November 22, 2018
Quebec To Have Record 2018 Home Sales
The Quebec residential real estate market achieved record sales in 2017 and that record will be shattered in 2018 with more than 86,000 transactions forecast by the end of the year, says the Quebec Federation of Real Estate Boards (QFREB) in partnership with Desjardins. All census metropolitan areas (CMAs) in the province except Trois-Rivières are on track to post growth in the number of transactions this year. Montreal's real estate market continues to outperform the rest of the province with time-to-sale also falling sharply. Condominiums are the strongest category, followed by plexes. The suburbs ‒ particularly the South Shore and the Laval region ‒ are doing well, with increases of 12 per cent and seven per cent respectively to date in 2018. The North Shore has had four per cent increase in sales. The QFREB expects 2019 to start with a bang for the residential real estate market, with activity gradually slowing in the second semester due to steadily rising borrowing costs. The five-year mortgage rates posted by the main financial institutions will continue to climb, adding half a percentage point to end 2019 at around six per cent. Ultimately, the QFREB expects a slight one per cent increase in the number of transactions in 2019, for a new record of 87,650 sales.
Private Label Helping Consumers Make Ends Meet
Despite the U.S. economy growing at a strong 3.5 per cent annual growth rate in the third quarter, 49 per cent of consumers are making sacrifices to make ends meet, says the ‘IRI Consumer Connect’ survey. Consumers are continuing to rely on private label products to stretch their dollars. In fact, the report reveals that eight in 10 Americans buy private label products frequently or occasionally in order to save money. Private label products are quite popular with younger consumers, who tend to be driven more by product benefits than by brand name. Ninety-two per cent of Millennials are turning to private label products to save money, compared to 86 per cent of Generation Xers, 81 per cent of Baby Boomers, and 77 per cent of seniors. Consumers say private label quality is as good as national brands and often offer better value than national brands. Millennials, in particular, have very favourable views of private labels, with 76 per cent saying the quality is as good and 73 per cent saying the value is better. These viewpoints are making a positive impact on private label dollar sales, which increased 5.8 per cent compared to 1.5 per cent for national brands during the past year. In addition, private label unit sales increased 3.8 per cent compared to national brand unit sales decreases of 0.2 per cent during the past year.
IPG Completes Powerband Acquisition
Intertape Polymer Group Inc. (IPG) has completed its acquisition of the outstanding 26 per cent interest in Powerband Industries Private Limited. IPG now owns all of the issued and outstanding common shares of Powerband after this transaction, which is subject to regulatory approval in India. The company had already transitioned all management responsibilities to an IPG-appointed management team earlier this year so this transaction will not have any impact on day-to-day operations. The acquisition provides IPG with additional capacity for acrylic carton-sealing tapes in a low-cost manufacturing region with the goal of exporting these competitively-priced tape products to North America and Europe. Having this overseas asset has also enabled IPG to expand its market share in North America and negotiate better terms on raw materials for U.S. production of similar packaging tapes.
Skymer Joins Derby
Amber Skymer is senior product manager at Derby Building Products Inc., manufacturer of the Tando and Novik brands of exterior cladding. In this role, she will develop and lead programs targeting the builder, contractor, architect, and designer. She will also serve as Derby’s lead on market knowledge for competitive products and categories. Most recently, she worked as category manager at Wolf Organization.
Leon's Third-quarter Sales Flat
Leon's Furniture Limited had sales of $707 million for the third quarter of 2018, an increase over sales of $706.5 million in the third quarter of 2017. Gross margin as a percentage increased 94 basis points to 43.6 per cent. The company had adjusted net income of $34.3 million for the quarter, down from adjusted net income of $34.4 million in the year-ago period.
November 21, 2018
Divestures Affect Lowe's Earnings
Lowe's Companies Inc. had net earnings of $629 million for the third quarter of 2018, a decrease over net earnings of $872 billion in the third quarter of 2017. Net earnings were 3.61 per cent of sales compared to 5.2 per cent of sales last year. Net earnings reflected asset impairment and severance obligations related to closing underperforming stores in Canada and the U.S. as well as the decision to exit retail operations in Mexico. The company has also decided to exit non-core activities including Alacrity Renovation Services and Iris Smart Home. Sales for the third quarter increased 3.8 per cent to $17.4 billion from $16.8 billion in the third quarter of 2017 and comparable sales increased 1.5 per cent. Comparable sales for the U.S. home improvement sector increased two per cent year-over-year. Gross margin was $5.66 billion or 32.5 per cent of sales compared to $5.71 billion and 34.07 per cent of sales.
