Canlan Sports – Stanley Cup Q1 Update
An update on the most Canadian company listed on the TSX
Disclosure: We are still long Canlan.
As we get closer to the Stanley Cup finals, we thought it would be a good time to provide an update on Canlan Sports, the most Canadian company listed on the TSX. As we noted in our original article (see full archives here - https://www.canadianvalueinvestors.com/t/ice ), they own an operate ice rinks and they are very well located real estate that we view is worth significantly above their current enterprise value. But, they are likely stuck assets. Still, the underlying business continues to perform well.
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Outcome so far
We first wrote about them last summer. Although the stock has been flat, they continue to pay their quarterly dividend and they have also paid two special dividends of $0.50/share. This has resulted in an IRR of ~35%.
But how is the business doing?
Q1 Financial Update
Revenue growth and margins continue to be remarkably stable. This continues to support our thesis that they have pricing power, but also have a bit of a “public good” mindset. We do not think they are trying to earn the marginal dollar. They are trying to provide access to sports while earning a reasonable return.
In turn, EBITDA
