High River, Alberta – The Western Investment Company of Canada Limited (“WICC”) (TSXV:WI) confirms its financial statements and MD&A for the quarter and nine months ended September 30, 2019 are available for viewing on SEDAR.
In a message to shareholders, CEO Scott Tannas provided the following commentary: “We are happy to have added to year-to-date profit numbers in Q3. While we have a long way to go in Q4 to achieve our net income goal for the year, we continue to work hard to help our businesses maximize their success for this year, while planning for a significant step forward in 2020.
As we reported in Q2, we have two retail focused businesses facing some headwinds, and in Q3 we supported both companies as they took actions to restructure and reduce costs in order to better position themselves in their respective markets. While this came with some short term costs, we are happy to make the investment.
Our food business continued to provide strong and growing sales and profits and our seniors care facilities continue to see steady profit and growing value. Our newly licenced insurance company began selling policies in September, and continues to add new customers. So, while we had some heavy lifting to do to face certain challenges, we had our share of success in Q3.
Portfolio Company Reports
In the Third Quarter, Ocean Sales continued to realize lower than prior year sales arising from their partnership in the USA and Canada with a leading global retailer. Together with management, we have agreed to step back from the USA stores, while committing additional resources to our profitable activities in the retailer’s Canadian stores. In addition, Ocean has taken steps to affect a significant reduction in overhead, putting them on a path to higher margins and profits in 2020. The summer exhibition and show season yielded modest increases in sales in the USA and eastern Canada, offset by reductions in the west, where the economy and consumer confidence remain at below normal levels. A refreshed product lineup in 2020 and a new cost structure will improve our prospects for increased sales and profits at Ocean Sales.
Our Seniors Care homes at Golden Healthcare remained at or near full capacity and provided our expected share of earnings in the quarter. As we pass our second anniversary of ownership, we have come to deeply appreciate the strong and steady profitability and value creation that Golden provides to our portfolio.
GlassMasters posted an increase in sales year over year, growing their share of market activity. Sales rose at their wholesale glass division and in their newly opened stores, while same store sales declined roughly 8%, mirroring spending reductions in the automotive industry in Alberta. Pressure on margins continued throughout the busy summer season. As with our other retail business, we have incurred costs to help GlassMasters restructure and streamline in order to increase margins and profits in future. There is evidence that pent up consumer demand will show itself in 2020. We are pleased at the steps the GlassMasters team has taken to temper the challenges of the last two years, and ready themselves for an improved economic environment in 2020.
Foothills Creamery remains ahead of budget in both sales and profit. As it celebrates its 50th anniversary, Foothills continues to be a great Alberta success story, and we are proud to be a part of it. The company continues to evaluate and execute on opportunities for growth and expansion in the butter and ice cream business. Their products are gaining notoriety in new markets across Canada, adding to the strong customer base in the West.
Fortress Insurance commenced writing policies in late Q3, and the momentum continues to grow. With the final regulatory approvals received from British Columbia earlier this month, Fortress is now licenced to write insurance across all four western provinces. The timing of Fortress’ entry into an insurance market hungry for capacity provides tremendous opportunity. I know that many shareholders are keenly interested in our progress as we move forward. I want to thank the large group of WICC investors who have special expertise in insurance. Many have provided advice, assistance and contacts over the past months. Be assured we will be working hard to seize the opportunity in front of us.
Our financial goal for 2019 is to grow our net income by at least 10% over 2018 results. While our challenges in retail operations weigh heavy against our goal, we have a strong and diverse portfolio to partially mitigate this challenge. We also have some potential investment related gains in Q4 that may bring us closer to the goal. We look forward to reporting on our progress in the weeks and months to come.”
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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