- Current strategy working for management and the incumbent Board, not for shareholders
CALGARY, May 29, 2017 /CNW/ - PointNorth Capital Inc., together with certain of its affiliates and associates (collectively, "PointNorth"), the largest shareholder of Liquor Stores N.A. Ltd. ("Liquor Stores" or the "Company"), released a new letter to shareholders today outlining how achievable its New Strategy is and the benefits of long-term value creation all shareholders can expect.
The letter, which can be viewed in full at www.FixLIQ.com and at www.sedar.com under Liquor Stores' issuer profile, outlines how the first step to creating value for shareholders is to elect six new, independent directors with the necessary expertise required to materially increase adjusted operating profit, reduce debt, increase cash flow and increase the Company's cash position significantly.
For shareholders, this means that the recent turnaround in the Company's share price that started when PointNorth announced its ownership will continue. The new Board intends to maintain the existing dividend policy and review it regularly for opportunities to increase it.
While PointNorth remains resolute in its belief that the Company can and will do better, shareholders should consider the implications of maintaining the status quo approach of the current Board.
PointNorth encourages shareholders to look at analyst research price targets for the Company's stock as an indication of where your share price will go if management and the current Board continue on their current strategy. CIBC World Markets published a research note titled "Competition Conundrum" on May 9, 2017, prior to PointNorth's public disclosure of the New Strategy. CIBC did not rate the Company's shares as a BUY and had a target price of $9.00, significantly below today's prices. This is where shareholders should expect their share price to go if the status quo continues. RBC Capital Markets, in a May 10, 2017 research note, stated: "Our downside scenario for LIQ leads to a valuation of $6."
The current Board has not presented a single idea that will reverse the declining share price, increase the dividend, or result in any significant improvement in the Company's operations. The Company has repeated numerous times: "our strategy is working". The Company's current strategy is only working for management and the incumbent Board. The strategy is not working for shareholders.
The Company's management and current Board continue to blame the Company's performance on oil prices and the Alberta economy. The Company's strategy is to hope that oil prices return to US$100 per barrel and the Alberta economy recovers to its boom years. Liquor Stores' performance declines began long before oil prices declined.
Hope is not a strategy and neither is the status quo.
The choice is clear:
Say no to the same Board, same approach, same results.
Say yes to a new Board, new strategy, and better results.
If you believe your investment can and should be doing better: Vote your BLUE proxy or BLUE voting instruction form for change.
The deadline to vote is approaching fast so vote today. The cut-off to receive your proxy is before 5:00 p.m. (Toronto time) by June 15, 2017.
If you have questions or need help voting, contact Kingsdale Advisors at 1-877-657-5857 or at firstname.lastname@example.org.
About PointNorth Capital
PointNorth, together with its affiliates and associates, is a private equity investment firm formed in Ontario. PointNorth invests, as did its predecessor, in equity and debt situations where it is able to influence operational, financial and strategic direction.
PointNorth invests in companies that are experiencing financial or operational challenges, are in out-of-favour sectors or are otherwise in need of change to drive significant long-term value for stakeholders. PointNorth does not seek to appoint its founders and principals to the boards of directors of companies it invests in, but rather operates by identifying best-in-class independent candidates to nominate for board positions. This commitment to improvements benefits all shareholders, not just PointNorth.
PointNorth has developed the New Strategy for Liquor Stores with the input of third party alcohol retail industry experts. As at April 21, 2017, PointNorth beneficially owned or controlled or directed, directly or indirectly, an aggregate of 2,750,000 common shares, representing approximately 9.91% of the common shares in the capital of Liquor Stores.
Forward-Looking Statements and Information
Certain statements contained in this press release, constitute forward-looking statements. The words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to Liquor Stores or PointNorth are intended to identify forward-looking statements. Such statements reflect PointNorth's current views and intentions with respect to future events as well as assumptions made by and information currently available to PointNorth, and are subject to certain risks and uncertainties. Although PointNorth considers these assumptions to be reasonable based on the information currently available to it, many factors could cause the actual results, performance, actions or achievements of Liquor Stores or others that may be expressed or implied by such forward-looking statements to materially differ from those described herein should one or more of these risks or uncertainties materialize. Such factors include, but are not limited to, economic, business, competitive and regulatory factors. Readers are cautioned not to place undue reliance on forward-looking statements.
The forward-looking statements contained herein are expressly qualified by this cautionary statement and are made as of the date of this press release. Except as expressly required by law, PointNorth does not intend, and disclaims any intention or obligation to, update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Liquor Stores' registered office address is Suite 101, 17220 Stony Plain Road
Edmonton, AB Canada T5S 1K6. A copy of this press release may be obtained on Liquor Stores' SEDAR profile at www.sedar.com.
In this press release, references are made to non-International Financial Reporting Standards ("IFRS") financial measures, including adjusted operating profit. These measures are not recognized by IFRS and do not have a standardized meaning. Shareholders are cautioned that these measures should not replace net earnings or loss (as determined in accordance with IFRS) as an indicator of the Company's performance, of its cash flows from operating, investing and financing activities or as a measure of its liquidity and cash flows. The method of calculating the aforementioned non‐IFRS measures may differ from the methods used by other issuers. Therefore, these measures may not be comparable to similar measures presented by other issuers.
Adjusted operating profit represents operating profit before amortization, adjusted for unusual, non-recurring or non-operating factors on both a consolidated and segmented basis.
SOURCE PointNorth Capital Inc.
For further information: Ian Robertson, Executive Vice President, Communication Strategy, Kingsdale Advisors, Direct: 416-867-2333, Cell: 647-621-2646, Email: email@example.com