MISSISSAUGA, Ont. - Coffee store chain operator Second Cup Income Fund (TSX:SCU.UN) returned to profitability in the fourth quarter and full year of fiscal 2009 despite sliding same-cafe sales, the company said Thursday.
The fund also announced plans to convert from an income trust to a corporation by the beginning of the next calendar year.
The Toronto-based retailer reported net income of $4.1 million or 42 cents per unit for the quarter ended Dec. 31, reversing year-earlier losses of $17.7 million or $1.79 per unit.
Despite a 1.3 per cent decline in same-cafe sales, or sales at locations which have been open for at least a year, the fund said quarterly revenue more than doubled to $7.3 million from $3.4 million recorded the year before.
Second Cup was also profitable for the 2009 fiscal year, reporting net income of $11.5 million or $1.16 per unit. In 2008, the fund recorded a net loss of $9.5 million or 96 cents per unit.
Full-year revenue rose to $19.5 million from $12.6 million despite a 3.2 per cent dip in same-cafe sales for the period.
"Like most of the retail sector, Second Cup experienced soft same-cafe sales in 2009, with improvements in the trend line in the fourth quarter. Notwithstanding that, we are very confident in the strength of the Second Cup brand," chief executive Stacey Mowbray said in a statement.
The fund also outlined a proposal that would see it convert to a corporation by Jan. 1, 2011. Under the terms of the proposal, unitholders would receive one share of the new company for each unit they currently hold.
The proposal has been approved by the fund's board, but is still subject to unitholder approval.
Second Cup also announced it would hold monthly unit distributions steady at eight cents per unit for the remainder of 2010.