Food retail and wholesale group Musgrave plans to spend between €70m and €80m on improving its business this year on the back of posting its first annual net profit in three years.
The Cork-headquartered group — which owns the SuperValu, Centra, and Daybreak retail grocery brands — yesterday, via its annual report, reported a pre-tax profit of €67.5m for 2015 and sales of €4.4bn.
When the loss-making UK business — Musgrave completed the sale of its Budgens brand, there last September — is excluded, turnover amounted to €3.7bn, with pre-tax profits coming in at €52.8m.
Musgrave last posted an annual net profit, of around €61m, in 2012. Since then it has been heavily loss-making.
In 2013, total losses amounted to almost €95m, underlying gains being dragged down by costs associated with the integration of the Superquinn business and €141m of exceptional costs relating to its UK business.
A year later, the group was still in the red, but losses reduced to €13m after some recovery was seen in Britain.
Speaking yesterday, group chief executive Chris Martin, said the business is at “an exciting juncture” and that 2015 was the year during which it was positioned “on a path to growth”.
“In recent years, against a backdrop of challenging trading conditions, we have invested in our brands and consolidated the Musgrave business as Ireland’s number one food retailer and wholesaler, feeding one-in-three people.
“We are successfully delivering a transformation programme and we are now focused on a growth agenda for the business,” he added.
Musgrave spent around €80m in the last 12 months, including the acquisitions of distribution firm Allied Logistics and Wexford-based foodservice company CJ O’Loughlin. Mr Martin said a similar amount will be invested this year.
The group is open to more acquisition opportunities but much of the investment will go on refurbishing existing SuperValu and Centra stores, some new openings, and enhancing its digital/online and loyalty card offerings.
Mr Martin said SuperValu’s recent regaining of its market-leading position and strong sales growth over the Easter period shows that its offering is resonating with customers.
He said management is confident of another profitable year, based on the progress made in the first quarter.
However, he warned that a Brexit could make the Irish grocery market more challenging in that it could alter consumer confidence and affect tourism spend. He added that it would be “foolhardy” for Britain to leave the EU.
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