MONTRÉAL, April 22, 2021 /CNW
Telbec/ -
Results
For the year ended January 31,
2021, the Company's revenues decreased by $71,113,000 to $649,056,000 compared to $720,169,000 recorded for the year ended
January 31, 2020, a 9.87% decrease.
Net earnings for the year ended January 31,
2021 amounted to $54,842,000
compared to $36,034,000 recorded for
the year ended January 31, 2020.
Basic net earnings per share amounted to $1.61 compared to $1.05 recorded for the year ended January 31, 2020.
For the year ended January 31,
2021, the share repurchase program contributed to an
increase of $0.01 on basic net
earnings per share., whereas during the year ended January 31, 2020, it contributed to an increase
of $0.02 on basic net earnings per
share.
During the year ended January 31,
2020, the Company proceeded with the sale of the
Kirkland store for an amount of
$4,915,000 resulting in an after-tax
gain of $1,048,000 or $0.03 per basic share.
The Company determined that it met the eligibility criteria and
applied for the Canadian Emergency Wage Subsidy (CEWS) during the
year ended January 31, 2021. The
Company received $5,759,000 after-tax
which contributed to an increase of $0.17 on basic net earnings per share.
The variation in adjusted net earnings would be $14,184,000 or $0.42 per basic share for the year ended
January 31, 2021 and is explained as
follows:
|
|
|
|
|
($ in
thousands)
|
|
|
|
|
|
January 31, 2021
|
January 31,
2020
|
Net
earnings
|
|
|
|
|
54
842
|
36 034
|
Gain on disposal of
fixed assets (after-tax)
|
|
-
|
(1 048)
|
CEWS
(after-tax)
|
|
|
|
|
(5
759)
|
-
|
Variation in cost of
options (after-tax)
|
|
-
|
(87)
|
Adjusted net
earnings
|
|
|
|
|
49
083
|
34 899
|
Minus : adjusted net
earnings for 2020
|
|
34
899
|
|
|
|
|
|
|
|
|
Variation
|
|
|
|
|
14
184
|
|
This variation in adjusted net earnings is allocated throughout
the quarters as follows:
|
|
($ in
thousands)
|
|
|
Increase (decrease)
in
retail operating earnings
|
Increase
(decrease)
in investment income
|
Increase (decrease)
in
adjusted operating earnings
|
|
|
|
|
April 30,
2020
|
784
|
(9 695)
|
(8 911)
|
July 31,
2020
|
1 707
|
4 416
|
6 123
|
October 31,
2020
|
7 897
|
(1 616)
|
6 281
|
January 31,
2021
|
4
905
|
(1
616)
|
10
691
|
Total
|
15
293
|
(1
109)
|
14
184
|
Despite the significant drop in sales during the year ended
January 31, 2021, following the
temporary store closures on two different occasions due to
COVID-19, the Company managed to improve its retail operating
results during the year by $19,621,000 or an after-tax increase of
$15,293,000.
Annual financial information
($ in thousands, except
for per share amounts)
|
|
January 31,
2021
|
January 31,
2020
|
Revenue
|
|
649
056
|
720 169
|
Net
earnings
|
|
54
842
|
36 034
|
Total
assets
|
|
450
207
|
382 040
|
Net earnings per
share
|
|
|
|
Basic and
diluted
|
1,61
|
1,05
|
Dividends per
share
|
|
0,29
|
0,28
|
|
|
|
|
|
Financial position and dividends
Cash, net of the bank overdraft, and investments increased by
$51,107,000 during the year ended
January 31, 2021. Investments consist
of liquidities bearing interest, government and corporate bonds and
common shares, which at the close of the year had a market value of
$175,092,000 (including cash net of
bank overdraft).
As at January 31, 2021, the
working capital showed a deficit of $34,606,000, an increase of $15,139,000 compared to the year ended
January 31, 2020. The Company's
shareholders' equity increased from $216,624,000 as at January
31, 2020, to $270,708,000 as
at January 31, 2021. As at
January 31, 2021, the book value per
share stood at $7.99, compared to
$6.35 as at January 31, 2020.
