- Monday, May 06, 2024
The grocer reported revenue of £5.4bn for the three months
By: Pramod Thomas
SUPERMARKET chain Asda, owned by brothers Zuber and Mohsin Issa, has recently settled a hefty £300 million debt.
It paid off a £200m loan acquired for the purchase of 132 convenience stores and petrol stations from the Co-op last year. Also, it cleared an additional £100m in borrowings.
As a result, Asda’s net debt reduced from £4.2 billion to £3.9bn over three months, according to reports.
The total debt, however, has now increased to £4.6bn due to the recent purchase of EG Group’s UK business, a transaction finalised at the beginning of the current quarter. Asda’s overall debts, encompassing lease liabilities, amount to £7.4bn.
The grocer reported revenue of £5.4bn for the three months to the end of September.
Its underlying sales rose 2.8 per cent year-on-year in its third quarter – a sharp slowdown from growth of 9.6 per cent in the previous quarter and an underperformance versus its bigger rivals, reported Reuters.
The company said that it invested £130m in lowering prices on over 600 products by an average of 10 per cent during the quarter.
Mohsin Issa, Asda’s co-owner, said: “Despite inflation easing slightly, we know that many families are still struggling, as disposable income for the average household is 10 per cent down compared to two years ago. Throughout the quarter we have been focussed on helping customers save money whenever they shop with us, and this remains our key focus.
“This means keeping prices low on the products they buy the most, putting money back in their pockets via the Asda Rewards app and passing on savings whenever there is an opportunity to do so.”
In October, Asda concluded the purchase of a significant portion of EG Group’s UK & Ireland business, specializing in petrol forecourt operations and retail, for a total enterprise value of £2.07bn. EG is also owned by the Issa brothers and TDR.
As part of its plan to enhance its convenience store footprint, the company aims to introduce Asda Express stores across EG’s 356 sites in the UK.
Asda on Tuesday (14) announced an extension of its collaboration with FareShare, pledging to contribute the equivalent of 1 million meals during the holiday season.
“Whether it’s through our continued focus on offering the best prices to our customers or campaigns like £1 café meals for kids and over 65s – we’re committed to supporting families through the cost-of-living crisis. We’re incredibly proud to build on our longstanding relationship with FareShare and work across Asda and IPL to identify surplus food within our supply chain to provide a million additional meals in the run up to Christmas,” Issa added.
