Despite 2022 being characterised by challenges associated with post-COVID recovery, geopolitical tension, persistent inflation and supply chain disruptions, The Convenience Shop managed to deliver “strong results” off the back of a “focused strategy”, Chairman Benjamin Muscat shared in a statement.
The Convenience Shop (Holding) plc registered a profit before tax of €2.6 million for the year ended 31st December 2022, up 63 per cent on the previous year, while noting that total revenue, including both owned and franchise outlets, has increased by 18 per cent to €74.5m when compared to €63.3m reported in 2021.
During 2022, the Group generated a total net cash from operations of €3.5m, being €788k higher than prior year. Following a year of heavy investment in 2021, the Group has again invested €810k in the purchase of furniture, plant and equipment as well as intangible assets related to the acquisition of new outlets.
Financing related cash outflows were mainly related to payments of lease liabilities of €1.2m, dividends paid amounting to €625k, interest payments of €441k and bank loan repayments of €141k.
The Group continues to maintain its strong balance sheet with total assets amounting to €33.6m.
Current liquid assets remained at €7.7m in line with last year, mainly comprising of stock for resale amounting to €3.2m, trade and other receivables of €3.4m and cash and cash equivalents of €1.2m. Current liabilities decreased by seven per cent from €11.3m to €10.6m primarily due to the full settlement of tax balance from the COVID era and tight control on supplier credit terms. This helped improve the Group’s liquidity or current ratio by 4.6 percentage points over 2021.
Commenting on the results, Mr Muscat remarked:
“I am pleased to report that the Group has delivered strong results in 2022, despite facing challenges associated with the post-COVID recovery period exacerbated by international political turmoil, inflationary pressures and supply chain disruptions.
“Our focused strategy enabled us to weather the prevailing inflationary environment resulting mainly from global supply chain disruptions following the Covid pandemic and the ongoing Russia-Ukraine dispute. In spite of the effect of the foregoing, we remain highly competitive whilst retaining focus on business growth, customer-centricity, and corporate governance. Having now weathered ‘the storm’, we believe that we are now well-positioned to capitalise on the opportunities that lie ahead.”
Indeed, Group Turnover reached €42.4m, an increase of 21 per cent over the €35.2m reported last year. Further, Group EBITDA (as adjusted for IFRS 16 Leases) increased to €4m from €3m in 2021, an increase of 33 per cent.
The Convenience Shop (Holding) plc’s management team is made up of Jonathan Smith – Chief Operations Officer, Adrian Zammit – Chief Technology Officer, Martin Agius – Chief Executive Officer, John Muscat Drago – Chief People Officer, Sharon Sammut – Chief Commercial Officer and Alan Schembri – Chief Finance Officer.
In 2022, the Group increased the number of outlets to 83 (2020: 70) and expanded to 48 localities (2020: 39).
In his own statement as part of the 2022 financial results, CEO Martin Agius shared that the Group has refined its strategy for new business acquisitions by seeking already established grocery stores with specific area dimensions allowing the capture of new shopper occasions.
“This approach reduces the risk of setting up a new store (which may underperform) and allows the Group to realise better ownstore margins due to the economies of scale of operating a larger shop. The Group has been experiencing an increase in demand from existing grocery store owners/operators who wish to join The Convenience Shop Franchise network.
“Such operators are increasingly recognising the value added brought about by the Group’s strong franchisee offering,” Mr Agius commented.
Providing a high-level view of 2022, he said that it was a momentous year for the group: “Guided by our vision to be Malta’s retailer of choice in the convenience sector by providing a modern, reliable and customer-centric experience to our shoppers, our strategic priorities focused on increasing retail space growth and the Average Transaction Value (ATV) while simultaneously widening our category development and keeping rigorous control on cost and cash management.
“This aligns perfectly with our mission to make daily life easier for our customers through proximity, availability, and our caring team. Our strong performance for the year is also evidenced by an 11 per cent increase in customer footfall, the takeover of two outlets and the opening of six new franchise outlets in 2022, highlighting the success of our franchise concept.”
“These significant achievements would not have been possible without the support of our dedicated people who are the Company’s primary driving force in the successful delivery of results,” added Mr Agius. The expansion of the franchise network momentum, together with higher customer reachability has also significantly contributed to this year’s strong financial performance.
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