Pursuant to the normal course issuer-bid put in place on
April 15, 2019, and renewed on
April 15, 2020, accordingly, 208,000
common shares were repurchased and cancelled by the Company. As a
result of this change, the Company had as at January 31, 2021, 33,880,000 common shares issued
and outstanding.
During the year ended January 31,
2021, no options were granted. As at April 1st, 2020, options regarding 197,100 Common
Shares expired and were cancelled as they were out of money. As at
April 1st, 2020, the closing price of
the Common Shares on the Toronto Stock Exchange was $5.97. The Company may still grant pursuant to
the Plan a total of 5,710,864 options, representing 16.86% of the
issued and outstanding shares of the Company.
During the fiscal year ended January 31,
2021, the Company paid eligible dividends totalling
$0.29 per common share to
holders.
Quarterly results
($ in thousands, except for per
share amounts)
|
|
April
30,
2020
|
April 30,
2019
|
July
31,
2020
|
July 31,
2019
|
Revenue
|
|
100
445
|
150 310
|
175
973
|
215 067
|
Net (loss)
earnings
|
|
(12
427)
|
(3 455)
|
19
579
|
13 480
|
Net (loss) earnings
per share
|
|
|
|
|
Basic and
diluted
|
(0,36)
|
(0,10)
|
0,57
|
0,39
|
|
|
October 31,
2020
|
October 31,
2019
|
January 31,
2021
|
January 31,
2020
|
Revenue
|
|
194
342
|
183 312
|
178
286
|
171 480
|
Net
earnings
|
|
20
775
|
10 649
|
26
915
|
15 360
|
Net earnings per
share
|
|
|
|
|
Basic and
diluted
|
0,61
|
0,31
|
0,79
|
0,45
|
For the three-month period ended January
31, 2021, the Company's revenues increased by $6,806,000 to $178,286,000, compared to $171,480,000 recorded for the corresponding 2020
period, a 3.97% increase, despite the fact that all 32 points of
sale of the Company were closed for 37 consecutive days during the
quarter leaving only online sales possible during this period. Net
earnings for the three-month period ended January 31, 2021, amounted to $26,915,000 compared to $15,360,000 recorded for the corresponding 2020
period. Basic net earnings per share increased to $0.79 compared to $0.45 for the corresponding 2020 period.
For the three-month period ended January
31, 2021, the share repurchase program had no impact on
basic net earnings per share.
During the year ended January 31,
2020, the Company proceeded with the sale of the
Kirkland store for an amount of
$4,915,000 resulting in an after-tax
gain of $1,048,000 or $0.03 per basic share.
The Company determined that it met the eligibility criteria and
applied for the Canadian Emergency Wage Subsidy (CEWS) during the
quarter ended January 31, 2021. The
Company recieved $1,912,000 after-tax
which contributed to an increase of $0.06 on basic net earnings per share.
The variation in adjusted net earnings would be $10,691,000 or $0.31 per basic share for the year ended
January 31, 2021 and is explained as
follows:
|
|
|
|
|
($ in
thousands)
|
|
|
|
|
|
January 31,
2021
|
|
January 31,
2020
|
Net
earnings
|
|
|
|
|
26
915
|
|
15 360
|
Gain on disposal of
fixed assets (after-tax)
|
|
-
|
|
(1 048)
|
CEWS
(after-tax)
|
|
(1
912)
|
|
-
|
Adjusted net
earnings
|
|
|
|
|
25
003
|
|
14 312
|
Minus : adjusted net
earnigs for the 2020 period
|
|
14
312
|
|
|
|
|
|
|
|
|
|
|
Variation
|
|
|
|
|
10
691
|
|
|
Operations
BMTC Inc.
The Company continues to restructure all of its websites and the
first phase of the implementation of a distinct e-commerce platform
for its banners Brault & Martineau and EconoMax is now
completed and operational. The process of implementation will
continue throughout 2021 for the following phases as well as the
restructuring for all the other banners of the Company. The Company
also reviewed its IT systems in to order standardize them
throughout the banners, as well as to allow them to be more aligned
with its e-commerce strategies. Following this review, the Company
decided to invest and to modify its existing IT systems, the
integration and implementation which will continue for a 3 to 5
year period.
