Sunday, November 27, 2011

Teachers Pension Plan Cancels Sale of Maple Leaf Sports and Entertainment. Bell and Rogers Dispute Over Media Rights. Leafs, Raptors, Marlies, and the FC are Cash Cows for Fund.

The Ontario Teachers Pension Plan has called off its sale of Maple Leaf Sports and Entertainment (MLSE). The asset has been a cash cow for the Teachers and after elongated talks with Bell and Rogers broke down, the Pension Plan has decided it is in its best interests to maintain its majority stake.

MLSE currently owns the Toronto Maple Leafs, the Toronto Raptors, the Toronto Marlies, the Toronto FC, and the Air Canada Centre. With the Leafs alone valued at over $500 million, the Teachers were hoping to fetch somewhere between $1.4 and $1.8 billion for their 80% stake in the regional sports powerhouse.

Why the talks to sell the company broke down is uncertain. Some say that Bell and Rogers could not agree on the media rights for the company, but others say that the price the Teachers wanted was simply too high. MLSE, however, it reported to generate approximately $650 million in revenue annually, making it a substantial enterprise for the pension fund, which will need more and more cash as aging teachers start collecting their benefits.

Potentially, the Teachers will probably keep their search for a buyer below the radar for awhile, until the plan needs to liquidate some holdings in the future to pay more retirees. So MLSE is off the block for now, but undoubtedly its sale will resurface as a news item again soon.

Sunday, November 20, 2011

Tim Hortons Profits Soar to $103.6 Million in Quarter. McDonald's Pressure not Hurting Bottom Line. New Tim Hortons Lattes Will Ensure Margin Improvement.

This month, Canada's Tim Hortons reported that profits for the third quarter soared over 40% compared to last year. For the three month period Tim Hortons earned $103.6 million, well ahead of the $73 million earned last year. This was much better than many analysts had expected, and a clear sign that Tims is on the right track when it comes to new menu introductions and store expansions.

Also this year Tim Hortons announced that it is set to open 120 restaurants in the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman over the next five years. A clear indication that the company is primed for international expansion beyond the United States of America.

Much of the growth over the last quarter was from the sale of its bakery unit, which sold for a whopping $475 million. But other positive signs were its same store sales growth, and the increased prospect of a substantial share buyback with the new cash infusion into the company.

Though there is increased competitive pressure from McDonald's and its aggressive expansion into the coffee business in Canada, Tim Hortons is weathering the battle very well, and even perhaps benefiting from an increased overall market for higher priced lattes now in the lineup.

Shoppers Drug Mart Earnings Keep Investors Happy. New Opportunity With Zellers Closing.

Canada's Shoppers Drug Mart (TSE: SC) could be primed for a nice growth opportunity following the closure of Zellers' pharmacies in 2012. Though Target has announced plans to open its own pharmacies in 2013 once it begins expanding into Zellers' locations, the hiatus will give Shoppers and other pharmacies, including Rexall, some time to either poach or purchase the current client files.

Shoppers also recently announced an increase in overall sales of 2.1% over the third quarter of last year, and a rise in net earnings of 5%. Good news for investors who have been worried about earnings deflation in the prescription drug category due to new legislation in Ontario, Quebec, and British Columbia that have limited generic drug prices to 25% of the patented version.

Shoppers shares are up almost 12% in the last year and well ahead of an overall market, which is down 12%.

Full Disclosure: (Matthew Clarke currently owns or indirectly control shares in Shoppers Drug Mart).

Wednesday, November 2, 2011

Consumers’ financial literacy a key focus for Ottawa: Flaherty - The Globe and Mail

Consumers’ financial literacy a key focus for Ottawa: Flaherty - The Globe and Mail:

"The $5-million task force, headed by Sun Life Financial chief executive officer Donald Stewart, is charged with developing Canada's first national strategy to improve financial awareness.

After embarking on a cross-country tour, the task force released a report earlier this year that contained 30 recommendations on how to improve financial literacy. It said education, starting as early as elementary school, is the best way to sow the seeds of knowledge and skills Canadians need to save, invest, buy homes and plan for retirement later in life.

Other initiatives it recommended include the establishment of dedicated national leader on literacy, and that Ottawa create a one-stop website where Canadians can obtain information on everything from mortgages to retirement planning.

Financial literacy is usually defined as a combination of knowledge of financial matters and numerical skills, such as an understanding compound interest, as well as having the ability to put those skills into practice in making financial decisions."

Hopefully the federal and provincial governments follow-up on this idea with a concerted effort to actually make financial literacy courses mandatory in high-schools. The fact that Shakespeare, the Boer War, and an understanding of quadratic equations is mandatory, but consumer lending and banking is not is a key reason why our population is steering itself toward the financial abyss. Lobby your MPP's, MP's, and School Boards, and the Minister of Education to help this country get its act together. An uneducated populace is easily duped by middlemen and financiers.