Crown Capital Partners Inc. - CEO, Chris Johnson
CEO, Chris Johnson
Source: YouTube (SmallCapPower)
  • Crown Capital Partners (TSX:CRWN) has suspended its dividends, while the company transitions into a more profitable business
  • The company’s Q1 financial report showed a C$1.2 million net loss, an improvement on 2019’s Q1
  • To readdress its capital allocations, the company is lowering its ownership of Crown Partners Fund to 20 per cent 
  • Crown is realising a number of long-term investments and redirecting the proceeds towards new opportunities to sure up its capital position
  • Before the market opens, Crown Capital Partners (CRWN) is trading at $4.25 per share, with a $39.9 million market cap

Crown Capital Partners (TSX:CRWN) has suspended its dividends, while the company transitions into a more profitable business.

In its first quarter financial report, the company reported a net loss of C$1.2 million. This is an improvement on the company’s $4 million net loss in 2019’s same quarter.

Despite the improvement, Crown has suspended the dividends so it can re-address the company’s capital allocations and improve its revenue.

The company has revealed a two-pronged strategy moving forward. Firstly, Crown will develop scalable and profitable revenue streams, in which it can act as a direct investor and asset manager of capital pools.

Secondly, Crown is shifting to a capital-light business mode, so it can better allocate its capital spending more efficiently.

To this end, the company is lowering its ownership in the Crown Partners Fund from 39 per cent to 20 per cent.

Furthermore, Crown is realising a number of its long-term investments. The company will redirect the proceeds from these investments towards new opportunities, to sure up its capital position.

Crown admits that these measures are likely to impact its earnings in the short-term. However, it believes that the steps are required to move the company forward.

Crown’s CEO, Chris Johnson, believes the dividend suspension is necessary, given the challenges facing the company during the COVID-19 pandemic.

“The current environment has led us to accelerate a repositioning of the Corporation’s balance sheet to be more capital efficient.

“As we undergo this transition, we’ve made the decision to suspend shareholder dividends. Our focus is on increasing earnings per share over the medium-to-long term. We believe in light of the current market realities, funds available for distribution will be more impactful for shareholders to be used for strategic investments and share buybacks,” he said.

Chris went on to say that, despite expecting significant recession following the pandemic, the company remains optimistic about its future.

Before the market opens, Crown Capital Partners (CRWN) is trading at $4.25 per share, with a $39.9 million market cap.

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