NSLC Releases Year-End Financial Performance
Halifax, June 14, 2022 – The NSLC released its year-end financial results today (April 1, 2021 – March 31, 2022), reporting earnings of $268.7 million. Total sales for the year were $820.5 million, with beverage alcohol sales of $718.7 million and cannabis sales of $101.7 million.
“We undertook some large corporate initiatives this fiscal year while continuing to manage our operations through the pandemic,” said Greg Hughes, President & CEO. “These included the addition of 13 new cannabis locations, the launch of home delivery for beverage alcohol, and a new community investment program.”
There was a 3.5% increase in sales to $820.5 million with an 18.2% increase in cannabis sales and a 1.7% increase in beverage alcohol sales. Overall, there was a 0.1% reduction in the volume of beverage alcohol purchased.
“We are delivering on our strategic priorities to support the growth of local industry and ensure we offer access to a safe and secure supply of cannabis across the province,” Hughes said. Sales in both categories have increased, however earnings were reduced by 2.1%. Factors contributing to this included lower margins on both local products and cannabis, higher payroll costs, and increased freight costs.
The increase in sales reflects ten extra selling days this fiscal year due to some Sunday closures the previous year and improved access to cannabis with the addition of 13 new stores.
Licensee sales started returning to more normal levels as Nova Scotians support bars, pubs, and restaurants. Sales to licensees were up 45.1% as COVID-19 restrictions were lifted. Sales to Private Wine and Specialty Stores were up 26.7% and sales to Agency stores were down 7.3% after experiencing unusually high sales during the peak of pandemic measures.
Cannabis experienced the strongest growth of all categories with an 18.2% increase in sales, surpassing sales in the Ready to Drink category. We added 13 more cannabis stores to our network across the province for a total of 37 stores. “This improved access to a safe supply of cannabis along with a further reduction in prices as we work to impact sales in the illicit market,” Hughes said.
“We’re pleased to see customers are passionate in their support of our local industry partners,” Hughes said. Sales of local beverage alcohol increased 12.0% to $84.6 million and cannabis sales increased 40.1% to $23.6 million. Cannabis also experienced a 15.7% reduction in the average price per gram to $6.94 and local listings now represent 28% of all listings.
We continued to invest in our store network across the province. Our $9.2 million investment last year focussed on major renovations to four beverage alcohol stores in smaller communities and the addition of 13 new cannabis stores. Additionally, $2.4 million was invested in key initiatives including the launch of home delivery, enhancements to the web site, and IT systems which support store operations.
The NSLC has a long history of giving back to our communities by making meaningful social and economic contributions. Through our new community investment program, and together with our teams, partners, and customers, we invested close to $1.2 million dollars in more than 100 charities and causes across the province. As part of the program, employees volunteered their time that was matched by a corporate donation of $6,000 that was given to 25 non-profit organizations.
“Nova Scotians are caring people. It’s incredible how our teams, our customers, and our suppliers continued to support one another this past year to help create stronger communities,” Hughes said. “I’m extremely proud that we were able to do this together while executing on our strategic priorities and providing a strong return to the province.”
YE Business Highlights:
- Our diligent front-line employees asked customers who appeared to be under the age of 30 for valid photo ID more than 2.4 million times, a 9% increase over the previous year, and refused service 21,364 times.
- Thanks to the outstanding efforts of our team members, customers, and vendors, we raised $460,000 for the IWK Foundation to support the critical care needs of women, children, and families in the Maritimes.
- Enabled Make-A-Wish Canada to deliver wishes to three critically ill children through a $14,000 contribution.
- Enabled the Mental Health Foundation to provide grants to 58 non-profit organizations.
- Supported Feed Nova Scotia through volunteer days and by coming together with our customers and vendors to raise enough money to deliver 278,000 meals.
- Added 13 cannabis stores to the network:
- Bayers Lake Park, Berwick, Bible Hill, Dominion, Eastern Passage, Larry Uteck, Lunenburg, Mahone Bay, New Waterford, Novalea Drive, Porters Lake, Welton St. in Sydney, and Sydney Mines
- Completed four major store renovations: Bible Hill, Dominion, Eastern Passage, and Porter’s Lake
- Launched home delivery for beverage alcohol and made enhancements to the website.
