Diversified Royalty Corp. Announces Third Quarter 2026 Results
Key Highlights
- ➤Revenue $31.5M, up 72.7% year over year in Q3 2026
- ➤Combined contribution $24.9M, up 27.2% year over year
- ➤Distributable cash $15.5M, up 21.9%; payout ratio fell to 86.9%
- ➤Mr. Lube + Tires system sales $126.4M, down 1.7% year over year
- ➤Sutton impairment $4.7M as Canadian housing weakness reduced royalty payments
Expert Statements
Sean Morrison, Chief Executive Officer of Diversified Royalty Corp.
“We are excited to have Mr. Lube + Tires as our first controlled operating franchisor business.”
Sean Morrison, Chief Executive Officer of Diversified Royalty Corp.
“This changes DIV’s primary exposure to Mr. Lube + Tires from SSSG, directly impacting the royalty received, to system sales which most impacts adjusted EBITDA.”
Sean Morrison, Chief Executive Officer of Diversified Royalty Corp.
“Mr. Lube + Tires’ 1.7% year-over-year decline in system sales for Q3 2026 largely reflects a challenging automotive environment.”
Sean Morrison, Chief Executive Officer of Diversified Royalty Corp.
“Inflation in fuel and other vehicle operating costs is leading people to drive fewer kilometres, which has reduced demand for oil changes and maintenance services.”
Sean Morrison, Chief Executive Officer of Diversified Royalty Corp.
“Mr. Lube + Tires remains on track to open 18 new locations in 2026 and meet the previously disclosed estimate of $58.7 million in adjusted EBITDA contribution for the twelve months following DIV’s acquisition.”
Sean Morrison, Chief Executive Officer of Diversified Royalty Corp.
“Mr. Lube + Tires is budgeting 16 new locations for 2027 and is considering bolt-on acquisition opportunities.”
Sean Morrison, Chief Executive Officer of Diversified Royalty Corp.
“Additionally, DIV’s payout ratio has decreased since the acquisition of Mr. Lube + Tires, and we are using our excess cash flow to de-lever Mr. Lube + Tires.”
VANCOUVER, British Columbia, Nov. 06, 2026 (GLOBE NEWSWIRE) -- Diversified Royalty Corp. (TSX: DIV, DIV.DB.A and DIV.DB.B) (the “Corporation” or “DIV”) is pleased to announce its financial results for the three months ended September 30, 2026 (“Q3 2026”) and nine months ended September 30, 2026.
Highlights * Mr. Lube + Tires system sales(1) were $126.4 million in Q3, 2026, a 1.7% decrease from $128.5 million in Q3, 2025 (as reported by Mr. Lube Canada LP). Mr. Lube + Tires system sales were $380.5 million* for the nine months ended September 30, 2026, a 2.9% increase from $369.9 million for the nine months ended September 30, 2025 (as reported by Mr. Lube Canada LP). * The weighted average organic royalty growth(1) of DIV’s diversified royalty portfolio was 3.6% in Q3 2026 and 3.1% for the nine months ended September 30, 2026, compared to 0.6% for the three months ended September 30, 2025 (“Q3 2025”) and 1.0% for the nine months ended September 30, 2025. The weighted average organic royalty growth(1) on a consistent currency basis was 3.0% in Q3 2026 and 3.2% for the nine months ended September 30, 2026, compared to 0.3% in Q3 2025 and 0.2% for the nine months ended September 30, 2025. * Revenue was $31.5 million in Q3 2026 and $70.7 million for the nine months ended September 30, 2026, up 72.7% and 36.6%, respectively, compared to the same periods in 2025. * Combined contribution(1) was $24.9 million in Q3 2026 and $65.5 million for the nine months ended September 30, 2026, up 27.2% and 17.5%, respectively, compared to the same periods in 2025. * Distributable cash(1 )was $15.5 million in Q3 2026 and $40.6 million for the nine months ended September 30, 2026, up 21.9% and 12.5%, respectively, compared to the same periods in 2025. * Payout ratio(1) was 86.9% in Q3 2026 based on dividends of $0.0716 per share for the quarter ($0.2850 per share annualized), compared to 91.9% in Q3 2025 based on dividends of $0.0688 per share for the comparable quarter ($0.2750 per share annualized), and 93.3% for the nine months ended September 30, 2026 based on dividends of $0.2139 per share for the period ($0.2850 per share annualized), compared to 90.6% based on dividends of $0.1938 per share for the comparable 2025 period ($0.2750 per share annualized). * On July 6, 2026, DIV closed its previously announced bought deal public offering of 12,339,500 common shares, including 1,609,500 common shares issued pursuant to the full exercise of the over-allotment option, at a price of $4.66 per common share for total gross proceeds of approximately $57.5 million (the “Equity Offering”). * On July 7, 2026, DIV used partial net proceeds from the Equity Offering to make a full $38.5 million principal paydown on its Acquisition Facility, reducing the principal balance to nil. DIV had previously drawn on the Acquisition Facility to partially fund the acquisition of the Mr. Lube + Tires franchisor business (the “Acquisition”). Third Quarter Commentary
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