Foodstuffs reports net profit of $24.3m

Last updated 12:49 23/07/2012

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Foodstuffs South Island has reported a strongly improved bottom line in 2012, with the 2011 result impacted by a large tax provision following the Government's removal of tax depreciation for buildings with a tax life of over 50 years.

The supermarket co-operative group has reported a net profit for the year to February 29 of $24.3 million, compared to a $23.9m loss in the year to February 28, 2011.

The income tax expense on the change to depreciation on buildings law was $36.3m in the 2011 year, but that figure shrank to $6m in the 2012 year.

The co-operative's revenues from sale of goods rose to $2.43 billion in 2012 from $2.34b in the prior year.

Chairman Robin Brown said in the year to February 29, 2012 the New Zealand economy was still affected by the uncertainty that had gripped the global markets brought on by the European sovereign debt crisis and the Canterbury earthquakes.

"During the last half of the reported period, consumer confidence in New Zealand started to slip due to a barrage of negative news regarding the global economy, weakening of our labour market, rising fuel prices and the trend of constant rising costs for some core staples,'' Brown said.

''On the positive side is the improvement in our property market.

''The co-operative had a good year against the background of New Zealand's lacklustre economic performance, achieving a strong financial result. Revenues were up and the group's major banner groups traded strongly.''

This was achieved despite the closure due to the Canterbury earthquakes of three of our New Worlds, one Four Square and one Henry's Beer Wine and Spirits.

''Overall the co-operative's Four Square and New World store chains experienced a lift in trade. For New World and Pak'n Save there was a change in trading patterns due to the closure of various stores after the earthquakes.

''Pak'n Save stores' trading was patchy due to the impact of the earthquakes - some stores were adversely impacted whilst other stores were advantaged.

''The Four Square Group had an excellent trading year achieving sales growth on a same stores basis of 5.99 per cent.''

The earthquakes played a significant part in the group's growth and, although this was shared throughout the South Island, the north and mid-Canterbury stores, in particular, had exceptional increases.''

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