FAX Capital Corp. announced its results for the fourth quarter and full year ended December 31, 2020. All currency figures are Canadian dollars.
Operating Highlights:
“We are extremely pleased with our operational execution and performance during this historic and volatile year,” said Blair Driscoll, CEO of FAX Capital. “Our equity value on a per share basis grew to $4.83, an increase of 11% from the prior year, driven by strong returns on our deployed capital of 32%.”
“We successfully executed on our strategy to acquire substantial ownership in high-quality businesses where we have the opportunity to meaningfully support their ongoing growth and development as a value-add partner. As we look ahead, we will remain disciplined and patient with our capital allocation to ensure we continue to generate strong returns for our shareholders over the long-term.”
Results for the Quarter and Year Ended December 31, 2020
The Company’s book value per share increased 7.6% from $4.49 per share at September 30, 2020 to $4.83 per share as at December 31, 2020. The 7.6% increase is primarily attributed to the Company recording an unrealized gain on its investments of $15.8 million in the quarter ended December 31, 2020, largely driven by a $7.4 million increase in the fair value of the Company’s investment in People Corporation (People Corp.).
On December 14, 2020, People Corp. announced that it was to be acquired by Goldman Sachs Merchant Banking for $15.22 in cash per share. The purchase price represented a 37% premium to the 20-day volume-weighted average price per share for the period ended December 11, 2020, and a 36% premium to the closing price of December 11, 2020. The transaction was approved by the People Corp.’s shareholders at a special meeting held on February 11, 2021. Subsequent to the approval, FAX Capital recognized a realized gain of $13.5 million on its $14.2 million investment in People Corp.
Net income for the quarter ended December 31, 2020 was $13.0 million, compared to a net loss of $624.8 thousand in the quarter ended December 31, 2019.
The Company’s book value per share increased 11.3% from $4.34 per share at December 31, 2019 to $4.83 per share as at December 31, 2020. The increase in the book value per share is primarily attributed to the Company earning a 31.8% return on its deployed capital during the year, largely a result of the Company recording an unrealized gain on its investments of $23.3 million during the year.
Net income for the year ended December 31, 2020 was $19.3 million, compared to a net loss of $2.0 million last year.
Other Information
FAX Capital’s Financial Statements and Management’s Discussion & Analysis for the year ended December 31, 2020, are available under the Company’s profile at www.sedar.com and www.faxcapitalcorp.com. FAX Capital’s Letter to Shareholders and supplemental materials in respect of the Company’s fourth quarter and full year 2020 contain further information on the Company’s strategy and operations and can be accessed on the Company’s website under Shareholder Information. Shareholders are encouraged to read these documents.
About FAX Capital Corp.
The Company is an investment holding company with a business objective to maximize its intrinsic value on a per share basis over the long-term by seeking to achieve superior investment performance commensurate with reasonable risk. The Company intends to invest in equity, debt and/or hybrid securities of high-quality businesses. The Company initially intends to invest in approximately 10 to 15 high-quality small cap public and private businesses located primarily in Canada and, to a lesser extent, the United States.
For additional information please contact:
Investor Relations
Tim Foran
Email: IR@faxcapitalcorp.com
Website: www.faxcapitalcorp.com
Media Relations
Kieran Lawler
Telephone: (416) 303-0799
Email: Kieran.lawler@loderockadvisors.com