ADM Londis, the Irish c-store franchise group, is to convert from a co-operative to an unlisted public company, enabling retailers to buy and sell shares in the company.
The change in corporate structure, approved by members in a weekend vote, will see additional capital injected into company and make expansion easier, said joint chief executive, Stephen O’Riordan. Banks would look more favourably on a plc than on a co-op, he added.
ADM Londis, which now adds plc to its title, has 330 stores in the Republic, with plans to open another 15 this year. Only 100 retailers are shareholders but many more are now expected to seek shares and the change of status is also expected to attract new members.An initial price for the shares will be set at the end of the financial year.
The group, which employs some 5,000 staff, reported pre-tax profit of €8.6m last year on a 14% rise in turnover to €294m.
O’Riordan recalled that earlier this year the company had rejected a €5m takeover offer from its larger rival, BWG, owner of the Spar and Mace franchises, and said it was now looking to grow through “large scale” acquisition opportunities as well as getting new members.
Building up buying power was increasingly important in the competitive c-store market, and the latest development would help with that, he said.
“It also strengthens our commitment to our retailers, demonstrating that we are no longer just another franchise.”
The aim was to drive retailer turnover, margins and overall profitability. A stock market listing was not on the cards in the medium term, but is not ruled out.