Heron Foods has reported a 40.5% drop in pre-tax profits to £4.8m for the financial year ending 29 December 2012.
The Hull-based discount retail chain said the decline was partly down to “increased charges due to depreciation, amortisation and write downs on properties”. In comparison, pre-tax profits stood at £8.1m for 2011.
With turnover of £184m, the retailer posted a 5.1% rise in like-for-like sales and managed to maintain an EBITDA of £14.6m. It acquired 53 stores from Iceland of its frozen foods retailer Cooltrader back in September, with the transaction creating goodwill of £12.5m. The group also opened 11 new stores, relocated a further nine and refitted 11 units.
“With the recent acquisition of Coldtrader we are investing in its infrastructure and its central cost base to more effectively manage the increase in the turnover, staff and the increased distribution activity,” said Heron Foods’ finance director David Heuck.
“As our turnover will increase by some 30% in the coming year, and with the challenging economic climate continuing to result in more and more customers seeking value, the directors feel that this is a prudent course of action and will more than pay for itself in the medium term.”
Heuck said the group plans to open 20 new stores over the coming year and will look to switch over all Cooltrader stores to the Heron Foods brand.