M&Z plc - Interim Results

On 30 August 2022, M&Z plc published its interim financial statements covering the six-month period ended 30 June 2022.

Revenues surged by 26.2% to €13.4 million (H1 2021: €10.6 million) reflecting the ripple effects on the market from the war in Ukraine, the impact of high inflation, as well as the initial contribution of €0.86 million from Red October which was acquired on 21 February 2022.

Operating costs also increased notably to €12.1 million (H1 2021: €9.37 million) reflecting the higher level of business as well as the increases in administrative expenses and depreciation charges. Excluding depreciation, EBITDA grew by 18.3% to €1.92 million (H1 2021: €1.62 million) but the EBITDA margin contracted to 14.3% from 15.2% in the first half of 2021.

After accounting for finance costs of €0.12 million and a tax charge of €0.43 million, M&Z reported a net profit of €0.79 million which is virtually unchanged from the €0.78 million figure recorded in the previous comparable period.

In terms of financial position, total assets increased by almost 25% to €18.1 million compared to €14.5 million as at the end of 2021. Similarly, total liabilities also grew markedly to €9.06 million but given the sharper increase in assets than liabilities, total equity expanded by 9.6% to €9 million.


The Directors approved a net interim dividend of €0.009 per share which translates into a payout ratio of just over 50%. The dividend will be paid on 23 September 2022 to all shareholders as at close of trading on 6 September 2022.


In their commentary, the Directors explained that the integration of Red October is proving more challenging than previously anticipated and that M&Z is working hard to recover lost ground in bringing the merged business on board in the second half of the year. In fact, total sales from Red October in 2022 is expected to be around €2.2 million compared to the previous estimate of an income of €2.6 million. Meanwhile, although M&Z is expecting a more moderate second half of the year, the company reiterated its revenue target of €26.5 million for the 2022 financial year despite the shortfall suffered from the initial setback of Red October.

From a margin and profitability perspective, M&Z noted that the prevailing increases in overheads may not always be fully recoverable particularly at a time when consumers and businesses alike are struggling to grapple with unparalleled inflation on all fronts. The company is nevertheless doing its utmost to manage costs with efficiency and resolve, particularly as the threat of margin compression (also due to the ongoing expansion of hard discounters) is becoming ever more real.

Going forward, M&Z will continue to innovate and diversify its business with a view of mitigating market turbulence which is expected to intensify further. In addition, as the company is also absorbing part of Brexit-related costs on the UK managed business, M&Z is forecasting a calming effect in total revenues and gross profit in H2 on the first half of the year. This is due to the material consumer retrenchment from unprecedented cost increases across the board and also because consumers are looking for cheaper alternatives.