Montréal, Québec, June 28, 2006 BDC, a development bank for Canadian small and medium-sized businesses, made public its annual report today which contains its financial statements for the year ended March 31, 2006 and announced a record net income of $138 million. These results mean a dividend payment of $21 million to BDC's shareholder, the Government of Canada. Since 1997, total dividends paid to the shareholder will amount to $119 million."BDC's record year is an indication of the strength of the Canadian economy and the further growth and development of Canadian small and medium-sized businesses," said Jean-René Halde, President and CEO. "Our net income will provide the resources necessary to work with even more companies who look to BDC for financing, venture capital and consulting solutions. BDC's goal is to help many of them become more innovative, productive and ultimately more globally competitive."
Highlights
BDC Financing authorized $2.5 billion ($0.2 billion more than a year ago) through some 8,500 transactions. The commitment to Financing clients increased to $9.7 billion and income totalled $155 million in 2006, compared to $172 million in 2005. BDC Consulting revenues increased 14% over last year to reach $21.6 million. The number of mandates performed increased to over 2,000, up 8% from fiscal 2005. BDC Consulting offers a comprehensive range of business solutions to support the innovation, productivity and operational efficiency of small and medium-sized businesses in Canada. BDC Venture Capital was active in the market and authorized 81 direct investments for a total of $106 million versus 78 investments for $118 million in 2005. As well, BDC authorized $34 million in two specialized funds in fiscal 2006. Once again, a persistent lack of divestiture opportunities has constrained investment income. However, net gains on disposals of investments increased to $21.6 million in 2006 compared to $12.7 million in 2005. The net operating loss of $13 million showed considerable improvement compared to last year's $56 million loss.Consolidated net income totalled $138 million, compared to $113 million a year ago, while total assets reached a record $10.3 billion, compared to $9.4 billion last year.Client satisfaction continued to be positive with a satisfaction rating of 92%, surpassing BDC's own target of 89%."BDC has only one client: Canadian small and medium-sized businesses. This focus as well as our ongoing business relationships with 26,000 of them has enabled us to serve them well," Mr. Halde added.
Leading as a development bank
BDC is a Canadian leader in the critically important early stage (including seed) investment phase. This past year, total seed investments in Canada were $37 million. BDC authorized $23 million of this total in 24 seed ventures. 83% of our investments are in early stage compared with the industry average of 44%.Canada continues to lag behind the U.S. in terms of productivity. To support greater SME productivity, BDC offers specially designed loans of up to $5 million to help finance the purchase of equipment, machinery and software. BDC lends up to 125% of the value of the assets purchased to cover installation and training. In fiscal 2006, BDC authorized almost 700 productivity loans for a total of $181 million.BDC also addresses the lower productivity issue through its Competitiveness Strategy consulting solution which offers a review of business processes, productivity diagnoses and tools such as lean manufacturing. In fiscal 2006, BDC served 224 clients with operations management consulting.BDC's role as an SME development bank is also clear in its relationships with its clients. Over half (54%) are characterized by authorizations with a total commitment of $250,000 or less. BDC continues to support higher risk start-ups as well as fast-growth firms in need of working capital.Women entrepreneurs lead businesses of all sizes in all sectors and, over the past two decades, their number has grown significantly. Women entrepreneurs represent about one-quarter of BDC's clients. This portfolio is $1.7 billion in committed and outstanding financing. About 9% of Canadian SMEs are led by young entrepreneurs, many of whom find it difficult to secure financing because they are in a start-up position and have little or no managerial experience. BDC's portfolio consists of 2,900 young entrepreneurs with over $500 million in committed and outstanding loans.Many Aboriginal businesses will be start-ups or look like start-ups in that their debt-to-equity will be higher than is generally acceptable. Also, many lack tangible security to offer as collateral. BDC supports them by providing working capital and through a grassroots approach called the "Circle of Entrepreneurial Success." This strategy delivers loans of $5,000 to $20,000. BDC is a financial institution wholly owned by the Government of Canada. BDC actively supports the development and growth of Canadian small and medium-sized businesses through its complementary financial, investment and consulting solutions.
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For information :
Eva Boucher-HartlingMedia Relations ManagerBDC(514) 283-7929Contact by e-mail
