© Reuters.
NewLake Capital Companions, a cannabis-focused actual property funding belief (REIT), has introduced report monetary outcomes for the fourth quarter and the complete 12 months of 2023 in its newest earnings name. The corporate reported important will increase in income, internet earnings, and adjusted funds from operations (AFFO), alongside a raised dividend and a strong share repurchase program.
With 100% lease assortment and no debt, NewLake highlighted its robust steadiness sheet and the strategic positioning of its portfolio, which incorporates 17 dispensaries and 14 cultivation services throughout 12 states. The corporate’s management additionally mentioned future progress prospects, together with potential regulatory adjustments within the hashish trade and its plans to fulfill the itemizing necessities of main U.S. exchanges, with a selected give attention to worthwhile operators and property-level money flows.
Key Takeaways
- NewLake Capital Companions achieved report income, internet earnings, and AFFO for This autumn and the complete 12 months of 2023.
- The corporate raised dividends, repurchased shares, and reported 100% lease assortment.
- NewLake has a strong steadiness sheet with no debt and important credit score facility availability.
- The REIT is concentrated on the expansion of the hashish trade and regulatory developments that might profit its tenants.
- Plans to uplift to a significant U.S. change are underway, with the corporate additionally contemplating the TSX.
Firm Outlook
- The CEO mentioned potential trade catalysts, together with the rescheduling of hashish that might enhance tenant credit score profiles and money move.
- NewLake has a robust portfolio with 71% of lease coming from publicly traded operators, displaying monetary enhancements.
- The corporate plans to proceed specializing in operators with robust monetary profiles in states with favorable regulatory frameworks.
Bearish Highlights
- Regardless of its achievements, NewLake expressed frustration over not being listed on a significant U.S. change whereas related firms are.
- The corporate is operating to fulfill all itemizing necessities however can’t predict when NASDAQ will change its stance.
Bullish Highlights
- NewLake’s income progress was pushed by acquisitions, lease escalators, and tenant enchancment (TI) fundings.
- The REIT has revised its lease agreements to assist tenant enhancements and has deployed important capital in direction of these enhancements.
Misses
- There have been no particular misses mentioned through the earnings name.
Q&A highlights
- The corporate mentioned its capital market choices and the advantages of extra suppliers getting into the market.
- NewLake is concentrated on providing honest worth for actual property belongings and constructing its investor base.
- Efforts to fulfill the itemizing necessities of main U.S. exchanges are ongoing, with an uplisting focused as quickly as potential.
In abstract, NewLake Capital Companions (ticker: NLCP) showcased robust monetary efficiency and a strategic strategy to progress throughout the evolving hashish trade. With a give attention to regulatory developments and a dedication to supporting worthwhile operators, the corporate is positioning itself for continued success and is actively working towards uplisting on a significant U.S. change to boost its market presence.
Full transcript – Newlake Capital Companions (NLCP) This autumn 2023:
Operator: Good morning. I will be your convention operator as we speak. Presently, I would wish to welcome everybody to NewLake Capital Companions 2023 12 months-end Convention Name. In the present day’s name is being recorded. I’ll now flip the decision over to Valter Pinto, Managing Director of KCSA Strategic Communications. Please go forward.
