Bestway Group announces good full year results: weaker performance in wholesale but investment continues

The Bestway Group has today (January 30) announced its financial results for the year ended June 30, 2016. The Group’s turnover increased by 9% to £3.28bn from £3.01bn in 2015. All businesses were profitable for the year under review and overall Group profit before tax increased by 6% to £413.3m as compared to £390.5m in 2015. This was due to an improvement in the underlying performance of the Banking Group and the Cement business as well as a full reflection of the twelve month performance of Well Pharmacy and Pakcem.

Zameer Choudrey, the Group CEO, said: “2016 has been a year of consolidation for the Group. Despite difficult business conditions in the UK, we have maintained our market share across the Wholesale and Pharmacy businesses. During the year, Well Pharmacy was fully separated from The Co-Operative Group and it is now a standalone business, thus eliminating a key business risk”.

During the year, the Group made repayments of £172.2m as part of its ongoing de-leveraging strategy. This included £125.5m repayment of debt in the UK, which had been taken as part of the acquisition of Well Pharmacy, as well as repayments of £46.7m of debt by Bestway Cement Limited as part of Pakcem’s acquisition.

Turnover in the wholesale business amounted to £2.17bn, a decrease of 1.1% compared to the corresponding period last year. The marginal decrease was in line with the performance of the broader wholesale sector.

Profit before tax decreased to £19.7m. This, said Bestway, “has been driven by a conscious decision to invest in margin to support the independent retail sector against the increased competition from the multiples. There has also been investment in Foodservice and Symbol Club, which should translate into a more positive trading performance going forward. The variance in profitability is also explained by a lower gain on revaluation of properties of £3.0m in 2016 compared to £18.8m in 2015.

The company said wholesale sector had been adversely affected by food price deflation, intense competition and changing consumer habits. However, despite the challenges, “we have maintained our focus on the three pillars of Symbol & Club, Foodservice and Digital”.

Bestway said in its statement: “Symbol & Club: The Best-one and Xtra Local retail club membership continues to grow as we ensure greater discipline and compliance among our affiliated stores. During the year, we introduced The Great Rebate and MyRewards schemes to help our customers increase their margins and profitability.

“Foodservice: Our catering sales are up 5% with over 25 major suppliers now enjoying growth of over 20%.

“Digital: Our online business now has over 28,500 registered users with weekly sales averaging £4.7m. The mobile app accounts for nearly 15% of all online transactions.”

The period under review was also the first full year of trading of Well Pharmacy within the Bestway Group. Turnover of the pharmacy business for the year ended June 2016 was £802.7m, with profit before tax of £27.5m.

The sales growth was driven by prescription volumes and is now comfortably above our competitors and ahead of the market in UK. During the year under review, Well’s market share of the prescriptions nationally grew to 6.0%.

 

 

 

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