Few things:
- Reaffirm the idea that their growth strategy will go through acquire mom and pop stores and improving efficiencies through hyfire
- Discussed American Acres (nothing new from this end for me ...)
- 83 stores
- Nasdaq process "measured in months and not in quarters"
- The spoke model uses Circle K "existing square footage" and are "extremely efficient" in terms of revenue per square foot. I understood this as allowing for easier real estate 'finds' and probably cheaper locations
- Considering franchises if they can make this happen in an "appropriate way." "American Acres is an example of licensing tech and brand to go out and acquire mom and pops to make them into FAF stores, the first step, licensing, in making a franchising business"
- Regarding SP: FAF doesn't get the right multiple because some Canadian companies have not been great stewards of shareholders money and it's affecting the perception of FAF. This will be resolved over time. The other piece is the incorrect perception that Circle K has capped the value of the stock. "I would say of that, as a large shareholder myself, I'm excited about ... the aquisiton process because our chances of being on the global podium are increased versus our competitors ... at the end of it, Circle K ends up with 50.1%, as a shareholder of 49.9%, I have freely traded shares to receive 330M in capital with a strategic partners that has 16 000 locations. I don't see how this is capping the growth of the SP ... I think it's a bit of a red herring that there is a bit of a value limitation ... It is something that does mistify me as well"
- From the California store, the transition should be completed within the first half of the year. This is a prototype store to better understand how to retrofit a store.
- Regarding SAFE: Should allow a lot of access to the US for FAF. Excited about legalization, but in the interim, excited about SAFE.
- Regarding US entry and dilution: We know that we have capital coming (from Circle K) and what the dilution we are facing, i.e., we have about 200M (minimum, if SP is higher, then it's more around 400M) coming in, which is already priced in to the SP since we know it's coming. Dilution increases the likelihood of more strategic initiatives, such as spoke stores, with Circle K.
- competing against MSO: We proved that our digital model works in the most competitive market in the world (Alberta), and we can be effective and drive revenues. Now that we know that we can drive profits from stores that are driving 2M rather than 8M, we actually welcome competition, we don't have the added infrastructure (of being vertically integrated). Once things normalize (i.e., competition increases), these competitors should experience greater costs because of their company structure (i.e., vertical integration), which will become a disadvantage.