Despite what it described as a “challenging” year, Nisa Retail swung back into profit during the 53 weeks to 3 April 2016.
Adjusted earnings came in slightly ahead of target at £7.3m, compared to a loss of £2.9m in the previous year. Meanwhile, underlying profit was £0.6m, recovering from a loss of £5.4m in the prior year.
Nisa’s new management team attributed the improvement to reduced overheads, the removal of loss-making accounts, and new contract wins. It added that whilst there was still much to do in transforming the business, it was now on a more stable footing.
Overall sales were 1.9% lower at £1.31bn, although after adjusting for the loss of Costcutter (and week 53), they were 2.3% higher. The group revealed that fresh sales rose 6% to £210m, whilst sales of its 800-strong Heritage own range were up 7.9% to £119m. Membership numbers also jumped by 476 stores to reach an overall total of 2,915.
Nisa also made a good start to its current financial year, with weekly sales to week 12 tracking 3.5% higher than the same period last year.
In the year ahead, the group said that range optimisation would be an area of focus, along with stock management. Nisa will also continue its work on addressing any loss-making accounts within its member base.
Nick Read, CEO of Nisa Retail, commented: “It has been a challenging, but ultimately pleasing year for Nisa. The business experienced the biggest swing in profit in its 39 year history as we sought to stabilise the company, address historical issues and lay the foundations to return to profitable growth and build for it a sustainable business model. Nisa is now very much back on an upward curve, with the business having already seen a 3.5% increase in weekly sales in the first 12 weeks of FY17, and we are extremely positive about our future.”
- All the right moves – cutting overheads, reducing loss-making accounts and new contract wins
- …of more concern to NAMs will be range optimisation (culling) and stock management (smaller, faster, more frequent)
- …otherwise, business as usual…