Musgrave Group reduces losses by €100m in 2014
Group confident it will return to profit in 2015
Print11 August 2015
Musgrave Group reported sales of €4.6 billion and operating profit before exceptional items of €66 million* for the financial year ended 27 December 2014. The group which partners with retailers across Ireland, the United Kingdom and Spain, reported that after exceptional costs of €70 million and property profits of €11 million, the loss for the year after tax is €13 million. Compared to a loss of €113 million in 2013, losses have reduced by €100 million in 2014 and a return to profit is expected in 2015. Cash was well managed, with net cash of €110 million at year end.
Chris Martin, Musgrave Group chief executive said the investments “made in brand development strategy” had delivered for the SuperValu, Centra and Marketplace brands.
“As part of our group transformation agenda, which is about positioning the business to deliver long-term sustainable growth, we announced our exit from Great Britain, combined our retail and wholesale businesses in Northern Ireland and integrated the former Superquinn business with SuperValu. With the transformation well progressed and given the strong position of our brands, the business is now on track to return to profit in 2015,” Martin said.
Business review
Musgrave reports it is now the leading food retailer in Ireland. In a press statement, the group said: “Our strategy throughout the recessionary years was to invest significantly to build market leading brands that are now making good progress”.
SuperValu recorded retail sales in line with last year of €2.6 billion and now serves over 2.6 million customers every week. The integration of Superquinn with SuperValu gave the brand the platform to become Ireland’s largest grocery retailer, securing 25% share of the grocery retail market.
Musgrave states Centra consolidated its position as the number one convenience retailer in the market with growth of 3%, serving over 3 million customers a week.
MarketPlace had a strong year, growing sales by 8%. The acquisition of Allied Foods, which was completed during the year, is expected to support the growth of the business.
In Great Britain, since year end, Musgrave Group has reached agreement with Booker Group plc to sell its GB business. The sale is now subject to the approval of the UK Competition and Markets Authority.
In Northern Ireland, the group reorganised its business, bringing together the retail and wholesale operations. Musgrave stated: “We are beginning to see the benefits of this new structure with our brands Centra, MarketPlace and SuperValu performing according to plan. We have opened new stake in the ground SuperValu stores in Crossgar and Fintona as we look to invest and develop our brands in the province.”
In a tough market, the group said business in Spain performed satisfactorily in 2014, with brand work, investment and the development of concept stores, laying the foundations for improved performance in a recovering Spanish economy.
Outlook
Trading conditions remain challenging in 2015 with the grocery market continuing to lag behind the general economic upturn. However with an ever improving Irish economy, Musgrave states the group sees opportunities for its brands as the grocery market returns to growth. Musgrave’s adds that following reorganisation work, the business is now more efficient, and it is subsequently “confident that the group is positioned to return to growth in 2015”.
*(Operating profit of €66 million before amortisation of intangible assets and exceptional items)
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