MONTREAL, Nov. 14, 2019 /CNW Telbec/ - SPORTSCENE GROUP INC. ("Sportscene" or "the Company") (TSXV: SPS.A) is proud to announce today its results for the fiscal year ended August 25, 2019, with restaurant sales reaching a historical level.
"Our revenues and profitability continue to reach new heights thanks to the strong performance of our main banner La Cage – Brasserie sportive. In 2019, we initiated a new expansion phase that allowed us to increase our portfolio of banners and grow the distribution of our branded products in grocery stores. We are now working to build the foundation of our next phase of growth and are excited about the potential of our network," commented Jean Bédard, President and Chief Executive Officer.
"In addition to diversifying our operations towards other value-added niches, we will continue to build value from our main banner. La Cage generates significant cash flows that we can allocate to future growth projects, while maintaining the financial health of the Company. We believe that this banner has not yet reached its full potential and we intend to grow it further in the coming years," added Mr. Bédard.
Financial Performance
For the Fiscal Year Ended August 25, 2019
Total restaurant sales(1) reached an all-time high of $145.4 million, representing a 9.6% increase over fiscal 2018.
Sportscene's consolidated revenues reached $122.6 million, an increase of 16.2% reflecting the growth in average same-restaurant sales(2), the acquisition of Moishes and the inauguration of three new corporate restaurants. Revenues from the distribution of Moishes and La Cage branded products in grocery stores also contributed to the growth and diversification of our activities.
Consolidated adjusted EBITDA(3) also grew, reaching $12.4 million, representing a growth of 12.0% over fiscal 2018. The increase in profitability from the corporate La Cage network was mitigated by significant investments made to support the new expansion phase, most notably with the opening of a corporate La Cage, the launch and running-in period of the new À Domicile and L'Avenue banners and the integration of the Moishes restaurant.
Resulting from the increase in consolidated revenues and profitability, Sportscene ended fiscal 2019 with net earnings of $3.9 million or $0.46 per basic share(4) ($0.45 diluted), an increase of 26.9% compared to last fiscal year when net earnings amounted to $3.1 million or $0.36 per share(4) (basic and diluted).
For the Fourth Quarter of Fiscal 2019
Sportscene's total restaurant sales(1) reached $37.0 million, an increase of 11.8% compared with the fourth quarter of fiscal 2018.
Sportscene's consolidated revenues reached $33.5 million, an increase of 23.8%, with an adjusted EBITDA(3) reaching $3.4 million, an increase of 26.3% compared with the same fiscal period of 2018. The excellent performance of La Cage network and the growing contribution from sales of products sold in grocery stores were mitigated by the increase in expenses related to the start-up phase and adjustments of our new concepts.
Sportscene ended the fourth quarter of the fiscal year 2019 with a net income that grew by over 300% to reach $1.2 million or $0.14 per basic share(4) ($0.13 diluted), compared with $0.3 million or $0.04 per share(4) (basic and diluted) during the fourth quarter of last year. This increase is attributable to growing consolidated revenue and profitability.
Key Developments Since the Beginning of Fiscal 2019
The optimization and expansion of the La Cage banner remained a priority with the objective of upgrading our restaurant offering based essentially on fresh and local products. To this end, La Cage – Brasserie sportive obtained the Aliments du Québec certification.
The new La Cage restaurant, inaugurated in Gatineau at the beginning of the third quarter of 2019, was an immediate success and exceeded our expectations.
Customer retention initiatives and the use of new technologies allow Sportscene to continually optimize its offering, operations and customer experience. The innovative Club Cage program is a great success with customers and now has more than 360,000 members.
The integration of Moishes, acquired in the second quarter of 2019, is progressing very well, for both the famous steakhouse and the retail activities of its branded products sold in Canadian supermarkets.
Significant efforts and additional resources have been dedicated to expanding the distribution network for our Moishes and La Cage branded products in order to stimulate growth. Since the end of the fourth quarter of 2019, the Company launched fifteen new La Cage branded products which are certified Aliments du Québec and are now available in grocery stores.
Profile
Sportscene Group Inc. is a pioneer and a leader in the ambiance restaurant niche in Quebec. Since 1984, it has been operating the restaurant chain La Cage – Brasserie sportive (« La Cage »), which differentiates itself by its sporting ambiance and food offering made from fresh, local products. Enjoying a strong brand image, the La Cage banner is present throughout the province and comprises 43 outlets at the date hereof. Sportscene is diversifying its restaurant activities through its partnership with the breakfast restaurants L'Avenue, the operation of the Moishes steakhouse, the new concept À Domicile, the Asian cuisine restaurants P.F. Chang's and the development of its catering business at special events, thus becoming a significant player in Quebec's restaurant industry. Besides its restaurant operations, Sportscene is active in the sale of La Cage and Moishes branded products in grocery stores.
