Sales at UK unit of grocery group BWG down 5.6%

SALES AT the UK subsidiary of Irish wholesale grocery group BWG declined by 5.6 per cent in 2007 as a handful of its stores defected to supermarket rivals.

Accounts filed recently for Appleby Westward Group, which supplies about 300 Spar convenience stores in southwest England, show that it posted turnover last year of £137.7 million (€172.4 million), down from £145.9 million in 2006.

"This decrease results from the purchase of customers' stores by multiple retail groups," the directors' report stated.

Appleby Westward's operating profit declined by 45 per cent to £1.9 million.

A spokesman for BWG said this was due to an "intergroup transaction" between the Irish group and its British subsidiary. This was the result of its administrative expenses rising to £4.7 million last year from £3.5 million in 2006.

The decline recorded in its pretax profit was not as sharp as that at an operating level, due to a significant reduction in interest and other charges and a large increase in interest received by the group.

Interest payments declined to £92,000 in 2007 from £458,000 the previous year, while the company earned £334,000 in interest payments last year compared with just £4,000 in 2006. As a result, Appleby Westward's pretax profit fell by 30 per cent to £2.2 million in 2007 from £3.1 million last year.

Commenting on the likely out-turn for Appleby Westward in 2008, a BWG spokesman said: "Trading for all retailers [in the UK] is tighter in 2008 than in 2007.

"We are likely to see a small decrease in [Appleby Westward's] turnover and profitability in 2008 because of economic factors rather than anything fundamental to the business."

Appleby Westward's accounts show that it had total shareholders' funds at the end of December 2007 of £6.4 million compared with £5 million a year earlier.

The company's total staff costs rose by 3.7 per cent to £5.1 million. The number of employees rose by six to 207.

The financial statements show that Appleby Westward's highest-paid director - presumably managing director Ian Connell - earned £150,000 in salary and bonuses in 2007, down from £152,000 the previous year.

In addition to its Appleby Westward business, BWG operates the Spar and Mace franchises in the Republic.

It is the second-largest wholesale grocery supplier here behind the Cork-based Musgrave Group.