The Western Investment Company of Canada Limited (TSXV: WI)
(“
Western” or the “
Corporation”)
today reported its financial and operating results for the three
and six months ended June 30, 2024. Western also announced that it
will delay its Annual General and Special Meeting of shareholders
(the “
Meeting”) to amend the terms of the
transaction with Tevir Capital Corp. ("
Tevir"),
and other affiliates of Paul Rivett, that was previously announced
on March 22, 2024 (the “
Transaction”).
Transaction and Annual General and Special Meeting
UpdateWestern is in the process of amending the
Transaction terms and, once finalized, the new terms will be
announced in a subsequent news release. As such, Western will delay
its Shareholder Meeting which was to take place on August 30th,
2024. Western will provide the details of its revised meeting and
record date in a subsequent news release and post a revised Notice
of Meeting and Record Date to Sedar+ (www.sedarplus.ca) at that
time.
Second Quarter of 2024 Financial ResultsThe
interim financial statements and management’s discussion and
analysis have been filed on SEDAR+. Unless otherwise indicated,
financial figures are expressed in Canadian dollars and comparisons
are to the prior periods ended June 30, 2023.
Western’s associate companies (the
“Associates”) are operating in-line with
expectations as both of the seasonal Associates, GlassMasters and
Foothills, prepare for peak revenues through the summer season.
Equity income from Foothills was significantly lower than in 2023
due to the impact of a one-time gain on the sale of real estate
that positively impacted their results in 2023. Removing this
one-time gain would have resulted in equity earnings from Foothills
comparable to the prior period.
|
Three months ended June 30, |
|
Six months ended June 30, |
|
($ unless otherwise noted) |
2024 |
|
2023 |
|
% Change |
|
2024 |
|
2023 |
|
% Change |
|
Income from equity investments |
442,152 |
|
|
750,033 |
|
|
-41 |
% |
|
170,401 |
|
|
1,098,421 |
|
|
-84 |
% |
|
Finance income |
187,329 |
|
|
144,725 |
|
|
29 |
% |
|
377,745 |
|
|
303,074 |
|
|
25 |
% |
|
Management fees |
37,500 |
|
|
37,500 |
|
|
0 |
% |
|
75,000 |
|
|
75,000 |
|
|
0 |
% |
|
Income |
666,981 |
|
|
932,258 |
|
|
-28 |
% |
|
623,146 |
|
|
1,476,495 |
|
|
-58 |
% |
|
Remove extraordinary gain |
|
|
|
|
|
|
|
|
|
|
|
|
(554,934 |
) |
|
|
|
|
Normalized Income |
666,981 |
|
|
932,258 |
|
|
-28 |
% |
|
623,146 |
|
|
931,561 |
|
|
-33 |
% |
|
|
“While a cooler start to the summer impacted both of our
seasonal businesses, Western was still able to post a modest second
quarter, with equity income only slightly below expectations,” said
Scott Tannas, President and Chief Executive Officer of Western.
“Early indications are that the hot weather in July and August will
help offset this with total revenues for the month of July at both
GlassMasters and Foothills increasing 30% and 10% respectively over
the prior year. We continue to make operational investments to
drive long-term growth at our Associates, and all of them are
running very smoothly and close to plan.”
Portfolio Company Report for the Six Months Ended June
30, 2024
Fortress Insurance Company (“Fortress”)
Business at Fortress continues to grow rapidly, with a 44% increase
in gross written premiums from the comparative period of 2023.
Overall, insurance service results at Fortress are comparable to
the comparative period in 2023, as the company manages this growth
with the increase in administrative expenses that come with it.
Fortress is focused on diversification, expanding its product
offerings into liability insurance and the Ontario market. Fortress
is primed to become the key focus of Western.
Key Highlights:
- Gross written premiums grew 44% to $15.8 million in the first
six months of 2024 compared with $11.0 million in the comparative
period 2023.
- 2024 results include three new programs which didn’t exist in
2023. Such programs add geographic diversity and class of insurance
to the portfolio.
- Fortress’s investment portfolio, including cash, grew 20% to
$18.4 million compared to $15.4 million as at June 30, 2023.
For the six months ending June 30, 2024, Western recognized
equity income of $31,604 from Fortress compared to $90,552 in
equity income for the comparative period ended June 30, 2023.