October U.S. Construction Starts Soar 21 Per Cent
New U.S. construction starts in October climbed 21 per cent to a seasonally adjusted annual rate of $864 billion, says Dodge Data & Analytics. The substantial increase followed three straight months of decline, during which the pace of total construction starts fell 22 per cent from the exceptionally strong volume reported in June. Non-residential building surged 53 per cent, as several very large projects lifted the manufacturing plant, office building, and transportation terminal categories. Non-building construction advanced 14 per cent in October, supported by growth for public works while the electric utility/gas plant category bounced back from depressed activity in September. Residential building edged up a slight two per cent, helped by improvement for multi-family housing. During the first 10 months of 2018, total construction starts were up one per cent from the same period a year ago. October’s data raised the index to 183, up from September’s 150, marking the second highest reading for the index so far in 2018 after June’s 192. Through the first 10 months of 2018, the index averaged 169, up slightly from the full year 2017 average of 166.
McGill Opens Bensadoun School Of Retail Management
McGill University has opened its Bensadoun School of Retail Management (BSRM) which will act as a hub in the heart of Montreal for students, researchers, and practitioners to work collaboratively towards addressing the host of real-world challenges facing retailers today. As an interdisciplinary, forward-looking school dedicated to all facets of the retail industry, its researchers will focus on fostering sustainable consumption and healthy societies. BSRM and McGill are committed to equipping the next generation of retail leaders with the necessary tools and knowledge to address the retail industry's transformation. A first cohort of students entered the retail management concentration of the BCom program this fall. The PhD in Management with a specialization in retail management is set to admit its first students in the fall of 2019 and a specialized Masters of Management in retail is scheduled for 2020. Executive education is set to be launched in 2019 with both custom and open-enrollment offerings. A key area of focus for BSRM will be sustainability, which is central to the transformation of retailers' practices and products.
Giant Tiger Opens Ottawa Location
Giant Tiger has opened a store in Ottawa, ON. The 19,294-square-foot store will be stocked with on-trend home and family fashions, brand-name groceries, and everyday necessities.
NCI Closes Ply Gem Merger
NCI Building Systems, Inc. has completed its merger with Ply Gem Parent, LLC. The completion of the transaction follows the satisfaction of all customary closing conditions, including approval of the merger by NCI shareholders. NCI shareholders retained a 53 per cent ownership of the company’s common equity with Ply Gem shareholders now owning 47 per cent. The combination will increase the companies' scale, broaden product offerings, and expand the customer base. In addition, the new company will be a stronger, more diversified enterprise serving all channels of the construction markets – residential, repair and remodel, and commercial. The company will operate under a name to be determined and each entity will preserve its existing established brands. It will be headquartered in Cary, NC, with a significant presence in Houston, TX.
Hultafors Group Names President
Peter J. Chatel has been named chief executive officer of Johnson Level and president of Hultafors Group North America, effective November 26. Previously, he was a member of the senior executive team who led the turnaround of Senco Brands resulting in the successful transition of the business from private equity to Kyocera. Hultafors Group acquired Johnson Level & Tool in April.
Griffon Has Strong Revenue
Griffon Corporation had revenue from continuing operations of $546 million in the fourth quarter of its 2018 fiscal year, an increase of 27 per cent over revenue of $431 million in the fourth quarter of 2017. Income from continuing operations was $1 million for the quarter compared to $4.3 million in the prior year quarter. Segment adjusted EBITDA was $67 million, up 26 per cent over adjusted EBITDA of $54 million a year ago. Revenue for the home and building products segment increased 55 per cent year-over-year. AMES revenue increased 72 per cent compared to the prior year quarter due to the acquisitions of Tuscan Path, CM, Harper, and Kelkay. Earnings for the segment increased 40 per cent.
November 20, 2018
September Manufacturing Sales Remain Flat
Manufacturing sales edged up 0.2 per cent in September to $58.5 billion, following a 0.5 per cent decrease in August, says Statistics Canada. Sales increased in eight of 21 industries, led by higher sales in the transportation equipment industry. However, these gains were largely offset by declines in the machinery and wood product industries. Constant dollar sales edged down 0.1 per cent, indicating a lower volume of goods sold. Wood product sales were down for the fourth consecutive month, declining 2.9 per cent to $2.9 billion in September. Many wood product manufacturers indicated that they experienced lower demand and lower prices in the previous four months. Exports of lumber and other sawmill and millwork products were also down in the previous three months. Six provinces posted higher manufacturing sales in September, led by Ontario. Decreases in New Brunswick and Manitoba partially offset the increase. The inventory-to-sales ratio was unchanged at 1.44. This ratio measures the time in months that would be required to exhaust inventories if sales were to remain at their current level. Unfilled orders increased 0.4 per cent to $95 billion and this was the eighth consecutive monthly gain.