Non-IFRS measures
The following measures used by the Company are not measures consistent with International Financial Reporting Standards ("IFRS"):
- Total restaurant sales correspond to the aggregate sales achieved by all restaurants operating under the Company's various banners, whether they are corporate units, joint ventures or franchises.
- Average same-restaurant sales isolate the impact of restaurant openings and closures to assess the actual trend in restaurant sales.
- Consolidated adjusted EBITDA corresponds to "Earnings before financial expenses, amortization, net income of joint ventures", from which other (gains) losses are excluded, and to which the Company's share of earnings before financial expenses, amortization and income taxes of joint ventures is added.
- Earnings per share reflects the retroactive application of the two-for-one stock split effective February 8, 2019.
For further information regarding the results and financial position of Sportscene Group Inc., refer to the management report as well as the annual consolidated financial statements and accompanying notes for the fiscal year ended
August 25, 2019, which are available on SEDAR.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Reconciliation of Non-IFRS Financial Measures |
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(in thousands of $, except for percentages) |
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Fourth quarter ended |
Fiscal year ended |
|||
August 25, |
August 26, |
August 25, |
August 26, |
|
Restaurant revenues – La Cage(1) |
21,474 |
18,703 |
81,846 |
72,971 |
Restaurant revenues – Other banners(1) |
3,465 |
1,695 |
12,003 |
6,575 |
Sales generated by franchises and joint ventures |
12,042 |
12,670 |
51,520 |
53,140 |
Total restaurant sales |
36,981 |
33,068 |
145,369 |
132,686 |
Income before financial expenses, amortization, net income of joint ventures and income taxes |
3,268 |
1,976 |
11,194 |
9,269 |
Other (gains) losses |
(101) |
373 |
(272) |
447 |
Earnings before financial expenses, amortization and income taxes of joint ventures (2) |
262 |
367 |
1,518 |
1,405 |
Consolidated adjusted EBITDA |
3,429 |
2,716 |
12,440 |
11,121 |
(1) |
Restaurant revenues figures are disclosed in Note 7 "Revenues" accompanying the audited consolidated financial statements. |
(2) |
For further details, see Note 18 "Investments in joint ventures" accompanying the audited consolidated financial statements. |
Consolidated Statements of Comprehensive Income for the Fiscal Years Ended August 25, 2019 and August 26, 2018 |
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(in thousands of Canadian dollars, except for earnings per share and number of outstanding shares) |
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August 25, |
August 26, |
|||
2019 |
2018 |
|||
$ |
$ |
|||
Revenues |
122,593 |
105,476 |
||
Cost of sales |
39,281 |
32,710 |
||
Selling and administrative expenses, excluding amortization |
72,390 |
63,050 |
||
Other (gains) losses(1) |
(272) |
447 |
||
Earnings before financial expenses, amortization, net income of joint ventures and income tax |
11,194 |
9,269 |
||
Amortization |
5,909 |
5,059 |
||
Financial expenses |
1,172 |
914 |
||
Net income of joint ventures |
(796) |
(704) |
||
6,285 |
5,269 |
|||
Income before income tax expenses |
4,909 |
4,000 |
||
Income tax expenses |
1,026 |
941 |
||
Net income and comprehensive income |
3,883 |
3,059 |
||
Net income and comprehensive income attributable to: |
||||
The Company's shareholders |
3,957 |
3,068 |
||
Non-controlling interests |
(74) |
(9) |
||
Net income and comprehensive income |
3,883 |
3,059 |
||
Earnings per share (in dollars): |
||||
Basic |
0.46 |
0.36 |
||
Diluted |
0.45 |
0.36 |
||
Weighted average number of outstanding |
||||
Class A shares (in thousands): |
||||
Basic (2) |
8,543 |
8,466 |
||
Diluted (2) |
8,732 |
8,516 |
||
(1) |
Other (gains) losses include gains on business combinations and gains/losses on the disposal of property, plant and equipment. For further details, see Note 9 accompanying the audited consolidated financial statements. |
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(2) |
The weighted average number of Class A shares (basic and dilutive) reflects the retrospective application of the two-for-one stock split effected on February 8, 2019. |
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SOURCE Sportscene Group Inc.
Jean Bédard, Chairman of the Board, President and Chief Executive Officer, François-Xavier Pilon, Vice-President, Finance, 450-641-3011
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