Musgrave profits rise 26% to £18m

THE Cork based retailing group, Musgrave, has reported impressive results for 1995, with pre tax profits up 26 per cent to £17.98 million. Turnover rose 121 per cent to a record £738 million.

The 1995 results include a five month contribution from the Waterford based L&N group, bought last year for an estimated £20 million. L&N has an annual turnover of around £100 million and the addition of its 2.7 per cent share of the Irish grocery market brought Musgrave's total market share to 17.6 per cent. This puts Musgrave third in the Irish market behind Quinnsworth/Crazy Prices and Dunnes Stores.

Musgrave is Ireland's largest grocery wholesaler and also owns the franchises to the 166 strong chain of Supervalu and L&N Supervalu independently owned supermarkets. Musgrave also owns the franchise to the Centra and Centra QuickStop chain of 225 convenience stores. In addition, it owns 90 per cent of the Spanish supermarket chain, Dialsur.

As well as owning the franchises, it also buys for the Supervalu and Centra franchises. The group sold £415 million worth of goods to these retailers last year, a figure that does not include any contribution from the L&N chain. Cash and carry sales from Musgrave's eight outlets in the Republic and Northern Ireland totalled £180 million, while Dialsur's sales in Spain totalled £90 million.

According to chief executive Mr Hugh Mackeown, trading in the Republic was particularly buoyant, while there was steady progress in Northern Ireland. The market is Spain is increasingly competitive but sales at Dialsur were "satisfactory".

Overall trading so far this year was very satisfactory, he added. Earlier this year, Musgrave acquired five supermarkets in Northern Ireland, as the first stage of an expansion which will see 50 independently owned, Supervalu stores in operation within five years.

Mr Mackeown also said that Musgrave would like to increase sales in Spa in from the current £90 million to £259 million in the same period, possibly through acquisition.

Musgrave ended the year with debt of almost £19 million, mainly due to the L&N acquisition, but is now in a net cash position following the sale of 10 of the 18 L&N stores. The intention is to sell all of these stores, but Mr Mackeown said that it was unlikely that this would be completed by the end of the year.

After tax profits at the group were up over 55 per cent to £11.1 million, mainly due to a sharp fall in the tax charge from 50 per cent to 38 per cent, Musgrave suffered a once off exceptional tax charge in 1994.

Shareholders, mainly members of the extended Musgrave family, shared a dividend of almost £2.6 million, up from £2.1 million last year. And shareholders will benefit further next year when dividends will rise to over £3 million "in light of the successful performance of the group in 1995".

Mr Mackeown is one of the main beneficiaries of the dividend growth - he has received almost £2,35,000 this year and will receive over £277,000 in dividends next year. The other major beneficiary is Mr P.J. Musgrave, who has collected £360,000 in dividends this year and will receive over £425,000 next year.

Following the retirement of the chairman, Mr Frank Casey, at the end of this year, Mr Mackeown will become chairman, with Mr Seamus Scally taking over as chief executive and managing director. Mr Mackeown said he would continue to be involved in Musgrave's strategic direction, although. Mr Scally would have responsibilities for the group's operations.