Corby Spirit and Wine Limited reports its fiscal 2024 second quarter results for the period ended December 31, 2023 and announces dividend of $0.21 per share
TORONTO, Feb. 7, 2024 /CNW/ - Corby Spirit and Wine Limited ("Corby" or the "Company") (TSX: CSW.A) (TSX: CSW.B) today announced its fiscal 2024 second quarter financial results for the three-month period ended December 31, 2023 ("Q2") and the six-month period ended December 31, 2023 ("H1").
Q2 Revenue +23% and H1 Revenue +33% benefitting from the addition of Ace Beverage Group ("ABG") brands into our portfolio
Adjusted Earnings from Operations up +7% in Q2 and +21% in H1 (+1% and +5% Reported, respectively)
Quarterly Dividend declared of $0.21 per share
QUARTERLY DIVIDEND
The Corby Board of Directors is pleased to declare a dividend of $0.21 per Voting Class A Common Share and Non-Voting Class B Common Share of the Company, consistent with the amount of last dividend payment. This dividend is payable on March 13, 2024 to shareholders of record as at the close of business on February 27, 2024.
MARKET TRENDS
Total Beverage alcohol market (excluding Beer and Cider) experienced a slight decline over the past 6 months due to:
- Channel normalization with On-Premise channel back to pre-COVID-19 pandemic levels;
- Spirits in slight decline but RTD (Ready-To-Drink) segment showing solid mid-single digit growth;
- Value growth continuing to outpace volume across all categories.
FINANCIAL RESULTS
The second quarter of the fiscal year reflected Revenue growing +23% compared to the same period last year, driven by:
- The contribution of the ABG portfolio of brands;
- International markets' sales +18% driven by continued sales through new market opportunities;
- Commissions on par with last year;
- Domestic Case Good sales excluding ABG -1% consistent with market trend.
As a result of investment phasing and addition of ABG marketing activities and overheads, adjusted Earnings from Operations1 in the second quarter grew +7% (+1% Reported) versus the same period last year.
Benefitting from a strong Q1, Revenue for the first half was up +33% compared to the same period last year, driven by:
- The contribution of the ABG portfolio of brands, contributing approx. one third of H1 Revenue;
- International markets' sales +27% driven by shipments through new market opportunities;
- Domestic Case Good sales excluding ABG -1% despite Spirits market general slowdown and stock level normalization at liquor boards, offset by;
- Commissions -9% on high comparison basis (H1 FY23 +11% vs. prior year) with the lapping of high inventory levels from liquor boards seen last year to mitigate the supply chain disruption in the market.
In the first half, marketing, sales and administrative expenses increased +21% when compared to the same period last fiscal year, reflecting new marketing activities and overheads related to ABG brands, combined with J.P. Wiser's package redesign, Polar Ice media campaign and higher OND investments to sustain our sell-outs.
As a result, adjusted Earnings from Operations1 in H1 grew +21% (+5% Reported) versus the same period last year despite continued broad-based rising input costs.
During the first half, Corby incurred interest charges of $3.1 million as a result of its credit facilities and long-term debt linked to ABG acquisition, which totaled $127.5 million at the end of the period.
The acquisition of ABG triggered certain IFRS accounting treatments to adjust assets acquired in the business combination to their fair value at the acquisition date, resulting in a charge to cost of goods sold of $3.0 million before taxes in the first-half results.
Corby's President and Chief Executive Officer, Nicolas Krantz, stated,
"We continued during these first 6 months to achieve a robust market performance, including during the must-win festive season, outperforming the Spirits and RTD market; Our competitive advantage combines one of the most comprehensive portfolios of brands with excellence in execution.
I am also particularly pleased with the integration and contribution of ABG to Corby's results."
NEW CHAIR OF THE BOARD OF DIRECTORS
As announced on November 8, 2023, Mr. George McCarthy, Corby Chair and Director, has retired effective February 7, 2024. After review and discussion, the Board of Directors announced today that current Corby independent director, Mr. Lucio Di Clemente, has been appointed as the new Corby Chair.
"It is an honour to succeed George as Chair of the Board and I am very grateful for the opportunity to build upon his outstanding contributions to Corby over his long tenure. As I take on this new responsibility, I hope to continue George's legacy and commit to maintaining the high standards that he set, to enable the continued success of the company," said Mr. Di Clemente.
"As I now retire from my role as Chair after 30 years, I look forward to a future filled with new possibilities and achievements for Corby. I am very confident that Lucio will continue to lead the company, consistent with its values and principles, while bringing fresh ideas, innovative solutions, and a renewed energy to the position," said Mr. McCarthy.
For further details, please refer to Corby's Management's Discussion and Analysis and consolidated financial statements and accompanying notes for the three-and-six months period ended December 31, 2023, prepared in accordance with International Financial Reporting Standards.