Valter Pinto: Thanks, operator. Good morning, and welcome, everybody, to NewLake Capital Companions fourth quarter and full 12 months 2023 earnings convention name. I am joined as we speak by Gordon DuGan, Chairman; Anthony Coniglio, President and Chief Government Officer; Lisa Meyer, Chief Monetary Officer; and Jarrett Annenberg, Senior Vice President and Head of Investments. Earlier than we start, I would wish to remind everybody that statements made throughout as we speak’s convention name could also be deemed forward-looking statements throughout the that means of the protected harbor of the Personal Securities Litigation Reform Act of 1995, and precise outcomes might differ materially attributable to a wide range of dangers and uncertainties and different components. For an in depth dialogue of a number of the ongoing dangers and uncertainties of the Firm’s enterprise, I refer you to the press launch issued this morning and filed with the SEC on Kind 8-Ok in addition to the Firm’s 10-Ok and different experiences filed periodically with the SEC. The Firm disclaims any intention or obligation to replace or revise any forward-looking statements, whether or not because of new data, future occasions or in any other case. FFO and AFFO are supplemental non-GAAP monetary measures utilized in the true property trade to measure and examine the working efficiency of actual property firms. A whole reconciliation containing changes from GAAP internet earnings attributable to frequent shareholders to FFO and AFFO and definitions of phrases are included on the finish of our press launch. Please discuss with that press launch for extra data. The Firm’s steerage is predicated on present plans and assumptions and topic to the dangers and uncertainties extra absolutely described within the Firm’s filings with the US Securities and Change Fee. This outlook displays administration’s view of present and future market situations together with assumptions such because the tempo of future acquisitions and tendencies, rental charges, occupancy ranges, leasing exercise, uncollectible rents, working and common and administrative bills, weighted common diluted shares excellent and rates of interest. With that, it is my pleasure to show the decision over to Mr. Gordon DuGan. Gordon, please go forward.
Gordon DuGan: Thanks, Valter, and thanks, everybody, for becoming a member of our name. Throughout 2023, NewLake outperformed throughout our key monetary metrics year-over-year regardless of a really difficult 12 months for the hashish trade and REITs typically. In opposition to this tough backdrop, the Firm delivered progress in addition to report income, report internet earnings and report AFFO. Moreover, we raised our dividend within the fourth quarter. And as we speak, we introduced one other improve in our dividend for the primary quarter of 2024. We have now raised our dividend yearly for the reason that Firm’s setting in 2019. Since our IPO in 2021, the Firm has elevated its dividend 67%, paying out over $80 million or $3.85 per share in dividends to shareholders. There are a number of objects I would like to spotlight from this previous 12 months. As we count on it to happen in some unspecified time in the future in 2023, we skilled our first tenant situation within the portfolio. Our staff was nicely ready and labored diligently to resolve the problem. We ended 2023 with 100% of our invested capital producing returns for our buyers and 100% lease assortment for the fourth quarter. This can be a stable basis to construct upon as we embark on 2024 and drive for continued progress. Throughout 2023, we additionally took benefit of a low inventory worth and aggressively repurchased our frequent shares, shopping for again almost 12 million of our inventory at a median worth of $13 per share. which was properly accretive, notably the place the inventory worth sits as we speak and what we see as a future upside for buyers. As stewards of our shareholders’ capital, we’re keenly centered on maximizing returns, and we’ll proceed to use this return-oriented strategy as we consider future buyback alternatives. Lastly, our enterprise generates important free money move as demonstrated by our This autumn 2023 payout ratio of 78%. There’s a important cushion for our dividend and potential for progress as we handle to our purpose of an 80% to 90% payout ratio. As we glance to the longer term, we see handful alternatives for progress. with just about no debt and $89 million accessible to us beneath our credit score facility, which has a gorgeous rate of interest and doesn’t mature till 2027. We’re in an excellent place to capitalize on our strengths and deploy capital into high quality transactions. In closing, I am pleased with what now we have achieved in 2023. I proceed to be very bullish on the long-term prospects for our firm, and I am excited for the alternatives that lie forward. With that, I am going to flip the decision over to our CEO, Anthony.
