PG plc - Interim Results

Wednesday, December 19th, 2018

On 19 December, PG plc published its interim financial statements covering the six months ended 31 October 2018.

Performance Overview

During the period under review, PG plc registered a 6.6% increase in total revenue to €51.2 million reflecting the 14.3% increase in revenue from the Group’s supermarket and associated retail operations to €46.3 million. This growth was achieved as the Pama Shopping Village continued to grow in popularity whilst encouraging levels of growth were also being registered at the PAVI Shopping Complex in response to the ongoing refurbishment program. The growth at both PAMA and PAVI also led to a corresponding increase in the Group’s rental income from third party tenants. On the other hand, the turnover from the Zara and Zara Home franchise operations decreased by 35% to €4.9 million mainly due to the closure of the main outlet in Sliema in view of the expansion and refurbishment project. In fact, normal operations at the Sliema outlet were effectively brought to a close in mid-June and the store completely closed in mid-July following an extensive sale to dispose of all clothing stock.

Cost of sales also increased by almost 7% to €43.7 million reflecting the growing business of the supermarket and associated retail operations. Similarly, other operating expenses increased by 21.5% to €1.7 million on the back of increased marketing and staff related costs.

Nonetheless, the PG Group still reported a marginal 0.2% increase in operating profit to €5.78 million. The Directors noted that this is a positive outcome for the Group as it has successfully offset the impact of the unavoidable temporary disruption in its Zara franchise operations in Sliema.

After accounting for net finance costs of €0.29 million (in line with the corresponding figure for the six months ended 31 October 2017), pre-tax profit amounted to €5.54 million representing a 0.6% increase from the €5.51 million pre-tax profit registered during the six months ended 31 October 2017.

The tax charge amounted to €1.4 million representing an effective tax rate of 25%. This is lower than the effective tax rate of 33% incurred in the comparable six months ended 31 October 2017, largely reflecting a higher incidence of rental income which is taxed at 15%.

Overall, PG plc reported a 12.1% increase in net profit to €4.14 million which translates into an earnings per share figure of €0.0383 compared to €0.0342 in the corresponding six months ended 31 October 2017.

The Statement of Financial Position as at 31 October 2018 and compared with corresponding values as at 30 April 2018, shows a 7.2% increase in total assets to €84.47 million largely reflecting the €8.2 million capital expenditure (related to the PAVI refurbishment works and partly also related to the expansion of the Zara outlet in Sliema) undertaken during the period under review. On the other hand, total liabilities also increased by 9.1% to €49.1 million mainly due to the 20.9% increase in total current liabilities to €28.25 million. It is also noteworthy to highlight that following the reporting date of 31 October 2018, PG utilised a €9 million loan facility to finance the Sliema Zara store refurbishment project on a long-term basis which also strengtheed the Group’s liquidity. Overall, the Group’s equity base expanded by 4.7% to €35.37 million which translates into a net asset value per share of €0.3275 (April 2018: €0.3128).


In a separate announcement published on 3 December, PG plc had announced an unchanged net interim dividend of €0.01574 per share (gross: €0.02422). This dividend was paid out on 10 December 2018 to all shareholders as at the close of trading on 28 November 2018.


Looking forward, the Directors noted that although the initial indications from the newly inaugurated Zara store in Sliema are favourable and augur well for the future, it is still too early to make firm long-term predictions on its commercial outcome.

Meanwhile, the Directors are also encouraged by the results obtained from the continued refurbishment and upgrade at the PAVI supermarket. This project is now in its final stages and is expected to be completed early in 2019.

The announcement also noted that the Group’s operations continue to benefit from a favourable economic environment even if competition has intensified. In fact, the Directors had expected a drop in profitability during the first six months of the current financial year ending 30 April 2019, with the shortfall being compensated by a better performance in the second half following the reopening of the Zara store in Sliema. The interim results as at 31 October 2018 have exceeded such expectations as the profitability in the first half of the current financial year has actually improved. As such, the Directors are now cautiously optimistic that the Group will deliver improved results for the full financial year ending 30 April 2019 when compared to the previous financial year.

Furthermore, following the completion of the Zara Sliema outlet expansion and the refurbishment project as well as the expected completion of the PAVI upgrade by early 2019, the Directors feel that the Group can now focus better on new initiatives for the future.


PG plc – Interim Financial Report covering the six months ended 31 October 2018.

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