Apr 28, 2010

ADM Londis plc, one of Ireland’s leading symbol groups, today detailed that the Group and its nationwide network of independent retailers are well positioned to benefit from any uplift in consumer confidence in 2010. This forward looking statement followed the resilient results detailed for the year ended 31^st December 2009.Profit before tax is reported at €2.4m, on a wholesale turnover of €269m and Group Retailer sales of €560m.

These results also included the Group’s second and consecutive dividend payment for ADM Londis shareholders since the Group’s conversion to plc status in 2004. Marked price deflation throughout the grocery retail industry resulted in a 10% decline in organic sales by the Group. This reduction was replicated across the industry and also reflected an intensive investment in promotional and pricing support programmes for Londis retailers.

Stephen O’Riordan, Chief Executive, ADM Londis plc, said, “2009 marked a continuation of the 2008 trend that has seen double digit declines in the value of the Irish grocery retail sector. Against this background ADM Londis plc returned resilient results. Considered alongside our low debt profile and strong commercial initiatives, Londis remains well positioned within the Irish symbol group market.”Continuing, O’Riordan emphasised the importance of the completion of the cost savings programme initiated in 2008. “Prudent financial management was an ongoing feature across Group operations during 2009 in an effort to mitigate credit risk as a result of the ongoing credit squeeze. In practical terms this resulted in the closure of credit lines to exposed stores and also reduced scope for store recruitment, which in turn impacted on Group turnover. The completion of this programme has culminated in a Business with a strong financial position supported by a core group of proven Londis retailers, providing the Group with a strong and highly sustainable platform for growth once market conditions improve.”  

This emphasis on prudent financial management has resulted in Staff Costs of approximately 1.5% of Group turnover reinforced by Capital and Retained Profits of €23m and Shareholder Funds of €21m. Today’s recommended dividend payment of €0.25 per share is based on the current share price of €51.67 representing a growth of 7% from the initial share valuation of €48.15 in 2005. A major development in 2009 was the establishment of a strategic alliance with UK wholesaler, Nisa Today’s. This alliance delivers in excess of €6 billion buying power to retail members, whilst also bringing one of the credible Private Label offerings in the business to Londis’ consumers.  In conjunction with a newly launched rebate scheme and broader strategic procurement focus, the Group is investing heavily in retailer profitability through maintaining sustainable retail margins for Londis Members whilst delivering exceptional value to Londis consumers. This was reflected in 2009 through a national price point led marketing campaign reflecting the considerable benefits brought about by the Group’s strategic procurement initiatives.

Leo McCauley, Chairman, ADM Londis plc, commented “2010 is not expected to bring radical improvement to the fortunes of the Irish retail market. Low consumer confidence, challenging employment forecasts and continuing tight credit conditions look set to prevail in the immediate future. Additionally a sustained value motivation on behalf of consumers will continue to bring margin and profit pressure to bear on all operators within the Irish grocery market. However as a result of the process of very positive change by the Londis Group in recent years, through strategic alliances, strategic procurement practices, strong value led marketing campaigns and strategic cost management, the Group is well positioned in the marketplace. Ongoing support in terms of promotional and value-led initiatives will continue to be key to supporting our Retail members throughout 2010 and with the strong financial standing of the Group we are very well placed to meet these challenges.”