MONTREAL, April 25,
2024 /CNW/ -
Results
For the year ended January 31,
2024, the Company's revenues decreased by $139,027,000 to $578,945,000 compared to $717,972,000 recorded for the year ended
January 31, 2023, a decrease of
19.4%. This decrease is mainly explained by the following elements.
Following the commercial reorganization and deployment of the
Tanguay banner in May 2023, as of
January 31, 2024, the Company
operated 25 points of sale compared to the 30 operated during the
previous year. Same-store-sales declined by 17% for the year ended
January 31, 2024. In addition, the
Company experienced a 20% drop in financed sales compared to the
previous year due to the increase in interest rates and the
tightening of available credit offered to consumers. Net earnings
for the year ended January 31, 2024,
amounted to $47,427,000 compared to
$40,838,000 recorded for the year
ended January 31, 2023. Basic net
earnings per share amounted to $1.44
compared to $1.23 recorded for the
year ended January 31, 2023. Finally,
despite the decrease in revenues, the Company managed to maintain
its gross margin by reducing its fixed costs thanks to the
synergies created following the operational and commercial
reorganization carried out in May
2023 with its Tanguay.
For the year ended January 31,
2024, the share repurchase program contributed to an
increase of $0.02 on basic net
earnings per share. As for the corresponding period of 2023, the
share repurchase program contributed to an increase of $0.01 on basic net earnings per share.
During the period ended April 30,
2023, the Company proceeded with the sale of its
Montreal distribution center for
an amount of $66,500,000 resulting in
an after-tax gain of $50,962,000 or
$1.54 per basic share.
The variation in adjusted net earnings for non recurrent
elements would be ($44,373,000) or
($1.35) per basic share for year
ended January 31, 2024, as well as
the comparable period ended January 31,
2023, are explained as follows:
($ in thousands)
|
|
|
|
January 31,
2024
|
|
|
January 31,
2023
|
|
|
|
|
|
|
|
|
|
|
Net earnings
|
|
|
|
|
47
427
|
|
|
|
40 838
|
Gain on disposal of
fixed assets (after-tax)
|
|
(50
962)
|
|
|
|
-
|
Adjusted net
earnings
|
|
|
|
(3
535)
|
|
|
|
40 838
|
Minus: Adjusted net
earnings for the previous year
|
|
40
838
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variation
|
|
|
|
|
(44
373)
|
|
|
|
|
The variations in net adjusted earnings is allocated as
follows:
($ in thousands)
|
|
|
|
|
|
|
|
|
|
Increase
|
|
|
|
|
|
Increase
|
|
|
Increase
|
|
(decrease)
|
|
|
|
|
|
(decrease)
|
|
|
(decrease)
|
|
in adjusted
|
|
|
|
|
|
in retail
operations
|
|
|
in
investment
|
|
net earnings
|
|
|
|
|
|
|
|
|
|
|
|
As at April 30,
2023
|
|
|
|
|
(15 637)
|
|
|
1 885
|
|
(13 752)
|
As at July 31,
2023
|
|
|
|
|
(16 237)
|
|
|
5 354
|
|
(10 883)
|
As at October 31,
2023
|
|
|
|
(11 348)
|
|
|
(10 948)
|
|
(22 296)
|
As at January 31,
2024
|
|
|
|
(710)
|
|
|
3 268
|
|
2 558
|
Total
|
|
|
|
|
(43
932)
|
|
|
(441)
|
|
(44
373)
|
Annual financial information
($ in thousands, except for per share amounts)
|
|
|
|
January
31, 2024
|
|
|
January 31,
2023
|
Revenue
|
|
|
|
|
578
945
|
|
717 972
|
Net earnings
|
|
|
|
|
47
427
|
|
40 838
|
Total assets
|
|
|
|
|
621
029
|
|
581 694
|
|
|
|
|
|
|
|
|
Net earnings per share
basic and diluted
|
|
1,44
|
|
1,23
|
Dividends per
share
|
|
|
|
|
0,36
|
|
0,36
|
|
|
|
|
|
|
|
|
|
Financial position and dividends
Cash and investments, net of bank overdraft, increased by
$43,712,000 during the year ended
January 31, 2024. Investments consist
of treasuries bearing interest, government and corporate bonds,
common and preferred shares, which at the close of the quarter had
a market value of $263,342,000
(including cash).
