Italian sale boosts Hyparlo
has helped French retail operator Hyparlo to a significant
improvement in profits in the first half. The company will now
focus on its domestic and Romanian businesses, but warned that
growth would be slow this year.
The continued growth of the Carrefour retail group in France has, not surprisingly, had a knock on effect on the performance of the company's two main franchise holders.
Last week Guyenne and Gascogne reported a 6 per cent increase in sales to €556 million and net profits up 83 per cent to €17.1 million for the first half of the year. Now Hyparlo has unveiled a similarly impressive performance, with net profits of €19.7 million after losses of €0.61 million in the first half of 2002.
However, Hyparlo was not able to match its compatriot in terms of sales growth, with turnover dropping from €466.3 million to €436.5 million, mainly as a result of the sale of its Italian business to Carrefour since the previous year. On a comparable basis, the company lifted sales by 3.3 per cent.
The sale of the Italian business was also responsible for the majority of the net profit gain - Hyparlo netted €16.3 million as a result of the sale - but even excluding this, the company managed to lift net profits to €3.9 million after losses of €1.2 million in the previous year - an indication that the sale of the Transalpine business was the right strategic move, the company claimed.
The company is now focused on just two markets, France and Romania, and its operations in both markets performed well during the half. In France, sales were up 3 per cent, while the Bucharest hypermarket operated by Hyparlo posted a 15 per cent increase in sales at constant exchange rates.
The sale of the Italian business has enabled the company to finance its expansion in its two remaining markets without recourse to debt. The final quarter of the year, the company will benefit from an additional 12,500 square metres of floorspace (4,000 at its remodelled store in Orange, southern France and 8,500 from a third Romanian hypermarket), all of which was financed from the company's own funds.
But despite its steady gains during the first half, Hyparlo warned that French consumer spending levels were still low, and that while the additional sales space in Orange should lead to increased sales in the domestic market, the gains would not be spectacular.