Pre-tax profits at Musgrave increase by 3% to €72m

MUSGRAVE Group plc increased its pre-tax profits by 3% to €72 million last year but it said that the grocery market has changed permanently.

Chief executive Chris Martin said that whatever people’s incomes, almost every shopper is seeking out value to a greater extent today than they did a year ago.

“This demands fundamental changes to our ways of working in order to emerge with stronger businesses when recovery finally becomes a reality,” he said.

The group, whose brands include SuperValu and Centra, reported overall sales of €4.4 billion, down 3% on 2009. The company said it eliminated its start of the year debt of €59m to close the year with net cash of €21m.

Mr Martin said despite the economic crisis in Ireland and a “very tough trading environment” the company delivered a good set of results.

“We have responded to the unprecedented challenges by completing the first year of our transformation programme which is about delivering value for the consumer and our partners, simplifying our business and reducing our costs. In 2010, through improved ways of working with retailers and suppliers, we delivered lower prices and an enhanced product offer for shoppers. I am confident that this transformation programme is strengthening the business and providing a platform for the long term,” he said.

Mr Martin said he expects the rest of this year will be tough for the grocery market and the trading environment will remain difficult.

However, we are confident that our brands are adapting well to the budget- conscious consumer, that our retail partners who own their stores are bringing a different and better offer to their local communities and that our brands continue to attract new retailers.”

There are 254 SuperValu stores in Ireland recording sales of €2.4bn last year. Musgrave said that over Christmas last year SuperValu achieved the strongest growth among the top grocery retailers, increasing sales by 7.6% compared with the same period in 2009.

There are 550 Centra stores in Ireland, recording sales of €1.6bn last year.

The accounts also show that dividends amounting to €17.1m were paid out last year compared with €19.1m in the previous year. The pension deficit has declined to €6m from €41m last year.

Most of the company’s turnover was generated in Ireland with €2.6bn generated here. In Britain there was €1.5bn turnover generated while Spain accounted for €185m.

Company chairman, Seamus Scally said: “In the past few years we have experienced some of the toughest trading conditions in living memory, yet as so often in the past, challenge has once again brought out the very best in Musgrave people.”