Anthony Coniglio: Thanks, Gordon, and thanks, everybody, for becoming a member of our name as we speak. As Gordon mentioned, 2023 was a report 12 months for NewLake and I need to thank our staff for his or her exhausting work through the 12 months, delivering stable outcomes for our shareholders. As we glance ahead, I would like to debate quite a lot of potential catalysts in 2024 for the hashish trade and for NewLake. There have been many headlines just lately and particularly, President Biden’s point out of his hashish coverage throughout final week’s acknowledged Union deal with, has many buyers to grasp what these potential catalysts imply for NewLake. So, let us take a look at these federal state and legislative catalysts. Before everything, we’re awaiting the DEA’s choice concerning the advice by the Well being and Human Providers Division to reschedule hashish from Schedule I to Schedule III. Such a transfer would eradicate the onerous Part 280E taxation and lead to higher free money move for the trade, together with our tenants. There are a number of examples the place REIT’s whole tenant base has a possibility to expertise a significant enchancment in credit score danger profile and important improve in money move in a single day from a single catalyst comparable to this anticipated transfer to Schedule III. Moreover, we imagine a rescheduling to Schedule III could have a optimistic impression on operator valuations, permitting them to recapitalize their steadiness sheet by issuing fairness and paying down debt. Not solely with this improved steadiness sheet well being, however would additionally cut back their curiosity expense and additional enhance their money flows. This may be one more enchancment within the credit score danger profile of the trade and particularly our tenant base. On the state degree, Ohio accepted leisure hashish on the poll field in November, and we count on an adult-use program to launch later this 12 months. Lots of our tenants have operations in Ohio, comparable to Ayr, Acreage, Hashish, Cresco, Trulieve, and PharmaCann, and their monetary efficiency is predicted to learn from the anticipated improve in gross sales within the state of almost 12 million folks. We’re excited concerning the potential credit score enchancment inside our tenant base in addition to the potential for incremental funding alternatives within the state. Moreover, we await the Florida Supreme Court docket’s choice concerning adult-use hashish on the Florida invoice. Most observers count on the State Supreme Court docket to permit the poll initiative to proceed. With over 21 million folks and adult-use program in Florida will profit our Mt. Dora, Florida tenant Curaleaf in addition to our different tenants which have operations within the state, notably Trulieve, Ayr, Cresco and the Hashish, creating one more alternative for our tenant base to extend scale and profitability. Two weeks in the past, Virginia’s legislature accepted laws to implement an adult-use program, which was accepted again in 2021. The laws is awaiting the Governor’s signature with the potential to have an adult-use program launch in 2025. With solely three operators serving the state with — excuse me, serving this state with 8.7 million folks, there’s the chance for the incumbents to guide within the adult-use market launch. Our tenant to Hashish owns 10 of the 21 operational dispensaries in Virginia and is poised to learn from this conversion to grownup use, to not point out the potential for added funding alternatives. Let’s flip to New York. With New York lastly permitting the unique medical market operators to take part within the adult-use market, we must always see a few of our tenants start to learn from their important investments into that state. Equivalent to Acreage, the Hashish, Cresco, Curaleaf and PharmaCann. We’re additionally listening to that SAFER Banking is once more again within the dialogue. Casting the Senate Banking Committee final September, this invoice is now changing into the potential car for the anti-Operation Choke Level laws, now often called Part 10 of the SAFER Banking Act. Whereas we’re cautious about predicting legislative motion on the federal degree, it is notable that Congress continues to have dialogue round this invoice, higher entry to monetary providers advantages all market contributors and we’re actually rooting for passage of SAFER. So, what does all this imply? Patching within the administrative manufacturers with potential for rescheduling. There’s motion within the legislative department round SAFER Banking and different cannabis-oriented laws, and there is motion on the state degree had been in keeping with Pew Analysis, greater than 50% of our nation’s inhabitants resides in a state with adult-use hashish. Whereas we predict it strongly confirms that hashish stays on the inevitable path to normalization and in the end legalization. 2024 may very well be the 12 months to start out realizing a few of these trade catalysts, which ought to profit our tenants, our portfolio and, after all, our buyers. With that, I am going to flip it over to Jarrett.
