BMTC GROUP $19.90 (Toronto symbol GBT.A; TSINetwork Rating: Extra Risk) (514-648-5757; No website; Shares outstanding: 49.2 million; Market cap: $979.1 million; Dividend yield: 1.2%) is one of Quebec’s largest retailers of furniture, electronics and household appliances. It sells these products through its two affiliates: Brault & Martineau Inc. and Ameublements Tanguay.
The company has 20 large stores in the Montreal, Quebec City, Repentigny, Laval, Saint-Georges, Chicoutimi, Sainte-Therese, Trois-Rivieres, Sherbrooke, Rimouski, Riviere-du-Loup and Gatineau areas. It also has six liquidation centres, six Sleep Gallery stores and two distribution and administration centres in Montreal and Quebec City. It’s now building a new store in Levis that will open shortly.
In the three months ended December 31, 2011, BMTC’s sales fell 10.0%, to $194.2 million from $215.8 million a year earlier. Lower consumer spending hurt BMTC’s sales. Earnings per share fell 10.0%, to $0.45 from $0.50.
In 2011, BMTC bought back 4.8% of its shares. The company plans to continue these repurchases. Share buybacks reduce the number of shares outstanding, which means that per-share earnings rise because net income is divided by fewer shares. That helps boost share prices.
The company’s near-term outlook is uncertain, but the stock trades at 17.2 times BMTC’s latest 12 months of earnings.
BMTC Group is a hold.
