Regular Monthly Dividends
Coast Wholesale Appliances Inc. (Coast) currently pays a monthly dividend of $0.025 ($0.30 per annum) per share. Going forward, we anticipate that our monthly dividend pay-out rate will equal approximately 50% of Coast’s EBITDA.
Solid Industry Fundamentals
Major household appliances represent a $3.5 billion market opportunity in Canada. While new housing starts are currently down from the record levels of recent years, strong demand continues to be generated by growth in home renovation, as well as by product innovation, an increasing focus on home décor and energy efficiency, and favourable demographics.
Proven and Sustainable Business Model
Coast has operated successfully since 1978 in both the business-to-business and business-to-consumer markets. We deliver complete appliance solutions for new homes and home renovations, and also serve the retail and rental apartment appliance replacement markets, with an unusually wide selection of products and brands, and a superior service offering. We benefit from strong, established supplier relationships and a loyal, diversified customer base.
Leading Market Position
Coast has an estimated 20% share of the developer and builder market in Canada, as well as a significant and growing share of the retail market.
Track Record of Stable, Growing Cash Flow
Since opening our first store in Vancouver, BC in 1978, Coast’s growth has been driven by a long-term vision of providing superior service to customers, complemented by a wide selection of new and innovative products. The company has benefited from the essential nature of major home appliances and a balanced business model that draws revenues from all of the new homes, home renovation and replacement markets. These factors have historically allowed Coast to maintain a stable growth trajectory across more difficult economic periods.
A significant opportunity exists for us to increase sales from our existing stores over the longer-term as we grow our retail business by capitalizing on growing customer recognition of the Coast name and tailoring our product offerings to meet regional preferences. Geographic expansion also offers growth potential, particularly in Ontario, Canada’s largest market.
Experienced, Proven Management
Coast’s management team has a demonstrated ability to successfully execute the company’s business strategy.