Alcanna Inc. (the “Company” or “Alcanna”) (TSX: CLIQ) today
reported its financial results for the three and six months ended
June 30, 2021.
Second Quarter Financial Results and
Business Update
- For the second
quarter of 2021, Alcanna’s same-store liquor sales from continuing
operations of $158.9 million was essentially equal to the increased
sales realized for Q2 2020 during the initial months of the
COVID-19 pandemic of $159.8 million. Compared to Q2 2019 (pre
COVID-19 pandemic), same-store liquor sales in Q2 2021 increased by
10.6%.
- Since late
March 2020, the Company’s liquor retail sales have been positively
impacted due to a shift in customer consumption habits resulting
from the COVID-19 pandemic, where customers shifted away from
on-premise alcohol consumption establishments, such as bars and
restaurants with social distancing restrictions in place, to dining
and entertaining at home with alcohol purchased at retail liquor
stores.
- In June 2021,
the Alberta provincial government began easing COVID-19
restrictions with substantially all restrictions eliminated as of
July 1, 2021. While the Company expects that people will return to
bars, restaurants and other on-premise alcohol consumption
establishments, it believes the consumption habits adopted during
the first 15 months of the pandemic will at least partially
continue with people eating and entertaining more at home.
- Alcanna
anticipates that same-store sales will continue to trend higher
than 2019 pre-pandemic levels for that reason as well as a result
of our strategy to expand our discount retail banner and capitalize
on the increased popularity that our Wine and Beyond large-format
stores enjoyed during COVID-19 restrictions.
The operating profit before depreciation,
remeasurements and provisions for the Company’s Liquor and
Corporate Segments for the three months ended June 30, 2021 was
$11.4 million in aggregate (Q2 2020: $12.9 million). This modest
decline was anticipated as in the initial months of the COVID-19
pandemic in the prior year that resulted in increased sales and
resulted in lower spend on our marketing programs as we adapted to
changing customer shopping habits during that period.
Since the March 22, 2021 spin out of Alcanna’s
retail cannabis business into a separate publicly traded company,
Nova Cannabis Inc., the Company indirectly participates in the
retail cannabis business through its approximately 63% ownership of
Nova. As a result of this majority investment, Alcanna must
consolidate the financial results of both companies as per
accounting practices. For discussion of Nova’s financial results,
business updates and outlook, refer to Nova’s management’s
discussion and analysis (“MD&A”) for the three
and six months ended June 30, 2021 at www. novacannabis.ca.
The Company’s condensed interim consolidated
financial statements and MD&A for the three and six months
ended June 30, 2021 will be available in the “Investor Centre –
Financial Reports” section of the Company’s website at
www.alcanna.com and will be filed on SEDAR and available at
www.sedar.com.
FINANCIAL RESULTS
(In thousands of Canadian dollars except per share amounts,
unaudited) |
Three months ended June 30, |
Six months ended June 30, |
2021 |
$ |
2020 |
$ |
2021 |
$ |
2020 |
$ |
|
|
(Restated)(i) |
|
(Restated)(i) |
Sales |
188,967 |
|
183,469 |
|
331,177 |
|
321,738 |
|
Operating
profit before depreciation, remeasurements and provisions |
8,890 |
|
14,580 |
|
12,097 |
|
18,478 |
|
Net (loss)
earnings from continuing operations |
(5,711 |
) |
7,451 |
|
(15,174 |
) |
(990 |
) |
Basic and
diluted (loss) earnings per share from continuing operations |
(0.09 |
) |
0.18 |
|
(0.33 |
) |
(0.02 |
) |
i) The financial results for the
three and six months ended June 30, 2020 have been restated to
exclude the results of the Company’s discontinued operations
comprised of the British Columbia operations, which have been
disposed as part of the Company’s coordinated plan to exit the
British Columbia convenience-format retail liquor store
business.CONFERENCE CALL
Management will conduct a conference call on
August 17, 2021 at 12:00p.m. ET (10:00a.m. MT) to discuss its
second quarter operating and financial results. To participate,
please dial (416) 406-0743 or (800) 806-5484 and use the required
participant access code: 9690808#. The playback will be made
available approximately four hours after the event at (905)
694-9451 or (800) 408-3053, required access code: 5246993#.
ABOUT ALCANNA INC.
