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

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RNS Number : 1104M  DFI Retail Group Holdings Ltd  19 May 2022



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



Interim Management Statement


19th May 2022 - DFI Retail Group Holdings Limited today issues its Interim
Management Statement for the first quarter of 2022.


Overall performance for the Group's subsidiaries in the first quarter was
impacted by a number of factors.  In North Asia, the surge in COVID-19 cases
and the resultant movement restrictions saw panic buying of core grocery
products in the quarter, as well as a rush to buy COVID-19 protection items
and anti-bacterial products.  The trading performance of both Grocery Retail
and Health and Beauty benefitted from these factors, which offset heavy
reductions in foot traffic that negatively impacted Convenience performance.
In Southeast Asia, stronger year-on-year performance within Health and Beauty
broadly offset some softer performance in Grocery Retail as a result of
normalisation of customer behaviours.


Like-for-like sales for the Group's Grocery Retail businesses in the first
quarter were ahead of the same period last year.  In North Asia, Wellcome
reported robust growth, driven by pantry-stocking behaviour and strong
in-store execution in the face of challenging external conditions and supply
chain constraints.  Sales performance in Southeast Asia was impacted by the
easing of movement restrictions and store renovation disruptions in Singapore,
as well as ongoing disruptions to stock availability caused by the pandemic in
Malaysia.  Overall Grocery Retail profitability for the quarter was broadly
in line with the prior year.  Strong sales performance, particularly in Hong
Kong, was offset by higher pandemic-related store expenses and increased
electricity costs in Singapore caused by higher energy prices.


Sales and profit for the Group's Convenience businesses in Hong Kong and South
China were both significantly adversely affected by government-imposed
restrictions arising from the spread of the Omicron variant in the quarter.
Sales and profit for the 7-Eleven business in Singapore, however, both grew
strongly as the easing of movement restrictions there supported the recovery
of customer traffic.


The Group's Health and Beauty businesses reported strong sales growth in the
quarter.  Mannings' revenues in Hong Kong were driven by effective in-store
execution and a surge in demand for COVID-19 related products and
over-the-counter medicines.  Guardian's like-for-like sales grew strongly
across Southeast Asia, driven by a combination of a recovery in mall and
tourist locations, strong demand for COVID-19 related products and effective
store-level execution.  Robust sales for the division translated to solid
profit growth for the quarter relative to the prior year.


Revenue for the Home Furnishings division increased relative to the
corresponding period in 2021, due to a combination of the annualisation impact
of newly-opened stores in the prior year and strong e-commerce sales.
Like-for-like sales, however, reduced as the surge in Omicron cases impacted
store visits in Hong Kong and store operating capacity continued to be limited
in Indonesia for most of the quarter.  Despite the challenges posed by
COVID-19 and ongoing supply chain constraints, IKEA's profitability in the
quarter was broadly in line with the prior year, reflecting strong cost
control.  Global geopolitical conflicts and recent government-imposed
movement restrictions in the Chinese mainland have, however, exacerbated
IKEA's supply chain constraints further, and this is likely to delay a return
to normalised levels of availability and further adversely impact trading


The performance of Maxim's, the Group's 50%-owned associate, in the first
quarter, was significantly adversely impacted by the surge in COVID-19 cases
and subsequent government-imposed restaurant dining restrictions in both Hong
Kong and parts of the Chinese mainland.


Yonghui's underlying profitability increased significantly in the first
quarter relative to the prior year, due to a combination of improved sales
revenue, higher gross margins and operating cost control.  However, DFI's
reported results for 2022 will, as normal, also incorporate Yonghui's reported
losses for quarter ended December 2021, which will have an adverse impact on
DFI's overall profitability.


Robinsons Retail maintained its upward momentum into the first quarter of
2022, reporting strong growth in both sales and profits.  Robinsons Retail's
drugstore, department store and specialty store segments delivered
double-digit like-for-like sales growth, reflecting increased economic
activity as restrictions in the Philippines started to ease in February


The first quarter was an extraordinary period, particularly in Hong Kong, with
a significant surge in COVID-19 cases and consequent constraints on the supply
chain and labour shortages.  The safety and wellbeing of our team members and
customers remained top priorities, and a number of actions were taken to
mitigate the impact of the pandemic.  We would like to express our deep
gratitude to our team members for their continuing dedication and resolve in
putting customers first during these challenging times.


Despite the prolonged impact of the pandemic on the Group's operations, the
Group remains confident in the long-term benefit potential of its
transformation changes.  The Group is therefore continuing to make operating
expense investments to drive the advancement of digital capacity and capital
investments in stores as it seeks to catch up on planned investment,
compromised over the previous two years as a result of the pandemic.  The
Group believes these investments are important to drive the long-term
sustainable growth of the business, and remains confident that its multi-year
transformation is delivering sustainable improvements to the business over


There remains a high level of uncertainty with respect to outlook for the
remainder of the year, due to large variability of outcomes with respect to
pandemic-related restrictions in Hong Kong and the Chinese mainland on DFI's
own banners and our associate businesses Maxim's and Yonghui.  Given
additional planned investments in digital capacity, as well as ongoing
external headwinds associated with prolonged border closures between Hong Kong
and the Chinese mainland and continued supply-chain disruptions, the full year
reported results of the Group are expected to be lower than in 2021.


DFI Retail Group is a leading pan-Asian retailer.  The Group, together with
its associates and joint ventures, operates over 10,200 outlets - including
supermarkets, hypermarkets, convenience stores, health and beauty stores, home
furnishings stores and restaurants - employing some 230,000 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 on 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
 Sunitha Chalam                                (65) 6426 8188


This and other Group announcements can be accessed through the Internet at

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