Jarrett Annenberg: Thanks, Anthony. For my remarks, I might be speaking about our present portfolio, exercise for the quarter, tenant and trade insights and expectations. Beginning with our present portfolio. As of December 31, we had dedicated a complete of $428 million throughout 17 dispensaries and 14 cultivation services in 12 states, with 13 tenants, representing roughly 1.6 million sq. ft lined. Our price foundation in retail properties is $389 per sq. foot and in cultivation properties, it is $252 per sq. foot, each metrics are nicely beneath substitute prices. 71% of our present lease is from publicly traded operators and 93% is from properties during which the tenant is vertically built-in within the state. EBITDA protection for the newest accessible quarter was 3.7x for cultivation and 10.3x for dispensaries, a slight lower for cultivation and slight improve for dispensaries from the earlier quarter. Please notice, we use estimates the place applicable given every firm experiences barely otherwise on a property degree foundation. As I mentioned in our final name, within the fourth quarter, we finalized the lease settlement with Revolutionary Clinics in Massachusetts and the brand new administration staff is executing on their transition plan. Moreover, in November, our Pennsylvania tenant Calypso had been offered the Canvas Acquisition Corp., a brand new entrant into the trade. In reference to the sale and beneath the phrases of the revised lease settlement, NewLake has agreed to supply as much as $3 million in tenant enchancment allowance and has acquired a six-month lease escrow. We visited the power two weeks in the past to fulfill with the brand new staff. New strains had been within the floor and new processes are being applied. In December, Pennsylvania handed a invoice that can present impartial cultivators within the state, comparable to Calypso with three dispensaries, permitting for vertical integration within the state and the potential for improve in each gross sales and margins. Moreover, Pennsylvania’s Governor included taxes from adult-use hashish gross sales in his finances for 2025. That motion, along with 5 of the six bordering states having adult-use hashish gross sales, is predicted to place stress on the state’s legislature to enact adult-use laws. In regard to our properties beneath improvement, we deployed $8.8 million of TI allowance within the fourth quarter and $14.8 million in whole for the complete 12 months, nearly all of which went to our tasks for the Mint in Phoenix and C3’s growth in Missouri. As of year-end, we had $14.4 million in TI excellent and we count on the bulk to be drawn down by the tip of the second quarter as each Mint and C3’s tasks are accomplished. The staff was in Missouri a number of weeks in the past touring the 2 properties we personal within the state. Particularly, we had been excited to see C3’s growth that we have been funding for the previous 12 months. Building is continuing nicely, and the staff is happy to place crops within the floor to fulfill the rising demand within the state. Wanting broadly at our tenant base, we proceed to see monetary enhancements because the give attention to operational efficiencies have began to take impact and mixed with the wholesale pricing stabilization we have been seeing over the previous few quarters. In contrast with the identical quarter final 12 months, lots of our tenants have been capable of preserve high line income with a median gross margin of 40%, whereas rising EBITDA from 15.5% to twenty% on common throughout the portfolio. Moreover, we’re seeing operators shore up their steadiness sheets and supply themselves with extra runway. Ayr restructured and prolonged their debt till the tip of 2026. The Hashish introduced a debt per fairness conversion. And Trulieve introduced a $130 million debt discount. These enhancements could have a higher impression on our tenant credit score within the occasion of a rescheduling as we estimate our tenants may save an mixture of over $400 million yearly in federal taxes with 280E aid about 20% of annual gross earnings. As we glance ahead, we have seen an uptick in deal exercise for the reason that begin of the 12 months as operators have gotten extra optimistic about potential Schedule III and new state applications coming on-line. As at all times, we’ll preserve self-discipline when deploying extra capital, specializing in operators with robust monetary profiles, high quality administration groups and in states with regulatory frameworks that present the perfect alternative for long-term success. With that, I am going to flip it over to Lisa.
