Bestway Wholesale suffered a 56% fall in pre-tax profits for the year to June 2016 as it warned of “changing consumer habits and intense competition”.
Pre-tax profits for its cash and carry operation fell to £19.7m from £44.6m in 2015, while turnover slipped from £2.27bn to £2.17bn. The wholesaler suggested its “conscious decision” to invest in supporting the independent retail sector and a revaluation of its properties from £18.8m to £3m had contributed to the fall in profits.
Bestway added its investment in its foodservice operations and symbol club should translate into a more positive performance going forward.
The UK’s second-biggest cash & carry operator said its Best-one and Xtra Local retail club membership continued to grow as it took measures to ensure greater discipline and compliance among affiliated stores.
During the last year it introduced The Great Rebate and MyRewards schemes to help customers increase their margins and profitability.
Bestway’s catering sales were up 5% while its online business now has over 28,500 registered users with weekly sales averaging £4.7m. Its mobile app accounts for nearly 15% of all online transactions.
Overall the group’s pre-tax profits rose 6% from £390.5m to £413.3m thanks to an improved performance in its banking and cement sectors in Pakistan. Bestway’s overall turnover rose from £3.01bn to £3.28bn.
“Despite difficult business conditions in the UK, we have maintained our market share across the wholesale and pharmacy businesses,” said CEO Zameer Choudrey.
Bestway said it had made £172.2m worth of repayments over the year as part of its deleveraging strategy, with £125.5m being spent on repaying debt in the UK as part of its acquisition of Well Pharmacy.
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