Sustained Growth for La Cage - Brasserie sportive: Third-Quarter Network Sales Increase by 18.5%

MONTREAL, July 13, 2017 /CNW Telbec/ - SPORTSCENE GROUP INC. ("Sportscene" or "the Company") (TSXV: SPS.A) is happy to disclose good financial results for the third quarter of fiscal 2017.  In line with the previous quarters, this period gave rise to solid sales growth and improved profitability for the La Cage – Brasserie sportive chain. 

The repositioning strategy has continued to produce solid increases in both sales and profits since the start of fiscal 2017. In the third quarter, in particular, the La Cage – Brasserie sportive network turned in its best performance in three years.

Financial Results for the 13 and 39-Week Periods Ended May 28, 2017

For the 13-week period ended May 28, 2017, total network sales (1) reached $32.5 million, posting a 18.5% increase over the same quarter last year even though the network comprises four fewer Cages than in 2016. Average same-Cage sales (2) continued to grow, driving a significant improvement in the network's profitability and the Company's results. In fact, Sportscene's revenues increased by 30.8% compared with the same quarter in 2016 to stand at $26.0 million, whereas its consolidated adjusted EBITDA (3) nearly doubled to reach  $2.4 million. As a result, quarterly net earnings reached $0.9 million or $0.21 per share, compared to a net loss of $0.3 million or $0.08 per share for the same quarter last year.

For the first nine months of fiscal 2017, being the 39-week period ended May 28, 2017, network sales (1) totalled $90.4 million, up 12.7% over the same period of the previous year. Sportscene's consolidated revenues increased by 12.3% to $70.1 million, while consolidated adjusted EBITDA (3) rose 58.6% to $5.8 million, driven by increased average same-Cage sales (2) and the numerous measures taken to enhance the added value offered to customers while optimizing costs. Thus, the Company ended the first nine months of fiscal 2017 with year-to-date net earnings of $1.5 million or $0.36 per share, compared to a net loss of $0.2 million or $0.04 per share the year before. Furthermore, the growth in profitability had a significant beneficial impact on Sportscene's financial position, especially its working capital and treasury.

Outlook

"In recent years, we have adopted a bold repositioning strategy that today provides us with a competitive edge in our industry segment. We are determined to continue building on this to strengthen our market leadership and maximize our profitability," said Sportscene's President and C.E.O. Jean Bédard.

Mr. Bédard added that in light of the particularly strong results posted by the 21 restaurants that have been transformed to the new Cage design so far, the Company intends to implement the concept throughout the network over the next two years. It will also continue optimizing operations in order to efficiently manage sales growth, increase profitability, build the loyalty of its current customer base and capture additional markets shares. "Our success in achieving these objectives rests on a key pillar: our ability to attract, develop and retain the best people. At a time of growing competition, not just for customers, but also within the labour market, this will be our biggest challenge in years to come. Given the innovative programs we have developed to recruit, train, and motivate our staff, it may also prove to be one of our best assets," the C.E.O. concluded.

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 45 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, including corporate units, partnerships and franchises.

(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 (income) loss of joint ventures and associates and income taxes", from which other (gains) losses 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 39-week periods ended May 28, 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

39 Weeks Ended


May 28,

2017

May 29,

2016

May 28,

2017

May 29,

2016






Restaurant revenues (1)

21,082

16,676

57,898

47,812

Food concession revenues

(497)

(664)

(1,763)

(1,559)

Restaurants out of banner

(1,419)

(1,414)

(4,245)

(4,045)

Revenues from franchises and partnerships

13,355

12,854

38,508

38,002

Total network sales

32,521

27,452

90,398

80,210






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

2,475

1,187

5,928

3,654

Other (gains) losses

(71)

78

(117)

10

Adjusted EBITDA

2,404

1,265

5,811

3,664

 

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

39 weeks ended


 May 28,
2017

May 29,
2016

May 28,
2017

 May 29,
2016


$

$

$

$






Revenues (Note 5)

26,048

19,916

70,097

62,396

Cost of sales  

8,762

5,814

22,773

19,307

Selling and administrative expenses, excluding amortization (Note 6)

14,882

12,837

41,513

39,425

Other (gains) losses (Note 7)                                                                                 

(71)

78

(117)

10

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

2,475

1,187

5,928

3,654






Amortization (Note 6)  

1,174

1,117

3,490

3,348

Financial expenses (Note 8)    

182

192

589

549

Share of net (income) loss of joint ventures and associates (Note 11)

(57)

248

(127)

82

Income (loss) before income tax expenses

1,176

(370)

1,976

(325)






Income tax expenses (recovery)

288

(17)

483

(66)

Net income (loss) and comprehensive income (loss) 

888

(353)

1,493

(259)






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










The Company's shareholders     

876

(346)

1,495

(171)

Non-controlling interests

12

(7)

(2)

(88)

Net income (loss) and comprehensive income (loss)

888

(353)

1,493

(259)






Earning (loss) per share (in dollars) (Note 9):






Basic

0.21

(0.08)

0.36

(0.04)


Diluted 

0.21

(0.08)

0.36

(0.04)






Weighted average number of outstanding






Class A shares (in thousands) (Note 9):






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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