Foodstuffs' balance sheet reflects improving economy

Turnover continues to grow for Foodstuffs South Island's New World and other grocery outlets. Photo by Gerard O'Brien.
Turnover continues to grow for Foodstuffs South Island's New World and other grocery outlets. Photo by Gerard O'Brien.
The balance sheet of Foodstuffs South Island continues to grow strongly, with revenue exceeding $2.6 billion in the year ended February, the annual accounts show.

The cost of sales also continues to grow but the gross profit of $291.85 million for the period under review was still 4.9% higher than the $278.3 million reported in the previous corresponding period.

After finance costs, income and operating expenses were included, the 2014 operating profit was $256.3 million. Rebates to members increased nearly $10 million to $227.1 million, leaving a reported profit of $21.5 million for the year, compared with $15.6 million in the pcp.

Foodstuffs operates the New World, Pak'n Save, Four Square, Trents, Raeward Fresh and Henry's Beer, Wine and Spirits brands.

At balance date, Foodstuffs SI had total assets of $955.7 million. Operating cash flow at balance date was $48.9 million, compared with $15 million in the pcp.

Chairman Robin Brown said in his annual review the New Zealand economy gained substantial momentum over the second half of 2013, with a strong growth forecast for the next three years.

Consumer spending and confidence improved due to an improved labour market, rising house prices and growth in incomes.

''Foodstuffs SI's financial results were consistent with this marked improvement in the New Zealand economy and, together with clear strategy, good cost control and great marketing, we have managed to have an excellent year.''

The group celebrated its 25th anniversary during the year, opened its 10th Pak'n Save, in Blenheim, and the 41st New World, in Woolston, and ran the successful ''Little Shop'' promotion nationally in New Worlds, he said.

Customers were the core of the business and the reason Foodstuffs existed. Commitment to service excellence and investing in a healthier society were paramount.

''We are aware the choices our customers make are of consequence and could be life-changing.''

In 2007, Foodstuffs started a community nutrition programme - Food for Thought - that taught year 5 and 6 pupils how to make healthier food and lifestyle choices.

Over recent years, consumer demand for healthy products had grown and Foodstuffs was proud to give children the tools they needed to make those healthier choices now and in the future.

Looking at the retail market, Mr Brown said Foodstuffs SI strengthened its competitive position by gaining market share. Despite various challenges, the banner groups achieved good growth, partly due to the opening of two new stores.

Mr Brown, who is also the chairman of Foodstuffs New Zealand, said it had been a big year from a public relations perspective. Supermarkets were ''very front of mind'' with the media and the industry remained of intense public interest.

''We see this level of intensity and media scrutiny as `business as usual' rather than merely a pulse in time. Our industry and media relationships, responsiveness, transparency and integrity are all elements of our reputation protection we manage very seriously.

''It is an area where we all share a collective responsibility.''

Foodstuffs SI annual meeting will be held in Dunedin on July 15.


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