CKUA

[Tackler]

Liquor Stores earns $11.51-million in 2006

2007-03-08 08:06 ET - News Release

Mr. Irv Kipnes reports

LIQUOR STORES INCOME FUND REPORTS 2006 AND FOURTH QUARTER RESULTS

Liquor Stores Income Fund has provided its results for 2006. The fund reported sales of $222.0-million compared with $157.4-million for 2005. Sales for the fourth quarter of 2006 were $71.0-million compared with $50.7-million in 2005.

The strength of the Alberta and British Columbia economies led to same-store sales increases of 7.2 per cent and 7.1 per cent for the year and the fourth quarter, respectively. For 2007, the fund expects that same stores sales increases will be moderate and in the range of 2 per cent to 4 per cent.

Operating margin was $19.5-million or 8.8 per cent of sales for 2006 compared with $12.9-million or 8.2 per cent of sales for 2005. For the fourth quarter of 2006 operating margin was $7.1-million or 10.1 per cent of sales compared with $4.8-million or 9.4 per cent of sales for the same period in 2005.

Distributable cash for 2006 was $1.39 per unit and distributions declared were $1.24 per unit. For the fourth quarter of 2006, distributable cash per unit was 45 cents and distributions declared were 35 cents per unit.

For the year ended Dec. 31, 2006, earnings before non-controlling interest were $16.0-million or $1.35 per weighted average unit outstanding and net earnings were $11.5-million or $1.32 per weighted average unit outstanding. For the fourth quarter ended Dec. 31, 2006, earnings before non-controlling interest were $6.2-million or 45 cents per weighted average unit outstanding and net earnings were $4.6-million or 45 cents per weighted average unit outstanding.

Irv Kipnes, chief executive officer of Liquor Stores GP Inc., stated: "We are extremely pleased that the execution of the fund's growth strategy in 2006 led to an increase from 75 stores at the start of 2006 to 105 stores today. Equally, we are pleased that our continued focus on operations led to improvements in same-store sales, operating margin and earnings.

"Beyond 2006, the fund intends to continue to follow the acquisition and store development strategy that led to an increase in the number of stores to 105 from 75. The fund believes there will continue to be a consolidation trend in the industry and that the fund is well positioned with the capital and human resources to benefit from this trend.

"In addition to one store that the fund acquired to date in 2007, the fund so far has commitments to develop and open six stores in 2007. The fund has set an objective of doubling the number of stores it operates in the next three to five years.

"All of the growth from new store development and acquisition results from transactions with arm's-length third parties, and the accretion in value from this growth continues to accrue to the benefit of the fund's unitholders.

"Because of our growth and improvements in operations, we announced on Feb. 7, 2007, that the board of directors of Liquor Stores GP Inc. had approved an increase in cash distributions from $1.40 annually (11.67 cents per month) to $1.50 (12.5 cents per month). The increase will be effective commencing with the distribution payable April 13, 2007, to unitholders of record March 30, 2007."