July 29, 2008 / 12:06 PM / in 9 years

UPDATE 1-FirstService profit drops; now eyeing takeovers

(In U.S. dollars)

TORONTO, July 29 (Reuters) - FirstService Corp (FSV.TO) reported a lower quarterly profit on Tuesday as the company faced difficult market conditions in the United States, but it remains on the lookout for acquisitions.

The property services company, whose brands include Colliers International and Pillar to Pillar Home Inspections, said it earned $17.9 million, or 47 cents a share, in its first quarter ended June 30, down from a profit of $18.1 million, or 61 cents, in the corresponding quarter of 2007.

FirstService completed the sale of its Integrated Security Services division on July 1, which resulted in gross proceeds of $187.5 million.

Net earnings from continuing operations rose to $16.1 million, or 41 cents a share, from $15.7 million, or 48 cents, a year earlier.

Despite a 1 percent slide in net profit and the unfavorable outlook for the remainder of the year, FirstService said the current conditions are favorable for making acquisitions.

“Although we expect challenging market conditions to prevail for the coming year, these same conditions are providing us with an abundance of acquisition opportunities, which we will continue to carefully evaluate as we redeploy the significant proceeds received from the sale of our security division, completed just after the end of the quarter,” Jay Hennick, chief executive of FirstService, said in a statement.

Revenue at FirstService grew 24 percent to $457.8 million in the quarter, from $370.5 million.

Shares of FirstService closed at C$13.93 on the Toronto Stock Exchange on Monday and are down 54 percent in 2008.

$1=$1.02 Canadian Reporting by Frank Pingue; Editing by Frank McGurty

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