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.
DFI RETAIL GROUP HOLDINGS LIMITED
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
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 performance.
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
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
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 2022.
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 time.
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
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 'www.DFIretailgroup.com'.
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(END) Dow Jones Newswires
May 19, 2022 05:23 ET (09:23 GMT)
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