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Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Welcome to the Altus Group Income Fund's 2008 second quarter financial results conference call. During the presentation all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. (OPERATOR INSTRUCTIONS). As a reminder, this conference is being recorded on August 14th, 2002.
I would now like to turn the conference over to Mr. Gary Yeoman, Chief Executive Officer of the Altus Group Income Fund. Please go ahead.
GARY YEOMAN, CEO, ALTUS GROUP INCOME FUND: Good morning, everyone, and welcome. The format for today's call is straightforward. We'll start by reviewing the highlights of our second quarter and then discuss our financial performance. As always, we'll make time at the end of this call for your questions.
Joining the today is our Chief Financial Officer, Dale Lawr, who will start things off by reminding everyone of the Safe Harbor provisions regarding forward-looking statements.
DALE LAWR, CFO, ALTUS GROUP INCOME FUND: The statements made during this conference call which are not historical facts are forward-looking statements subject to the risks and uncertainties that could cause actual results to differ materially from those set out or implied by forward-looking statements. These risks are described in Altus' filings on SEDAR. Please note that this conference call is copyrighted material and cannot be rebroadcast in any form without the written consent of Altus Group Income Fund. Gary?
GARY YEOMAN: The second quarter of this year saw further strengthening of our organic growth strategy through tangible investments to our core business units. Our accretive acquisition plan resulted in two key additions, one that augments our tax practice in Canada, the other which broadens our UK platform and extends the reach of the Cost Consulting division. I'll go into more detail on these items in a moment, but first I'll provide some highlights of our quarterly financial performance, which Dale will explore in more detail.
In the second quarter of 2008 revenue was $48.8 million, EBITDA for the quarter was $6.9 million, and the Fund generated $5.6 million of adjustable distribute or cash, or $0.30 per unit. Overall, our business continues to be solid. We have built a strong foundation of core services, and that, coupled with a reputation for excellence, will underpin our revenue in the months ahead. Conditioning these results are a number of one-time investments that will create a stronger position for us going forward.
Turbulent world financial markets have slowed certain sectors of real estate, most devastating for the brokerage community. However, organic growth for Altus in this quarter was an incredible 19%, fortifying our long-standing position that we are less impacted by economic decline even in the worst conditions.
Factors impacting the second quarter results were the following -- $1 million invested in our Valuation Group for the development of expanded data subscription products as well as education and training for [our hires] related to the international accounting standard rules; seasonality related to Edwin Hill, delay of one month in the legal process of the business rating decision-making, and a $900,000 swing on near-term revenue for our Deloitte property tax normalized to historical margins in the tax division.
While the second quarter can historically be slow, particularly in the oil and gas industry, our results for each of our business units were positive. Realty taxes bolstered by the addition of the property tax practice of Deloitte Canada. This acquisition will bring 80 professionals and support staff into the division and will not only broaden the client roster but also open the door to the key western Canadian market.
We have also broadened our existing international platform with the addition of the Andrews Partnership, a UK-based cost consulting firm that will be the springboard for our extending our service offerings in Europe. The integration costs associated with our accretive acquisitions can influence results but are a necessary part of our growth. Traditionally in quarter two, our Geomatics business unit is affected by the spring thaw. But this year, our strategy to diversify and help offset seasonal fluctuations meant that this unit had the strongest results for Altus Group with [twelve point million] dollars revenue generated, additionally bolstered by the added benefit of Crape's survey crews. Part of this was due to the increase in exploration and drilling activity, which was promoted by strong oil and gas prices.
In this quarter we continued to invest in the development of an innovative product solution team to drive our LiDAR capabilities to clients looking for alternatives to on-the-ground surveying.
Our Valuation group has been laying the foundation for the incoming international financial reporting standards, which will replace the Canadian GAAP in 2010 by hiring staff and investing in education through Altus Institute Program designed to share expertise and support ongoing employee training. IFRS will result in an incredible addition of project work in Canada for our RDA and is not yet being fully realized. The division has also put a great deal of focus on developing its data platform to anticipate the demands of growing client needs.
In particular, we have been developing Altus InSite, which recently expanded its market data and prospectus product line to include the retail and industrial markets. Altus InSite will also be further strengthened with the recent addition of Space4Lease, a Vancouver-based office market information company that serves the commercial real estate sector, which will allow for more western Canadian positioning.
Also as a people-based business, we have laid the groundwork for employee retention with a new equity-based executive compensation plan. While we recognize the importance of compensating our current employee base, it was also necessary to value and retain the architects of the Company. Altus incurred a one-time legal expense related to the setup of this plan which is reflected in our general and administrative costs.
Altus Group remains in a solid position and fully expects to see strong results in the next two quarters, ones which are characteristically stronger than quarter two. A cornerstone of our optimistic outlook is a growing demand to refurbish government infrastructure. With that in mind, we have formed a cross-divisional, multidisciplinary group called Altus Group Infrastructure to operate in the public/private partnership sectors that are looking at ways to repair and rebuild our crumbling highways, schools and hospitals. We expect …