La Cage - Brasserie sportive Grows its Network Sales by 16% in the Second Quarter

MONTREAL, April 13, 2017 /CNW Telbec/ - SPORTSCENE GROUP INC. ("Sportscene" or "the Company") (TSXV: SPS.A) is proud to announce that the second quarter of fiscal 2017 gave rise to accelerated growth in the La Cage – Brasserie sportive network's sales and to an even more pronounced increase in profitability. 

For the 13-week period ended February 26, 2017, total network sales(1) rose 16.3% to $29.8 million. Since the beginning of fiscal 2017, total sales have grown by 9.7% over the previous year to total $57.9 million, despite a fewer number of restaurants in operation this year following the network optimization carried out in the summer 2016. As was the case in previous quarters, the network's recent sales growth is primarily attributable to the increase in average same-Cage sales(2).  For their part, the Company's revenues increased by $2.2 million or 3% due primarily to a 11.4% growth in the restaurant segment's revenues. However, this was attenuated by the Company's withdrawal from certain activities related to the organization of sporting events.

The rise in average same-Cage sales, coupled with the various measures taken to increase the added value for customers while optimizing operating expenses, also had an appreciable effect on the profitability of both the network and the Company. Indeed, Sportscene's consolidated adjusted EBITDA(3) increased by 50.4% in the second quarter and by 42.0% since the start of the fiscal year, to $1.5 million and $3.4 million respectively. Although satisfactory, the growth in adjusted EBITDA does not reflect the full potential of the Cage network since the Company continued investing to build up the unit's goodwill.

Sportscene closed the second quarter of fiscal 2017 with net earnings of $0.1 million or $0.2 per share (basic and diluted) compared with a net loss of $0.1 million and $0.01 per share for the same quarter last year. For the first six months of fiscal 2017 the Company recorded year-to-date net earnings of $0.6 million or $0.15 per share compared with net earnings of $0.1 million and $0.04 per share for the corresponding period of the previous year.

"We are satisfied and encouraged by the upward trend that has gained momentum during each period since mid-fiscal 2016", said President and C.E.O. Jean Bédard. Mr. Bédard added that the upgrading of La Cage's food offering and brand image continues to produce concrete results, while the success met by the new Cage design shows no signs of abating as, quarter after quarter, the renovated Cages continue to enjoy customer traffic growth rates well above the network average. Five additional Cages were completely renovated during the first six months of fiscal 2017, bringing to 20 the total number of outlets showcasing the new La Cage image as of today.

Outlook

"The highly encouraging results of the past quarters prompt us to scale up our efforts to consolidate our recent achievements and invest more resources in our key drivers for growth and success. Primarily, with respect to the quality of our workforce, we are better equipped today to meet the challenges of growth and follow through on our number one commitment: to provide an outstanding customer experience. We also continue to focus on our other growth drivers: the physical modernization of the network, slated for completion within the next three years, a permanent emphasis on quality of execution at all levels, and ongoing innovation with respect to both our technological platform and food offering", Jean Bédard concluded.

Appointment

Josée Pépin has informed the Company that she will not, for the next few weeks, be able to fulfill her duties as Chief Financial Officer of the Company. Consequently, the Board of Directors has appointed François-Xavier Pilon, Senior Director, financial performance and technology, to serve as interim Chief Financial Officer of the Company.

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 46 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: franchisees, partnerships and corporate units.

(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, adjusted EBITDA corresponds to "Earnings before financial expenses, amortization, share of net earnings of joint ventures and associates and income taxes", from which other losses (gains) are excluded.

For further information regarding the results and financial position of Sportscene Group Inc., refer to the management's report as well as the unaudited consolidated financial statements and accompanying notes for the 13 and 26-week periods ended February 26, 2017, 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 26,

2017

February 28,

2016

February 26,

2017

February 28,

2016






Restaurant revenues, excluding revenues from franchises and sales in grocery stores

18,232

15,489

36,816

31,136

Food concession revenues

(355)

(276)

(1,266)

(895)

Restaurants out of banner

(1,392)

(1,362)

(2,826)

(2,631)

Revenues from franchises and partnerships

13,312

11,768

25,153

25,148

Total network sales

29,797

25,619

57,877

52,758






Income (loss) before financial expenses, amortization, share of net income (loss)  of joint ventures and associates, and income taxes

1,473

1,000

3,453

2,467

Other losses (gains)

35

3

(46)

(68)

Adjusted EBITDA

1,508

1,003

3,407

2,399

 

Interim Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands of Canadian dollars, except for earnings per share and number of outstanding shares) 

(unaudited)







13 weeks ended

26 weeks ended


February 26,

February 28,

February 26,

February 28,


2017

2016

2017

2016


$

$

$

$






Revenues

22,464

21,803

44,049

42,480

Cost of sales

7,623

6,533

14,011

13,493

Selling and administrative expenses, excluding amortization

13,333

14,267

26,631

26,588

Other losses (gains)

35

3

(46)

(68)

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

1,473

1,000

3,453

2,467






Amortization

1,144

1,126

2,316

2,231

Financial expenses

220

176

407

357

Share of net loss (income) of joint ventures and associates

1

(119)

(70)

(166)

Income (loss) before income tax expenses

108

(183)

800

45






Income tax expenses (recovery)

26

(97)

195

(49)

Net income (loss) and comprehensive income (loss)

82

(86)

605

94






Net income (loss) and comprehensive income (loss) attributable to:









The Company's shareholders

81

(53)

619

175

Non-controlling interests

1

(33)

(14)

(81)

Net income (loss) and comprehensive income (loss)

82

(86)

605

94






Earning (loss) per share (in dollars):






Basic

0.02

(0.01)

0.15

0.04


Diluted

0.02

(0.01)

0.15

0.04






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






Basic

4,165

4,165

4,165

4,165


Diluted

4,165

4,165

4,165

4,165

 

 

SOURCE Sportscene Group Inc.

For further information: Jean Bédard, Chairman of the Board, President and Chief Executive Officer, François-Xavier Pilon, Senior Director, financial performance and technology, 450-641-3011

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http://www.cage.ca

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