Corby management will be participating in a live virtual non-deal roadshow to discuss its latest investor presentation on Friday, February 23, 2024, at 12:00 PM EST followed by a live Q&A. Corby welcomes stakeholders, investors, and other individual followers to register and attend this live event by registering using the link https://www.renmarkfinancial.com/companies/corby-spirit-and-wine-limited.
1) NON-IFRS FINANCIAL MEASURES & RATIOS
Non-IFRS financial measures and ratios do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.
Management believes the non-IFRS measures defined above are important supplemental measures of operating performance and highlight trends in the core business that may not otherwise be apparent when relying solely on IFRS financial measures.
Management believes that these measures allow for assessment of the Company's operating performance and financial condition on a basis that is more consistent and comparable between reporting periods.
The following table presents a reconciliation of Adjusted Earnings from Operations and Adjusted Net Earnings to their most directly comparable financial measures for the three-and-six months period ended December 31, 2023, and 2022:
Three months ended | Six months ended | ||||||||
Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||
(in millions of Canadian dollars, except per share amounts) | 2023 | 2022 | $ Change | % Change | 2023 | 2022 | $ Change | % Change | |
Earnings from Operations | $ 11.4 | $ 11.2 | $ 0.1 | 1 % | $ 22.8 | $ 21.7 | $ 1.1 | 5 % | |
Adjusted for transaction costs related to ACE acquisition | 0.1 | - | 0.1 | n/a | $ 0.1 | - | 0.1 | n/a | |
Adjusted for restructuring provisions | 0.6 | - | 0.6 | n/a | 0.6 | - | 0.6 | n/a | |
Adjusted for fees related to distributor transition | (0.3) | - | (0.3) | n/a | (0.3) | - | (0.3) | n/a | |
Adjustment for cost of sale related to business combinations fair value adjustments to inventory | 0.2 | - | 0.2 | n/a | 3.0 | - | 3.0 | n/a | |
Adjusted Earnings from Operations1 | 12.0 | 11.2 | 0.7 | 7 % | 26.2 | 21.7 | 4.5 | 21 % | |
Net earnings | $ 7.3 | $ 8.6 | $ (1.3) | -15 % | $ 14.8 | $ 16.4 | $ (1.6) | (10 %) | |
Adjusted for transaction costs related to ACE acquisition | 0.1 | - | 0.1 | n/a | 0.1 | - | 0.1 | n/a | |
Adjusted for restructuring provisions | 0.4 | - | 0.4 | n/a | 0.4 | - | 0.4 | n/a | |
Adjusted for fees related to distributor transition | (0.2) | - | (0.2) | n/a | (0.2) | - | (0.2) | n/a | |
Adjustment for cost of sale related to business combinations fair value adjustments to inventory | 0.2 | - | 0.2 | n/a | 2.2 | - | 2.2 | n/a | |
Adjusted Net Earnings1 | 7.8 | 8.6 | (0.8) | -9 % | 17.3 | 16.4 | 0.9 | 6 % | |
Per common share | |||||||||
- Basic net earnings per share | $ 0.26 | $ 0.30 | $ (0.04) | -15 % | $ 0.52 | $ 0.58 | $ (0.06) | -10 % | |
- Adjusted Basic net earnings per share | $ 0.27 | $ 0.30 | $ (0.03) | -9 % | $ 0.61 | $ 0.58 | $ 0.03 | 6 % | |
- Diluted net earnings | $ 0.26 | $ 0.30 | $ (0.04) | -15 % | $ 0.52 | $ 0.58 | $ (0.06) | -10 % | |
- Adjusted diluted net earnings | $ 0.27 | $ 0.30 | $ (0.03) | -9 % | $ 0.61 | $ 0.58 | $ 0.03 | 6 % | |
1) See "Non-IFRS Financial Measures" & "Non-IFRS Financial Ratios". | |||||||||
Three months ended | Six months ended | ||||||||
Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||
(in millions of Canadian dollars, except per share amounts) | 2023 | 2022 | $ Change | % Change | 2023 | 2022 | $ Change | % Change | |
Basic net earnings per share | $ 0.26 | $ 0.30 | $ (0.04) | -15 % | $ 0.52 | $ 0.58 | $ (0.06) | -10 % | |
Adjusted for transaction costs related to ACE acquisition | 0.00 | - | 0.00 | n/a | 0.00 | - | 0.00 | n/a | |
Adjusted for restructuring provisions | 0.01 | - | 0.01 | n/a | 0.01 | - | 0.01 | n/a | |
Adjusted for fees related to distributor transition | (0.01) | - | (0.01) | n/a | (0.01) | - | (0.01) | n/a | |
Adjustment for cost of sale related to business combinations fair value adjustments to inventory | 0.01 | - | 0.01 | n/a | 0.08 | - | 0.08 | n/a | |
Adjusted Basic, net earnings per share1 | $ 0.27 | $ 0.30 | $ (0.03) | -9 % | $ 0.61 | $ 0.58 | $ 0.03 | 6 % | |
Diluted net earnings per share | $ 0.26 | $ 0.30 | $ (0.04) | -15 % | $ 0.52 | $ 0.58 | $ (0.06) | -10 % | |
Adjusted for transaction costs related to ACE acquisition | 0.00 | - | 0.00 | n/a | 0.00 | - | 0.00 | n/a | |
Adjusted for restructuring provisions | 0.01 | - | 0.01 | n/a | 0.01 | - | 0.01 | n/a | |
Adjusted for fees related to distributor transition | (0.01) | - | (0.01) | n/a | (0.01) | - | (0.01) | n/a | |
Adjustment for cost of sale related to business combinations fair value adjustments to inventory | 0.01 | - | 0.01 | n/a | 0.08 | - | 0.08 | n/a | |
Adjusted Diluted, net earnings per share1 | $ 0.27 | $ 0.30 | $ (0.03) | -9 % | $ 0.61 | $ 0.58 | $ 0.03 | 6 % | |
1) See "Non-IFRS Financial Measures" & "Non-IFRS Financial Ratios". | |||||||||
Adjusted Earnings from Operations is equal to earnings from operations before interest and taxes for the period adjusted to remove the costs incurred for business combination inventory fair value adjustments, costs and termination fees related to distributor transitions and restructuring provisions.
