REG - DFI Retail Group Jardine Matheson Hdg - Interim Management Statement

DFI Retail groupAnnouncement

10/11/2022 09:45

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RNS Number : 9935F  DFI Retail Group Holdings Ltd  10 November 2022

Announcement

 

The following announcement was issued today to a Regulatory Information
Service approved by the Financial Conduct Authority in the United Kingdom.

 

DFI RETAIL GROUP HOLDINGS LIMITED

Interim Management Statement

 

10th November 2022 - DFI Retail Group Holdings Limited today issues its
Interim Management Statement for the third quarter of 2022.

 

The Group's underlying profitability improved in the third quarter, compared
to the first half of the year.  Within subsidiaries, Health and Beauty,
Convenience and IKEA businesses all benefitted from stronger like-for-like
sales growth in the third quarter compared to the first half and higher
profits than in the equivalent period last year.  The performance of these
three divisions, however, was broadly offset by lower profitability in Grocery
Retail.

 

Overall Grocery Retail like-for-like sales in the third quarter of 2021 were
adversely impacted by the annualisation of movement restrictions which
supported spikes in demand the prior year.  Like-for-like sales in North Asia
were flat compared with the prior year, while sales performance in Southeast
Asia was impacted by a reduction in eating-at-home resulting from the easing
of movement restrictions; store renovation disruptions in Singapore; and
weaker consumer sentiment due to inflationary pressures.  Overall
profitability for Grocery Retail in the third quarter of the year continued to
be impacted by the higher cost of goods sold; increasing operating costs
(particularly electricity costs); and e-commerce investment costs.

 

The Group's Convenience business reported improving like-for-like sales over
the course of the year, and like-for-like sales growth was higher in the third
quarter relative to the first half of the year.  Like-for-like sales
performance in Hong Kong, Macau and Singapore improved as COVID-related
movement restrictions were relaxed or removed.  In South China, however,
sales continued to be impacted by COVID-related restrictions and lockdowns.
As a result of improving sales momentum, overall profitability for the
division in the third quarter increased compared to the same period last year.

 

Health and Beauty reported double-digit like-for-like sales growth in the
third quarter.  Mannings Hong Kong saw strong sales performance, driven by
effective in-store execution and market share gains.  Guardian also reported
strong like-for-like sales recovery, particularly in Malaysia and Indonesia.
Underlying profitability for the division increased significantly in the third
quarter compared to the same period last year, underpinned by a recovery in
customer traffic, effective promotion management and cost control.

 

The performance of the Home Furnishings division in the third quarter also
benefitted from increasing sales momentum.  Like-for-like sales growth
improved in the third quarter compared to the first half, as government
restrictions eased, particularly in Indonesia.  Stock availability also
improved as global supply chain constraints reduced in the third quarter.
Profit in the third quarter also increased relative to the equivalent period
last year, due to stronger sales performance and cost control.

 

The profitability of Maxim's, the Group's 50%-owned associate, improved
significantly in the third quarter compared to the first half, supported by
improved restaurant patronage and good mooncake sales.  Profitability was
broadly in line with the prior year.  Yonghui reported reduced net underlying
losses in the third quarter compared to the same period last year, although
its operations continued to be impacted by COVID-related restrictions and
lockdowns.  Robinsons Retail reported double-digit like-for-like sales growth
in the third quarter compared to the same period last year, driven by a strong
recovery in the department store, convenience store, DIY and specialty
segments, with customer traffic increasing as restrictions eased.

 

The Group continues to execute its key transformation and growth initiatives
to support its key strategic priorities.  The yuu Rewards loyalty programme
launched in Singapore in October 2022, with the Group entering partnerships
with minden.ai, a tech venture founded by Temasek, as well as BreadTalk Group,
DBS Bank, PAssion Card, Mandai Wildlife Group and Singtel.  The coalition
loyalty programme unites some of Singapore's most popular brands, offering
customers an effortless way to earn rewards on everyday purchases across over
1,000 outlets.

 

While the Group has been encouraged by improving financial performance in the
third quarter of the year compared to the first half, ongoing movement
restrictions, border controls and inflationary pressures continue to have a
significant adverse effect on the Group's businesses.  In addition, planned
investments in digital capacity will continue to impact short-term
profitability.  The Group expects profits in the second half to significantly
improve relative to the first half but, nevertheless, to be below those in the
comparable period last year.  Accordingly, full year profits are expected to
be materially lower than in 2021.

 

The Group remains confident, however, in the strength of the Group's banners
and believes that the Group's multi-year transformation and investments to
advance digital capabilities and improve stores and operating standards will
deliver sustainable growth as the impact of the pandemic recedes.

 

DFI Retail Group is a leading pan-Asian retailer.  The Group, together with
its associates and joint ventures, operates over 10,300 outlets - including
supermarkets, hypermarkets, convenience stores, health and beauty stores, home
furnishings stores and restaurants - employing over 220,000 people, and had
total sales in 2021 exceeding US$27 billion.  The Group's parent company, DFI
Retail Group Holdings Limited, is incorporated in Bermuda and has a primary
listing in the standard segment of the London Stock Exchange, with secondary
listings in Bermuda and Singapore.  DFI Retail Group is a member of the
Jardine Matheson Group.

 

- end -

 

For further information, please contact:

 

 DFI Retail Group Management Services Limited
 Christine Chung                               (852) 2299 1056

 Brunswick Group Limited
 William Brocklehurst                          (852) 5685 9881

 

This and other Group announcements can be accessed through the Internet at
'www.DFIretailgroup.com'.

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