Strong sales, financial services lift Brick to '06 gains
By Michael J. Knell -- Furniture Today, April 8, 2007
Edmonton, Alberta — The Brick Group Income Fund reported that sales and earnings for both the fourth quarter and fiscal 2006 showed healthy advances, driven in part by solid same-store sales growth and big gains from its financial services segment.
Consolidated revenue for the quarter was C$379.7 million, up 10.5% from the prior year, with same-store sales rising 6.2%. Net earnings rose 8.7% to C$14.6 million or 27 cents per trust unit.
For the year, revenues were C$1.33 billion, up 9.4%, with same-store sales climbing 6.1%. Net earnings jumped 18.5% to C$37.9 million or 69 cents per unit.
The fund operates three banners: The Brick (including three superstores in greater Toronto), The Brick Mattress Stores and United Furniture Warehouse.
Like most income funds in Canada, the company's preferred growth measure is earnings before interest, taxes, depreciation and amortization, which grew 5.1% during the fourth quarter.
"Annual consolidated EBITDA grew 9.4% over 2005, driven primarily by the success of management's top-line initiatives, including the ongoing growth of the financial services segment," Kim Yost, president and CEO, told analysts in a conference call. "Adjusted EBITDA for 2006 was C$79.5 million as compared to C$75.9 million in 2005."
Of the C$37.9 million in net earnings, C$24.3 million was generated by the financial services segment — which provides extended warranties, fabric protection and other services to The Brick's customers.
In contrast, net earnings generated by the company's retail segment fell 13.2% to C$13.6 million last year, even though total product sales grew 8.6% to C$1.29 billion.
Franchise sales grew 61.5% in the quarter to C$31 million and 61.8% for the year to C$93 million. The Brick added six franchise stores to its network during the year, bringing the total to 26.
At the end of 2006, The Brick Group operated a total of 175 stores and 26 franchises for a total of 201, an increase of seven units over 2005.
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