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

DFI Retail groupAnnouncement

18/05/2023 10:30

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RNS Number : 8913Z  DFI Retail Group Holdings Ltd  18 May 2023

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

 

18th May 2023 - DFI Retail Group Holdings Limited today issues its Interim
Management Statement for the first quarter of 2023.

 

The Group saw significantly improved year-on-year performance in the period.
The Group's subsidiaries reported a modest increase in operating profit, with
a strong recovery in the Health and Beauty and Convenience divisions mostly
offset by lower results in the Grocery Retail division, as consumer buying
patterns normalised following exceptional performance in the first quarter of
2022 and digital investments continued.  Underlying profitability for
associates increased significantly, with Maxim's achieving much improved
performance.

 

North Asia Grocery Retail sales were lower than in the equivalent period last
year, when demand was boosted by the fifth wave of COVID in Hong Kong.
Southeast Asia Grocery Retail sales performance was impacted by cautious
customer shopping behaviour, driven by rising cost of living pressures.
Although Grocery Retail profitability reduced relative to the first quarter of
2022, it remained higher than in the first quarter of 2019, with particularly
encouraging market share growth in Wellcome.

 

The Convenience division reported strong like-for-like sales growth across all
markets in the first quarter, as economies reopened.  7-Eleven Hong Kong
reported strong like-for-like sales growth, underpinned by the effective
execution of a range of commercial activities including new product
development and effective promotions.  7-Eleven South China reported
improving sales momentum across the quarter, driven by strong promotion
execution, improved foot traffic and strong progress in the digitisation of
customer-facing systems.

 

Overall profitability for the division, though still below 2019, improved
significantly compared to the prior year, driven by strong year-on-year sales
recovery.

 

The Group's Health and Beauty division reported substantial sales and profit
growth in the quarter.  In North Asia, Mannings saw double-digit
like-for-like sales growth, as Hong Kong's border with the Chinese mainland
reopened and health-related sales remained strong.  Effective in-store
execution led to a record market share in Hong Kong.  In Southeast Asia,
Guardian also reported strong sales growth compared to the prior year,
particularly in Malaysia and Indonesia.  Overall profitability of the
division more than doubled, leveraging sales recovery as well as ongoing
promotional optimisation and robust cost control.  While overall Health and
Beauty profitability remains below 2019 levels, the early pace of recovery is
encouraging.

 

Home Furnishings sales revenue in the first quarter was behind that in the
same period last year.  Sales were impacted by reduced demand for furniture,
with border reopening likely driving short-term discretionary spending toward
leisure activities, particularly in Hong Kong and Taiwan.  Profitability for
the division has also reduced relative to the prior year due to these trading
challenges, with the impact on profitability partially offset by robust cost
control.  IKEA remains focussed on delivering increased accessibility through
format innovation and new touchpoints.

 

Revenue and profit for Maxim's, the Group's 50%-owned associate, grew
substantially in the first quarter relative to the prior year, due to
increased restaurant patronage, as COVID-related restraints on trading fell
away in Hong Kong and the Chinese mainland.

 

Yonghui's first quarter sales were impacted by the absence of panic buying
seen in the same period last year.  Despite this, reported profitability
increased in the period, supported by higher gross margins and reduced
costs.  Robinsons Retail reported robust like-for-like sales growth in the
first quarter of 2023 compared to the prior year, with strong performances
from the supermarket, drugstores, department stores and convenience stores
segments, which together delivered double-digit revenue growth.  Robinsons'
underlying profitability also increased, although reported profitability was
impacted by higher interest expenses, foreign exchange movements and lower
earnings from associates.

 

On 2nd May 2023, the Group announced that Ian McLeod would be succeeded by
Scott Price as Group Chief Executive of DFI Retail Group Holdings Limited with
effect from 1st August 2023.

 

The Group remains optimistic on the outlook for the remainder of the year.
The reopening of the Hong Kong border and the continued recovery in our
Southeast Asian markets has driven positive trading performance in the first
quarter, although there remains some way to go before the business will see
the level of overall profitability achieved in 2019.  Global economic
headwinds remain and, while inflationary pressures are easing, consumer
confidence is uncertain and will have a bearing on both the speed and degree
to which behaviours return to pre-pandemic levels.  Recognising the sustained
shift to online digital convenience, the Group will continue its investment in
digital platforms in order to compete.  The Group's business transformation
has delivered strong underlying improvements and a solid foundation for the
business and we remain focussed on its continued execution to deliver
sustainable growth for our shareholders; a stronger business for our
customers; and a supportive organisation for our team members.

 

DFI Retail Group is a leading pan-Asian retailer.  The Group, together with
its associates and joint ventures, operates around 10,600 outlets - including
supermarkets, hypermarkets, convenience stores, health and beauty stores, home
furnishings stores and restaurants - employing some 216,000 people, and had
total sales in 2022 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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