As at January 31, 2024, the
working capital showed a surplus of $8,513,000, a decrease of $13,053,000 compared to the year ended
January 31, 2023. The Company's
shareholders' equity increased from $440,899,000 as at January
31, 2023, to $476,897,000 as
at January 31, 2024.
As at January 31, 2024, the book
value per share stood at $14.59
compared to $13.34 as at January 31, 2023.
Pursuant to the normal course issuer-bid put in place on
April 15, 2022, and renewed on
April 15, 2023, accordingly, 355,350
common shares were repurchased and cancelled by the Company. As a
result of this change, the Company had as at January 31, 2024, 32,685,050 common shares issued
and outstanding.
During the period ended January 31,
2024, no options were granted. The Company may still grant
pursuant to the Stock Option Plan a total of 5,710,864 options,
representing 17.47% of the issued and outstanding shares of the
Company.
During the fiscal year ended January 31,
2024, the Company paid eligible dividends totalling
$0.36 per common share to
holders.
Quarterly results
($ in thousands, except for per share amounts)
|
|
|
April
30,
|
|
April 30,
|
|
July
31,
|
|
July 31,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
Revenue
|
|
|
135
102
|
|
175 659
|
|
169
075
|
|
218 939
|
Net earnings
|
|
|
38
017
|
|
807
|
|
3 363
|
|
14 246
|
Net basic earnings per
share
|
|
1,15
|
|
0,02
|
|
0,10
|
|
0,43
|
|
|
|
October
31,
|
|
October 31,
|
|
January
31,
|
|
January 31,
|
|
|
|
2023
|
|
2022
|
|
2024
|
|
2023
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
Revenue
|
|
|
140
078
|
|
175 559
|
|
134
690
|
|
147 815
|
Net earnings
|
|
|
(8
449)
|
|
13 847
|
|
14
496
|
|
11 938
|
Net basic earnings per
share
|
|
(0,25)
|
|
0,42
|
|
0,44
|
|
0.67
|
For the three-month period ended January
31, 2024, the Company's revenues decreased by $13,125,000 to $134,690,000, compared to $147,815,000 recorded for the corresponding 2023
period, a 8.9% decrease. Same-store-sales decrease by 6% for the
three-month period ended January 31,
2024. Net earnings for the three-month period ended
January 31, 2024, amounted to
$14,496,000 compared to $11,938,000 recorded for the corresponding 2023
period. The improvement of net earnings during the last quarter is
mainly explained by the reduction in administrative expenses and
operating costs thanks to the operational and commercial
restructuring undertaken by the company last May. Basic net
earnings per share increased to $0.44
compared to $0.36 for the
corresponding 2023 period. The Company noted an overall improvement
of in store traffic in its points of sale during the last
quarter.
For the three-month period ended January
31, 2024, the share repurchase program contributed to a
decrease of $0.01 on basic net
earnings per share. As for the corresponding period of 2023, the
share repurchase program contributed to a decrease of $0.01 on basic net earnings per share.
The variation in adjusted net earnings for non recurrent
elements would be $2,558,000 or
$0.07 per basic share for the
three-month period ended January, 2024, as well as the comparable
2023 period, are explained as follows:
($ in thousands)
|
|
|
|
January 31,
2024
|
|
|
January 31,
2023
|
Adjusted net
earnings
|
|
|
|
14
496
|
|
|
|
11 938
|
Minus: Adjusted net
earnings for 2022
|
|
|
11
938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variation
|
|
|
|
|
2 558
|
|
|
|
|
Operations
Tanguay division
On May 16, 2023, the Company
announced the deployment of its Tanguay division across
Quebec, with management having
identified Tanguay stores as those with the greatest potential for
expansion. All Brault & Martineau stores and 3 EconoMax stores
have been converted. Following these changes, the Tanguay banner
now has 11 new stores in the western part of the province. In
addition, the Liquida Meubles banner as well as 3 EconoMax were
converted into Tanguay L'EntrepĂ´t. In total, there are 5 Tanguay
L'EntrepĂ´t stores across the province to offer clearance furniture
as well as new entry-level products. To ensure this deployment, the
Company had to close five EconoMax stores, namely those in
Kirkland, Sainte-Thérèse,
Brossard, Ste-Eustache and
LaSalle.