Lisa Meyer: Thanks, Jarrett. For the fourth quarter of 2023, our portfolio generated whole income of $13 million, a rise of 6.4% year-over-year. The expansion was primarily pushed by acquisitions, TI fundings, rising base lease, annual lease escalators and earnings associated to the valuation of warrants. The rise in rental income was partially offset by decreased lease collections from Revolutionary Clinics and Calypso for which we executed lease amendments within the fourth quarter of 2023. The $13 million of income for the fourth quarter included roughly $1.3 million of non-recurring income related to Revolutionary Clinics the place we captured a $315,000 safety deposit, $480,000 of delinquent rents for intervals previous to the fourth quarter and $522,000 of non-cash income associated to the valuation of the warrants acquired with the lease modification and forbearance agreements. Web earnings attributable to frequent shareholders for the three months ended December 31, 2023, totaled $6.9 million or $0.34 per share. Whereas fourth quarter AFFO was $10.8 million, a lower of 1.2% in comparison with the identical interval in 2022. On a per share foundation, AFFO elevated by $0.01 to $0.51 per share within the fourth quarter of 2023 in comparison with the prior 12 months pushed by the worth created for our shareholders via our share repurchase program. Through the three months ended December 31, 2023, we invested $8.8 million in tenant enhancements with $14.4 million in unfunded commitments at quarter finish. Transferring to the complete 12 months 2023 monetary outcomes. Our portfolio generated whole income of $47.3 million, a rise of 5.1% year-over-year. Web earnings attributable to frequent shareholders for the complete 12 months of 2023 totaled $24.6 million in comparison with $22 million for the complete 12 months of 2022. For the complete 12 months of 2023, AFFO totaled $40.7 million or $1.89 per share, a rise of 5.2% year-over-year. In 2023, we adopted ASC 326 Monetary Devices Credit score Loss generally known as CECL. We had been required to report an anticipated credit score line as outlined by the steerage. The quantity of the credit score loss recorded was $167,000. As of December 31, 2023, the $5 million notice receivable is the one monetary instrument that the Firm holds that falls beneath this steerage. The Firm is unaware of any data that might lead us to imagine that we’ll not absolutely get well our $5 million funding on this mortgage. On December 14, 2023, the Firm declared a fourth quarter 2023 money dividend of $0.40 per share of frequent inventory that was paid on January 12, 2024. On March 8, the Firm’s Board of Administrators raised the primary quarter 2024 money dividend to $0.41 per share of frequent inventory, equal to an annualized dividend of $1.64 per share of frequent inventory. The dividend is payable on April 15, 2024, to stockholders of report on the shut of enterprise on March 29, 2024. For the 12 months ending 2023, we repurchased 908,394 shares of frequent inventory at a median worth of $13 per share. At December 31, we continued to have a robust steadiness sheet with $412.3 million in gross actual property belongings and solely $1 million of excellent debt on our $90 million revolving credit score facility. We have now roughly $115 million of liquidity comprised of money and the remaining availability beneath our credit score facility. We imagine the Firm is nicely positioned to execute our enterprise technique to develop earnings for buyers as we deploy capital. And now, I want to flip the decision again to the operator for Q&A.
Operator: [Operator Instructions] Our first query comes from the road of Pablo Zuanic with Zuanic and Associates. Please proceed together with your query.
Pablo Zuanic: Anthony, I assume I do not need to put phrases in your mouth, however primarily based on the ahead commentaries that you simply made — feedback that you simply made, and the truth that you, I believe, funded $9 million allowances within the fourth quarter of $14 million for all of 2023, there’s been a little bit of a ramp, proper. It appears to me that over the previous 12 months, you would be a bit gun shy when it comes to new offers. However now you might be changing into extra — I assume, extra lively. The outlook is outwardly enhancing the way in which you see it. So, I do not know when you can speak concerning the pipeline, however when it comes to simply funded commitments or pipeline inform us what you see there over the subsequent six months? And am I proper in saying that you’ve got been a bit gun shy, however now changing into a bit extra proactive.
Anthony Coniglio: Sure. Pablo, thanks for the query. I am going to make a few feedback after which hand it over to Jarrett to speak somewhat bit concerning the pipeline. I might say that, certainly, throughout 2023, we had been somewhat bit gun shy. Actually what we had been doing in 2023 is we had been watching the panorama evolve. We wished to make it possible for we understood how the operators had been going to reply and react to the tough working setting. And we additionally need to perceive what was occurring with — from a price’s perspective after we take into consideration our price of capital and placing out transactions and agreeing to. And so, as we’re sitting right here in 2024, I believe there’s a way more secure panorama that permits us to make higher knowledgeable selections for our shareholders. Jarrett, why do not you speak somewhat bit about what we’re seeing on the pipeline part.
Jarrett Annenberg: Positive. And as I discussed, we’re seeing extra deal exercise, I believe, up to now few months than we had seen within the majority of 2023 as operators are trying ahead, and I believe they’re feeling extra bullish not solely on Schedule III and new states coming on-line. However as you’ll be able to see within the monetary experiences which are popping out, the operators are on higher monetary floating. So, for us, it is actually discovering the fitting transactions with the standard operators in states which are restricted license that we are able to deploy capital that is accretive and at charges that make sense for each us and the operators. We’re disciplined going ahead.
