Couche-Tard scouts for more M&As after record high revenues

MONTREAL Alimentation Couche-Tard Inc. is looking for new acquisitions following a blockbuster year that made it Canada’s largest company by revenues, the convenience store operator said Tuesday.

“I’d say M&A (mergers and acquisitions) continues to remain a core part of our strategy,” CEO Brian Hannasch said in a conference call.

Hannasch said consolidation in the U.S. convenience store market is very active but sellers are seeking very high selling prices. “We remain active in Asia to find the right management team, the right network for new growth platform in that part of the world.”

The company has reduced its debt and will soon be in a more comfortable position, he added. “We, at the same time, remain committed to be disciplined in our buying, and we remain committed to have a balance sheet ready for the right opportunity when it arises.”

The North American convenience store giant based in Laval, Que., reported Monday its net income rose 41.5 per cent in the fourth quarter as growth and acquisitions fuelled an equal jump in revenues.

The company, which reports in U.S. dollars, earned $392.7 million or 70 cents per diluted share for the 12-week period ended April 29. That compared with $277.6 million, or 49 cents per share, in what was a 13-week period a year ago. Revenues rose to $13,614.8 billion, from $9.62 billion a year ago. On an adjusted basis, CoucheTard said it earned $336 million or 59 cents per share.

Couche-Tard also increased its quarterly dividend by 11.1 per cent to 10 cents per share to shareholders of record as of July 18 for payment on Aug. 1.

The shares rose 6.67 per cent to close at $60.80 in Toronto. The stock has dropped 6.7 per cent this year.

The company said it has US$666.2 million in cash and about US$1.1 billion available through its revolving credit facilities to provide it with “ample flexibility to fund future investments.”

Couche-Tard, which operates mainly under the Circle K banner, said it expanded to 48 out of 50 U.S. states and added more than 2,100 stores through new openings and acquisitions. It has more than 12,700 stores and 130,000 staff in North America and Europe.