Brampton, Ontario–(Newsfile Corp. – May 30, 2024) – Urban Infrastructure Group (TSXV: UIG) A leading first-phase concrete and drainage infrastructure construction group specialising in large-scale new build residential developments., Reports financial results for three and six months ended March 31st2024. All financial information is provided in Canadian dollars unless otherwise stated.
Ungad Chadha, CEO of UIG, stated, “Urban continues to execute on its strategy and day-to-day operations, but is not immune to the ongoing slowdown in new home construction over the past few months. The slowdown has impacted contracted project delivery schedules in the form of project delays. While we cannot predict with certainty the length of these delays, we believe that the long-term structural shortage of housing in Ontario and the rest of Canada remains a significant issue. While the cyclical nature of the housing industry is well known, Urban is committed to an ambitious long-term growth strategy that leverages a promising future for the Canadian construction industry with many demographic and macroeconomic tailwinds. In particular, the current slowdown has had a positive impact on our M&A initiatives, having the effect of accelerating and expanding the number of active M&A discussions with first-stage targets in the construction industry.”
Management commentary for the first half of fiscal year 2024:
UIG's second quarter is a seasonally slow period due to the winter months. The slowdown this year was compounded by a well-known industry-wide weakness in the new residential construction market. As a result of the delays, UIG's quarterly revenues were significantly lower than the same period last year. UIG continues to have a very strong pipeline of contracts, and while it is unclear where the industry turning point will be, based on daily discussions with customers, we are cautiously optimistic that conditions will improve heading into the summer construction period. June 5thNumber The Bank of Canada meeting will be a very important data point for our industry and for Urban.
During the first six months of fiscal year 2024, UIG incurred significant expenses in preparing for the IPO process and executing its listing on the TSXV. The largest single expense was the listing expenses, reflecting non-cash expenses of approximately $1.5 million representing expenses incurred by Urban Utilities, Inc. as the beneficial purchaser of DealPro Capital Corporation. The listing expenses, along with the RTO, recapitalization and other one-time cash expenses incurred as part of the listing, were the largest single (one-time) contributor to UIG's loss for the interim period. These additional expenses included legal fees for the corporate and securities services of both entities (Urban Utilities and DealPro). Accounting and audit expenses for both entities included significant expenses to prepare Urban Utilities' three-year audited annual financial statements and to convert Urban Utilities' internal control over financial reporting to IFRS standards.
Lower revenues and higher costs resulted in a net loss for the period. UIG management believes these factors are temporary on the revenue side and primarily temporary on the cost side. Management continues to focus on the quality and timeliness of the concrete and drainage systems it installs for its customers while pursuing new business organically and within its M&A strategy. At the same time, if inflation subsides in the coming quarters and the Bank of Canada lowers interest rates, UIG is well positioned to take advantage of any upside experienced in the sector.
Financial highlights for the three and six months ending March 31, 2024:
The Company's key financial results for the three and six months ended March 31, 2024 are as follows:
|
Canadian Dollar |
F2024 – |
F2023 – |
F2024 – |
F2023 – |
||||||||
|
Total Revenue |
1,536,307 |
2,922,648 |
3,502,772 |
6,706,441 |
||||||||
|
gross profit |
323,284 |
901,155 |
1,305,693 |
1,799,259 |
||||||||
|
total cost, total expenses, total expenses |
2,178,924 |
341,291 |
2,598,634 |
644,355 |
||||||||
|
Comprehensive income (loss) |
(1,855,640 |
) |
559,864 |
(1,292,941 |
) |
1,154,904 |
|
Weighted average number of common shares outstanding |
5,742,646 |
200 |
2,871,423 |
200 |
||||||||
|
Basic and diluted loss per common share |
(0.32 |
) |
2,785 |
(0.45 |
) |
5,719 |
Options granted to the Board of Directors, management and employees:
Pursuant to the terms of the Company's Incentive Stock Option Plan, UIG has granted 7,972,267 incentive stock options in the Company's common shares to its directors, management and employees. The options have an exercise price of C$0.18 per share and the grant of these options was approved by the Board of Directors on May 29th.Number2024. Half of the options will vest 18 months from the grant date and the other half will vest 36 months from the grant date. The options will have a term of five years from the grant date and are subject to approval by the TSX Venture Exchange.
Options granted pursuant to investor relations activities:
The Company is also pleased to announce that it has engaged Venture North Capital Inc. (“Venture North”) to provide investor relations and shareholder communications services. Venture North is a full-service capital markets consulting firm headquartered in Toronto, Canada, with experience executing strategic investor relations campaigns on behalf of growth companies listed on the TSX and TSX-V.
The Company and Venture North have entered into a consulting agreement for an initial period of 12 months, continuing month-to-month thereafter until terminated by either party. In consideration for its services, the Company will pay Venture North C$7,900 per month and will grant 980,000 stock options pursuant to the terms of the Company's stock option plan. Each option is exercisable at $0.17 per share and will vest quarterly in accordance with the policies of the TSX-V. The agreement is subject to approval of the TSX-V.
About Urban Infrastructure Group
Urban Infrastructure Group Inc. (TSXV: UIG) is a leading concrete and wastewater infrastructure construction group involved in the early stages of the construction process (Stage 1). Urban Infrastructure Group specializes in large scale master planned residential communities, supporting its partners and clients in some of the most significant residential development projects in Ontario.
Connect with UIG: https://urbaninfrastructuregroup.com/
# # #
contact:
Bill Mitoulas
Investor Relations
Phone: +1.416.479.9547
Email: bill@urbaninfrastructuregroup.com
Notes
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information
This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “plans,” “expects,” “does not expect,” “is expected,” “budget,” “scheduled,” “estimates,” “anticipates,” “intends,” “projects,” “does not expect,” “believes,” or variations of these words and phrases, or by stating that certain actions, events or results “may,” “might,” “will,” “might,” “will be performed,” “occur” or “be achieved.” Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the Company's actual results, levels of activity, performance or achievements, in some cases, to differ materially from those expressed or implied by such forward-looking information. Some of these risks are described in the “Caution Regarding Forward-Looking Information” and “Risk Factors” sections of the MD&A. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Readers should therefore not place undue reliance on forward-looking information. Actual results and developments may differ materially from those anticipated in such statements. The Company undertakes no obligation to update any forward-looking information, except in accordance with applicable securities laws.
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