EG Group saw profits drop in the first three months of the year ahead of Asda’s £2.3bn deal, new figures have revealed.
The Blackburn-headquartered group posted an EBITDA of $228m (£181m) for the period to March 31, 2023, compared to the $270m (£215m) it achieved over the same period last year.
The convenience group, which includes Euro Garages, Cooplands and Leon, also posted a revenue of £7.2bn. However, underlying trading performance for Q1 was down $12 million (£9.5m) or 5% down versus the prior year period.
Its US EBITDA also decreased by $12m (£9.5m) or 13% on Q1 2022, which the group said was a reflection of “competitive market pressures following oil price decreases in the quarter”.
However, this impact was short-lived as “we have seen margins recover in Q2 to date”, the statement said.
The figures come after a deal worth more than £2.3bn was confirmed at the end of last month, which will see Asda acquire the majority of EG Group’s UK and Ireland operations.
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In Foodservice, sales increased by almost 15% year on year, driven largely by the Group’s continued Foodservice investment strategy, with 88 new outlets opening since March 2022.
As a result, total Foodservice gross profit for Q1 of $192m on a constant currency basis was $17m or 10% above the prior year.
“In Q1 we delivered another robust set of results, with strong performances in most regions and significant growth in Foodservice gross profit, which was up 10% on the prior year,” Asda co-owner and co-CEO of EG Group, Zuber Issa said.
“Our future ambitions are unchanged and, following the Asda transaction, we will continue to operate across three continents and nine countries, benefiting from a strengthened balance sheet, strong cash generation and $6 billion of freehold property.
“This provides continued geographic diversification, scale and an unrivalled platform from which to grow.”
