Ireland: Musgrave profits down
Mr Martin was speaking as Musgrave - which controls the SuperValu and Centra brands in Ireland and owns Superquinn - posted a 1pc decline in profits to €71m for 2011.
Sales at the group rose 1.6pc to €4.5bn, including turnover at its operations in the UK and Spain. However, excluding revenue from Superquinn, Musgrave sales actually declined 1pc for the year.
Accounts for Musgrave, which is privately owned, showed that turnover in all its three markets was effectively flat.
It generated €2.74bn of its sales in Ireland, €1.53bn in the UK, where it operates under the Budgens and Londis names, and the remainder in Spain, where Musgrave operates about 100 stores and cash and carry outlets.
The company paid €16.6m in dividends to the Musgrave family last year, down from €17.1m paid in 2010.
The latest figure is down about 18pc from the €20.2m that was paid in 2008.
The accounts also confirmed that Musgrave paid €228.8m to buy Superquinn last year.
The business, which had been owned by investors after it was acquired from founder Feargal Quinn in 2005 for €450m, was sold last summer after Bank of Ireland had receivers appointed to the firm behind it.
Mr Martin said that the purchase had been part-funded via €75m in funds raised from a private placement in the United States.
"It was a sign of confidence in the business," Mr Martin said.
Musgrave had net debt of €187.3m at the end of last December compared to net cash of €20.5m a year earlier. It has total facilities of €435m available to it.
"Whenever we've made investments, we've done them in a very appropriate way. We have clear plans to bring debt levels down.
"We did that with Budgens, so that would be our modus operandi going forward," Mr Martin said.
He added that the Superquinn chain had probably been in worse shape than he imagined it would be once Musgrave got down to running the operation.
"That did surprise me more than I had anticipated," he said. "I said at the time that it was a very challenged business. Sales were declining when we bought it at a rate of about 7pc."
He said that annualised rate of decline has now reduced to about a 4pc.
Mr Martin hopes SuperValu's own brand products - which have also been launched in UK Budgens stores - will account for €1bn in group sales by 2014.
Source: independent.ie
