PG plc - Interim Results

On 19 December 2024, PG plc published its interim financial results for the six-month period ended 31 October 2024.

Revenue marginally increased by 0.5% to €96.7 million (H1 2023/24: €96.2 million) as the higher turnover generated from ‘Franchise Operations’ (+9.8% to €17.0 million) outweighed the decline in revenue from ‘Supermarkets & Associated Retail Operations’ (-1.3% to €79.8 million).  The Directors explained that PG is operating in a competitive commercial environment across all its operations, particularly as the supermarket retail segment has seen new entrants last year. Furthermore, new shopping malls have opened, focused largely on clothing, that impact the group’s franchise business.

Operating costs increased by 1.8% to €86.9 million reflecting the impact of the Group’s decision to absorb an element of the cost price increases in the supermarket segment to maintain its competitiveness.  In this respect, PG explained that the Group prioritised offering a competitively priced entry level product, even at the expense of margins. The operating profit (EBIT) decreased by 10% to €9.78 million compared to €10.7 million in H1 2023/24 and the EBIT margin deteriorated to 10.1% (H1 2023/24: 11.3%) The deterioration in EBIT margin was driven by the worsening EBIT margins of ‘Supermarkets & Associated Retail Operations’ to 9.1% from 10.9% in H1 2023/24 which offset the improved EBIT margin of the ‘Franchise Operations’ which rose to 14.9% from 13.3% in the same period last year.

Net finance costs amounted to €0.40 million.

Overall, PG reported a pre-tax profit of €9.32 million (H1 2023/24: €10.1 million). After accounting for a tax charge of €2.38 million, PG’s net profit amounted to €6.95 million, which is 3.6% lower than the €7.21 million figure reported for H1 2023/24. The net profit reported during the period under review translates into an annualised return on equity of 20.4% compared to 23.4% in H1 2023/24.

The condensed Statement of Financial Position as at 31 October 2024, when compared to the corresponding figures as at 30 April 2024, shows that total assets increased by €4.5 million (+3.4%) to €136.8 million whilst total liabilities increased by €2.0 million (+3.2%) to €65.6 million. Total equity expanded by €2.5 million (+3.5%) to €71.2 million. PG stated that as at 31 October 2024, its cash balances and marketable securities exceeded its working capital overdraft by €15.0 million.

Dividend

On 6 December 2024, PG paid out a net interim dividend of €0.025463 per share, unchanged from the net interim dividend paid out for the first half of the 2023/24 financial year. PG’s payout ratio increased to 39.6% compared to 38.1% in H1 2023/24.

Outlook

In their commentary, the Directors explained that works commenced on developing the substantial land adjacent to Pavi that was acquired in 2022. The first phase of this development relates to the construction of warehousing, with overlying parking facilities.