Pablo Zuanic: Understood. And only a follow-up on that. By way of the choices that operators have on the market, I do know which are shorter-term loans, proper, mortgages, 5 years. I do know your sale leaseback. I imply, are you able to speak concerning the aggressive setting when it comes to the choices. So there, on the one hand, we hear about Financial institution Needham, we hear about First Residents Financial institution. I perceive it is not the identical gross sales leaseback, however there appears to be there appear to be extra choices on the credit score entrance for operators by right me if I am mistaken, when it comes to my interpretation of that. However on the similar time, when it comes to sale leaseback, the suggestions we hear from some operators is that given potential reform coming on the federal degree, they do not need to need to tie up belongings for such an extended time period, 15 years or extra. So, in that context, is it honest to say that perhaps the demand due to competitors and due to the outlook, perhaps much less on the market leaseback? Or once more, is that the mistaken interpretation?
Anthony Coniglio: Pablo, I might say that — it relies on the group’s outlook for the longer term. We had many conversations with operators two years in the past who believed that by 2023, they might have seen their price of capital dropped by, in some instances, 400, 500 foundation factors. And right here we sit as we speak and that price of capital has solely gone up. So sure, there’ll at all times be operators within the sector that imagine that simply across the nook, a major drop of their price of capital goes to happen. I believe additionally it is necessary to notice that each one of those capital market choices to the extent that extra are available in for [Technical Difficulties] has comparatively very, little or no monetary flexibility to see some extra suppliers are available in is a major optimistic in our opinion as a result of we wish the tenant base and wish the operators to have extra choices accessible to them as a result of these choices do coexist any individual which will need a portion of their capital construction funded with shorter-term debt may even have a portion of their capital construction funded with a sale leaseback. So, it is not at all times an or I believe it is and since we serve totally different functions. Most notably, the financial institution facility normally gives a reduction prematurely price relative to the place you’d get at a sale leaseback. So, a financial institution might lend $0.55 or $0.60 on the true property worth non-cannabis whereas given our five-year historical past of underwriting transactions, our capability to grasp this trade and particularly, this actual property asset class permits us to supply honest worth for these belongings. Jarrett, something you need to add to that?
Jarrett Annenberg: No, I believe you actually lined it. We at all times have a look at sale leasebacks as a software within the software belt. It should not be the one factor an operator is doing to fund growth. And I believe we have been competing with these decrease LTV financial institution mortgages since inception. We have been seeing them for 5 years. And I believe the identical factor goes with shorter-term debt and operators having that optimistic view of the longer term. We have been seeing it for 5 years. It occurred in April of ’19 after we began the enterprise as nicely.
Pablo Zuanic: One final one, extra on the technical entrance when it comes to the inventory, proper, when it comes to having the ability to appeal to extra buyers into the inventory? What’s beneath your management proper now? Or is it extra simply having to attend for uplisting and nonetheless having additional cash to. Any shade you’ll be able to share in that regard would assist.
Anthony Coniglio: Sure. Thanks for the query. This is essential. So, we’re — a few issues I need to point out. Primary, now we have spent a major quantity of effort to be extra seen for our buyers to have a higher outreach to the investor neighborhood, each on the retail facet in addition to the institutional facet. We’re collaborating in a convention later this week and have fairly a number of one-on-one arrange with institutional buyers. And so, now we have a dual-pronged strategy to attempt to construct up our investor base. However on the finish of the day, it is about execution. And so, for us, we spend quite a lot of time centered on executing our marketing strategy, delivering worth for buyers and letting the outcomes actually be a very powerful mouthpiece for the Firm. I might notice for you that as buyers have a look at our most up-to-date investor presentation, included somewhat bit extra — not somewhat bit, we have included extra direct comparability to the numerous low cost that we predict NewLake is buying and selling at. And so, we predict there’s an actual alternative for buyers to not solely have a top quality dividend getting paid by NewLake on a quarterly foundation. However whenever you have a look at that beneath valuation that we imagine exists in our inventory worth as we speak in contrast seems, we predict there’s an actual alternative for buyers. And so, we’ll be focusing of us on that chance an increasing number of as we proceed the dialogue. With respect to uplifting, we’re very conscious of what TerrAscend and Curaleaf has been capable of accomplish vis-à-vis custody and particularly Pershing, which is among the largest prime brokers within the sector, financial institution in New York firm. And so, we’re a price that might imply for NewLake. We perceive that that is a vital element to closing that valuation hole. And we’re spending quite a lot of time and power to attempt to determine it out.