Sico Moves Quebec Operations To Ontario
Paint manufacturer Sico will close its Montreal, QC-based distribution centre and Quebec City, QC-based plant in September 2019 to relocate its architectural coatings production to Ontario. Sico was founded in Quebec City in 1937, was acquired by AkzoNobel in 2006, and then acquired by PPG Industries Inc. in 2013. PPG says the move is necessary to remain competitive in the market. The move will optimize manufacturing output and distribution capacity according to product demand. The company also says it will retain various Quebec branches as well as Sico administrative offices in Longueuil, QC.
Employers Should Prepare For Holiday Work Parties
With the holiday season just around the corner, employers should take proactive steps to ensure the health and safety of their employees who attend holiday parties or other workplace celebrations, say David W. Foster and Pamela M. Hillen in a Hicks Morley ‘FTR Now’ bulletin. The authors say employers face a risk of liability should an employee be permitted to drink too much at a work-related function. Liability can also arise from the actions of an employee who becomes impaired at a workplace function and then engages in inappropriate behaviour. With the legalization of recreational cannabis in October, there may also be a concern with impairment from cannabis use during workplace functions. Employers should consider the rules and requirements they have established regarding cannabis use; workplace policies may specifically prohibit the use of recreational cannabis at work-related functions. The bulletin says it is important to make expectations clear at any workplace function and prepare a strategy in advance that considers all possible scenarios. By planning ahead of time, employers can help avoid many of the problems associated with excess alcohol consumption and can help to ensure that an enjoyable and safe time is had by all, say the authors.
AI Powers Shopping Assistant
Shopbrain has launched an AI-powered shopping assistant that helps online shoppers in the U.S. and Canada find the best price in seconds. The browser extension can be added to Chrome and automatically activates when users browse for products online, searching other retailers across the web to find the best price on their chosen products. It says 86 per cent of Americans say that the ability to compare prices from several different sellers is important to their final purchasing decision. To find the lowest price online, consumers spend time researching the best price before making a decision on a product. Through AI, more than one billion products at 10,000 retailers, merchants, and search engines, including Amazon, Best Buy, Home Depot, Walmart, Target, and Google Shopping, can be searched. The Shopbrain shopping assistant always provides customer reviews for products, so shoppers can evaluate quality against price.
Coyle Joins ADS
Patrick Coyle is vice-president, logistics and supply chain planning, with Advanced Drainage Systems, Inc. (ADS), effective November 26. He brings more than 15 years of experience in executing end-to-end supply chain programs, driving continuous improvement initiatives, and leading organizational change. Most recently, he served as senior director of supply chain, Americas, at the Goodyear Tire & Rubber Company.
James Hardie Profit Rises
James Hardie had adjusted net operating profit of $80.9 million for the second quarter of its 2019 fiscal year, a seven per cent increase over the second quarter of its 2018 fiscal year. Adjusted EBIT was $106.9 million for the quarter, a one per cent increase year-over-year. Net sales increased 23 per cent to $644.6 million. The North American fiber segment volume increased five per cent compared to the year-ago period; with EBIT margin for the segment up 22.8 per cent. The Europe building products segment adjusted EBIT margin increased 9.7 per cent year-over-year. The company says that after a detailed review of its product portfolio and business segments to focus on its core business, it will discontinue the windows business and the multiple contour trim product line and simplify the core ColorPlus product offering.
November 19, 2018
Tariffs Increase Building Costs
Contractor prices for the construction of new non-residential buildings increased 1.5 per cent while prices for new residential buildings were up 0.8 per cent in the third quarter, says Statistics Canada. The rise in the cost of both non-residential and residential building construction was attributable to higher prices for steel and metal products, both affected by the tariffs imposed in June 2018. According to the Industrial Product Price Index, prices for primary ferrous metal products rose 14.3 per cent from January to September. Increases in contractor prices were observed for all types of new non-residential buildings and in all 11 surveyed census metropolitan areas (CMAs). Prices rose the most in Ottawa, ON, Vancouver, BC, and Montreal, QC. Prices for the construction of new non-residential buildings were up 4.3 per cent over the 12-month period ending in the third quarter. Construction costs rose for all types of residential buildings and in all CMAs covered by the survey. The largest gains were in Ottawa, followed by St. John's, NL, and Halifax,. Ottawa also led the price gain for the construction of single-detached houses and townhouses. Prices charged by contractors for new residential building construction were up six per cent over the 12-month period ending in the third quarter. Prices rose the most in Winnipeg, MB.
