PG plc - Interim Results

On 16 December 2021, PG plc published its half-yearly results covering the six-month period ended 31 October 2021.

Performance Overview

Total revenues increased by 16.5% to a record (at interim stage) of just under €71 million reflecting the higher level of turnover achieved by both the ‘Supermarkets & Associated Retail Operations’ (+12.1% to €58.5 million) and the ‘Franchise Operations’ (+43% to €12.5 million). In this respect, PG explained that the success of the PAMA Shopping Village and the PAVI Shopping Complex continues to be reflected in their continued popularity among a growing clientele. On the other hand, the performance of the ‘Franchise Operations’ must also be seen in the context of the significant disruptions to business caused by the pandemic in the comparative period in 2020 (i.e. between May and October 2020) which, to some extent, continued to be felt during the reporting period. Nonetheless, the ‘Franchise Operations’ still posted a record performance with revenues and operating profits (“EBIT”) well ahead the level pre-pandemic.

Operating costs increased by 16.4% to €61.6 million reflecting the overall growth in business as well as the measures that PG put in place with a view of mitigating health risks. However, as the increase in revenues in absolute terms outweighed the growth in costs, the EBIT margin improved to 13.1% compared to 13% in H1 2020/21. The uptick in the EBIT margin was driven by the improved profitability of the ‘Franchise Operations’ as the EBIT margin of this business segment climbed to 15.7% from 15.5% in H1 2020/21 whilst the EBIT margin of the ‘Supermarkets & Associated Retail Operations’ stayed at the 12.6% level. Meanwhile, net finance costs contracted by 11% to €0.62 million as PG continued with its fast pace of debt reduction. Indeed, net debt dropped sharply to just €0.89 million when excluding lease liabilities compared to €8.54 million as at 30 April 2021 and €9.4 million as at the end of October 2020.

Overall, PG reported a pre-tax profit of €8.64 million. After accounting for a tax charge of €2.43 million, PG’s net profit amounted to €6.21 million representing an upsurge of 20.7% from the €5.14 million figure reported during H1 2020/21. The net profit reported during the period under review also translates into an annualised return on equity of 25.4% compared to 23.7% in H1 2020/21 despite the further expansion in the equity base of the company.

The Statement of Financial Position as at 31 October 2021, when compared to the corresponding figures as at 30 April 2021, shows that total assets increased by €7.69 million (+7.4%) to €111.2 million whilst total liabilities grew by €4.68 million (+8.6%) to €59.2 million. As the increase in total assets in absolute terms offset the rise in total liabilities, shareholders’ funds expanded by 6.1% to €52.1 million.


On 10 December 2021, PG paid out a net interim dividend of €0.0208333 per share which is 12.5% higher than the corresponding interim dividend paid out for the first half of the 2020/21 financial year. As the increase in dividend was lower than the upsurge in profitability (+20.7%), the payout ratio eased to 36.2% compared to 38.9% in H1 2020/21.


In their commentary, the Directors explained that while PG notes the satisfactory results registered in all areas of business, the company also recognises that the growth rates experienced so far may not necessarily be repeated in the second six months of the current financial year. Although sales registered in November 2021 and December 2021 are ahead of expectations, the case for optimism has been dampened by the recent increase in COVID cases and by the continued pressure on general price levels. However, PG remains cautiously optimistic that its results for the full year will further improve upon the positive performance of the first six months.

In the meantime, the company will continue to invest in the enhancement of its two supermarkets and in the upgrading of the facilities and shops therein. In addition, PG will continue to invest in technology as the new supermarkets’ on-line shopping platform has been very well received and a mobile application, which will be launched in the coming months, will further enhance customer offering. In this respect, PG also referred to the popularity of the online facilities of its ‘Franchise Operations’ as online sales of both Zara® and Zara Home® have now exceeded 16% of the turnover generated by this business segment, and the objective is for this to increase to 20% in the foreseeable future.

In conclusion, the Directors reiterated that PG has a strong liquidity position and remains well placed to pursue new growth opportunities in its core line of business. In fact, the company is actively exploring and negotiating a number of potential ventures which, if secured, would contribute to future growth.


PG plc – Half-Yearly Report covering the six-month period ended 31 October 2021.