Revenues surged by 13.6% to a new record of just over €147 million (FY2020/21: €129.4 million) reflecting the further growth achieved by the ‘Supermarkets & Associated Retail Operations’ (+8.9% to €121.2 million) as well as the improved economic climate following the peak of the COVID-19 pandemic which boosted the amounted of sales generated by the ‘Franchise Operations’ by 42.7% (or +€7.74 million) to €25.9 million.
Operating costs (net of other income) increased in line with the growth in overall revenues and amounted to €129 million (+14%). Nonetheless, PG still reported an 11.1% increase in operating profit (EBIT) to €18.1 million although the EBIT margin eased slightly to 12.3% compared to 12.6% in the previous financial year. Excluding depreciation and amortisation charges which amounted to €2.91 million, EBITDA grew by 10.4% to €21 million (FY2020/21: €19 million) whilst the EBITDA margin slipped to 14.3% from 14.7% in the previous comparable period.
After accounting for net finance costs of €1.23 million and a tax charge of €4.65 million, PG reported a net profit of €12 million which is 14% higher than the previous comparable figure of €10.6 million and translates into a return on average equity of 23%.
The Statement of Financial Position as at 30 April 2022, when compared to the corresponding figures as at 30 April 2021, shows that total assets increased by 6.8% to €110.5 million largely reflecting the higher level of inventories, trade receivables, and cash. On the other hand, total liabilities increased by just 0.7% to €54.9 million as the reduction in bank borrowings (-32.4% to €8.95 million) was offset by the increase in trade payables and tax liabilities. Overall, total equity expanded by 13.4% to €55.7 million which, coupled with the reduction in total debt, led the company’s gearing ratio to drop to 31.5% compared to 38% as at the end of April 2021 (when including lease liabilities).
From a cash flow perspective, PG generated €15.6 million in net cash from operations during the 2021/22 financial year (compared to €13.1 million in the prior year), €1.48 million of which were used towards investing activities, and another €5.45 million were used towards the payment of dividends. For the 2021/22 financial year, PG paid out total net dividends of €0.0542 per share (+12.5%) which translate into a payout ratio of 48.6%.
In their commentary, the Directors reiterated that PG operates in a highly competitive business environment and remains subject to various risks such as increasing pressures on margins and increased competition to attract and retain customers.
Nonetheless, the company has started the 2022/23 financial year on a positive note as overall sales between 1 May 2022 and 15 August 2022 are 13% higher when compared to the same period in 2021. Despite this, PG is experiencing severe cost pressures across its operations and the company’s target for the current financial year is to at least achieve the same level of profitability as that recorded in the 2021/22 financial year. However, much will depend on macroeconomic and geopolitical events that are taking place in Europe and beyond as global supply and logistical issues, the war in Ukraine, and rising interest rates are all factors that are having a negative impact on disposable income.
Notwithstanding the challenging backdrop, PG noted that it remains confident on the outlook for the coming years on the back of its solid business model which is based on the retail of foodstuffs and other essentials, as well as two franchise brands that offer excellent value for money at affordable prices. Furthermore, PG continues to adopt a prudent approach to business by seeking to avoid undue levels of risk that would either impair the Group’s resilience when faced with unfavourable market conditions, or else inhibit its ability to capitalise on suitable opportunities that may be identified from time to time.