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BMTC Group Inc. — Management Reports 2025
Jun 5, 2025
43306_rns_2025-06-05_870774d9-8ea4-4dbf-9614-9d1a7042d698.pdf
Management Reports
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Quarterly Management Report *
Caution regarding forward-looking statements
This Quarterly Management Report contains certain forward-looking statements with respect to the Company. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", as well as the opposites of these terms and similar terminology, including references to assumptions.
Forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, which the Company has identified in the 2025 Annual Information Form under "Narrative Description of the Business - Risk Factors", and other risks detailed from time to time in the Company's continuous disclosure documents.
The reader is cautioned that the factors we refer to above are not exhaustive of the factors that may affect any of the Company's forward-looking statements. The reader is also cautioned to consider these and other factors carefully and not to put undue reliance on forward-looking statements.
The Company made a number of assumptions in making forward-looking statements in this Quarterly Management Report. The Company considers the assumptions on which these forward-looking statements are based to be reasonable.
These statements reflect current expectations regarding future events and operating performance and speak only as of the date of release of this Quarterly Management Report, and represent the Company's expectations as of that date. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.
Non-International Financial Reporting Standards (IFRS) financial measures
The Company discloses adjusted net earnings, which includes or excludes certain elements that are not considered representative or recurrent of the performance measures and financial recurrence of the Company. Management believes that this measure is useful in understanding and analyzing the operational performance of the Company and that it can provide additional information.
Adjusted net earnings as well as same store revenues are not an earnings measure recognized by IFRS and do not have a standardized meanings prescribed by IFRS. Therefore, adjusted net earnings and same store revenues as discussed in this Quarterly Management Report may not be compared to similar measures presented by other issuers. These measures of performance should not be considered as alternatives to indicators of performance calculated according to IFRS, but rather as a source of additional information.
The Company discloses in this MD&A under the section "Results" a reconciliation between net earnings and adjusted net earnings.
- The financial information, unless otherwise indicated, is in Canadian dollars and has been prepared in accordance with IFRS Accounting Standards (IFRS).
Results
For the period ended April 30, 2025, the Company's revenues increased by $12,980,000 to $150,124,000 compared to $137,144,000 recorded for the corresponding period of 2024, an increase of 9.5%. This increase is primarily attributable to the growth in commercial revenue from the Tanguay division, whose revenue rose by $13,215,000 or 9.7%. Comparable store sales also increased by 10.5% during the period. In contrast, investment property revenue from the real estate division declined by ($235,000) compared to the corresponding period in 2024, representing a decrease of 98.3%. Net loss for the period ended April 30, 2025, amounted to ($12,933,000) compared to the net earnings of $1,461,000 recorded for the corresponding period of 2024. Basic net earnings per share amounted to ($0.40) compared to $0.04 recorded for the corresponding period of 2024.
The net loss recorded is comprised of a loss of ($3,717,000) from the real estate division and a loss of ($9,216,000) from the Tanguay division, compared to a net loss of ($419,000) and net income of $1,880,000, respectively, for the corresponding period in 2024.
The variation in the net loss of the real estate division is primarily attributable to the ongoing expansion and optimization work, which is temporarily increasing operating expenses. These projects are expected to be completed during the year, which should allow for a gradual return to improved financial performance for the division.
The significant variation in the net income of the Tanguay division is primarily explained by the unrealized loss on investments, net of tax, which amounted to ($7,878,000) during the period, compared to a unrealized gain net of tax of $7,993,000 for the corresponding period, representing a variation of ($15,861,000). Stronger operational result helped to partially counterbalance the negative effect of the unrealized loss. Indeed, the operating loss, net of tax, amounted to ($2,669,000) for the period ended April 30, 2025, compared to ($8,345,000) for the corresponding period. This improvement mainly stems from the synergies generated by the operational and commercial reorganization implemented in May 2023, the completion of the network revitalization program, as well as the sales growth observed during the period.
For the period ended April 30, 2025, the share repurchase program had no impact on basic net earnings per share. As for the corresponding period of 2024, the share repurchase program contributed to an increase of $0.01 on basic net earnings per share.
