Musgrave targeting return to profit

Leading food retailer, Musgrave Group, is set for a first net annual profit for two years, with no exceptional costs expected to be included on its 2015 balance sheet.

The Cork-based business — which owns the likes of SuperValu, Centra and Daybreak — has reported underlying profits of €66m for 2014.

Its net loss, for the year, amounted to €13m; down significantly from a total loss of €113m (restated, due to a change in accounting measures) for 2013, when exceptional costs — largely relating to the takeover of the Superquinn brand — of €70m are included.

Group sales amounted to €4.6bn. Centra consolidated its position as the number one convenience retailer in the market, while SuperValu generated sales of €2.6bn; in line with the previous year.

“Losses have reduced by €100m in 2014 and a return to profit is expected in 2015. Cash was well-managed, with net cash of €110m at year-end,” the group said.

“As part of our group transformation agenda — which is about positioning the business to deliver long-term sustainable growth, we announced our exit from 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,” said group chief executive, Chris Martin yesterday.

“We’re pleased with the 2014 performance, in what was a tough market and it sets us up well for 2015,” he added.

Musgrave is set to focus on the whole of Ireland (though with a continuing small presence in Spain) once it completes the sale of its British assets. Regarding the Irish market, Mr Martin said he doesn’t anticipate consolidation, but expects further expansion by the likes of Aldi and Lidl and wider competition to intensify.

He added that Musgrave’s tie-in with UK wholesale group Booker — which is buying its UK business — in Ireland won’t hamper the existing relationship with homegrown suppliers.

That deal is aimed at enhancing digital selling capabilities and improving Musgrave’s supply base by introducing more own-brand labels to SuperValu/ Centra/Daybreak stores)

He said Musgrave remains committed to Irish suppliers, which can benefit from upping their exports to the UK via this arrangement.

Musgrave expects continuing growth in the Irish grocery market which is increasing about 1%.