Tribe Property Technologies Inc. achieved record quarterly revenue of $6.16 million in the three months ended June 30, an increase of 28 per cent from the same period last year.
Part of the strong performance from the Vancouver property management solutions and technology firm is attributable to the June 5 acquisition of Toronto-based property services company DMSI Holdings Ltd. and its three subsidiaries. That brought its expected pro forma revenue run-rate to more than $31 million, with improved profitability.
Tribe previously acquired Meritus Group Management Inc., a Toronto-based condominium management company, in November 2023.
“We’ve built a national footprint and feel really good about our presence as one of the largest property management companies in residential living,” Tribe chief executive officer Joseph Nakhla said during an Aug. 29 presentation to review his firm’s Q2 financial and operational performance.
Tribe is now the property manager for more than 30,000 strata and condo units and more than 19,000 multifamily rental units across Canada.
Tribe completed two separate private placement equity financing transactions for gross proceeds of $6.17 million in June, allowing it to solidify its balance sheet and complete the DMSI acquisition.
It has since rebranded DMSI to become DMS.
Gross profit rose by 50 per cent
Tribe’s gross profit was $2.34 million in the second quarter, an increase of 50 per cent from a year earlier.
“This improvement was primarily accomplished by the increase in revenue and the execution of strategic integration and efficiency projects, resulting in cost reductions,” Tribe president and chief financial officer Angelo Bartolini said during the presentation.
Tribe continues to outperform general real estate conditions due to its aggressive mergers and acquisitions strategy, a strong business development pipeline, a healthy base of recurring revenue and its diversified revenue streams, he said.
“The company continues to win contracts from its competitors, underscoring the strength of Tribe’s market position,” Bartolini said. “This success is driven by the strength of our franchise, characterized by superior service, better managed buildings and our proprietary technology, which provides a distinctive competitive advantage.”
Tribe leverages scale, operational efficiencies, green partnerships and data to pass on cost savings to building owners, while readying those buildings for the road ahead. Nakhala said buildings managed by Tribe cost less to insure than those managed by its competitors. Administration and energy costs per square foot are also lower, he noted.
“We’re often the most expensive solution,” Nakhala observed, “however, the overall operation of the building is significantly lower.”
More acquisitions being targeted
Tribe has several additional targets in its mergers and acquisitions pipeline that it will look to transform through streamlining and digitization of operations. It will also continue to invest in its proprietary software platform and add functionality to its suite of products.
Tribe has augmented its organic growth by selling more services to existing customers, leading to a marked increase in its revenue-per-home metric.
“As we continue to increase the number of homes that we service and the amount of data that we accumulate about every single one of those homes, we’re able to present really interesting products and services that save the community money,” Nakhala said.
Tribe expects to continue to drive efficiencies in the business, which it expects to result in improved gross margins and positive cash flows in 2025.
“Tribe’s commitment to achieving profitability is unwavering, as strategic steps are being taken every day to position the company for sustainable financial success,” Bartolini said. “We have implemented strategies which include employee process improvements, cost optimizations and consolidation of back office systems, allowing us to be much more efficient with our head count.
Optimism around growth prospects
“We are confident about the company’s growth prospects and continue to be committed to improving our profitability while increasing revenues and strengthening our market leadership position. The outstanding progress we’ve made in the first half of the year underscores our unwavering commitment to delivering value to our shareholders.”
The persistent housing shortage across North America is a significant long-term trend Tribe expects to drive increased construction activity and further enhance demand for its services for the foreseeable future.
Tribe will contemplate expanding into the United States next year, according to Nakhala.
“The U.S., I would argue, is significantly behind us in terms of our condo management solutions, processes and even government regulations,” he said. “They’re catching up, but that will open up opportunities for us in the market as well.” steve