This announcement is part of the transformation process that
began in September 2022, with the
migration to a single IT system, which was successfully completed
last December. These IT changes have thus enabled the Company to
carry out a complete reorganization of its operational and
commercial structure as well as its administrative services. All
these changes over the past few months have made it possible to
create significant synergies, thus creating expanded and
diversified teams allowing the success of this deployment.
This decision comes at an opportune time for the Company. The
difficulty of obtaining qualified labour, the retail trade, which
is in constant transformation and evolution, the competition which
is now extended across Canada and
the United States and the shift
towards e-commerce, therefore this decision will allow the Company
to be much more agile in its business decisions.
The Company has decided to make significant changes to transform
its former Brault & Martineau and EconoMax stores into Tanguay
store in order to provide a better product and service offering and
a unique customer experience in its market. These renovations
across our entire network were initially estimated at $28,000,000, but as of January 31, 2024, the amount was reassessed
downward to $20,000,000. During the
2024 financial year, $15,500,000 of
these costs were recorded in selling expenses in the Consolidated
Statements of Earnings and Other Comprehensive Income, the balance
of the costs will be incurred during the next financial year.
Real estate division
The Company entered into a partnership agreement with Urbania,
who will be responsible for the development and construction of its
property at 500 boulevard Le
Corbusier in Laval into
several residential rental towers. The Company intends to finance
this real estate project at 75% with a long-term mortgage. The
estimated value of the entire project is approximately $600,000,000. The Company created a new
subsidiary, Le Corbusier-Concorde
S.E.C. for this real estate project on January 31st, 2022. This real estate project
should begin in the summer of 2025 as we are still waiting on
approval of all permits with the city of Laval before we begin the construction phase.
Once construction begins, the project should span over a period of
8 to 10 years with the construction of 5 rental residential towers
for a total of approximately 1,200 doors.
As announced on February 1, 2023,
the Company concluded the sale of its distribution center in
Montreal for an amount of
$66,500,000, resulting in an
after-tax gain of $50,962,000, or
$1.54 per basic share. The Company
remains a tenant and uses this distribution center for its
operations in the Montreal
metropolitan region. The initial lease was for 2 years and in
February 2024, the company renewed
its lease.
On April 15th, 2024, the Company
finalised the purchase of the RONA distribution center bearing the
civic address 2055, boulevard des Entreprises in the city of
Terrebonne. The transaction was in
the amount $96,000,000 before taxes
which includes a lease-back agreement with RONA. The transaction
was paid in full in cash from investments held by the Company. The
Company intends to continue on a long-term basis to create lease
revenues with this property. In the next few months, the Company
will be evaluating if renovations in order to make the distribution
center more efficient by automating it would create greater lease
value.
The Company intends to proceed with the real estate development
of several rental residential towers on its property located at 125
boul. Desjardins Est in Sainte-Thérèse. This real estate project is
currently in the exploratory phase and the Company has identified a
potential developer for the project. We should be able to announce
during this financial year the details of this real estate
project.
Management discussion and outlook for the Future of the
Company
In the last few years, e-commerce has developed exponentially in
Quebec. The Company continues to
focus on online sales by actively pursuing the improvement of its
digital platforms, its live chat initiative with online customers
as well as the improvement of our telephone sales department.
It is also Management's opinion that the digital platform of our
banner is essential in order to allow the Company to increase its
market shares as well as to allow customers to start their shopping
experience online to then complete their purchases in one of our
stores with the help of our sales representatives.
It is difficult to predict the future level of consumer
spending, however the results of the last year demonstrate a
significant slowdown in the Quebec
economy. This downward economic trend is the result of high
inflation and interest rates. This economic slowdown has not
affected all provinces and sectors in the same way. Real estate and
financed products, have been the most affected sectors and are
expected to continue to bear the brunt of this economic situation.