The variation net earnings would be ($14,394,000) or ($0.44) per basic share for the period ended April 30, 2025, when compared to the period ended April 30, 2024, is explained as follows:
(Unaudited and $ in thousands)
| April 30, 2025 | April 30, 2024 | |
|---|---|---|
| Net earnings | (12 933) | 1 461 |
| Net earnings prior period | 1 461 | |
| Variation | (14 394) |
The variations in net earnings is allocated as follows :
| (Unaudited and $ in thousands) | ||||
|---|---|---|---|---|
| Increase (decrease) in retail operations | Increase (decrease) in investments | Increase (decrease) in investment properties | Increase (decrease) in adjusted net earnings | |
| As at April 30, 2025 | 5 677 | (16 773) | (3 298) | (14 394) |
Annual financial information
($ in thousands, except for per share amounts)
| January 31, 2025 | January 31, 2024 | |
|---|---|---|
| Revenue | 602 701 | 578 945 |
| Net earnings | 43 909 | 47 427 |
| Total assets | 724 945 | 621 029 |
| Net earnings per share basic and diluted | 1,35 | 1,44 |
| Dividends per share | 0,36 | 0,36 |
Financial position and dividends
Cash and investments, net of bank overdraft, decreased by $5,702,000 during the period ended April 30, 2025. This decrease is mainly due to the decrease in the unrealized value on the investments as of April 30, 2025. Financial investments consist of treasuries bearing interest, common and preferred shares, which at the close of the period ended April 30, 2025, had a market value of $199,622,000 (including cash).
As at April 30, 2025, working capital showed a deficit of ($10,342,000) a decrease of $2,319,000 in the deficit compared to the year ended January 31, 2025. Despite the working capital deficit, the Company has access to an unused credit facility as at April 30, 2025, and holds interest-bearing cash equivalents in its investment portfolio. Management considers these resources sufficient to meet short-term liquidity needs and financial obligations. The Company's shareholders' equity decreased from $529,507,000 as at January 31, 2025, to $516,143,000 as at April 30, 2025. As at April 30, 2025, the book value per share stood at $15.97 compared to $16.36 as at January 31, 2025.
Pursuant to the normal course issuer-bid put in place on April 15, 2024, and renewed on April 15, 2025, accordingly, 34,300 common shares were repurchased and cancelled by the Company. As a result of this change, the Company had, as at April 30, 2025, 32,328,000 common shares issued and outstanding.
During the period ended April 30, 2025, no options were granted. The Company may still grant pursuant to the Stock Option Plan a total of 5,710,864 options, representing $17.67\%$ of the issued and outstanding shares of the Company.
A semi-annual eligible dividend of $0.18 per Common Share has been declared to holders registered at the close of business on June 20, 2025, which will be paid on June 27, 2025.
Company pension plans and treatment of future actuarial gains and losses
The pension expense for all plans for the period ended April 30, 2025, amounted to $1,401,000 (compared to $1,441,000 for the period ended April 30, 2024).
Contributions paid by the Company for all plans for the period ended April 30, 2025, amounted to $1,201,000 (compared to $1,216,000 for the period ended April 30, 2024).
Related party transactions
The Company is bound by leases expiring in December 2027 and 2034 for which a lease liability of $5,410,000 is recorded as at April 30, 2025. For the period ended April 30, 2025, depreciation of $179,000 relating to the right-of-use asset and a $81,000 interest expense were recognized in earnings in connection with these leases.
Lease liability
Payments due by period
(Unaudited and $ in thousands)
| Carrying amount | Contractual cash flows | Under 1 year | 2 - 5 years | After 5 years | |
|---|---|---|---|---|---|
| Lease liability | 17 204 | 19 583 | 8 239 | 7 808 | 3 536 |
Accounting policies and accounting estimates
The accounting policies used in preparing the unaudited interim consolidated financial statements are described in Note 3 to the unaudited interim consolidated financial statements.
The main estimates discuss allowances on inventories. Inventory allowances are taken for obsolete and/or damaged products as well as for slow inventory turnover items. The allowances are based on many years of historic experience. Rebates for unsold merchandise are deducted from the value of the inventories at the date of the consolidated financial statements.
Financial instruments
The Company operates retail outlets in 24 locations across Quebec. A significant portion of the Company's sales are realized through the offering of financing solutions, by third-party credit providers, to the Company's customers. The cost of financing these sales is assumed by the Company, and is expensed, as the associated sales are realized. The Company assumes no credit risk in these transactions. The Company's working capital is composed primarily of trade and other receivables, inventory and cash, while its short-term liabilities include bank overdraft, suppliers of goods and services, customer deposits, employee benefits liabilities and lease liability. The change in working capital reflects the associated fluctuations in all of the constituent accounts incurred during the normal course of the Company's activities. The Company has a positive cash position, which is invested in various financial instruments.
The Company records its investments at market value as indicated in Note 3 and Note 8 of the unaudited interim consolidated financial statements as at April 30, 2025. The Company has no hedges against its investments in US funds and assumes 100% of any fluctuations in the markets for these investments. Furthermore, the Company assumes the risks interest rate fluctuations have on its fixed-income investments, as well as the risks stock market fluctuations have on the value of investments in publicly traded companies.
