The Western Investment Company of Canada Limited (TSXV: WI)
(“
Western” or the “
Corporation”)
today reported its financial and operating results for the three
and nine months ended September 30, 2024. The 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 September 30, 2023.
Western had a strong third quarter, with equity income coming in
at expectations, exceeding all third quarter results for the past
five years. Western’s associate companies
(“Associates”) are running smoothly, and the
transactions that will transition Western to a property and
casualty insurance and investment holding company are proceeding as
planned. Subsequent to the end of the quarter, Western acquired the
first tranche of shares in Fortress Insurance Company
(“Fortress”) increasing the Corporation’s
ownership in Fortress to 83.57% from 28.45%.
Uncapitalized transaction costs were $260,530 and $277,528 for
the three and nine months ended September 30, 2024 respectively.
Western’s portion of the $1.1 million gain on the sale of
Foothills’ Kelowna warehouse for the nine months ended September
30, 2023, was $554,934. In the absence of these extraordinary
items, it is apparent how the strong results in the third quarter
allowed Western to make up for the cooler start to the summer that
impacted seasonal businesses in the second quarter.
|
Three months ended Sept 30, |
Nine months ended Sept 30, |
($ unless otherwise
noted) |
2024 |
2023 |
% Change |
2024 |
2023 |
|
% Change |
Income from equity investments |
1,008,243 |
681,383 |
48 |
% |
1,178,644 |
1,779,803 |
|
-34 |
% |
Finance income |
188,269 |
161,969 |
16 |
% |
566,013 |
465,035 |
|
22 |
% |
Gain on disposal |
22,978 |
486 |
4628 |
% |
22,978 |
486 |
|
4628 |
% |
Management fees |
37,500 |
37,500 |
0 |
% |
112,500 |
112,500 |
|
0 |
% |
Income |
1,256,990 |
881,338 |
43 |
% |
1,880,135 |
2,357,824 |
|
-58 |
% |
|
|
|
|
|
|
|
Net
income |
521,104 |
488,590 |
7 |
% |
149,959 |
1,070,035 |
|
-86 |
% |
Remove one-time items: |
|
|
|
|
|
|
Extraordinary gain |
|
|
|
|
(554,934 |
) |
|
Uncapitalized transaction costs |
260,350 |
|
|
277,528 |
|
|
Normalized
Income |
781,454 |
488,590 |
60 |
% |
427,487 |
515,101 |
|
-17 |
% |
“It has been an incredibly busy and focused time for Western and
our Associates. Our Associates collectively delivered a strong
third quarter, allowing Western to outperform relative to the same
quarter last year despite some one-time transaction costs we had to
absorb,” said Scott Tannas, President and Chief Executive Officer
of Western. “Our transition towards a property and casualty
insurance and investment holding company is going smoothly.
Subsequent to the end of the quarter we increased our total
ownership in Fortress to 83.57%, and we expect to acquire the
remaining shares in the near future. The Private Placement that was
upsized to a maximum of $30 million in aggregate proceeds is
expected to close on December 6th and the Rights Offering appears
to have been well received. It is truly great to see our plan come
together to position Western and Fortress for growth and
success.”
Portfolio Company Report for the Nine Months Ended
September 30, 2024
Fortress Fortress gross written premiums
increased 102% to $30.9 million for the nine months ended September
30, 2024 compared with $15.3 million in the prior year. 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 on growing the Ontario market. Fortress is
primed to become a key focus of Western.
Key Highlights:
- Gross written premiums grew 102% to $30.9 million in the first
nine months of 2024 compared with $15.3 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 23% to
$22.7 million compared to $18.4 million as at September 30,
2023.
For the nine months ending September 30, 2024, Western
recognized equity income of $85,258 from Fortress compared to
$103,496 in equity income for the comparative period ended
September 30, 2023.
|
Three months ended Sept 30, |
Nine months ended Sept 30, |
Financial results ($) |
2024 |
2023 |
|
% Change |
2024 |
2023 |
% Change |
Insurance revenue |
6,206,829 |
5,341,356 |
|
16 |
% |
17,778,333 |
15,024,227 |
18 |
% |
Insurance service result |
616,370 |
600,699 |
|
3 |
% |
1,117,350 |
1,700,079 |
-34 |
% |
Investment income (loss) |
487,185 |
(72,147 |
) |
N/A |
|
974,696 |
283,048 |
244 |
% |
Net income (loss) |
188,588 |
45,692 |
|
313 |
% |
299,676 |
544,845 |
-45 |
% |
Gross written premiums1 |
15,167,777 |
4,326,060 |
|
251 |
% |
30,945,542 |
15,307,900 |
102 |
% |
1 Supplementary financial measure – total gross
insurance premiums written during the year.
GlassMasters Autoglass
(“GlassMasters”)GlassMasters continued its growth
trajectory with a 20% increase in sales for the nine months ended
September 30, 2024 compared to the comparative period in 2023.
GlassMasters has seen an average of 20% growth in revenue annually
for the past four years. This has been achieved through a
combination of growth at current retail and warehouse locations and
from the 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 boost in
profitability over the last couple of years. Gross margins have
improved by 2% from 2023. Sales, gross profit and EBITDA for 2024
are comparable to the prior year after removing the prior year's
one time gain on the sale of real estate. Foothills continues to
innovate with new products and is expanding its customer base.
Golden Health Care (“Golden”)Golden Health Care
is working to improve occupancy at its underutilized homes
resulting in an increase in revenue of 11% compared to the
comparative nine month period 2023. Inflation has impacted the cost
of care, and attracting staff has been challenging. Management is
focused on occupancy and is working to access government funding
for senior care, which would allow more seniors in need to access
their beds.
OutlookLooking forward, Western’s financial
results and their presentation will change significantly as a
result of the consolidation of Fortress, which became a subsidiary
on October 1, 2024. Equity income from the remaining Associates for
the fourth quarter are expected to be in line with normal
seasonality, with the fourth quarter traditionally being a modest
quarter. Costs associated with the transactions closing in the
fourth quarter will continue to be incurred.
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.
Readers should also refer to the forward-looking statements and
associated assumptions and risk factors contained in Western's
August 30, 2024 and September 26, 2024 news releases regarding the
Private Placement. The Private Placement remains subject to TSXV
approval.
"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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