BWG Group records turnover growth of 14.5% to €1.4 billion
Strong performance recorded across all brands alongside successful integration of Londis and Gillett acquisitions
18 November 2016
BWG Group has recorded impressive growth in its latest annual results, released as part of the Spar Group (South Africa) latest financial report for the year ended 30 September 2016.
The Irish operations owned by BWG Group showed a strong 36.8% increase in turnover to R23.1 billion, with euro-denominated turnover growth of 14.5% to €1.4 billion and all retail brands achieving positive growth.
The integration of Londis, acquired in the prior year, was completed and sales retention was ahead of plan with a pleasing improvement in like-for-like sales. Excluding Londis, BWG Group attained organic turnover growth of 4.8% for the period.
The report noted the performance of the Spar brand within Ireland was particularly pleasing, with total turnover up 8% and 6.0% on a like-for-like basis. Management interventions were successful at Eurospar which grew sales strongly in the year.
Appleby Westward, operating in South West England, delivered 13% turnover growth including a positive contribution from Gilletts, which comprises 63 Spar stores and was acquired in July 2016.
Improved trading performance
Operating profit grew 41.4% to R433.4 million while profit after tax was up 106% to R327.6 million, or 73% in euro terms. This reflects the improved trading performance as well as substantial interest cost savings on the lower banking rates which were realised for the full year.
What’s more, due to an improved product mix, led by high perishable volumes, the gross margin increased to 10.8%.
Total store numbers across BWG Group’s store formats increased to 1,340 stores, with 94 new stores opened during the year and the completion of 197 store refurbishments.
The commissioning of the chilled facility at the Kilcarbery National Distribution Centre was completed and will result in lower distribution costs per case. In addition, the Londis chilled facility was closed and consolidated into the Kilcarbery facility where volumes peaked at 32,500 cases per day, delivering economies of scale and improved costs per case.
Commenting on the performance, Spar Group (South Africa) CEO Graham O’ Connor, said the strong result within the Irish operations was “underpinned by a strong performance across all brands as well as the Londis and Gillett acquisitions. The BWG Group attained organic turnover growth of 4.8% for the period”.
BWG Group CEO Leo Crawford said he was “delighted” with the performance within a “very competitive trading environment”. He also highlighted the “successful integration of the Londis and Gillett acquisitions in Ireland and the UK [which] underpinned our success and positions us well for the future.”
The news was also positive for the overall Spar Group (South Africa) with O’Connor noting: “We achieved 23.8% turnover growth and a 22.1% increase in headline earnings per share. Our core Southern African business continues to perform extremely well, despite high levels of competition, with 9.5% turnover growth.”