Operator: [Operator Instructions] Our subsequent query comes from the road of Nick Anderson with Roth MKM. Please proceed together with your query.
Nick Anderson: First one for me, simply on the underwriting course of. I recognize the commentary round scheduling. Does this variation the way in which you consider perhaps the smaller, much less worthwhile operators within the area? Simply your sense on the way you view the rescheduling catalyst in regard to your capital deployment alternatives?
Jarrett Annenberg: Thanks, Nick. So, I would not — so the short reply is we have at all times underwritten, I believe, extra conservatively, and we aren’t actually underwriting any otherwise within the face of Schedule III. Our assumption is taxes must be paid and the money move profiles of operators would not change instantly. Clearly, it is an upside in the event that they do. from a smaller unprofitable operator perspective, our focus at this level is de facto on essentially the most worthwhile operators within the sector, whether or not that is public or non-public. I believe quite a lot of consideration is clearly paid in direction of the bigger public operators, however there are non-public operators each in our portfolio and possibly out which are earning profits after taxes. I believe that is the place our power is concentrated.
Anthony Coniglio: And it additionally factors out our give attention to EBITDAR coverages, I believe that has served us very nicely during the last 18 months in how the efficiency of the portfolio has delivered for us throughout this very, very tough time interval for the trade. So, we’ll proceed to remain centered on property degree money flows.
Nick Anderson: Okay. I recognize that. After which second one for me, simply on uplifting within the U.S. right here. You mentioned the TSX, however simply with rescheduling discussions escalating right here. Questioning, when you may type of lay out the potential pathway to a significant U.S. change itemizing and simply what you assume might be wanted to get there?
Anthony Coniglio: Sure. Thanks. We function — the very first thing I need to say is we function the Firm to qualify to qualify with all New York Inventory Change and NASDAQ itemizing necessities. So, we’re operating the Firm to be able to uplift as soon as they may have us primarily based on a rule change. It is vitally exhausting, and I actually am not going to foretell when NASDAQ will change their posture. Do I imagine {that a} Schedule III alone will do it, uncertain that it’s? Do I imagine SAFER Banking with out a protected harbor would do it by itself, I am uncertain it will? Do I believe SAFER Banking can get a protected harbor, there’s important lobbying effort occurring to get a protected harbor for exchanges. However can I predict that it’ll occur. So, it will not. Would one other name memo 2.0 do it by itself? I doubt it. Can all of those collectively — when you get all of that and run the desk, does that change their thoughts? Once more, exhausting to foretell on the margin higher, however exhausting to foretell. However as everyone knows, hope isn’t a technique. So, we proceed to run the Firm in order that we are able to uplift as quickly as we’re accessible to, however we’re additionally on the lookout for options and therefore, the give attention to TSX.
Gordon DuGan: It is Gordon DuGan. I simply need to add that it’s a little bit of a private frustration that the New York Inventory Change continues to let IIPR record elevate capital and do the whole lot that we’re doing. The companies are an identical. And there is actually no good cause that we’re not listed and they’re. I imply there is not a single — not a single good cause that they are listed and we’re not. So, it’s a continued frustration. So, thanks for permitting me to vent as a result of there’s completely no distinction in our companies.
Operator: There are not any different questions within the queue. I would like at hand it again to Anthony Coniglio for closing remarks.
Anthony Coniglio: Thanks, all people, for becoming a member of our name as we speak. We stay up for hopefully an thrilling and optimistic 2024. Have an awesome week.
Operator: Girls and gents, this does conclude as we speak’s teleconference. Thanks in your participation. Chances are you’ll disconnect your strains presently, and have an exquisite day.
This text was generated with the assist of AI and reviewed by an editor. For extra data see our T&C.
