchases. We will continue to evaluate the best way to execute on our buyback within the realities of our trading volume and market structure. Finally, I'd like to highlight the successful conclusion of the REIT transaction.
In April of this year, we completed the buyout of the remaining public interest in Melcor REIT for a total of CAD 71.3 million at a price of CAD 550 per unit. This move fully recombines our income-producing properties under Melcor's direct ownership, simplifies our structure, and strengthens our position for the future. In order to complete the acquisition of the REIT, including the redemption of the REIT debenture, Melcor increased its bank operating line to CAD 170 million in 2024. Our intention is to reduce this operating line utilization throughout 2025. It will be Melcor's objective to strategically dispose of certain assets in order to generate cash to pay down the operating line. The process of selling these assets will consider the best long-term interest and value creation for shareholders, but will also take into account the reality of today's real estate markets.
The successful closing of the REIT transaction was an enormous team effort, and I'd like to acknowledge and thank everyone that participated in getting this done, including our dedicated staff and the strong leadership of our board of directors. That was 2024, but here we are well into 2025 as we hold this AGM. We announced our results for the first quarter of 2025 on May 13th, and I'd like to share a few highlights. Our quarterly performance naturally fluctuates due to the seasonal nature of our operations. Activity in our land division aligns with Alberta's construction season, and as such, we report little sales activity until after the summer construction months. Our golf courses also follow seasonal patterns, with most courses not opening until the second quarter.
Our first quarter results, therefore, typically reflect these timing differences, and it is more meaningful to view Melcor's results over a longer time period. Having said all that, we're off to a good start here in Alberta. Housing construction remains strong in the province, where recent stats released show housing starts in the province are on pace for a record year. The number of housing starts in Alberta to date this year is at a record high and is 79% higher than the five-year average. As it relates to Melcor for Q1, revenue was up 2% to CAD 50.7 million, and gross profit was also up 16% to CAD 27.3 million. FFO was CAD 13.4 million, or 2% lower than Q1 last year, impacted by higher-than-normal general and admin costs associated with the REIT transaction. In the first quarter of 2025, we sold 80 lots in Canada, up from 66 last year.
We also sold 22 acres of raw land in the quarter compared to 22 acres of multifamily land in Q1 of last year. In the U.S., we completed the sale of 44 acres of paper lots for CAD 12 million. Subsequent to the quarter, we sold a further 154 acres in paper lots for total revenue of CAD 49 million. This sale will be reported in our Q2 results. Our property portfolio ended the quarter at 86% occupancy, which includes both our Melcor-owned and REIT properties. Melcor remains committed to the conservative financial strategies that have contributed to our longevity for the past 100-plus years. Our land division remains focused on harvesting current inventory. New acquisitions, if any, would be strategic parcels, especially adjacent to existing land. Our properties division will continue to focus on optimizing our current portfolio and selling some non-core assets.
Our golf division will continue to attract golfers through fantastic player experience and provide an inviting neighborhood food and beverage experience to the communities that border the course. The ability to evolve and adapt has been a cornerstone of Melcor's success. Along with our disciplined and conservative approach to debt and strong balance sheet, we believe that this adaptability will enable Melcor to continue to thrive. The achievements of the past year were made possible by the unwavering commitment and hard work of the entire Melcor team. I'm incredibly proud of our collective efforts. As COO and CFO, I have the privilege of witnessing firsthand the dedication and experience that drive our company forward, and I'm deeply grateful for the team's contribution to our continued success. This concludes our management presentation. We'd now be happy to take your questions.
As a reminder, you click on the messaging icon at the top of the left-hand Loomi window to enter your question. Note the questions may be moderated for clarity and brevity. Robyn, are there any questions in the queue?
Thanks, Naomi. Yes, our first question is two-part from Justin Lee. I'll read the first question and give you an opportunity to respond and then get to the second question. So from Justin Lee, we've been very supportive investors of Melcor for many years. During this time, we've witnessed Melcor deftly navigate multiple crises and emerge today as a much stronger, more diversified, and resilient business. Our question is twofold. Do you have a long-term strategic vision of what Melcor looks like in five or ten years from now, and can you share how one might measure that journey and performance over time?
Second, Melcor shareholders have been patient and supportive for a very long time but have not yet been rewarded for their ownership in a business which has grown and improved considerably over time. Can you speak directly to those shareholders who are waiting for their trust in the company to be rewarded more positively and in what ways the company can take further or more consistent action in that regard?
T hank you for that question, Robyn, and our shareholder that's asking them. I'll briefly give my take on those items, and then ask Naomi if she's got any follow-up. With respect to where the company will be five years from now, I would like to know with clarity where we would be, but in this environment of volatile interest rates and the demographic changes that have really impacted real estate, that's tough. My crystal ball isn't that good.
I comfort our shareholders and our team. We look at our record of growth through the years and our ability to adapt to changing circumstances, and we think we're pretty responsive to whatever opportunities are out there. I would hope that adhering to those principles, no matter what the environment's like, we'll do well. We're cautiously optimistic that we'll compete, and obviously, we think North America and the U.S. and Canada are probably the best destinations in the world. We know there's interest rate uncertainty, and that affects real estate big time, and demographic changes that have impacted online shopping and work-from-home situations that do impact income real estate. We're cautiously optimistic, and like I say, I won't make a prediction, but just look at our ability through the years and hope that's testimony of how we'll do.
With respect to the return to shareholders, the second part of your question there, as we get our balance sheet stronger, we hope we're in a position to increase dividends to shareholders. We think that's very important, and we've had a good record of paying dividends. We're hoping that once we get our debt levels down a bit, we can be in a position to pay more dividends. In terms of the share value, we've always probably traded at a discount to book value, and I think it's probably a combination of the mix of real estate assets we have. If our results continue positive, the share price will likely reflect that. I'll turn it over to Naomi. She might have some follow-up.
I don't have much to add to what Tim said.
I think as far as sort of the vision for the company in the next five years, I think we'll continue to focus on land development in the areas where we are. As it relates to our properties portfolio, we're sort of taking a good look at which assets we will be looking to divest of some of them and then looking to maybe reposition or spend some money on some of the assets that are currently underperforming. I think the goal would be that we have a leaner, stronger properties portfolio going forward with sort of an ongoing primary focus on the land development aspect of our business.
At this time, there are no additional questions from our audience. I would like to take the opportunity to thank everybody for attending our 2025 annual general meeting. The meeting is now concluded.
We wish you all a fantastic summer. Thank you.