Musgrave Group, partner to entrepreneurial retailers across Ireland, the UK and Spain today announced its financial results for the year ended 31st December 2013.
The Group reported sales of €4.8 billion, which on a constant currency basis, were in line with last year. Profit, before tax and operating exceptional items, was €60 million, down 16% reflecting challenges in our business in Great Britain. Cash was well managed with net debt reduced by €19 million to €121 million. The Group continues to be strongly capitalised with net assets of €314 million.
Commenting Chris Martin, Musgrave Group chief executive, said:
“All our markets continued to experience difficult economic conditions in 2013, impacting consumer spending. In a flat Irish grocery market our brands increased sales and out-performed the market. SuperValu was up 1.1%, Centra up 3.5%, Daybreak up 3.8% and MarketPlace up 5.3% reflecting the investment made in these brands over the past three years through our ‘Winning in the New World’ strategy. We continued to invest in our brands and in margin and cash flow support for our retail partners. Great Britain was tough for all grocery retailers where the market is going through fundamental and permanent structural change, similar to what the Irish market experienced three years ago. Our GB business underperformed in 2013 and this is being addressed through a turnaround programme which is already underway. Against this backdrop, the Group delivered a very good performance in the Irish market.”
Republic of Ireland
In 2013 our brands out-performed the flat Irish grocery market with SuperValu up 1.1%, Centra up 3.5%, Daybreak up 3.8% and Marketplace up 5.3%. The investment made in these brands over the past three years through our ‘Winning in the New World’ strategy has delivered significant benefits.
Centra is Ireland’s number one convenience brand serving three million customers per week. Centra sales growth was driven by the launch of the Centra Own Brand range, new store openings, exceptional value and commitment to Irish food producers which resonate with shoppers.
SuperValu performed exceptionally well in 2013 and is now the largest Irish grocery retailer with a market share of 25.2% and was this week recognised by RepTrak as the most reputable Irish brand in the country. Over the important final 12 weeks of 2013 it was the leading supermarket brand attracting 43,000 new shoppers in store. This was a result of a focus on an exceptional fresh offer, market leading promotions as well as the development of our mobile and online offer.
In 2013 we announced the integration of Superquinn into SuperValu creating an unrivalled Irish retail brand with a network of 223 stores. Investments in integration and name change incurred a planned exceptional post-acquisition cost of €12.2 million.
Our strategy in Ireland has delivered for shoppers, our retail partners and brands, which outside of the discounters, were the best performing in the market in 2013.
Great Britain (GB)
In a growing convenience market our sales in GB declined by 3%. In 2013 our GB business pursued a growth strategy but this has not delivered profitable sales. We are committed to the GB market and to working with our retail partners to deliver a profitable business for them and for us. Following the recent appointment of Peter Ridler, as Managing Director, to lead the turnaround, we are addressing the performance and implementing fundamental improvements to our brand disciplines and ways of working.
In light of the 2013 GB results, the Board has determined that it is appropriate to write down €131 million of assets in GB including all of the remaining goodwill of €78 million arising on the original acquisition of Budgens and Londis, €37 million for tangible assets as well as €16 million for onerous property obligations.
In 2014 as we enter the third year of our Group strategy, we are continuing to see an improvement in sales in Ireland as green shoots appear in the economy. We will continue to invest in Ireland to build on our progress where our brands have market leading positions. We will apply many of the successes and learning from Ireland to the GB market where we are strengthening our brands and improving our offer to the consumer to ensure our retail partners can compete in an increasingly competitive convenience market. As we progress in 2014, our focus will be on driving profitable sales growth and delivering exceptional value to the shopper in all our markets.
* Profit is before tax and operating exceptional expenses of €143 million, which reflect the write down of assets in Great Britain and planned investments associated with the Superquinn integration.