In a message to shareholders, WICC CEO Scott Tannas provided the following commentary:
“With $138,204 of net income earned in Q2, our results are behind plan, primarily due to mark to market losses in the investment portfolio at Fortress Insurance, and lower than expected sales and margins at Foothills Creamery. The Fortress situation is correcting itself as investment values have risen through July and August. Foothills has enjoyed an increase in July / August business that should mitigate some of the Q2 shortfall in Q3. All other businesses are at or exceeding budget targets. On a combined basis, we continue to make progress toward what we expect to be a strong second half of 2022, and the completion of a solid year for growth and profitability.
– Fortress Insurance Company achieved their second consecutive quarterly operating profit in Q2. Sales in Q2 rose to $4.9 million – triple the amount from the same time last year. The claims ratio stands at a respectable 43% on a trailing 12 month basis. Fortress’ investment portfolio of high quality bonds and equities is “marked to market”, and was impacted by the market downturn in the first half of the year. July and August market values have risen, so we expect to recover theses losses as Fortress’s business maintains its trajectory.
– GlassMasters had strong spring sales growth and is experiencing unprecedented revenue for both July and August. While inventory supply and shipping challenges suppressed margins in Q2, most of the backlogged orders have arrived, allowing GlassMasters to capitalize on the summer season demand, and they have sufficient inventory on hand for the remainder of the 2022 season. GlassMasters is running ahead of budget.
– Ocean Sales completed Q2 on target, with strong sales across their online, big box retail, and TV home shopping channels. The return of public exhibitions and consumer shows is also now contributing to revenues, and July and August Fair and Exhibition sales have exceeded expectations. As of Q2, Ocean Sales is on budget, with strong momentum for Q3.
– As with Q1, sales and margins at Foothills Creamery are below expectations. The planned shift in product mix is progressing, but at a slower than anticipated pace. The team is making expense adjustments and July and August sales point toward a stronger Q3. Recent price increases for butter and ice cream products negotiated with retailers will help boost margins for Foothills in the second half of this year.
– Golden Health Care is slightly behind on their year-to-date budget, while dealing with rising costs and a modest increase in vacancy rates. Q3 and Q4 revenue will benefit from a recent annual rent increase, and management remains focused on improving occupancy and achieving its budgeted result for the full calendar year.
We are working closely with our equity partners and with management teams at Foothills and Golden Health to increase profitability in 2022. Strong growth continues at Fortress, Ocean Sales and GlassMasters, with opportunities for each of these companies to meet or exceed their annual targets. We remain focused on achieving a strong consolidated financial result for Western in 2022 and beyond”.
About The Western Investment Company of Canada
Western is a unique publicly traded, private equity company founded by a group of successful Western Canadian business people, and dedicated to building and maintaining ownership in successful Western Canadian companies, and helping them to grow. The company’s shares are traded on the TSX Venture Exchange under the symbol WI. For more information on the company, please visit its website at www.winv.ca.
The Western Investment Company of Canada Limited
President and Chief Executive Officer
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