American Express Supports Small Business
American Express is encouraging cardmembers to 'Shop Small' with the launch of its latest campaign in support of Canadian small business. As part of the ongoing Shop Small program, the campaign brings cardmembers closer to the small businesses they already love and helps them discover new independent businesses in their communities. First launched in 2013, the Shop Small program continues its efforts to bring value to small merchants and cardmembers. The program is part of American Express' strategic approach to supporting Canadian small businesses and broadening acceptance and it's seeing results. In 2017, over 70,000 additional small businesses started to accept American Express cards. After the success of last year's Toronto, ON-focused campaign, Shop Small has expanded to include four key markets: Toronto, Vancouver, BC; Calgary, AB; and Montreal, QC. Consumers get a $5 statement credit when they spend $5 at a participating small merchant and up to $25 in statement credits when they shop up to five times at different participating locations with their American Express card during the offer period.
Canfor To Invest In VIDA Group
Canfor Corporation plans to purchase 70 per cent of the VIDA Group of Sweden. The current owners of VIDA will retain a 30 per cent interest and continue to manage the day-to-day business. "With the acquisition of VIDA, we are excited to become a truly international manufacturer and provider of wood product solutions for our global customers," says Don Kayne, president and chief executive officer of Canfor. "This transformational growth will allow Canfor to further diversify and secure a worldwide fibre supply to meet the growing demand of our customers for high quality wood products." VIDA is Sweden's largest privately-owned sawmill company, operating nine sawmills in southern Sweden with an annual production capacity of 1.1 billion board feet. All of the sawmills produce spruce and pine products and are strategically located in high quality and sustainable fibre regions of Sweden. In addition, VIDA has nine value-added facilities that include premium packaging, modular housing, industrial products, and energy. The transaction is expected to close in the first quarter of 2019.
Building Professionals Going Green
Almost half (47 per cent) of architects, engineers, contractors, and other building professionals say they are planning to do the majority (60 per cent) of their projects green by 2021, says the 'World Green Building Trends 2018 SmartMarket Report' by Dodge Data & Analytics. The report indicates that the international market for green construction projects has grown significantly in the last 10 years and demand for green building activity is poised to grow by double in some regions. Green buildings provide a triple win – delivering measurable benefits for building owners, occupants, and the public from reduced operating costs, improved indoor air quality and reduced energy consumption. Business benefits include operating cost values and increased building asset values. Similar benefits are reported for green building retrofits and renovations. The report finds that the biggest challenge to increased green building – the perception that it costs more than traditional construction – declined dramatically from over three-quarters in 2012 to under half today. Healthier buildings emerge as a top green priority in the study. For example, the top social drivers for green buildings include improved occupant health and well-being and increased worker productivity.
2017 Global DIY Market Increases 2.6 Per Cent
In 2017, the DIY/home improvement world market turnover reached €589 billion, an increase of 2.6 per cent compared to 2016, says Fediyma (European Federation of DIY Manufacturers). North America and Europe combined represent approximately 85 per cent of this market, although their joint population accounts for only 15 per cent of the world population. The DIY markets of these two continents total €503 billion. North America and Europe cover 60 per cent and 28 per cent of the world market respectively. North America had the highest average DIY expenditure per capita in 2017 at €919. Approximately 81 per cent of the global DIY market (€477 billion) is concentrated in eight countries: the U.S., Germany, Canada, Japan, the UK, France, Australia, and Italy. Home Depot and Lowe's account for 25 per cent of the global retail market share.
Lalonde Succeeds Longworth As CFO
Remi Lalonde is senior vice-president and chief financial officer at Resolute Forest Products Inc. Previously, he was vice-president, strategy and corporate development. He succeeds Jo-Ann Longworth, who is retiring after seven years in the role.
Slight Rise In Walmart Revenue
Walmart had total revenue of $124.9 billion for the third quarter of 2018, an increase of 1.4 per cent over total revenue of $123.2 billion in the third quarter of 2017. Net sales at Walmart International were $28.8 billion for the quarter, a decline of 2.6 per cent compared to the same period a year ago. Comparable sales for the quarter increased 3.4 per cent year-over-year. Operating income was $5 billion, up from $4.8 billion last year. eCommerce sales grew 32 per cent.
