NSLC Releases Second Quarter Financial Performance

Halifax, October 27, 2020 ­­– The NSLC released its second quarter financial results today (June 29 -September 27, 2020), reporting a 5.4% increase in earnings for a total of $77.8 million. Total sales for the quarter were $216.6 million, with beverage alcohol sales of $194.5 million and cannabis sales of $22.1 million.

“This was a very strong quarter for us with growth in both cannabis and beverage alcohol sales,” said Greg Hughes, President & CEO. Customers purchased more from NSLC stores given the pandemic restrictions in place at bars, pubs and restaurants.

“Customers continued to visit our stores less frequently and made larger purchases during each visit,” Hughes said. This was reflected by a 10.9% decrease in the number of transactions and a 21.8% increase in the average basket size compared to the same period in the previous fiscal year.

Sales to licensees (bars, restaurants and pubs) were higher than the previous quarter but remain down compared to the same time last year ($6.1M or 44.2%) due to operational restrictions related to the pandemic.

“Throughout this quarter, our people, partners and customers continued to come together for the good of Nova Scotia raising record amounts for the IWK Health Centre,” Hughes said. “The IWK has long been our peoples’ charity of choice and I’d like to thank everyone involved for their commitment and generous contributions to this outstanding organization.”

Q2 Business Highlights

  • With the support of our customers and partners, we raised $401,771.72 for the IWK Health Centre.
  • Our diligent front-line employees asked customers who appear to be under the age of 30 for valid photo ID 600,707 times and refused service 6,469 times.
  • Invested in five stores in the NSLC retail network:
    • Opened three new modular cannabis stores: Liverpool, Elmsdale and Mill Cove
    • Completed renovating our Antigonish store to become a Signature store. Signature stores have a full assortment of beverage alcohol products from all categories, a Port section featuring premium wine and spirits tasting units, Limited Finds and a Cool Zone
  • Listed products from three new Nova Scotia cannabis producers: Mernova Medicincal Inc., Robinsons Cannabis Inc. and Truro Cannabis Inc.
  • Reduced the average price per gram of cannabis 26% compared to the same period last year.

Local Product Sales Highlights

  • Nova Scotia ready to drink products experienced another period of extremely strong growth with sales increasing by 58.0% to $9.6 million. This strong growth was driven primarily by vodka coolers and new sweeter coolers recently introduced to the market.
  • Nova Scotia craft beer sales grew by 2.2% to $6.3 million. We now list products from 30 local breweries, up from seven breweries just five years ago.
  • Nova Scotia spirit sales grew by 4.8% to $2.7 million. This category has experienced steady growth over the last couple of years.
  • Nova Scotia wine sales declined by 4.5% to $3.7 million.
  • Nova Scotia cannabis sales grew by 16.6% to $4.2 million. We listed products from three new Nova Scotia suppliers this quarter.

Financial Highlights 

(compared to the same period last year):

  • Net income (earnings) totaled $77.8 million; up $4.0 million or 5.4%.
  • Total sales were $216.6 million; an increase of $12.9 million or 6.3%, due to increased beverage alcohol and cannabis sales.
  • Cannabis sales were $22.1 million, an increase of 21.6%.
  • Beverage alcohol sales were $194.5 million, an increase of 4.8%.
  • Retail customer transactions (purchases) for beverage alcohol were down 11.3%, however the average dollar value of each transaction grew by 20.6% to $38.39.
  • The total volume of beverage alcohol sold was up 4.0%.
  • Retail customer transactions for cannabis were down 6.8%, however the average dollar value of each transaction grew by 30.6% to $44.08.

Q2 2020/2021 2019/2020
Sales Volume (Hectolitres) 246,608 237,135
Spirits 47,797,719 43,475,815
Wine 36,981,832 39,605,225
Beer 80,143,219 81,816,965
Ready-To-Drink 29,561,904 20,607,265
Cannabis 22,125,153 18,188,646
Non-Liquor 1,969 29,052
Total Sales by Category $216,611,796 $203,722,967
Gross Profit $110,298,838 104,070,250
Store Operating Expenses (19,966,426) (18,265,337)
Gross Operating income $90,332,412 $85,804,913
Other Corporate Expenses & Other earnings (12,541,173) (12,026,007)
Income from Operations $77,791,239 $73,778,907
 
Sales Channel Sales Change
NSLC Stores $183.2M $14.0M (8.3%)
Licensees (bars/restaurants/pubs) $8.4M $6.1M (-42.2%)
Agency Stores (independently owned) $20.7M $5.0M (32.4%)
Private Wine and Specialty Stores $3.6M $0.3M (-7.9%)
Other Wholesale $0.1M $0.1M (-39.5%)
Online $0.6M $0.3M (114.4%)

Operating Expense Ratio

The NSLC’s operating expense ratio for the fiscal quarter, including amortization and depreciation, was 15.0% compared to 14.9% reported the prior year.

Board Expenses

The NSLC released the Board of Directors’ expenses for the fiscal year. These expenses amounted to $1.06 per Director, per day. An electronic version of these expenses is available by clicking HERE.

About the NSLC

The NSLC manages the safe and responsible sale of beverage alcohol and cannabis in Nova Scotia, returning 100% of its profits to government to help fund key public services. The NSLC aspires to be a trusted retailer, partner, employer, and responsible industry steward that is helping to create a stronger Nova Scotia. For more information about the NSLC, please click HERE.

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For more information please contact:

Beverley Ware

Communications Advisor

beverley.ware@myNSLC.com

O: (902) 450-5920

M: (902) 456-5040