Sportscene Group reports its third quarter results for fiscal 2021
MONTREAL, July 15, 2021 /CNW Telbec/ - Sportscene Group Inc. ("Sportscene" or "the Company") (TSXV: SPS.A) announced its financial results today for the third quarter ended May 30, 2021.
"Thanks to the diversification of our activities and the support of various government programs, we have been through the worst of the health crisis while maintaining our financial health," said Jean Bédard, President and CEO. "We continue to face various structural challenges, including workforce availability and supply chain issues, however we are emerging from this unprecedented situation with an enhanced off-premise dining offering, a well-established grocery store distribution network and an improved local supply strategy. We are also encouraged to see that our clientele is eager to return as we gradually reopen our dining rooms."
Financial performance for the third quarter ended May 30, 2021
Consolidated revenues stood at $13.8 million, a decrease of 17.1% from the same quarter of the previous fiscal year. The COVID-19 pandemic and lockdown measures in place resulted in a more significant slowdown in the third quarter of 2021. The majority of the network's dining rooms were closed during the entire period, whereas in the third quarter of the previous year, the first health measures didn't take effect until March 13, 2020, nearly three weeks into the quarter. As a result, revenues from restaurant activities decreased by 34.5% to $4.7 million. Retail revenues decreased by 5.9% to $8.0 million, mainly due to supply chain issues. This decrease is also explained by the impact of expansion of the distribution network in 2020, which at that time generated strong orders from the new grocery store chains to establish their inventory. Revenues for the franchising segment increased by 110.8% to $0.8 million as a result of the gradual resumption of restaurant activities.
Consolidated adjusted EBITDA(1) for the third quarter was $2.1 million, an increase of 227.3% compared to a loss of $1.6 million. This growth in consolidated adjusted EBITDA(1) is explained by the support of various government assistance programs that were not yet in place in the third quarter of fiscal 2020 as well as the significant efforts made to reduce expenses. Adjusted EBITDA for the restaurant segment improved by $2.8 million to $2.2 million, while adjusted EBITDA from retail activities remained consistent with the third quarter of the previous year at $1.0 million. Adjusted EBITDA loss from franchising activities improved by $0.9 million to a total loss of $1.2 million.
Sportscene ended the third quarter of fiscal 2021 with a net loss of $0.4 million or $0.05 per share, compared to a net loss of $7.1 million or $0.83 per share in the same quarter last year.
Financial performance for the First Nine Months of the Fiscal Year
Sportscene's year-to-date consolidated revenues decreased by 53.9% to $41.3 million compared to the first three quarters of last year. The COVID-19 pandemic and associated public health measures resulted in a significant slowdown in the restaurant, franchising and other activities segments, while retail revenues grew 24.7% to $23.6 million due to dedicated efforts in the second half of fiscal 2020 to grow the distribution network.
Consolidated adjusted EBITDA(1) for the first nine months of fiscal 2021 was $4.8 million, a 35.0% reduction. The partial shutdown of operations in the restaurant, franchising and other activities segments since March 13, 2020, was mitigated by government support measures, cost reduction initiatives and retail sales growth.
As a result, Sportscene ended the first three quarters of fiscal 2021 with a net loss of $1.8 million or $0.21 per share (basic and diluted), compared to a net loss of $4.7 million or $0.54 per share (basic and diluted) for the same period last year.
Reopening plan and gradual resumption of restaurant operations in all regions of Quebec
With the recent improvement in the public heath situation, the Quebec government has initiated the gradual easing of public health restrictions across the province. Under the gradual reopening plan, all dining rooms in the network were able to reopen as of May 28, 2021, with certain capacity restrictions in order to respect social distancing. Sportscene welcomes this development and is working hard to ensure the successful resumption of its restaurant operations while maintaining the customer and employee experience for which the banner is known.
To get back up to cruising speed and return to profitability, Sportscene's priorities will be to optimize its activities in this new operating context and continually improve its dining experience. In anticipation of the reopening, Sportscene has restarted several projects, including investing in staff training and recruitment. The Company has also invested in state-of-the-art technology to update its "Club Cage" mobile application and support the growth of its "La Cage at Home" off-site dining. In addition, the recent conclusion of a supply agreement with a Quebec-based supplier for its popular ribs sold in grocery stores will allow Sportscene to stand out even more in a market that remains highly competitive.
This press release contains forward-looking statements relating to the Company. Statements based on management's current expectations involve known and unknown inherent risks and uncertainties, including risks associated with public health issues such as those resulting from the COVID-19 pandemic. Actual results may differ from expectations. The reader is cautioned not to place undue reliance on forward-looking information. The Company does not undertake any obligation to update or revise any forward-looking statements as a result of new information, future events or other changes except if required by applicable laws.
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.
About Sportscene Group
Sportscene Group Inc. is a pioneer and leader in the ambiance restaurant niche in Quebec. Since 1984, it has been operating the La Cage – Brasserie Sportive ("La Cage") restaurant chain, differentiated by its sporting ambiance and food made from fresh, local products. With a strong brand image, La Cage is established throughout the province and has currently 38 locations. Sportscene continues to diversify its restaurant activities, notably through the operation of P.F. Chang's, an Asian cuisine restaurant and its catering business for special events, making the Company a key player in Quebec's restaurant industry. Besides its restaurant operations, Sportscene is active in the sale of La Cage and Moishes branded products in grocery stores, ready-to-eat meals and ready-to-cook boxes.
The following measures used by the Company are not measures recognized under International Financial Reporting Standards ("IFRS"):
For more information on the operating results and financial position of Sportscene Group Inc., please see the interim management discussion and analysis and interim condensed consolidated financial statements and accompanying notes for the 13- and 39-week periods ended May 30, 2021, available on SEDAR.
SOURCE Sportscene Group Inc.
Company Codes: TorontoVE:SPS.A
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