Adjusted Net Earnings is equal to net earnings for the period adjusted to remove the costs incurred for business combination inventory fair value adjustments, costs and termination fees related to distributor transitions and restructuring provisions, net of tax calculated using the effective tax rate.
Adjusted Basic Net Earnings Per Share is computed in the same way as basic net earnings per share and diluted net earnings per share, respectively, using the aforementioned Adjusted Net Earnings non-IFRS financial measure in place of reported Net Earnings.
Adjusted Diluted Earnings Per Share is computed in the same way as basic net earnings per share and diluted net earnings per share, respectively, using the aforementioned Adjusted Net Earnings non-IFRS financial measure in place of reported Net Earnings.
Please refer to the "Non-IFRS Financial Measures" & "Non-IFRS Financial Ratios" section of our MD&A for the three-and-six months period ended December 31, 2023 as filed on SEDAR+ for further information regarding Non-IFRS measures.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements, including statements concerning possible or assumed future results of Corby's operations. Forward-looking statements typically are preceded by, followed by or include the words "believes", "expects", "anticipates", "estimates", "intends", "plans" or similar expressions. These statements are being provided for the purposes of providing information about management's current expectations and plans and allowing investors and others to get a better understanding of our anticipated financial position, results of operations and operating environment. Readers are cautioned that such information may not be appropriate for other purposes and are not guarantees of future performance. Although Corby believes that the forward-looking information in this press release is based on information, assumptions and beliefs which are current, reasonable and complete, this information is necessarily subject to a number of factors, risks and uncertainties that could cause actual results to differ materially from management's expectations and plans as set forth in such forward-looking information. For more information on the risks, uncertainties and assumptions that could cause Corby's actual results to differ from current expectations, refer to the Risks and Risk Management section of our Management's Discussion and Analysis for the three-and-six months period ended December 31, 2023 as well as Corby's other public filings, available at www.sedarplus.ca and at https://corby.ca/en/investors/. Corby does not undertake to update any forward-looking information, whether written or oral, that may be made from time to time by it or on its behalf, to reflect new information, future events or otherwise, except as is required by applicable securities laws. Accordingly, readers should not place undue reliance on forward-looking statements. All financial results are reported in Canadian dollars.
About Corby Spirit and Wine Limited
Corby Spirit and Wine Limited is a leading Canadian manufacturer, marketer and distributor of spirits and imported wines. Corby's portfolio of owned-brands includes some of the most renowned brands in Canada, including J.P. Wiser's®, Lot 40®, and Pike Creek® Canadian whiskies, Lamb's® rum, Polar Ice® vodka and McGuinness® liqueurs, as well as the Ungava® gin, Cabot Trail® maple-based liqueurs and Chic Choc® spiced rum and Foreign Affair® wines and Cottage Springs® ready-to-drink beverages. Through its affiliation with Pernod Ricard S.A., a global leader in the spirits and wine industry, Corby also represents leading international brands such as ABSOLUT® vodka, Chivas Regal®, The Glenlivet® and Ballantine's® Scotch whiskies, Jameson® Irish whiskey, Beefeater® gin, Malibu® rum, Olmeca Altos® and Código 1530® tequilas, Jefferson's™ and Rabbit Hole® bourbons, Kahlúa® liqueur, Mumm® champagne, and Jacob's Creek®, Wyndham Estate®, Stoneleigh®, Campo Viejo®, and Kenwood® wines. Corby is a publicly traded company based in Toronto, Ontario, and is listed on the Toronto Stock Exchange under the trading symbols CSW.A and CSW.B. For further information, please visit our website or follow us on LinkedIn.
SOURCE Corby Spirit and Wine Limited
CORBY SPIRIT AND WINE LIMITED, Juan Alonso, Vice-President and Chief Financial Officer, investors.corby@pernod-ricard.com, www.Corby.ca
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