Musgrave's €57m sale marks end of GB foray
Cork retail group Musgrave, which controls the SuperValu chain, has ended a decade-long failed foray into Britain.
Musgrave has sold its loss-making business there for just €57m - less than a quarter of the net price it paid for it.
The company has agreed to sell its Budgens and Londis business in Britain to UK retail and wholesale group Booker.
Family-owned Musgrave first took an effective 43.5pc stake in Budgens in 2000. It bought that stake and convertible loan stock for €146m from German retailer ReWe.
In 2002, it paid another £232m (€275m at the time) for the remainder of Budgens. Musgrave bought the Londis franchise for the UK in 2004 for £60m. That bought the total spend buying the businesses to £382m.
Musgrave hasn't sold its businesses in Northern Ireland.
Speaking to the Irish Independent, Musgrave chief executive Chris Martin said that the experience of the group in Britain has been "difficult".
Mr Martin said that the net price paid by Musgrave for Budgens and Londis, following the sale of company-owned stores to franchisees, was £200m.
"It was a tough market for us," he conceded.
Budgens, with 167 franchised stores, generated sales of £329m (€463m) last year. There are 1,630 Londis stores in Britain that generated £504m (€709.6m) in sales in 2014. On that turnover, the units made a pre-exceptional operating loss of £7.4m (€10.4m) last year.
In its 2013 annual report, Musgrave noted that its Budgens and Londis brands had experienced a "significant worsening" of their results due to factors including intense competition by multiples in the convenience sector.
In 2013, Musgrave wrote off the remaining €78.3m in goodwill that had arisen on the acquisition of Budgens and Londis.
Mr Martin said that Musgrave and Bookers will also develop a strategic partnership.
He added that Musgrave will now focus on its Irish and Spanish markets. It controls the Centra brand and others including Daybreak here. SuperValu and Tesco are Ireland's joint-biggest grocery retailers.
Musgrave releases its full-year results in the next few weeks. In 2013, its turnover dipped to €4.8bn and it made a pre-exceptional, pre-tax profit of €60.1m.
Shares in Booker, headed by Charles Wilson, jumped more than 12pc at one point yesterday after it announced the acquisition.
The group also released full-year results showing turnover rose 1.5pc to £4.8bn (€6.7bn) while operating profit jumped 17pc to £140.3m (€197.5m).