The Brick swings to profit

Furniture and electronics retailer The Brick Ltd.'s first-quarter net profit of $1.1-million reversed a year-earlier loss of $113.3-million on continued strong earnings from its financial services division as it reported audited financial results.

The report was essentially in line with a preliminary results report issued a week earlier.

The Edmonton-based company said its earnings amounted to one cent per share and compared to a loss of $2.05 per share in the same period of 2010, when The Brick recorded a one-time charge of $112.7-million related to the change in fair value of warrants.

Consolidates sales at corporate and franchise stores in the first quarter were down 3.5 per cent to $332.1-million, while same-store sales down 5.3 per cent.

The Brick's retail segment reported a loss of $3.4-million during the period. Earnings at the financial services division were $4.5 million.

On June 7, the company reported consolidated net profit before income taxes was $2.4-million. That compared with a loss of $114.4-million in the same quarter of 2010, the company said.

Sales in the latest quarter fell to $293.6-million from $306.3-million.

The huge loss in the 2010 quarter included a charge of $112.7-million related to the change in fair value of warrants as a result of the adoption of new International Financial Reporting Standard accounting rules.

Excluding the impact of this charge, the 2010 first quarter loss before income taxes would have been $1.7-million - an improvement of $4.1-million in profitability.

The Brick also reported it had $111-million in cash at the end of May, more than double the $45.2-million it had a year earlier.

The Brick Group is one of Canada's largest volume retailers of household furniture, mattresses, appliances and home electronics, operating under five retail banners.