|
Three months ended June 30, |
|
Six months ended June 30, |
|
Financial results ($) |
2024 |
|
2023 |
|
% Change |
|
2024 |
|
2023 |
|
% Change |
|
Insurance revenue |
5,852,846 |
|
|
5,036,753 |
|
|
16 |
% |
|
11,571,504 |
|
|
9,682,871 |
|
|
20 |
% |
|
Insurance service result |
888,982 |
|
|
639,083 |
|
|
39 |
% |
|
1,081,466 |
|
|
1,099,380 |
|
|
-2 |
% |
|
Investment income (loss) |
222,233 |
|
|
46,750 |
|
|
375 |
% |
|
487,511 |
|
|
355,195 |
|
|
37 |
% |
|
Net income (loss) |
52,634 |
|
|
224,752 |
|
|
-77 |
% |
|
111,088 |
|
|
499,153 |
|
|
-78 |
% |
|
Gross written premiums1 |
10,559,993 |
|
|
7,262,622 |
|
|
45 |
% |
|
15,777,765 |
|
|
10,981,840 |
|
|
44 |
% |
|
|
1 Supplementary financial measure – total gross
insurance premiums written during the year. |
|
GlassMasters Autoglass
(“GlassMasters”)GlassMasters continues its growth
trajectory with a 16% increase in sales for the six months ended
June 30th compared to the comparative period in 2023. The company
is seeing growth occurring at current retail and warehouse
locations and the regular addition of new locations. After adding
three locations in 2023, GlassMasters opened its first location in
Winnipeg in the second quarter of 2024, and the company expects to
add a warehouse in Winnipeg in the coming months. GlassMasters
serves as Western’s primary cash flow source, with regular interest
payments occurring on the restructured shareholder notes.
Foothills Creamery
(“Foothills”)Operational and strategic improvements have
given Foothills a significant boost in profitability over the last
couple of years. Gross margins have improved by 2% from 2023. Sales
of ice cream were impacted in the second quarter by an unseasonably
cold and wet spring; however, thanks to this improved margin, gross
profit remains comparable to the prior year. Foothills continues to
innovate with new products and is expanding its customer base. The
company holds high inventory levels, leaving it well-positioned to
meet high summer demand, which should be enhanced in the third
quarter by the good weather experienced in Foothills’ operational
area.
Golden Health Care
(“Golden”)Golden Health Care revenue increased 11%
compared to the comparative period 2023 thanks to improved
occupancy. Inflation has impacted the cost of care, and attracting
staff has been challenging. Management is focused on improving
occupancy and is working to access government funding for senior
care, which would allow more seniors in need to access their
beds.
OutlookThe tremendous growth in
gross written premiums at Fortress enjoyed so far this year is
expected to continue as it navigates its entry into the Ontario
marketplace. Fortress continues to work on adding new product
offerings to its lineup. GlassMasters is expected to continue its
trend of revenue growth, with revenues in July, one of its peak
business months, increasing 30% compared with the same period in
2023. While the cool spring tempered Foothills’ performance, the
return of hot weather though July and August was beneficial,
driving a 10% increase in sales through the month of July compared
to the same period in 2023.
About The Western Investment Company of
Canada Limited Western is a unique publicly traded,
private equity company founded by a group of successful Western
Canadian businesspeople, and dedicated to building and maintaining
ownership in successful Western Canadian companies, and helping
them to grow. Western's shares are traded on the Exchange under the
symbol WI.
For more information on Western, please visit its
website at www.winv.ca.
To add yourself to our email news alert
subscription please visit this link.
CONTACT INFORMATION - The Western Investment
Company of Canada Limited
Scott Tannas President and Chief Executive Officer
(403) 652-0408 stannas@winv.ca
Advisories This news release may
contain certain forward-looking information and statements,
including without limitation, statements pertaining to future
results and plans for Western and its associated companies,
acquisitions, financings and returns. Statements containing the
words: 'believes', 'intends', 'expects', 'plans', 'seeks' and
'anticipates' and any other words of similar meaning are
forward-looking. All statements included herein involve various
risks and uncertainties because they relate to future events and
circumstances beyond Western's control.
The forward-looking statements are based on certain
key expectations and assumptions made by Western, including
expectations and assumptions concerning the ability of Western to
successfully implement its strategic plans and initiatives.
Although Western believes that the expectations and
assumptions on which the forward-looking statements made by Western
are based are reasonable, undue reliance should not be placed on
the forward-looking statements because no assurance can be provided
that they will prove to be correct. Since forward-looking
statements address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risks. These include, but are not
limited to, the ability of management to execute its business
strategy, and the impact of general economic conditions in Canada
and the United States. A description of additional assumptions used
to develop such forward-looking information and a description of
risk factors that may cause actual results to differ materially
from forward-looking information can be found in Western's
disclosure documents on the SEDAR+ website at www.sedarplus.ca.
The forward-looking statements contained in this
news release are made as of the date hereof and Western undertakes
no obligation to update publicly or revise any forward-looking
statements or information, whether as a result of new information,
future events or otherwise, unless so required by applicable
securities laws.
This news release also contains financial outlook
information (“FOFI”) about prospective results of
operations and book value, which are subject to the same
assumptions, risk factors, limitations, and qualifications as set
forth in the above paragraphs. FOFI contained in this news release
was made as of the date of this news release to provide information
about management's current expectations and plans relating to the
future. Readers are cautioned that such information may not be
appropriate for any other purpose. Western disclaims any intention
or obligation to update or revise any FOFI contained in this news
release, whether as a result of new information, future events or
otherwise, except as required by applicable law.
“Neither the TSX Venture Exchange nor its
Regulatory Services Provider (as that term is defined in policies
of the TSX Venture Exchange) accepts responsibility for the
adequacy or accuracy of this release.”
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