2003 semi-annual report of Macintosh Retail Group

In the first six months of 2003, Macintosh Retail Group achieved turnover of EUR 383.1 million, compared with EUR 370.3 million in 2002 (+ 3.5%). Turnover from continuing activities rose by 7.4%. Despite further deterioration of market conditions, the operating result rose slightly from EUR 7.2 million to EUR 7.3 million. Net profit on ordinary activities increased by 13.9% from EUR 3.3 million to EUR 3.8 million. Net profit on ordinary activities per share amounted to EUR 0.54, as against EUR 0.45 in 2002.

Consumer confidence in the Netherlands in the first six months of 2003 dropped well below the already depressed level of the comparable period in 2002. Belgium, France and Germany likewise saw a further deterioration in spending climate. Non-food retail spending in the Netherlands fell by 2.9% in the first five months of 2003 (2002: + 3.0%).

Group profit and loss account
Turnover rose by EUR 12.8 million to EUR 383.1 million, driven largely by BelCompany, which further strengthened its market leadership in telecommunications. Turnover from continuing activities (i.e. excluding activities sold in 2002) increased by 7.4%.

Gross margin declined from 43.1% to 41.3% of turnover, mainly owing to a larger share in turnover from telecom activities with its customary lower gross margins. In addition, pricing measures to generate turnover in a declining market resulted in pressure on margins. The fall in the margin as a percentage of turnover was offset by likewise lower expenses as a percentage of turnover (39.4% of turnover compared with 41.2% in 2002) achieved by cost management and a higher share in turnover of BelCompany where expenses like gross margin as a percentage of turnover are customarily lower than in the other sectors.

The operating result rose slightly in the first six months of 2003 from EUR 7.2 million to EUR 7.3 million. The operating result of the Living sector declined by EUR 0.6 million to EUR 6.9 million, mainly as a result of lower turnover at Stoutenbeek and pressure on gross margins on home decorating activities. The Fashion sector reported an operating loss of EUR 1.6 million (2002: operating profit of EUR 1.8 million) owing to pressure on margins at Superconfex and the Hoogenbosch´s shoe store activities performing less well than in the first half of 2002. The operating result of the Automotive & Telecom sector increased sharply by EUR 4.4 million to EUR 5.3 million thanks to BelCompany.

As a result of reduced funding requirements and lower interest rates, financial expenses declined from EUR 2.7 million to EUR 1.5 million. The tax burden was 34.9% (2002: 25.8%). Net profit on ordinary activities rose by 13.9% to EUR 3.8 million.
There were no extraordinary items in 2003, by contrast to the first six months of 2002, with extraordinary income of EUR 3.5 million.

In view of the uncertain market conditions and low consumer confidence, consumers´ spending continues to be difficult to predict as evidenced for example by the good start to the first half year followed by sluggish sales as from the second quarter which have continued until now. Pricing measures to stimulate turnover will generate further pressure on margins in the second half of the year. The intention is again to compensate for this by cost management. However, the start to the second half of the year, which is a traditionally significant period for non-food retailing, was difficult, caused by the tropical weather conditions in particular. Therefore it is not a foregone conclusion that net profit on ordinary activities for the whole of 2003 will match that of 2002.

Source: Macintosh Retail Group

Related News