- Implemented core IT system upgrades in support of store operations.
- Implemented a product testing program to ensure the quality and safety of products we offer our customers.
Financial Highlights (compared to the same period last year):
- Net income (earnings) totaled $268.7 million; down $5.8 million or 2.1%.
- Total sales were $820.5 million; an increase of $27.4 million or 3.5%, due to increased beverage alcohol and cannabis sales.
- Cannabis sales were $101.7 million, an increase of 18.2%.
- Beverage alcohol sales were $718.7 million, an increase of 1.7%.
- Retail customer transactions (purchases) for beverage alcohol were up 2.9%, and the average dollar value of each transaction was down 2.6% to $38.37.
- The total volume of beverage alcohol sold was down 0.1%.
- Retail customer transactions for cannabis were up 29.5% primarily due to the addition of 13 new stores, and the average dollar value of each transaction dropped by 8.7% to $39.62.
Local Product Highlights:
Beverage Alcohol
- Nova Scotia wine saw very strong growth of 15.3% to $15.5 million.
- Nova Scotia spirit sales experienced strong growth of 12.2% to $12.6 million.
- Nova Scotia Ready to Drink sales saw slower growth of 5.1% to $30.0 million.
- Nova Scotia beer led the growth in local product sales with an 18.7% increase in sales to $26.4 million. This growth was driven by the popularity of 12-packs. We listed products from 34 local breweries, with more accepted for the current fiscal year.
Cannabis
- Nova Scotia cannabis led the growth in local products at 40.1% to $23.6 million.
- Nova Scotia cannabis accounts for 23.2% of all cannabis sales.
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Business Highlights
|
YE
|
2021/2022
|
2020/2021
|
|
Sales Volume (Hectolitres)
|
848,258
|
849,163
|
|
Spirits
|
$ 193,498,855
|
$ 192,169,673
|
|
Wine
|
158,401,459
|
152,598,152
|
|
Beer
|
273,819,419
|
276,198,814
|
|
Ready to Drink
|
92,962,588
|
86,020,256
|
|
Cannabis
|
101,671,213
|
85,987,361
|
|
Non-liquor
|
99,455
|
94,763
|
|
Total Sales by Category
|
$ 820,452,990
|
$ 793,069,018
|
|
|
|
|
Gross Profit
|
$ 407,679,307
|
$ 405,847,745
|
|
Operating Expenses
|
(86,230,144)
|
(79,166,693)
|
|
Gross Operating Income
|
$ 321,449,163
|
$ 326,681,052
|
|
Other Corporate Expenses & Other Earnings
|
(52,788,924)
|
(52,198,348)
|
|
Income from Operations
|
$ 268,660,239
|
$ 274,482,705
|
Sales by Channel
| Channel |
Sales |
Change |
| NSLC Retail Stores |
$702.1 M |
$19.0M (2.8%) |
| Licensees (bars/restaurants/pubs) |
$33.9M |
$10.5M (45.1%) |
| Agency Stores (independently owned) |
$63.0M |
$5.0M (-7.3%) |
| Private Wine and Specialty Stores |
$18.6M |
$3.9M (26.7%) |
| Other Wholesale |
$0.7M |
$0.1M (-35.4%) |
| Online |
$2.1M |
$1.2M (-35.4%) |
Operating Expense Ratio
The NSLC’s operating expense ratio for the fiscal quarter, including amortization and depreciation, was 16.9% compared to 16.6% reported the prior year.
Board Expenses
The NSLC released the Board of Directors’ expenses for the fourth quarter. These expenses amounted to $1.30 per Director, per day. An electronic version of these expenses is available for download.
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 visit our website at myNSLC.com.
For more information please contact:
Beverley Ware, Media Relations Manager
beverley.ware@myNSLC.com
O: (902) 450-5920
M: (902) 456-5040