MONTREAL, Jan. 17, 2019 /CNW Telbec/ - SPORTSCENE GROUP INC. ("Sportscene" or "the Company") (TSXV: SPS.A) announces its results for the first quarter of fiscal 2019. After three years of sustained growth, the Company's management is proud to say that its strategic repositioning has been successfully completed, as its performance continues to meet expectations in terms of restaurant traffic, increased sales, higher profitability and improved financial health.
Growth in results in line with previous periods
For the 13-week period ended November 25, 2018, Sportscene Group's consolidated revenues grew by 10.7% to $28.0 million, reflecting the strong performance of its core business, the restaurant segment, whose revenues were up by 11.0% thanks to the increase in restaurants' total sales (1), which in turn was mainly driven by higher average same-restaurant sales (2), coupled with the growing number of corporate restaurants. Consolidated adjusted EBITDA(3) rose 18.2% to $3.1 million, also thanks to restaurant operations. The Company closed the quarter with net earnings of $1.0 million or $0.25 per share, up 27.9% compared to the same quarter last year. Operating activities generated total net cash flows of $2.3 million, posting a 25.7% increase. As at November 25, 2018, Sportscene had $5.7 million in available cash while its total net debt was down slightly from its August 26, 2018 level, to $11.8 million.
"Sportscene's financial health allows us to pursue our growth strategy, as demonstrated by our recent acquisition of Moishes. Indeed, last December 10, we joined forces with the Moishes team to ramp up development of this business, which includes its internationally renowned steakhouse, its trademarks, and the distribution operations for the Moishes product line sold in leading Quebec grocery chains. Looking forward, we will continue to develop our brand portfolio along with our expertise, in order to maintain a healthy growth rate", said Sportscene's President and Chief Executive Office, Jean Bédard.
Achievements and new developments
The Company is pursuing optimization and expansion of the La Cage banner while maintaining its local procurement strategy focused on quality and freshness. The opening of a corporate Cage is scheduled in the next few months.
The team of Sportscene is also working on establishing new distribution channels to reach consumers. Last fall, a home delivery concept was successfully tested and it will be launched in the coming weeks.
The Company continues to build on its excellent Club Cage program, which is tailored to meet the needs and expectations of its customers and reward them for their loyalty. The program continues to grow in popularity, with more than 80,000 members now signed up.
In September, the Company opened a L'Avenue restaurant in Boucherville, the third unit to operate under that banner. In addition it has developed its new À Domicile concept, a first unit of which will open in January 2019, and it plans to expand its PF Chang's Asian cuisine banner in the summer 2019.
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. In recent years, Sportscene has diversified its restaurant operations through its partnership with the breakfast restaurants L'Avenue, its acquisition of the Moishes steakhouse and 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.
The following items are not performance measures consistent with IFRS:
Total restaurant sales correspondent 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.
In Sportscene's statement of comprehensive income, consolidated adjusted EBITDA corresponds to "Earnings before financial expenses, amortization, net income of joint ventures 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 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-Week Periods Ended
Restaurant revenues ? La Cage (1)
Restaurant revenues ? Other banners (1)
Sales generated by franchises and joint ventures
Total restaurant sales
Income before financial expenses, amortization, net income of joint ventures and income taxes
Earnings before financial expenses, amortization and income taxes of joint ventures (2)
Consolidated adjusted EBITDA
Restaurant revenues figures are disclosed in Note 5 "Revenues" accompanying the interim condensed consolidated financial statements.
For further details, see Note 11 "Investments in joint ventures" 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)
13 weeks ended
Cost of sales
Selling and administrative expenses, excluding amortization
Earnings before financial expenses, amortization, net income of joint ventures and income tax
Net income of joint ventures
Earnings before income tax expenses
Income tax expenses
Net earnings and comprehensive income
Net earnings and comprehensive income attributable to:
The Company's shareholders
Net earnings and comprehensive income
Earnings per share (in $):
Weighted average number of outstanding Class A shares (in thousands):
SOURCE Sportscene Group Inc.
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