Moves by Dutch grocery retailer Laurus to lift itself back into the black appear to be working, with a leap back into profit in the first half. But the streamlined group still has a long way to go.
Net profits for the first six months reached €7 million, a major improvement on the losses of €44 million in the same period the previous year. Operating profits were €19 million, up from losses of €29 million in 2002, partly due to disposals in Spain and the signing of a new purchasing agreement with major shareholder Casino.
But there is still plenty of work to do to ensure a profitable future. Like-for-like sales at the Dutch units Edah, Konmar and Super De Boer were down 1.3 per cent overall, with a good performance from the Edah discount store chain offset by a sharp decline in sales from Konmar. Super De Boer's wholly-owned stores registered a decline in sales, while its affiliated stores posted a slight gain.
Total sales from the Dutch business were down 6.2 per cent to €1.97 billion, due mainly to the sale of 81 stores and the difficult economic market conditions created by the economic downturn.
Edah's sales were down €8 million to €599 million, while Konmar's turnover dropped by nearly €100 million to €509 million. The large Konmar Superstores in particular posted lower sales and changes to the format are currently in progress with a view to improving sales and results, the company said. A number of the medium-sized Konmar supermarkets will be converted to the Super De Boer and Edah formats in the second half of the year, the group said.
Super De Boer posted net sales of €866 million, down slightly on the €891 million registered in the first half of 2002. Total group sales were down 24 per cent to €2.2 billion following the sale of Spar (258 stores), the disposal of the Spanish operations (649 stores), the transfer of the 81 stores in the Netherlands, the sale of most of the Belgian activities (363 stores) and the termination of the Basismarkt business (166 stores).
In Belgium, sales decreased to €193 million from €293 million in the same period in 2002, due to the sale of most of the Belgian operations to Colruyt. Twenty of the remaining Belgian stores are to be sold to Carrefour Belgium, with negotiations over the sale of the last eight Laurus stores in Belgium still continuing.
The restructuring of the business will continue in the second half, Laurus said, with moves designed to lower overhead and logistics expenses and reduce employee numbers likely to cost the group €15-20 million. Nonetheless, the company said it expected to post a modest profit for the year as a whole.