Five things you need to know before you start your work day on Feb. 13
Good morning once again! Shari Kulha (@FPExecEditor) here catching you up on the business stories of note from yesterday. Buyers seemed to have caught their collective breaths over the weekend, helping to thaw the markets and to post gains on virtually every index. But many believe clouds still hover on equities’ horizon. Here’s what else we’re following:
U.S. isn’t buying our coffee
Despite slower-than-anticipated store growth for the coffee-and-donut chain across North America, weak same-store sales on its home turf and an ugly spat with its franchisees, Restaurant Brands International posted quarterly earnings of $395 million, compared with $118.4 million for the comparable period. Revenue was up only slightly, indicating that cost-cutting is producing results.
Bottom line: Three years after being purchased by RBI, and after closing weaker locations, Tim Hortons has fewer restaurants in the U.S. than it did at the time of the merger. Nonetheless, as Hollie Shaw reports, shareholders liked RBI’s results, which included Burger King and Popeye’s — both of which had stronger sales than Tim’s. The stock closed up 7%.
Suncor is buying more oilsands, but …
Suncor Energy Inc. put another $920 million into the oilsands, buying Mocal Energy Ltd.’s 5% interest in the project. But, as Geoffery Morgan reports, the company also made a small but significant deal to buy a stake in a North Sea project. Suncor CEO Steve Williams has said he wants to deploy some of his $2.7B in cash outside the country.
Bottom line: “We’re having to look at Canada quite hard,” Williams said. “The cumulative impact of regulation and higher taxation than other jurisdictions is making Canada a more difficult jurisdiction to allocate capital in.”
Ontarians will buy pot through Shopify
The LCBO has picked Shopify to run its online marijuana sales. Shopify will have iPads in the liquor retailer’s brick-and-mortar stores to process transactions and to display product and health information. Shopify’s platform will also manage inventory, accounting and human resources operations.
Quote: This partnership “is a great example of a made-in-Canada innovation, which we are proud to be a part of,” said Loren Padelford, vice-president of Shopify Plus, the division that focuses on big clients.
Scotiabank buying Jarislowsky
Bank of Nova Scotia is buying Jarislowsky Fraser for about $950 million. The Montreal-based independent investment firm has more than $40 billion in assets under management via pension funds, corporations and high-net-worth clients. Geoff Zochodne reports that the deal, expected to close by the third quarter (pending regulatory approvals), would create Canada’s third-largest active asset manager, with around $166 billion in assets under management.
Bottom line: Scotiabank, Canada’s third-largest lender, said in a release that it would “primarily” pay for its purchase by issuing shares. The Jarislowsky management team will continue to run the existing business and retain its name and its investment independence.
Who’s buying for half a mil?
What kind of real estate can you buy with $500,000? In Toronto, a new condo about half the size of a badminton court, while in Vancouver, no new projects had availability below that price point. Builders didn’t put up enough supply in Vancouver, Naomi Powell reports, but in Toronto a record number of buildings went up; however, the lower-priced units sold quickly, raising their price points.
Bottom line: In Calgary’s and Edmonton’s condo markets, that amount would buy you a two-bedroom unit between 850 and 1,000 square feet in a desirable area near the core.