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Place de cotation: TORONTO (CKI)

Halifax-based Clarke invests in a variety of private and publicly-traded businesses and participates actively where necessary to enhance the performance of such businesses and increase its return. Clarke's securities trade on the Toronto Stock Exchange (CKI);

Clarke Inc. est un des fournisseurs canadiens d'avant-garde de services intermodaux, routiers et logistiques à travers l'Amérique du Nord. Fondée au tournant du siècle grâce aux efforts novateurs de William, James, John et George Clarke, la société Clarke Inc. fait partie intégrante de l'histoire du transport au Canada. 

http://www.clarkeinc.com
 

01.11.207 Clarke Inc. Reports 2017 Third Quarter Results


Clarke Inc. Reports 2016 Fourth Quarter and Year End Results
        
HALIFAX, Feb. 23, 2017 /CNW/ - Clarke Inc. ("Clarke" or the "Company") (TSX: CKI) today announced its results for the three months and year ended December 31, 2016.

Results for the Year Ended December 31, 2016

Net income of the Company for the year ended December 31, 2016 was $25.4 million compared with a net loss of $11.1 million in 2015. During the year ended December 31, 2016, the Company had unrealized gains on its investments of $20.1 million compared to unrealized losses of $15.5 million in 2015. The Company had realized gains on its investments of $0.1 million for the year ended December 31, 2016 compared with realized gains of $0.8 million in 2015.

Results for the Fourth Quarter 2016

Fourth quarter revenue increased as a result of an increase in the fair value of the Company's portfolio of publicly-traded securities. Net realized and unrealized gains on investments for the fourth quarter of 2016 were $9.5 million compared to $6.1 million for the same period in 2015. Interest income for the fourth quarter of 2016 was $0.3 million compared to $0.5 million for the same period in 2015 mainly due to the reduction of cash, loans receivable and sales of publicly-traded debentures. Expenses during the fourth quarter of 2016 were $0.5 million higher than expenses during the same period in 2015. The Company had net income of $9.4 million in the fourth quarter of 2016 compared to $6.6 million in the same period in 2015. This again was largely driven by the increase in unrealized gains on investments during the period. Comprehensive income for the fourth quarter was $11.0 million compared to $9.3 million for the same period in 2015.

For the three months ended December 31, 2016, Clarke's basic earnings per share was $0.64, compared to $0.42 for the same period in 2015.

Full Year Review and Outlook

During 2016, the Company's book value per share decreased by $0.60 or 4.9%. The decrease is attributed to the payment of regular and special dividends of $2.20 per Common Share offset by positive investment performance and the effect of share repurchases. Our book value per share at the end of the year was $11.61 while our share price was $9.36.

Two thousand and sixteen represented the seventh year since North American stock markets bottomed following the financial crisis. After a seven-year bull market, it has become progressively harder to find attractive investment opportunities, particularly investments of a control or activist nature. The main area of opportunity has been the oil and gas industry. We commenced buying securities of oil and gas companies in 2015 following the rapid decline of oil prices in the fourth quarter of 2014 and the first quarter of 2015. Clearly, we were too early in our buying and that will reduce the profit we ought to have made by recognizing that the decline in securities prices would be temporary. Nonetheless, we believe that our basket of energy securities will be quite profitable. Of the five investments we made in the energy industry, one company (Northern Frontier Corp., our smallest investment) was placed in receivership, one company's security price remains slightly below our cost basis in Canadian dollar terms and our other three investments are profitable. Net of purchases and sales, Clarke's securities portfolio increased in value by $19.4 million in 2016, reflecting the positive performance of our energy securities and our core securities holdings.

Seeing limited investment opportunities outside the oil and gas industry and wishing to limit the Company's investment in the oil and gas industry, the Board of Directors determined to return a substantial amount of capital to shareholders. This was completed by way of regular share repurchases totalling $7.2 million and special dividends totalling $31.2 million.

Throughout 2016, we continued to assist our core portfolio holdings, Holloway Lodging Corp. ("Holloway") and Terravest, with their businesses. In the case of Holloway, our contribution included a focus on operational improvements to minimize the effects of the oil and gas downturn on a fixed-cost business and processes to sell select assets. In the case of Terravest, our contribution focused on the identification of organic growth opportunities and acquisitions of complementary businesses. We continue to believe that each of these companies is undervalued in the public markets and we expect to generate additional profits in coming years with these investments.

As we look forward to 2017, we expect that oil and gas markets will continue to stabilize and/or improve, which should result in improved prices for Clarke's energy securities as well as its core securities holdings. As Clarke's energy and other investments are monetized, Clarke will be in a position to either reinvest that capital in new opportunities should they present themselves or to return that capital to shareholders should we not see attractive investment opportunities or the prospect of such opportunities in an appropriate time frame. As always, we expect to continue repurchasing our Common Shares as opportunities arise, whether under our normal course issuer bid which we expect will resume in the second quarter of 2017 or otherwise.

Other Information

Further information about Clarke, including Clarke's Consolidated Financial Statements and Management's Discussion & Analysis for the year ended December 31, 2016, is available at www.sedar.com and www.clarkeinc.com.

 

 



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