Sportscene Group Inc.'s Fiscal 2015 Dedicated to Repositioning La Cage

MONTREAL, Nov. 24, 2015 /CNW Telbec/ - SPORTSCENE GROUP INC. ("Sportscene" or "the Company"; SPS.A / TSX Venture Exchange) today announced the key developments and financial results of its fiscal year ended August 30, 2015. The Company remained focused on the strategic shift undertaken in recent years to position its banner for a new growth phase. The following actions were taken in 2015: (1) an in-depth renewal of La Cage's menu and beer selection; (2) the ongoing implementation of the new interior design showcased by a total of eight Cages as of today; and (3) a complete overhaul of La Cage's identity and image. The new name of the banner, La Cage – Brasserie sportive, was officially launched on September 28^th, 2015.

Financial Results

During the fiscal year ended August 30, 2015, La Cage's total network sales⁽¹⁾ decreased by 9.1% to stand at $102.7 million. This is explained by a 7.9% decline in average same-Cage sales⁽²⁾ due to a more challenging business context in 2015 than in 2014, combined with the definitive closure of three Cages over the past 15 months and the fact that fiscal 2014 included an additional week of operation.

Sportscene's revenues totalled $77.9 million, up 3.3% over the previous year. This growth is due primarily to the revenues generated by the organization of sporting events and construction activities. Conversely, revenues generated by restaurant operations, the Company's core business, were down by 3.1% for the aforementioned reasons.

Consolidated adjusted EBITDA⁽³⁾ amounted to $3.4 million, compared with $7.8 million the previous year. Besides lower average same-Cage sales, this decrease is partly attributable to the costs associated with the major banner repositioning operation, particularly in regard to the higher quality of ingredients, new culinary processes and employee training. The Company views the temporary decline in its operating results as an investment that will enable the La Cage network to strengthen its competitive advantages and thereby access to higher growth and profitability levels over the medium and long term.

Sportscene recorded a net loss of $1.5 million in the item Other losses (gains), consisting of a non-current asset impairment, a provision for an end-of-lease indemnity and a provision for a legal dispute. Consequently, Sportscene closed fiscal 2015 with a net loss of $2.4 million or $0.53 per share (basic and diluted), compared with a net profit of $3.1 million or $0.74 basic per share ($0.73 diluted) in 2014. 

During the 13-week period ended August 30, 2015, Sportscene recorded a net loss of $2.3 million or $0.50 per share (basic and diluted), due largely to the recognition of losses totalling $1.7 million in the item Other losses (gains).

2016 Objectives and Outlook

"Fiscal 2016 will mark the third and final year of La Cage's transition and the completion of our strategic shift," indicated Jean Bédard, President and Chief Executive Officer. "To that end, some other operational adjustments will be required, although most of the costs associated with our repositioning have already been incurred. Financially, the Company's strategic shift should start generating positive results throughout fiscal 2016, and yield its full benefits as of fiscal 2017. In fact, considering the increase in the Cages' customer traffic since the new brand image was launched last September, it seems that we made sound decisions and that we are on the right track". 

In addition to accelerating the implementation of the new La Cage design network-wide, Sportscene Group will focus on the following key objectives for fiscal 2016: (1) consolidate and reinforce the new positioning of La Cage – Brasserie sportive at the marketing and operational levels, with a special emphasis on the management of human resources; (2) introduce new innovations to the food and bar offering and the Company's technological platform; and (3) now that the La Cage network has gained stronger bases for its future growth, resume its expansion by building new units on high-quality sites.

Sportscene Group remains in a sound financial position to complete its various projects.

Profile

Sportscene Group has been a pioneer and still stands out as a leader in the ambience restaurant niche in Quebec, where it has operated a chain of sports-themed resto-bars for the last 30 years. Originally known as La Cage aux Sports, the chain's name was changed to La Cage – Brasserie sportive ("La Cage") in September 2015, to reflect its new Food, Beer, Sports positioning following a major upgrading of its food offering and beer selection. Enjoying a strong brand image, the province-wide La Cage banner comprised 49 units at the date hereof. The Cages offer complete foodservices and bar services in a sophisticated sports-inspired décor featuring the most advanced audiovisual technologies.

The following items are not performance measures consistent with IFRS: 

(1)	Total network sales correspondent to sales achieved by all La Cage restaurants: franchisees, partnerships and corporate units.
(2)	Average same-Cage sales isolate the impact of restaurant openings and closures to assess the actual trend in restaurant sales.
(3)	In Sportscene's statement of comprehensive income, adjusted EBITDA corresponds to "Earnings before financial expenses, amortization, share of net earnings of joint ventures and associates and income taxes", from which other gains and losses are excluded.

For further information regarding the results and financial position of Sportscene Group Inc., refer to the management's report as well as the consolidated financial statements and accompanying notes for the fiscal year ended August 30, 2015, 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.

Consolidated statements of comprehensive income (loss)
for the years ended August 30, 2015 and August 31, 2014
(in thousands of Canadian dollars, except for earnings  per share and number of outstanding shares)
		August 30, 2015	August 31, 2014
		(52 weeks)	(53 weeks)
		$	$
Revenues		77,922	75,425
Cost of sales		25,905	23,845
Selling and administrative expenses, excluding amortization		48,622	43,779
Other losses (gains)		1,474	(102)
Earnings before financial expenses, amortization, share of net loss (income) of joint ventures and associates and income tax		1,921	7,903
Amortization		4,094	3,800
Financial expenses		614	648
Share of net loss (income) of joint ventures and associates		376	(639)
		5,084	3,809
(Loss) income before income tax expenses		(3,163)	4,094
Income tax (recovery) expenses		(800)	983
Net (loss) income and comprehensive (loss) income		(2,363)	3,111
Net (loss) income and comprehensive (loss) income attributable to:
The Company's shareholders		(2,227)	3,099
Non-controlling interests		(136)	12
Net (loss) income and comprehensive (loss) income		(2,363)	3,111
(Loss) earnings per share (in dollars):
	Basic	(0.53)	0.74
	Diluted	(0.53)	0.73
Weighted average number of outstanding Class A shares (in thousands):
	Basic	4,165	4,165
	Diluted	4,165	4,231

SOURCE Sportscene Group Inc.

Source: Sportscene Group Inc.; Contacts: Jean Bédard, Chairman of the Board, President and Chief Executive Officer, Josée Pépin, Vice-President, Finance, 450-641-3011