MONTREAL, Jan. 14, 2020 /CNW Telbec/ - Sportscene Group Inc. ("Sportscene" or "the Company"); (TSXV: SPS.A) today announces its results for the first quarter of fiscal year 2020.

"We are entering fiscal year 2020 on solid grounds. Our first quarter results continue to reach new heights, both in terms of revenues and profitability. Our main banner La Cage – Brasserie sportive has demonstrated its growing appeal with customers and our dedicated team has adeptly managed the effect of increasing traffic at our restaurants," commented Jean Bédard, President and Chief Executive Officer.

"During the last few years, we have differentiated ourselves and gained significant market share in a highly competitive environment by focusing on the quality of our customer and employee experiences. In order to support the progression of our profitability, we will continue to extract value out of our main banner, La Cage - Brasserie sportive, which includes initiatives such as developing high potential markets."

"The expansion of the range of our La Cage and Moishes branded products has proven to be a great success in terms of retail sales growth. We are proud to see that our operational expertise in the restaurant segment as well as our expansion strategy into new niche markets is once again supporting profitability growth and generating significant cash flows. This allows us to invest in future growth, while still having the means to prioritize debt reimbursement and returning value to our shareholders with the payment of a dividend," concluded Mr. Bédard, President and Chief Executive Officer.

Financial Performance

For the Quarter Ended November 24, 2019

Total restaurant sales(1) reached $38.5 million, representing an all-time high and a 12.4% increase over the equivalent period of fiscal 2019.

During the first quarter of fiscal 2020, Sportscene's consolidated revenues grew by $10.4 million or by 37.1% over the same period of the previous fiscal year, reaching $38.4 million. This performance reflects the contribution of five new corporate establishments (including restaurant openings and business combinations) along with growth in average same-restaurant sales(2). Revenues from retail sales of La Cage and Moishes branded products increased by $3.0 million or 150.0%, to $4.9 million. This progression is attributable to the addition of the Moishes brand starting in the second quarter of 2019, the conclusion of a distribution agreement with a new retailer and the expansion of the range of products offered. Revenues from franchising and other activities have also increased, for a combined growth of $1.7 million from construction and event catering activities.

Sportscene's consolidated adjusted EBITDA(3) increased by $1.8 million or 59.1% to reach $4.9 million. Excluding the effect of the adoption of IFRS 16 – Leases, the comparable adjusted EBITDA stood at $3.7 million, representing an increase of $0.6 million or 20.3 % compared to the equivalent period of 2019. This increase results from a higher volume of sales within all four operating sectors of the Company.

Resulting from the increase in consolidated revenues and operating profitability, and from the recognition of a gain on business combinations, Sportscene ended the first quarter of fiscal 2020 with net earnings of $1.7 million or $0.20 per basic share ($0.19 diluted), an increase of 66.3% compared to the corresponding period of last year when net earnings amounted to $1.0 million or $0.13 per share(4) (basic and diluted).

Achievements and Ongoing Developments

The optimization and expansion of the La Cage – Brasserie sportive and of the other banners remained a priority. During the first quarter of fiscal 2020, the Company completed an important renovation of its flagship La Cage restaurant located in Montréal at the Bell Center. Additionally, the P.F. Chang's restaurant located in Montréal will be transformed into a La Cage – Brasserie sportive restaurant in order to maximize the potential of this location. As for the L'Avenue banner, a second establishment will open its doors on the south shore of Montréal in the spring of 2020. The integration of Moishes, acquired in the second quarter of 2019, is progressing well, both for the famous steakhouse and retail activities.

Furthermore, during the last year, important efforts and additional resources have been dedicated to expanding the retail network of the Moishes and La Cage branded products. Since the start of the fiscal year, approximately fifteen new La Cage products, certified Aliments du Québec, are available in grocery stores. Sportscene also concluded a new distribution agreement for its La Cage products with a large national retailer. These two initiatives have supported an important evolution of revenues from retail activities.

Customer retention strategies and the use of new technologies, such as the innovative "Club Cage" program, also allows Sportscene to continually optimize its offering, operations and its customer experience.

