PG plc - Interim Results

Thursday, December 21st, 2017

On 20 December, PG plc published its interim financial statements covering the six months ended 31 October 2017.

Performance Overview

PG plc recorded a 10.2% increase in total revenue to just over €48 million largely reflecting the contribution from the PAMA Shopping Mall which was inaugurated in November 2016 (hence no contribution was made from this operation in the previous corresponding period). Nonetheless, the Directors noted the 14% growth in turnover at the PAMA supermarket whilst sales at PAVI remained steady at around the same levels in the previous corresponding period. The results also reveal a 16% increase in sales from the Group’s Zara and Zara Home franchise operations.

Similarly, cost of sales increased by 9.5% to €40.8 million leading to a gross profit for the period under review of €7.2 million representing a 13.9% improvement over the €6.3 million recorded in the previous corresponding six months ended 31 October 2016.

Operating expenses during the period under review increased by almost 64% to €1.4 million largely reflecting the strengthening of the Group’s administrative and control processes to complement the growth achieved in recent years. The increase also reflects the costs incurred in relation to the improvement in the Group’s governance in conjunction with its transition to a publicly listed entity.

As a result, PG plc generated an operating profit of €5.77 million during the period under review representing a 5.8% increase from the previous corresponding period.

After accounting for share of results of associates amounting to €0.04 million (HY 2016: €0.02) and finance costs amounting to €0.3 million (HY 2016: €0.24 million), the Group’s pre-tax profit for the period under review amounted to €5.5 million, up 5.1% from the €5.2 million registered in the corresponding six months ended 31 October 2016.

The tax expense for the six months ended 31 October 2017 amounted to €1.82 million compared to €1.69 million in the previous corresponding period. Overall, PG reported a net profit of €3.69 million, up 3.9% from the €3.55 million reported in the previous corresponding period covering the six months ended 31 October 2016. This translates into an earnings per share of €0.0342 (HY2016: €0.0329).

The Statement of Financial Position as at 31 October 2017 compared to the corresponding figures as at 30 April 2017 shows a 2.8% increase in total assets to €72.46 million largely reflecting higher stock levels on the back of the opening of a new Zara Home outlet within the PAMA Shopping Mall as well as following the take over of the wines and spirits concession at both PAVI and PAMA. On the other hand, total liabilities contracted by 4% to €40.95 million largely reflecting the repayment of borrowings in line with the repayment schedule. Overall, the Group’s equity base grew by 13.3% to €31.52 million which translates into a net asset value per share of €0.2918 (Apr 2016: €0.2576).

Dividend

On 5 December 2017, PG plc announced that the company’s Board of Directors resolved to distribute a gross interim dividend of €0.02422 (net: €0.01574) per share which was paid on 11 December 2017 to all shareholders as at close of trading on 29 November 2017.

Outlook

In the announcement the Directors noted that the Group is well positioned to pursue new growth opportunities while retaining a strong element of resilience. In the meantime, the Group is embarking on a €9 million capital expenditure plan which includes the upgrading of the PAVI supermarket (including the opening of a new Zara Home outlet in Spring 2018) which should be completed in the coming months as well as expanding the Group’s Alhambra store in Sliema which should be completed by the end of 2018.

In conclusion, the Board indicated that it is cautiously optimistic that the Group will deliver positive results for the full financial year ending 30 April 2018 in line with the projected net profit of €8.4 million (equivalent to an earnings per share of €0.078) as set out in the Company’s Prospectus dated 27 March 2017.

Download

PG plc – Half-Year Report covering the six months ended 31 October 2017

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