According to the latest statistics from January 2024, construction projects in
Quebec fell by 40%, but in fact
they returned to the historical average of the last 50 years, after
two exceptional years in 2021 and 2022. This explains the same
phenomenon experienced by the company during the 2021 and 2022
financial years where the increase in its revenues came from a from
a transfer of consumer spending related to the restrictions imposed
by the various levels of government due to COVID-19 pandemic, more
precisely the restrictions related to travel, the closure of
restaurants and all other forms of entertainment in the cultural
and sporting world.
According to statistics published by CMHC in January 2024, Quebec households are spending less due to the
rise in interest rates, in fact their average mortgage payment
increased by 19% in 2023. In addition, 40% of Quebec mortgage holders have renewed their
loans at higher rates. Therefore, we should not expect the
situation to improve until we see the policy interest rate
decrease. According to economists, the province of Quebec has been the most affected by this
economy and will continue to underperform compared to the rest of
Canada, due to the debt level of
Quebec households and of the slow
demographic growth of the province compared to the rest of
Canada, which favorably stimulated
the economy and helped support the labor market.
The last observation, but not the least, the year 2023 saw a
decline of around 20% in the profits of Quebec companies. This decline is partly
explained by the drop in purchasing power due to the increase in
household debt and the inflationary impact of essential goods,
despite the increase in wages paid due to the labor shortage.
Caution regarding forward-looking statements
This press release contains certain forward-looking statements
with respect to the Company. These forward-looking statements are
identified by the use of terms and phrases such as "anticipate",
"believe", "estimate", expect", "intend", "may", "plan", "predict",
"project", "will", "would", as well as the opposites of these terms
and similar terminology, including references to assumptions.
Forward-looking statements, by their nature, necessarily involve
risks and uncertainties that could cause actual results to differ
materially from those contemplated by these forward-looking
statements. Results indicated in forward-looking statements may
differ materially from actual results for a number of reasons,
which the Company has identified in the 2024 Annual Information
Form under "Narrative Description of the Business - Risk Factors",
and other risks detailed from time to time in the Company's
continuous disclosure documents.
The reader is cautioned that the factors we refer above are not
exhaustive of the factors that may affect any of the Company's
forward-looking statements. The reader is also cautioned to
consider these and other factors carefully and not to put undue
reliance on forward-looking statements.
The Company made a number of assumptions in making
forward-looking statements in this press release. The Company
considers the assumptions on which these forward-looking statements
are based to be reasonable.
These statements reflect current expectations regarding future
events and operating performance and speak only as of the date of
release of this press release and represent the Company's
expectations as of that date. The Company disclaims any intention
or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
other than as required by law.
Non International Financial Reporting Standards (IFRS)
financial measures
The Company discloses adjusted net earnings, which includes or
excludes certain elements that are not considered representative or
recurrent of the performance measures and financial recurrence of
the Company. Management believes that this measure is useful in
understanding and analyzing the operational performance of the
Company and that it can provide additional information.
Adjusted net earnings as well as same-store revenues are not an
earnings measure recognized by IFRS and do not have a standardized
meanings prescribed by IFRS. Therefore, adjusted net earnings and
same-store revenues as discussed in this Annual Management Report
may not be compared to similar measures presented by other issuers.
These measures of performance should not be considered as
alternatives to indicators of performance calculated according to
IFRS, but rather as a source of additional information.
The Company discloses in this Annual Management Report under the
section "Results" a reconciliation between net earnings and
adjusted net earnings.
BMTC Group Inc. is a company governed the Business Companies Act
(Quebec). Its registered office
and principal place of business is located at 8500 Place
Marien, Montréal East, Quebec,
H1B 5W8. Its common shares are listed on the Toronto Stock
Exchange. The Company, through its subsidiary Le Corbusier-Concorde S.E.C. and its
Tanguay division, manages and operates a retail network of
furniture, household appliances and electronic products, in
Quebec.
SOURCE BMTC Group Inc.