November 16, 2018
Home Sales Slide
National home sales declined in October, falling 1.6 per cent from September, says the Canadian Real Estate Association (CREA). Actual (not seasonally adjusted) activity was down by 3.7 per cent from one year ago and the number of newly-listed homes eased 1.1 per cent. CREA says while activity is still stronger compared to the first half of 2018, it remains below monthly levels recorded from early 2014 through 2017. Transactions declined in more than half of all local markets, led by Hamilton-Burlington, ON; Montreal, QC; and Edmonton, AB. Although activity did improve modestly in many markets, it was offset by a decline in sales elsewhere by a factor of two. There were 5.3 months of inventory on a national basis at the end of October. While this remains in line with its long-term national average, the number of months of inventory is well above its long-term average in the Prairie provinces and in Newfoundland and Labrador. By contrast, Ontario and Prince Edward Island are the two provinces where the measure remains more than one standard deviation below its long-term average. In other provinces, the number of months of inventory is closer to the long-term average and suggests that sales and inventory are well balanced.
The Hillman Group, Inc., a solution provider for the retail hardware market, will relocate its Canadian national distribution centre and head office to a newly designed, 400,000-square-foot facility in the Metro East Business Park in Toronto, ON. "Over the past two years, we have invested considerable time and resources implementing new sales processes, along with warehouse and forecasting systems across our existing branch network," says Scott Ride, president of Hillman Canada. "All of these system changes, in conjunction with the move to a new and expanded western regional hub in Edmonton, AB, were developed with an eye to create an industry-leading distribution platform in the Canadian fastener and hardware market." Now that construction of the Toronto facility is approaching completion, Hillman is entering the last phase of its Canadian modernization plan, consolidating seven operations around the Greater Toronto Area. Starting in early 2019, a phased move of the company's $200+ million Canadian business will begin in the new location.
SPG Files For Bankruptcy Protection
Toolbox manufacturer SPG International has filed for protection under the Bankruptcy and Insolvency Act, says Drummondville, QC-based Journal Express. The 60-year-old company, located in Drummondville, has experienced significant financial difficulties for several years. The company filed on September 21 and ceased manufacturing activities November 5. The company has six months to submit a proposal to its creditors. SPG manufactured the Craftsman brand toolboxes for Sears Canada.
West Fraser To Reduce BC Production
West Fraser will permanently curtail approximately 300 million board feet of combined lumber production at its Fraser Lake and Quesnel, BC, sawmills. The curtailment will be realized through the elimination of the third shift at each sawmill. British Columbia faces a timber supply shortage owing to the Mountain Pine Beetle infestation. In anticipation of this decline, West Fraser has invested in excess of $500 million in its British Columbia assets to improve the safety and competitiveness of its mills to attain maximum value from the available timber resource. Today’s decision better aligns the company's production with current timber supply.
Schneider Electric Launches Home Monitoring System
Schneider Electric has launched its Wiser Energy System, an integrated monitoring system for residential homes that provides insights into activity and energy use. Wiser Energy is a digital app that provides real-time, easy-to-understand, and actionable data to help homeowners make their homes greener, more efficient, and wiser, says the company. The solution offers real-time access to energy usage and data in the home, accessible through a connected application so the information can be viewed from anywhere. The data and visibility enable homeowners to take control of their energy usage, improve efficiency, and maximize savings. The app will self-identify individual devices in the home using big data algorithms. It can also optimize solar installations.
Clark Leads Supply Chain
Doug Clark is senior vice-president, supply chain, at Lumber Liquidators. He joined the company in 2017. His promotion is part of the company's leadership transition and succession plans.
Acquisitions Drive CanWel Margins
CanWel Building Materials Group Ltd. had revenues of $350.2 million for the third quarter of 2018, an increase of 10.5 per cent compared to revenues of $316.8 million in the third quarter of 2017. Gross margin dollars for the quarter totaled $50.8 million or 14.5 per cent of revenues. EBITDA was $20.1 million. Net earnings were $8.5 million. The construction materials segment sales made up 58 per cent of the company sales with the balance made up of 35 per cent specialty and allied products and seven per cent forestry and other products. Gross margin dollars were $50.8 million, an increase of 20.9 per cent over gross margin dollars of $42 million. Gross margin percentage increased to 14.5 per cent of revenues versus 13.3 per cent during the same period in 2017. The increase in margin dollars and percentage mainly reflects margin improvements due to CanWel’s acquisitions. EBITDA for the period was down 5.6 per cent to $20.1 million compared to $21.3 million last year.