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Musgrave full year profits down 16%

Musgrave Group has reported a fall in its full-year pre-tax profits following “challenges” at its business in the UK.

GENERAL MERCHANDISE

Musgrave full year profits down 16%

Musgrave Group has reported a fall in its full-year pre-tax profits following “challenges” at its business in the UK.

In the year to 31 December 2013, profit before tax and operating exceptional items dropped 16% to €60 million while sales on a constant currency basis were in line with last year at €4.8 billion.

The group, whose UK fascias include Budgens and Londis, said its UK sales declined by 3%. In addition, Musgrave chose to write down €131 million of assets in the UK including all of the remaining goodwill of €78 million arising on its original acquisition of Budgens and Londis, €37 million for tangible assets, as well as €16 million for onerous property obligations.

Chief executive Chris Martin said: "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."

He added: "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."

The group said its brands in Ireland had out-performed the flat grocery market in the country with sales at SuperValu up 1.1%, Centra up 3.5%, Daybreak up 3.8% and Marketplace up 5.3%. SuperValu is now the largest Irish grocery retailer in Ireland with a market share of 25.2%.

Looking ahead, Martin said: "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."

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