Record interim results for neighbourhood group; £500K hit from duty paid mark
McCarthy confident that T&S will be resilient in recession
T&S Stores chief executive JIm McCarthy is confident his c-store group will ride out any recession after posting record interims for the eighth successive year.
He said: "Newsagents and stores are always the last to be affected by a recession. People still make small transactions with cash from their pocket. It's the big weekly shops that suffer."
He was unmoved by the major multiples' focus on price. "We're not in the price game. We're providing convenience and good service."
Turnover for the 26 weeks to June 30 was £462.6m, up 8% on the same period last year, with pre-tax profit up 11% to £15.7m.
McCarthy confirmed the group took a £500,000 hit caused by the introduction of the duty paid mark on cigarette packs. The group took the decision to discount non duty-marked packs by £1, to clear them before the new rules came in on July 1.
The group now has 880 One Stop convenience stores, which contributed 90% of the group's operating profit, and 376 newsagents and high street discount stores.
After several years of rapid growth during which the group acquired several large regional chains M&W, One Stop and Day & Nite as well as many individual stores, numbers fell this year with a decline of 10 c-stores and nine stores from the other division.
McCarthy said: "There comes a time after rapid growth when you pause and weed out poorly performing stores. But that's not to say we would not be interested in a major acquisition if the opportunity arose."
Despite the added focus on stores, operating margin slipped from 5.6% to 5.4%. McCarthy attributed the decline to the integration of 100 lower margin Nite & Day stores, acquired last year, and to lower margins on phone cards.
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