Emperia Group reported PLN 484 207 000 in revenue from sales for the third quarter of 2014, a 2.37% increase on the same period last year. Revenue for the first three quarters of 2014, at PLN 1 466 million, was slightly (0.70%) higher than in the prior year. Third-quarter EBITDA was PLN 14 896 000, compared with a PLN 780 000 loss in the same period last year. For the first three quarters of 2014, EBITDA reached PLN 59 891 000, up 38.1% on the comparative period.
Net profit in Q3 2014 amounted to PLN 119 000, compared with a PLN 10 944 000 loss in the same period of 2013. Net profit for the first three quarters of 2014 was PLN 17 474 000, up 28.5% on the comparative period.
The retail segment in Q3 2014 can be characterised as being under strong pricing pressure from the competitors and facing deflation in food prices, particularly: fruit, vegetables, meat and poultry. Despite this, the segment continued progress towards its objectives. In the third quarter, Stokrotka opened six new retail locations (one own supermarket and three own markets, alongside two franchise stores). At the end of the period, the Stokrotka chain comprised 246 retail locations. Intensive work continued on improving its price image, the cost effectiveness of stores and central office, as well as trade terms.
One of the key initiatives at Stokrotka during the third quarter of 2014 was the continuing optimisation of in-house logistics. The target level of store supply from the central warehouse has now been reached. The remaining 15-20% of supply comprises regional products, frozen foods and bread, which are delivered to stores directly by manufacturers and suppliers. In the coming quarters, Stokrotka will be focusing its efforts in the logistics performance area on driving logistics employee efficiency, allocation of overhead costs to a larger volume of products being distributed, improving transport effectiveness, as well as limiting product and packaging losses and deficits at warehouses and stores.
At the end of the third quarter, the company began to actively develop relations with stores having less than 400sqm of floor surface. Stokrotka offers its future franchisees the opportunity to open a new business under a well-regarded and modern brand in two formats: market and supermarket. It provides a highly functional and expansive logistics system, assistance from a dedicated team of experts, comprehensive marketing and operational support, as well as access to a list of trusted suppliers offering favourable trade terms.
With a view towards safeguarding its market position, Stokrotka is consistently rolling out its new store brand and format. As of the end of Q3 2014, the remodelling and rebranding process has been completed at nearly 150 retail locations.
The past quarter was a good period for the property segment. The portfolio of 94 properties held by Group companies delivers a steady stream of revenue and improving financial results. Companies within the segment continued to actively search for opportunities to expand the asset portfolio by adding new properties intended for retail operations, in line with the Group’s adopted strategy.
In the IT segment, Infinite has been consistently reinforcing its market position, which is resulting in steadily improving financial results from quarter to quarter.
In the third quarter of 2014, the Group’s management continued to purchase own shares, believing that the current share price remains below fair value. PLN 10.7 million was spent on this objective in Q3 2014, with a total of PLN 37.3 million being spent since the beginning of the year. The company continues to view the on-going buyback programme as an important tool for distributing excess cash to shareholders.