Brault & Martineau Division
On November 6, 2019, the Company
proceeded with the sale of the Kirkland store. During this same transaction,
the Company purchased land along the Autoroute 40 in the city of
Kirkland in order to build a new
Brault & Martineau store of approximately 80,000 square feet
which replaced the actual Kirkland
store. On this same land, the Company built an EconoMax store of
approximately 50,000 square feet which replaced the EconoMax store
on Côte-Vertu. The new stores opened on October 27th, 2020.
The Company continues the evaluation process for different sites
as well as its existing stores to modify them or in certain cases
proceed with the reconstruction of a new store based on its new
prototype. The new Kirkland store
will be the second of the banner to be modified. The Company
anticipates that in the next few years it will incur costs related
to the modification and improvement of its actual network is to be
considered.
Management discussion and outlook for the Future of the
Company
On March 11th, 2020, the World
Health Organization declared COVID-19 a global pandemic. The
financial impact of COVID-19 began to manifest itself by a decrease
in store traffic and consequently store revenues in the early weeks
of March 2020. Following the rapid
rise of COVID-19 cases in the province of Quebec, our priority during this difficult
period remains at all times the health and safety of our employees
and clients. In order to protect the Quebec population and to prevent the spread of
COVID-19 by encouraging social distancing initiatives recommended
by both levels of government, the Company decided on March 18th, 2020, to temporarily close its retail
sales network, namely our Ameublements Tanguay subsidiary in the
Quebec City area and the Brault
& Martineau and EconoMax banners in the Montreal area. On March
23rd, 2020, the Quebec
government announced, for the same reason, the closure of all
non-essential retail stores across the province.
In order to address the devastating effects of COVID-19 and to
assure its short and long-term financial health, the Company
decided to maintain its operations at a strict minimum level while
preserving its presence in our market and controlling its working
capital position. The following actions were undertaken by the
Company during these last weeks in order to support its operating
and working capital objectives:
- Following the closure of our retail sales network on
March 18th, 2020, the Company
temporarily laid off approximately 75% of its personnel, the vast
majority stemming from our retail stores.
- Our online and delivery services remained operational across
Quebec to ensure the population in
confinement the ability to rely on essential goods while respecting
government-mandated security protocols. We modified our services to
offer contactless home delivery.
- During this period, the Company introduced several measures and
protocols in preparation for the reopening of our stores across our
sales network to ensure and protect the health and security of our
employees and our clients. These new measures and protocols will be
in effect until the end of the COVID-19 pandemic.
- The Company has also made technological and operational
improvements to its sales network. These modifications will allow
us to reduce our fixed costs and will contribute to our initiatives
of effective cost controls.
- The Company applied for the Canada Emergency Wage Subsidy given the 30% or
more decrease in revenues during the prescribed period (CEWS).
During the year ended January 31st,
2021, the Company delivered strong operational results,
despite the negative financial impact of COVID-19.
The decrease in revenues during the year was recorded during the
first semester ended July 31, 2020
and was entirely due to the temporary physical store closures
during this period. During the first quarter, the Company had all
its 32 points of sale closed for a period of 43 consecutive days,
leaving only online sales operational. The loss of revenues arising
from the first quarter store closures amounted to $52,029,000. During the second quarter, the
Company had a total of 15 points of sale closed for a period of 25
consecutive days while the other 17 points of sale were closed for
the first 5 days of the quarter, again leaving only online sales
operational. The loss of revenues arising from the second quarter
store closures amounted to $25,465,000. Finally, during the last quarter
ended January 31, 2021, the Company
had all its 32 points of sale closed for a period of 37 consecutive
days, leaving only online sales operational, despite this, the
Company managed to increase it revenues by $6,806,000 or 3.97%. On February 1st, 2021, the Company still had all its
32 points of sale closed for a period of 7 consecutive days,
leaving again only online sales operational.
During the closure of our retail stores on two occasions during
the financial year of 2021, from March 19th
to May 3rd, 2020 and from December
26th, 2020 to January 31st,
2021, online sales increased significantly. Despite this
significant increase, the online sales only partially compensated
for in-store sales for the 2019 and 2020 corresponding periods.