Dividend Payment

In light of the sustained progression of the Company's results, as well as its solid financial situation and available cash flow, the Board of Directors approved, on January 14, 2020, the payment of a dividend of $0.15 per Class A share, which will be paid on February 19, 2020 to shareholders of record on January 31, 2020. 

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 operation of the Moishes steakhouse, of a breakfast restaurant L'Avenue, of an Asian cuisine restaurant P.F. Chang's and of its catering business for 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.

Disclaimer

This press release contains forward-looking statements relating to the Company. Statements based on management's current expectations contain known and unknown inherent risks and uncertainties. Actual results may vary from expectations. The reader is cautioned not to place undue reliance on forward-looking information. The Company does not undertake any obligation to update or revise any forward-looking statements as a result of new information, future events and other changes, except if required by applicable laws.

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.

Non-IFRS measures

The following measures used by the Company are not measures consistent with International Financial Reporting Standards ("IFRS"):

  1. Total restaurant sales correspond to sales made by all restaurants operating under the Company's various banners whether corporate, joint venture or franchised.
  2. Average same-restaurant sales isolate the effect of restaurant openings and closures in order to assess the real evolution of restaurant sales.
  3. Consolidated adjusted EBITDA corresponds to "Earnings before financial expenses, amortization, share of net income of joint ventures and income tax", from which other (gains) losses are excluded and to which is added the share of earnings before financial expenses, amortization and income tax of joint ventures.
  4. Earnings per share and the weighted average number of shares reflect, on a retroactive basis, the two-for-one stock split effected on February 8, 2019.

 

Reconciliation of Non-IFRS Financial Measures
(in thousands of $, except for percentages)
(unaudited)




13-Week Periods Ended


November 24,
2019

November 25,
2018

Restaurant revenues – La Cage(1)

23,729

18,811

Restaurant revenues – Other banners(1)

2,851

1,973

Sales generated by franchises and joint ventures

11,915

13,459

Total restaurant sales

38,495

34,243




Income before financial expenses, amortization, net income of joint ventures and income taxes

5,211

2,693

Other gains

(483)

(1)

Earnings before financial expenses, amortization and income taxes of joint ventures (2)

214

415

Consolidated adjusted EBITDA

4,942

3,107

Impact of IFRS 16

(1,203)

-

Excluding the Impact of IFRS 16

3,739

3,107



(1)

Restaurant revenues figures are disclosed in Note 5 "Revenues" accompanying the interim condensed consolidated financial statements.

(2)

For further details, see Note 11 "Investments in joint ventures" accompanying the interim condensed consolidated financial statements.

 

For further information regarding the results and financial position of Sportscene Group Inc., refer to the interim management report as well as the interim condensed consolidated financial statements and accompanying notes for the 13-week period ended November 24, 2019, which are available on SEDAR.

 

Interim Condensed Consolidated Statements of Comprehensive Income  
(in thousands of Canadian dollars, except for earnings per share and number of outstanding shares) 
(unaudited)



13-Week Periods Ended


November 24,

2019

November 25,

2018


$

$

Revenues

38,373

27,987

Cost of sales

14,285

8,647

Selling and administrative expenses, excluding amortization

19,360

16,648

Other gains(1)

(483)

(1)

Earnings before financial expenses, amortization, net income of joint ventures and income tax

5,211

2,693




Amortization

2,413

1,390

Financial expenses

543

220

Net income of joint ventures

(52)

(233)


2,904

1,377

Income before income tax expenses

2,307

1,316

Income tax expenses

599

289

Net income and comprehensive income

1,708

1,027




Net income and comprehensive income attributable to:  






The Company's shareholders

1,703

1,077

Non-controlling interests

5

(50)

Net income and comprehensive income

1,708

1,027




Earnings per share (in dollars):



Basic

0.20

0.13

Diluted

0.19

0.13




Weighted average number of outstanding Class A shares  (in thousands):



Basic(2)

8,548

8,532

Diluted(2)

8,759

8,572



(1)

Other gains include gains on business combinations and gains/losses on the disposal and impairment of property, plant and equipment. For further details, see Note 7 accompanying the interim condensed consolidated financial statements.

(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, as disclosed in Note 14 (a) accompanying the interim condensed consolidated financial statements.

 

SOURCE Sportscene Group Inc.

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