Costcutter invested more than £3m last year as it prepared for its distribution switch from Nisa to Palmer & Harvey.
In accounts for the year to 28 December 2013, the group said “business transformation costs” totalled £3.1m. Of this, £501,000 related to costs associated with the set-up of its new buying company, The Buyco - the joint venture it agreed with P&H in March 2013. Other investments included the creation of its new Independent own-label range.
It predicted further exceptional costs would be incurred “largely in the first half of 2014” as its business transformation was completed.
The accounts also reveal Costcutter renegotiated its banking facilities through to May 2016 during the year and secured £20m in funding from parent company Bibby Line Group.
Costcutter reported a 19.5% increase in sales to £783.9m, which it said had been driven largely by the acquisition of P&H’s Mace retail business in March last year, as well as a net 48 new Costcutter and Kwiksave-branded stores. However, it reported a loss of £5.2m versus profit of £1.8m the year before.
In the accounts, CEO Darcy Willson-Rymer described 2013 as a “highly significant year.” Though the symbol group is continuing to face delivery and availability problems after switching to P&H in July, Willson-Rymer said that once the transformation of the business was complete, Costcutter would “pursue a strategy of growth, both organically and by targeted acquisition.”