Musgrave Group Profits Weighed Down By 'Challenging' UK Business

Ireland-based grocery wholesaler the Musgrave Group has said that poor trading in the UK contributed…

Ireland-based grocery wholesaler the Musgrave Group has said that poor trading in the UK contributed to falling profits despite the fact that it 'out-performed' flat conditions in its home market.

Musgrave reported sales of €4.8 billion across its businesses in Ireland, the UK and Spain for the full year to 31 December 2013, down 1.9% from 2012.

The company said that this is 'in line' with the previous year on a constant currency basis. Net debt at Musgrave was reduced by €19 million to €121 million.

Group profit before tax and exceptional items fell 16% to €60 million.

In the UK, where it operates the Budgens and Londis franchises, sales dropped by 3% to €1.5 billion in 2013. It said that the UK business 'pursued a growth strategy but this has not delivered profitable sales', noting that it is 'addressing the performance [of the UK operation] and implementing fundamental improvements to our brand disciplines and ways of working'.

The company announced a writedown of €131 million worth of assets in the UK.

“All our markets continued to experience difficult economic conditions in 2013, impacting consumer spending," said Chris Martin, Musgrave Group chief executive. "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."