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Residents of Nova Scotia shop at a local Sobeys supermarket. (Ingrid Bulmer/CP)
Residents of Nova Scotia shop at a local Sobeys supermarket. (Ingrid Bulmer/CP)

Empire Company reports strong fourth quarter profit, beefs up dividend Add to ...

The operator of Sobeys, Canada’s second-largest supermarket chain, is increasing its dividend following a higher a fourth-quarter profit announced Thursday.

Empire Company Ltd. said Thursday that net earnings, net of minority interest, were $92.1-million, or $1.35 per share, in the 13 weeks ended May 5.

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That was up from $82.5-million, or $1.21 per share, in the same year-ago quarter, which ended May 7, and was one week longer at 14 weeks.

The company declared a quarterly dividend of 24 cents per share, up from 22.5 cents. The dividend is payable July 31 to shareholders of record on July 13.

Meanwhile, the company announced that Bill McEwan was stepping down as president and CEO of Sobeys effective on Friday and would be replaced by Marc Poulin, currently president of Sobeys IGA operations.

On the Toronto Stock Exchange, Empire shares were up 27 cents at $54.27 in midmorning trading.

Adjusted net earnings for the 13 weeks ended May 5 were $89.5-million, or $1.32 per share, compared with $81.3-million, or $1.20 per share, in the 14 weeks ended May 7, 2011.

“The fourth quarter last year contained an additional week of operations for wholly-owned Sobeys Inc. which served to positively impact last year’s sales by $313.6-million and net earnings by approximately $6.3-million,” Empire said in its earnings release.

“Excluding the net earnings impact of the additional week of operations in the fourth quarter last year, adjusted net earnings, net of minority interest, increased $14.5-million or 19.3 per cent.”

Consolidated sales for the 13 weeks ended May 5 were $4.07-billion compared with $4.15-billion for the 14 weeks ended May 7 last year.

Adjusting for the additional week of operations at Sobeys last year, which impacted sales by $313.6-million, and for the impact of sales relating to the acquisition of 236 retail gas locations and related convenience store operations in the fourth quarter this year, which amounted to $131-million, sales increased $106.6-million, or 2.8 per cent.

For the 52 weeks ended May 5, 2012, consolidated sales were $16.25-billion compared with $15.96-billion reported for the 53 weeks ended May 7, 2011.

Adjusting for the additional week of operations at Sobeys last year and for the impact of sales relating to the retail gas and convenience store acquisition, sales increased $474.9-million, or three per cent.

Net earnings, net of minority interest, for the 52 weeks ended May 5 were $339.4-million, or $4.99 per share. That compared with $400.6-million, or $5.87 per share, recorded for the 53 weeks last year, which also included a net gain of $76-million on the sale of a 27.5 per cent ownership interest in Wajax Income Fund.

“We are clearly pleased with our fourth quarter and fiscal 2012 operating performance as we continue to profitably grow our food retail business and our investments and other operations in a very competitive environment,” Empire Company president and chief executive officer Paul Sobey said in a release.

Mr. Sobey noted that the 6.7 per cent dividend increase to 24 cents from 22.5 cents maked the 17th consecutive year of Empire dividend increases.

On a segmented basis, Sobeys contributed net earnings, net of minority interest, to Empire of $81.2-million versus $76-million in the fourth quarter last year, an increase of $5.2-million, or 6.8 per cent.

Other segments, including real estate interests, contributed a combined $10.9-million.

In addition to its food stores, Empire holds a more than 40 per cent interest in Crombie Real Estate Investment Trust, a similar interest in Genstar Development Partnership and, through ETL Canada Holdings Ltd., operates Empire Theatres.

 
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EMP.A-T Empire Company 65.30 -0.70
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