Home Capital delays Q1 earnings, meeting
Embattled alternative mortgage lender Home Capital Group Inc. has postponed the release of its first-quarter earnings until May 11 and pushed back its annual meeting of shareholders until sometime in June, the company announced late Tuesday.
Home Capital was scheduled to report its earnings for the threemonth period ended March 31 on Wednesday.
“This timing change allows the MD&A to be updated for events that have occurred since the close of the first quarter,” Home Capital said after market close Tuesday.
The delay comes as the Toronto-based company fights liquidity problems that erupted after the Ontario Securities Commission accused it and several officers of misleading disclosure.
Clients have withdrawn more than $1 billion in funds from high interest savings accounts at its subsidiary, Home Trust, forcing Home Capital to take on a costly $2-billion credit line as an emergency backdrop.
These high interest savings account balances help Home Capital, which primarily provides mortgages to customers who don’t qualify for loans at traditional banks, fund its mortgage lending.
Home Capital’s annual meeting of shareholders will be pushed back from May 11 to a date in June, which is yet to be determined.
Home Capital had already preannounced its earnings for the first quarter, saying on April 21 that it expected to report first-quarter earnings of $1.02 on an adjusted diluted earnings per share basis, compared to $0.96 a year ago. Those preliminary, unaudited figures were above analysts’ estimates of $0.961 per share, according to data compiled by Bloomberg.
Home Capital said on April 26 that the proposed terms of the costly loan facility — which analysts pegged at an effective rate of 22.5 per cent for the first $1 billion — would have a “material impact on earnings, and would leave the Company unable to meet previously announced financial targets.”
The Healthcare of Ontario Pension Plan later confirmed that it agreed, with a syndicate of lenders, to provide a secured line of credit for Home Capital. Home Capital drew the first $1 billion from the facility on Monday. The firm also said last Thursday it had “retained RBC Capital Markets and BMO Capital Markets to advise on further financing and strategic options.”