The Company owns most of its stores and distribution centers, such that commitments regarding leasing contracts and lease liabilities are relatively insignificant with regard to its overall activities as detailed in Note 9 of the unaudited interim consolidated financial statements as of April 30, 2025. The Company holds no hedging contracts or any other type of derivative products.
Quarterly results
(Unaudited and $ in thousands, except for per share amounts)
| April 30, 2025 | April 30, 2024 | July 31, 2024 | July 31, 2023 | |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| Revenue | 150 124 | 137 144 | 169 394 | 169 075 |
| Net earnings | (12 933) | 1 461 | 19 464 | 3 363 |
| Net basic earnings per share | (0,40) | 0,04 | 0,60 | 0,10 |
| October 31, 2024 | October 31, 2023 | January 31, 2025 | January 31, 2024 | |
| $ | $ | $ | $ | |
| Revenue | 143 781 | 140 078 | 152 382 | 134 690 |
| Net earnings | 8 494 | (8 449) | 14 490 | 14 496 |
| Net basic earnings per share | 0,26 | (0,25) | 0,45 | 0,44 |
Operations
Tanguay division
During the year ended January 31, 2025, the Company completed its revitalization program across its entire network for a total amount of $18,692,000, which was $1,308,000 less than the anticipated $20,000,000. The revitalization program involved converting its former Brault & Martineau and EconoMax stores into Tanguay stores in order to provide a better product and service offering and a unique customer experience in its market. This program resulted in a significant modernization of the store network, the introduction of a broader and more targeted product offering, and a more attractive in-store presentation that better meets customer expectations.
The Company is now focusing its efforts on growing its market share, stabilizing operations across its network, and maximizing the synergies generated by the operational and commercial reorganization implemented in May 2023.
Real estate division
As part of its long-term growth strategy and commitment to sustainable value creation, the Company undertook a strategic diversification into the real estate sector during the past year. This initiative is intended to optimize the value of its real estate portfolio while creating recurring, complementary revenue streams alongside its core retail operations. The strategy includes the development of investment properties, strategic site repurposing, and the selective acquisition of assets with strong long-term value potential.
On April 15th, 2024, the Company finalised the purchase of the RONA distribution center bearing the civic address 2055, boulevard des Entreprises in the city of Terrebonne. The transaction was in the amount of $96,000,000 before taxes which includes a lease-back agreement with RONA. The transaction was paid in full in cash from investments held by the Company. The Company intends to continue on a long-term basis to collect lease revenues from this property. The Company is currently pursuing extension and optimization work at this property, aimed at improving its operational efficiency and, consequently, creating greater rental value. During the year ending January 31, 2025, the Company made commitments totaling $28,810,000 regarding the extension. As of the period ended April 30, 2025, an amount of $12,437,000 had been committed and capitalized in the cost of investment properties under construction. Of this amount, $10,465,000 remained unpaid as of the end of the period. The Company also incurred costs of $20,125,000 for the optimization of this center, of which $10,238,000 remains outstanding at the end of the period. Consequently, a decrease in the financial assets used to finance this project is expected during the coming quarters. The Company estimates that the project will be completed by the end of summer 2025 and will be available for lease at that time.
At the end of April 2024, the Company finalised the purchase of land in Lévis located in the Quebec region, for an amount of $20,223,000. As of January 31, 2025, this land was transferred to the Company's real estate division, in accordance with the Company's intention to hold it for real estate development purposes or as long-term investment.
The Company entered into a partnership agreement with Urbania, who will be responsible for the development and construction of its property at 500 boulevard Le Corbusier in Laval into several residential rental towers. The Company intends to finance this real estate project at 75% with a long-term mortgage. The estimated value of the entire project is approximately $600,000,000. The Company created a new subsidiary, Le Corbusier-Concorde S.E.C. for this real estate project on January 31st, 2022. This real estate project was supposed to begin in the summer of 2025, but the Company is still waiting for the approval of all permits by the City of Laval. In fact, the Company is facing delays beyond its control, resulting in additional delays related to administrative procedures governed by the City of Laval. This situation is preventing the start of construction work, initially planned for June 2025, despite the Company's sustained and continued efforts to move the project forward. At this date, the new expected start date is March 2026. Once construction begins, the project should span over a period of 8 to 10 years with the construction of 5 rental residential towers for a total of approximately 1,200 doors.