In order to mitigate the loss of revenues during these closures,
the Company proactively aligned its cost structure accordingly. The
Company intends to maintain these measures throughout the first
semester of fiscal year 2022, in order to protect the Company's
viability and preserve its working capital during these highly
uncertain times. Thanks to these new measures the Company believes
it will be able to produce positive operating results.
In-store sales increased significantly, between 45% and 80%, in
the days following their re-opening, compared to the same periods
in 2019 and 2020. This increase, however, has slowed down in the
weeks following the reopenings to stabilize with an increase of
approximately 4.5% compared to the corresponding period of 2019 and
2020. In addition, online sales continued to increase significantly
during this period compared to the corresponding period of 2019 and
2020.
The Company continues to focus on online sales, which
experienced a record increase since the start of the pandemic, 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 for all of the BMTC
Group Inc. banners.
It is also Management's opinion that the digital platforms of
our banners are 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.
The Company was able to increase significantly it's revenues
during the periods where stores remained opened compared to results
during the corresponding 2019 periods. This was partly due to
improvements in marketing and strategic measures implemented, our
extensive store network and the strength of digital platforms,
which have enabled the Company to increase its market share in
Quebec. On the other hand,
Management is aware that this increase is also partly due to the
fact that it has benefited 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
forms of entertainment in the cultural and sporting world.
The new measure related to COVID-19 which the Company had to
implement in its stores and distribution centers and the effects of
the closures and re-openings of our stores had a significant impact
on the Company's operational costs during the year ended
January 31st, 2021. Despite these
additional costs, the Company still managed to improve its
operating results.
During the year ended January 31st,
2021, the Company also managed to significantly improve its
net earnings, by recording an increase of $18,808,000 or 52% compared to the corresponding
period of 2020. This increase was in part possible due to
technological improvements and the constant attention put on
operational efficiency. The Company also benefited from the
Canadian Emergency Wage Subsidy from the Government of Canada for the year ended January 31st, 2021, which contributed to an
increase of $0.17 on basic net
earnings per share.
As at January 31st, 2021, cash net
of the bank overdraft and investments had a market value of
$175,092,000, an increase of
$ 51,107,000 during the fiscal year.
The Company's financial position will allow it to weather through
this period of uncertainty with more ease. Also, the Company owns
nearly all its stores and distribution centers, which reduces
pressure on cash flow requirements.
As a result of the increase in sales since the gradual reopening
of our stores, the Company was able to call-back about 75% of it's
sales staff. The Company must continue to respect social distancing
as well as the maximum number of people allowed in a commercial
establishment due to the regulations set by the provincial
government with COVID-19, thus limiting the number of possible
sales staff per store.
The rehiring of temporarily laid-off employees is in progress
and proceeding as the situation evolves. The Company has actively
worked to promote a call-back of its employees as soon as possible
and according to operational needs.
Finally, since mid-June, the Company has had issues with its
supply logistics. Many of the Company's suppliers, who have also
been affected by the consequences of COVID-19, are unable to honour
and deliver placed orders. This problem seems widespread in our
industry and is not unique to the Company. Therefore, it is
possible that this could have a negative impact on future results
because orders on hand may not be able to be delivered due to this
shortcoming.
It is difficult to predict the future level of consumer
confidence and the possible impact on sales of BMTC Group Inc.
Management is confident that the Company's operational efficiency
during this crisis, its market leadership and solid financial
position will allow us to emerge a stronger organization despite
these difficult market conditions and maintain its objectives
increasing its market share and profitability in Quebec.
We would like to take this opportunity to thank all our fellow
citizens who are relentlessly working day and night with extreme
dedication to reduce spread of COVID-19 and who to caring for those
who have been infected. Our thoughts are also with all those who
have in any way been affected by the virus.
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 2021 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 amounts that are not considered representative 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 press release 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 press release under the section
"Results" a reconciliation between net earnings and adjusted net
earnings.
BMTC Group Inc.'s Common Shares are listed on the Toronto Stock
Exchange and through its subsidiary Ameublements Tanguay Inc., and
its two divisions, Brault & Martineau and EconoMax, the Company
is a major retailer of furniture, electronic goods and household
appliances operating in the province of Quebec.
SOURCE BMTC Group Inc.