Sportscene Group Pursues its Financial Growth and Development Strategy

MONTREAL, April 12, 2018 /CNW Telbec/ - SPORTSCENE GROUP INC. ("Sportscene" or "the Company") (TSXV: SPS.A) pursued its financial growth during the second quarter of fiscal year 2018, being the 13-week period ended February 25, 2018.  Total sales ⁽¹⁾ of the La Cage – Brasserie sportive network posted a 6.6% increase over the same quarter of the previous year to stand at $31.8 million, thanks to the sustained growth in average same-Cage sales ⁽²⁾. Sportscene's consolidated revenues amounted to $25.1 million, up 11.8% over the preceding year, while consolidated adjusted EBITDA ⁽³⁾ increased by 39.3% to stand at $2.4 million. Sportscene ended the second quarter of fiscal 2018 with net earnings of $0.5 million or $0.11 per share, compared with $0.1 million or $0.02 per share for the same quarter last year.

For the six-month period ended February 25, 2018, network sales ⁽¹⁾ totalled $63.0 million, up 8.9% over the same period of the previous year. Sportscene's consolidated revenues increased by 13.6% to reach $50.0 million. Consolidated adjusted EBITDA ⁽³⁾ increased by 28.8% to $5.0 million. Sportscene thus ended the first half of the fiscal year with net income of $1.3 million or $0.31 per share, more than twice the result recorded during the same period last year.

"Our financial results continue to evolve, bringing us closer quarter after quarter to the objectives of the extensive repositioning of the La Cage – Brasserie sportive banner carried out in recent years. Consistent with our key priority, same-Cage sales have experienced strong and sustained growth over the past two years, leading to a continuous improvement in the profitability of both the Cage network and the Company", said Sportscene's President and Chief Executive Officer Jean Bédard. 

Moreover, operating activities have generated cash flows of $3.8 million since the beginning of fiscal 2018, bringing the Company's short-term available cash to $5.6 million as at February 25, 2018.  Therefore, Sportscene is in a solid financial position to execute its investment and expansion plan.  Today, more than 60% of the network sports the new Cage image, and the Company still aims to complete the transformation of the network before the end of fiscal 2019.

"Now that the La Cage network is better positioned than ever and on track to meet its growth and profitability targets, we can look forward to new growth opportunities consistent with our sphere of excellence: ambience restaurant services with an emphasis on local procurement and food freshness", the C.E.O. added. 

Appointment of two New Directors

Sportscene Group announces the appointment of two new members to its Board of Directors: Jean-Marc Léger and Marc Poulin. Mr. Léger is a well-known expert in consumer's behaviour, monitoring of consumer's experience and marketing strategy. He is president of Léger, the largest Quebec- and Canadian-owned survey, market research and marketing strategy firm. Mr. Poulin is a specialist of the Canadian food industry. He has been a senior officer at Sobey's for almost 20 years, including 4 years as President and chief executive officer. Sportscene's development will benefit from their expertise.

Profile

Sportscene Group is a pioneer and a leader in the ambience restaurant niche in Quebec, where it has operated a chain of sports-themed resto-bars since 1984: La Cage – Brasserie sportive ("La Cage"). Enjoying a strong brand image, La Cage comprises 45 units located across Quebec at the date hereof. The Cages offer complete foodservices and bar services in a sophisticated sports-inspired décor featuring the most advanced audio-visual technologies.

The following items are not performance measures consistent with IFRS: 

(1)	Total network sales correspondent to sales achieved by all La Cage restaurants, including corporate units, partnerships and franchises.
(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, consolidated adjusted EBITDA corresponds to "Earnings before financial expenses, amortization, net (income) loss of joint ventures and associates and income taxes", from which other losses (gains) are excluded, and to which the Company's share of earnings before financial expenses, amortization and income taxes of joint ventures and associates is added.

For further information regarding the results and financial position of Sportscene Group Inc., refer to the management report as well as the interim condensed consolidated financial statements and accompanying notes for the 13 and 26-week periods ended February 25, 2018, 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
	13 weeks ended		26 weeks ended
	February 25, 2018	February 26, 2017	February 25, 2018	February 26, 2017
Restaurant revenues ^(4)	20,638	18,232	41,866	36,816
Food concession revenues	(912)	(355)	(2,352)	(1,266)
Non-banner revenues	(1,579)	(1,392)	(3,170)	(2,826)
Revenue from franchises and joint ventures	13,624	13,312	26,684	25,153
Total network sales ^(1)	31,771	29,797	63,028	57,877
Income before financial expenses, amortization, net (income) loss of joint ventures and associates and income taxes	1,815	1,473	4,228	3,453
Other (gains) loss	171	35	98	(46)
Earnings before financial expenses, amortization and income taxes of joint ventures and associates ^(5)	380	190	669	469
Consolidated adjusted EBITDA^(2)	2,366	1,698	4,995	3,876

(4)	Restaurant revenue figures are disclosed in Note 5 "Revenues" accompanying the interim condensed consolidated financial statements.
(5)	For further details, see Note 11 "Investments in joint ventures and associates" accompanying the interim condensed consolidated financial statements.

                                                                                                                 

Interim Condensed Consolidated Statements of Comprehensive Income
(in thousands of Canadian dollars, except for earnings per share and number of outstanding shares)
(unaudited)
			13 weeks ended		26 weeks ended
		February 25,	February 26,	February 25,	February 26,
		2018	2017	2018	2017
		$	$	$	$
Revenues		25,121	22,464	50,027	44,049
Cost of sales		8,572	7,623	16,277	14,011
Selling and administrative expenses excluding amortization		14,563	13,333	29,424	26,631
Other losses (gains)		171	35	98	(46)
Earnings before financial expenses, amortization, net (income) loss of joint ventures and associates and income tax		1,815	1,473	4,228	3,453
Amortization		1,250	1,144	2,532	2,316
Financial expenses		210	220	417	407
Net (income) loss of joint ventures and associates		(202)	1	(324)	(70)
Income before income tax expenses		557	108	1,603	800
Income tax expenses		101	26	344	195
Net income and comprehensive income		456	82	1,259	605
Net income and comprehensive income attributable to:
The Company's shareholders		470	81	1,291	619
Non-controlling interests		(14)	1	(32)	(14)
Net income and comprehensive income		456	82	1,259	605
Earnings per share (in dollars):
	Basic	0.11	0.02	0.31	0.15
	Diluted	0.11	0.02	0.31	0.15
Weighted average number of outstanding Class A shares (in thousands):
	Basic	4,226	4,165	4,202	4,165
	Diluted	4,236	4,165	4,212	4,165

SOURCE Sportscene Group Inc.

Jean Bédard, Chairman of the Board, President and Chief Executive Officer; François-Xavier Pilon, Vice-President, Finance, 450-641-3011

Related Links

http://www.cage.ca