Shelf life: Spar and Mace operator files accounts for its first full year under Triode ownership

IRISH WHOLESALE grocery group BWG, which operates the Spar and Mace symbol groups here, increased its sales by 5 per cent last year to €1.3 billion in its first full year of ownership by Triode Investments Ltd.

Accounts just filed for Triode, controlled by BWG directors Leo Crawford, John O'Donnell and John Clohisy, show that the company spent €27.9 million on interest payments and costs relating to its €390 million buyout of BWG in October 2006.

This comprised €17.5 million in interest to service its €301 million debt, accrued payments of €7.6 million set aside for future debt servicing costs, and €2.4 million in deal costs associated with the buyout of BWG.

These costs amounted to just more than BWG's 2007 operating profit of €26.9 million, which rose by 2.1 per cent when compared with 2006.

A spokesman for BWG said the wholesaler was comfortable with its debt level and highlighted how it had invested €50 million last year in developing the business further. In addition, BWG acquired Ennis-based rival Mangans for about €40 million earlier this year.

According to the spokesman, BWG is highly cash-generative, with €48 million flowing from the business last year.

The accounts show just under €1.1 billion of turnover was earned by BWG in the Republic. About €201 million was generated in the UK, where it supplies 300 Spar shops in southwest England through a company called Appleby Westward. The balance of its sales came from the rest of Europe.

It is understood that BWG's Irish turnover rose by 7 per cent in 2007.

The picture was somewhat different in Britain. Accounts filed recently by its UK subsidiary showed that its turnover declined by 5.6 per cent in 2007, as a handful of its stores defected to supermarket rivals.

Triode earned €16.5 million in franchise fees from retailers, with the balance of its revenues generated by the distribution of products to shopkeepers.

The wholesaler supplied more than 900 Spar and Mace stores last year.

Triode earned just more than €1.3 million in interest and other income to leave it with a pretax profit for the year of €697,000.

It also earned €292,000 in tax rebates to give it a profit for the year of €989,000.

Triode closed 2007 with accumulated profits of €19.5 million and total shareholders' funds of €61.3 million. No dividend was paid to shareholders.

The accounts also show that Triode made a gain of €5.7 million on the revaluation last year of its properties by Hamilton Osborne King. In addition, it is understood that the company netted €21 million from the sale of some of its properties to franchisees.

BWG employed an average of 921 staff in 2007, and spent €40.9 million on wages, social welfare costs and pension payments. Its six directors were paid €2.6 million in fees during the year.

Figures in the accounts show that BWG was due to repay €23.9 million on its debt in 2008 with another €4.4 million due next year.

Under the terms of its loan agreement, another €121 million is due to be paid between 2010 and 2013, and €151.5 million from 2013. The €301 million debt is held with AIB.

BWG is Ireland's second-biggest grocery wholesaler, after the Cork-based Musgrave chain.