In the first half of 2011, the continued business of the Emperia Trading Group generated sales revenues of PLN 2.58 billion, up by 8.9% on the same period last year. EBITDA at PLN 79.6 million was up by 6.4%, and net earnings of PLN 28.7 million were down by 4.6%. At the same time, the company’s investment outlays stood at PLN 40.4 million.
In the first half of 2011, Emperia focused on the due diligence undertaken in connection with the Investment Agreement concluded with Eurocash SA, and on organic growth. Eventually, on 9 August 2011, as Eurocash failed to meet the requirements laid down under the Investment Agreement, the Management Board of Emperia, with full approval of the Supervisory Board, rescinded the Investment Agreement. The Investment Agreement was rescinded on the grounds of the failure of Eurocash to meet the agreed transaction completion deadline (by 15 July 2011 and in the additional period prescribed by Emperia); Eurocash failed to effect payment for shares in the Tradis Wholesale Group. By the same token, the sale of the Tradis Group to Eurocash did not take place.
Further, the Management Board of Emperia Holding SA called upon Eurocash to pay lump-sum damages of PLN 200 million. In June 2011, given the great interest in Emperia’s retail chains, the Management Board launched the auction process aimed at selecting the investor for the retail business.
The transaction covers the retail chains of Stokrotka, Delima, Społem Tychy, and Maro Markety, operating 233 outlets among them. It is the opinion of Emperia’s Management Board that the value of those companies (excluding real property) is at the level of PLN 900 million. If the sale goes through, Emperia intends to receive a price of not less than the above amount.
The sale of Emperia’s retail business has attracted both industry and financial investors. While several dozen firms have expressed their interest in the purchase, at lease a dozen or so will be shortlisted to take part in the next stage of the auction process. The investors have until 26 September to submit their non-binding bids, and the entire process is scheduled for completion in the first half of 2012.
Emperia also continues the process of buying back its own shares. So far the company has repurchased 285,047 shares representing 285,047 (1.886%) of votes at the General Meeting of Shareholders and accounting for 1.886% of the share capital. The transaction was undertaken under a resolution adopted at the Ordinary General Meeting of Shareholders on 23 June 2010 and resolution 39/2010 of the Supervisory Board of Emperia Holding S.A. of 16 September 2010, and under the terms and conditions of the Emperia Holding S.A. Share Buyback Programme adopted under a resolution of the Company’s Management Board of 21 September 2010 (RB 44/2010). They envisage buyback of up to 20% of the share capital for the aggregate price of up to the value of the reserve capital fund of PLN 40 million established for that purpose.
Emperia Holding SA will distribute some 40% of the Group’s 2010 consolidated net earnings as dividend. This is two times more than so far (20%). This year the value of the dividend distributed will total PLN 2.63 per share, which will cost Emperia over PLN 39.2 million. Starting from the distribution of net earnings for 2010, the Management Board intends to recommend annually to the General Meeting a dividend distribution of at least 40%.
In the first half of 2011, Emperia continued the development of its key business divisions. Further franchisees joined the franchise chains operated by the Tradis Wholesale Group. The Groszek chain launched further 63 locations, the Euro Sklep chain nearly 50, and the Koliber drugstore chain added further 27 outlets.
The Tradis Wholesale Group, acting through its subsidiary PSD, continued the expansion of the partnership with Społem Cooperatives and launched a new grocery store concept, the Gama chain, based on both existing and newly set up outlets of the Społem Cooperative. The development plans for the new chain envisage opening at least 25 outlets by the end of the year.
The franchise and partnership chains of the Tradis Wholesale Group comprise in aggregate 4,116 outlets.
Stokrotka Sp. z o.o., the key company of the retail business, has acquired six new retail sites. In the first two quarters of this year seven new Stokrotka supermarkets were launched, with as many as 20 new Stokrotka locations expected to become operational in 2011.