The Company intends to proceed with the real estate development of several rental residential towers on its property located at 125 boul. Desjardins Est in Sainte-Thérèse. This real estate project is currently in the exploratory phase and the Company has identified a potential developer for the project. We are currently evaluating the initial budget estimates and financial models to complete the project's profitability analysis. At the same time, the Company has initiated preliminary steps with the City of Ste-Thérèse, with a view to proactive planning aimed at optimizing completion times. If the project proves profitable, we estimate that we will be able to obtain the necessary permits in December 2025 and begin construction in March 2026. Following the profitability analysis and the conclusion of an agreement with a potential developer, the Company should be able to announce the details of this real estate project during in the coming quarters.
These investments are part of the Company's strategy to increase the value of its real estate assets while generating new sources of recurring revenue.
Risk factors and market tendencies
The Company operates a furniture, electronic and household appliance retail business, and is therefore subject to many risk factors such as:
- Sensitivity to general economic conditions
- Reliance on key personnel
- Investment portfolio risks
- Third-party credit providers for financing solutions to clients
- Labour relations with employees, some of whom are unionized
- Maintaining profitability and managing growth
- Highly competitive nature of the retail industry
- Effectiveness of its marketing programs
- Capacity to anticipate changes in fashion trends and consumer tastes
- Retention of senior management
- Interest rates fluctuation risks
- Risks related to real estate sector concentration
- Risks related to tariff policies and reciprocal measures
The Company is also dependent on its management information systems, its distribution operations, and its suppliers.
For a number of years, we have seen an increasing presence of strong competitors operating on a national and international level.
A significant portion of sales are realized using financing solutions offered by third-party credit providers. A significant increase in interest rates or a tightening of credit conditions could have a significant impact on the Company's sales. There are no guarantees the Company will be able to continue procuring such advantageous financing solutions for its customers, which in the past has permitted the Company to maintain its growth.
It is impossible to isolate and measure the importance of each individual risk to which the Company is exposed. In the past, the Company has managed to adapt to these changes and maintain its market share notably by aggressive marketing campaigns and efficient management.
Management discussion and outlook for the future of the Company
In a constantly evolving retail environment, forecasting consumer behavior is an increasing challenge. Preferences shift rapidly, economic conditions influence both purchasing power and willingness to spend, and consumption habits are increasingly migrating toward digital channels.
Despite these uncertainties, management believes that the Company succeeds in setting itself apart through a set of complementary strengths. Its well-established brand image, widely recognized customer service quality, and its network of stores and distribution across Québec ensure strong local presence. In addition, its continuously improving digital platform enables it to respond effectively to the evolving expectations of consumers. This combination of factors allows the Company to maintain a solid market position and stable performance, even in a complex and ever-changing commercial environment.
The diversification into the real estate sector, although outside the Company's core operations, presents natural synergies with its retail network, particularly in asset management and the generation of stable cash flows. Management believes that this diversification will enhance the Company's financial resilience, create new growth levers, and reduce its reliance on the retail sector.
The results for the first quarter of 2026 were promising and management remains confident that, thanks to its effective management, the operational and commercial reorganization carried out in May 2023, the solidity of its financial structure and the diversification undertaken in the real estate sector, the Company will be able to maintain its objectives which consist of increasing its market share in Quebec and its profitability, even in a more difficult market.
Disclosure controls and procedures (DCPs) and internal controls over financial reporting (ICRF)
The Company's management evaluated, as at January 31, 2025, the effectiveness of the design and operation of its DCPs and ICFR, as defined under National Instrument 52-109 - Certification of Disclosure in Issuers' Annual and Interim Filings. The evaluation was performed under the supervision of the Company's President and Chief Executive Officer (CEO) as well as the Chief Financial Officer (CFO). Based on such evaluation of ICFR, the President and CEO and CFO have concluded that the Company's DCPs and ICFR were effective as at January 31, 2025.
No changes were made in the Company's ICFR during the period beginning on February 1, 2025 and ended April 30, 2025, which have materially affected, or are reasonably likely to materially affect, the Company's ICFR.
Other information
This Quarterly Management Report for the period ended April 30, 2025 provides an analysis of the consolidated results of operations, financial position, and cash flows of the Company and its subsidiary. Additional information relating to the Company is available on the Company's website at www.bmtc.ca as well as on SEDAR at www.sedar.com.
This Quarterly Management Report is intended to assist in the understanding and assessment of significant changes and trends, as well as risks and uncertainties, related to the results of operations and financial position of the Company.
(s) Marie-Berthe Des Groseillers
Marie-Berthe Des Groseillers
President and Chief Executive Officer
June 5th, 2025