EDMONTON, Alberta, Aug. 16, 2021 (GLOBE NEWSWIRE) — 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.
|(In thousands of Canadian dollars
except per share amounts, unaudited)
|Three months ended
|Six months ended
|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.
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”.
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 b usiness 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 f uture 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
Vice Chair and Chief Executive Officer