CRCD generated a return of 3.8% in 2019
The share price is now $15.94
Highlights as at December 31, 2019
- Share price: $15.94, up $0.60 compared with $15.34 as at December 31, 2018
- Annual return: 3.8%
- Net earnings: $81 million
- Return on Investments impacting the Québec economy portfolio: 3.2%
- Return on Other investments portfolio: 8.4%
- Record amounts committed by CRCD and its partner funds in 2019: $400 million in 173 SMEs, cooperatives and funds
Montréal, February 13, 2020 – Capital régional et coopératif Desjardins (CRCD) announced that its share price has increased to $15.94, up $0.60 from a year earlier. CRCD generated net earnings of $81 million in 2019 for an annual return of 3.8%. CRCD’s net assets stood at $2,308 million as at December 31, 2019, up 6.4% compared with the previous year.
Over seven years, the minimum holding period for shares of CRCD, the compounded return of the share is 4.8%[i]—and that’s on top of the income tax credit claimed on purchase.
The 2019 annual results stem primarily from the Investments impacting the Québec economy and Other investments portfolios, which generated returns of 3.2% and 8.4%, respectively. On solid performance early in the year, CRCD’s share price peaked at $16.02 as at June 30, 2019.
The majority of partner companies performed well during fiscal 2019. However, incidental difficulties encountered by certain major portfolio companies, particularly in the second half of the year, weighed on performance of the Investments impacting the Québec economy portfolio. Given that companies’ market performance may be vulnerable to unforeseen forces, CRCD navigates such challenges as part of the risks inherent in its mission when investing in these companies year after year over the long term.
The favourable uptrend in the stock and bond markets enabled the Other investments portfolio to post solid returns, with portfolio asset classes performing well overall. The financial asset management strategy adopted by CRCD several years ago provides a more balanced overall profile and limits volatility in periods of substantial market turbulence or unfavourable events at partner companies.
Net capital subscriptions for the year totalled $58 million, compared with $47 million for fiscal 2018.
A record year for commitments to Québec SMEs and cooperatives
“In keeping with our ambitions to heighten our impact on Québec’s economic development, our investment teams are active throughout the province, close to entrepreneurs where they can help them achieve their dreams. CRCD and its partner funds stepped up the pace in 2019, supporting 173 Québec SMEs and cooperatives in their growth and transfer plans with commitments of $400 million, compared with $218 million in 2018,” noted Luc Ménard, Chief Operating Officer of Desjardins Capital, CRCD’s manager. “Out of that amount, $90 million was invested in companies located in territories identified as facing economic difficulties.”
Shareholders reconfirm their trust and contribute to collective wealth
Shareholder interest in the share exchange and issue was high in 2019, with both the $100 million and $140 million available, respectively, selling out.
Note that the share exchange consists in deferring for seven years an eligible shareholder’s right to redeem shares held for at least seven years in exchange for a 10% Québec tax credit. For 2020, the exchange will take place in the spring and all shareholders affected by the measure will be contacted by mail to let them know and advise them of the registration period for expressing their interest using an online form.
The pre-subscription details for the 2020 issue will be announced in a press release at a later date.
About Capital régional et coopératif Desjardins
With more than 109,000 shareholders, Capital régional et coopératif Desjardins (CRCD) is a public company with $2,308 million in net assets. CRCD contributes to Québec economic development through several levers developed with its manager, Desjardins Capital. These levers, with CRCD as the driving force, form an entrepreneurial ecosystem designed to value and nurture the best of Québec entrepreneurship. CRCD supports the growth of nearly 530 businesses, cooperatives and funds in various industries spanning all Québec regions, helping to create and retain more than 80,000 jobs.(www.capitalregional.com)
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[i] The share’s compound returns were 3.9% over one year, 6.3% over three years, 5.7% over five years and 5.1% over ten years. The indicated rates of return are the historical annual compounded total returns including changes in share value and reinvestment of all dividends or distributions and do not take into account any income taxes payable by any shareholder that would have reduced returns. The CRCD shares are not guaranteed, their value fluctuates and their past performance is not indicative of their future returns.