The Musgrave Group has posted a pre-tax profit of €71m for 2011; 1% down on the previous year.
The Cork-headquartered food service and retail group’s chief executive Chris Martin, praised the financial performance — which also saw group sales rise by 1.6% to €4.5bn — given the current economic conditions.
“Despite the economic challenges and a consumer that is focused on spending less, we’ve delivered a good performance, with turnover and profit remaining steady for the third consecutive year,” he said.
Last year’s €229m acquisition of Superquinn also saw Musgrave slip back into debt. After eliminating its outstanding debt in 2010, the Superquinn deal — which boosted Musgrave’s employee numbers to 35,000 — pushed the group from a net cash position of €21m to a debt position of €187m.
Musgrave invested €284m in Ireland, last year, across the Supervalu, Centra and Daybreak chains. Each of those brands outperformed a stagnant market, delivering sales of €2bn, €1.4bn and €300m, respectively.
While the group’s combined share of the Irish grocery retail market has increased from 25% to around 28% in the past year, management is still relatively downbeat about prospects this year.
“The outlook for the group, for 2012, remains challenging especially in Ireland, where we expect to see little to no growth in the grocery market.
“Nonetheless, our brands are performing well, with positive sales growth in both the Irish and British markets,” Mr Martin added.
Despite economic and market conditions, he said management remains pleased with all aspects of the group. In Britain — where Musgrave operates under the Budgens and Londis brands — sales topped €2bn last year.
While it only has a market share of less than 1% in Britain, Musgrave will add 150 new stores to its existing 2,451 there this year.
It will also open a further 30 here — mainly under the Daybreak and Centra brands — which would bring its total Irish-based stores to over 950.
Mr Martin said there exists “significant” room for expansion in Britain, where the market is growing at double the pace of the Irish retail sector.
He said management remains positive towards expanding its geographical presence in the medium-term, although declined to say what regions it would like to enter. It already has a small presence in Spain. “We’ve put in place medium-term debt facilities, as well as a long-term private placement, which has given the group available facilities of €435m.
“Together, these elements are providing us with the solid foundations to support our retail partners and to deliver sustainable growth,” Mr Martin said.
Regarding Superquinn, he said it is still too early to say what the group’s long-term plans are.
However, he said no new Superquinn stores will open this year, but the brand name will remain. He added there is nothing new in the pipeline, in terms of group acquisitions.
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