Alcanna is one of the largest private sector
retailers of alcohol in North America and the largest in Canada by
number of stores – operating 170 locations in Alberta and British
Columbia. The Company’s majority-owned subsidiary, Nova Cannabis
Inc. (TSX: NOVC), also operates 60 retail cannabis stores in
Alberta, Ontario and Saskatchewan.
Alcanna's common shares trade on the Toronto
Stock Exchange under the symbol "CLIQ".
Additional information about Alcanna Inc. is
available at www.sedar.com and the Company’s website at
www.alcanna.com.
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking
statements or information (collectively "forward-looking
statements") within the meaning of applicable securities
legislation. Forward-looking statements are typically identified by
words such as “continue”, “anticipate”, "will", "should", “plan”,
“intention”, and similar words suggesting future events or future
performance. All statements and information other than statements
of historical fact contained in this news release are
forward-looking statements. In particular, this news release
contains forward-looking statements pertaining to the impact that
the COVID-19 pandemic may have on sales and customer shopping
habits in the future; that same-store sales will continue to be
higher than pre-pandemic levels, the purchase of Common Shares
pursuant to the NCIB, capital investments in the development of
stores, Nova's re-branding of retail cannabis stores to the Value
Buds banner, our future financial position, capital and liquidity,
business strategy, proposed acquisitions and dispositions, the
execution and impact of the Company’s growth-orientated business
strategy, results of operations and financial condition, retail
cannabis and liquor strategies, budgets, government regulation and
laws, projected costs, plans and objectives.
With respect to forward-looking statements
contained in this news release, the Company has made assumptions
regarding, among other things, the COVID-19 pandemic and the impact
it may have on consumer behavior in Alberta and British Columbia;
Alcanna’s and Nova’s ability to locate and secure acceptable store
sites and to adapt to changing market conditions; poor weather
conditions; dependence on key personnel; labour costs, shortages
and labour relations including Alcanna’s and Nova’s ability to hire
and retain staff at current wage levels and the risk of possible
future unionization; supply interruption or delays; dependence on
suppliers; limited operating history of the cannabis business,
further regulatory risks from the provinces in the cannabis
business, supply risk in the cannabis business, risk of
infringement of intellectual property rights, reliance on
information and control systems; income tax changes; leverage and
restrictive covenants in agreements relating to current and future
indebtedness of Alcanna; credit risks arising from operations;
dilution and future sales of Common Shares.
Although the Company believes that the
expectations reflected in the forward-looking statements, and the
assumptions on which such forward-looking statements are made, are
reasonable, especially given the unprecedented uncertainty of the
full extent and impact of COVID-19, there can be no assurance that
such expectations and assumptions will prove to be correct. Readers
should not place undue reliance on forward-looking statements
included in this news release. Forward-looking statements are not
guarantees of future performance and involve a number of risks and
uncertainties that may cause actual performance and financial
results to differ materially from any estimates, forecasts or
projections. These risks and uncertainties include, among other
things, the duration and severity of the COVID-19 pandemic on the
business, operations and financial condition of the Company; the
risk that Alcanna (and Nova) will be unable to execute its
strategic plan and growth strategy, as planned without significant
adverse impacts from various factors beyond its control; dependence
on suppliers; potential delays or changes in plans with respect to
capital expenditures and the availability of capital on acceptable
terms; risks inherent in the liquor retail and cannabis industries;
competition for, among other things, customers, supply, capital and
skilled personnel; changes in labour costs and markets; incorrect
assessments of the value of acquisitions; general economic and
political conditions in Canada (including Alberta), and globally;
industry conditions, including changes in government regulations;
fluctuations in foreign exchange or interest rates; unanticipated
operating events; failure to obtain regulatory and third‐party
consents and approvals when required; changes in tax and other laws
that affect us and our shareholders; the potential failure of
counterparties to honour their contractual obligations; stock
market volatility; and the other factors described in the Company’s
public filings available at www.sedar.com. Readers are cautioned
that this list of risk factors should not be construed as
exhaustive.
The forward-looking statements contained in this
news release are made as of the date hereof. Except as expressly
required by applicable securities legislation, Alcanna does not
undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. The forward-looking statements
contained in this news release are expressly qualified by this
cautionary statement.
For Further Information
James BurnsVice Chair and Chief Executive
OfficerAlcanna Inc. (587) 460-1026
Alcanna (TSX:CLIQ)
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