Kuwait-headquartered supermarket chain The Sultan Center (TSC) today announced full-year 2017 results along with an update on the progress of TSC’s Turnaround Plan. TSC generates about 90% of its revenue from Retail operations, 50% of which are generated from Retail operations in Kuwait. TSC also operates supermarkets in Jordan, Oman, and Bahrain.
TSC Chairman Mr. Tarek Sultan said, “Last year, we kicked off our Turnaround plan “Kuwait Retail First”, which as the name suggests, is aimed to refocus TSC on retail operations primarily in our home market. We made a lot of progress and we are pleased to report to the shareholders that our plan is well on-track. 2017 financial results are encouraging and validate that we are heading in the right direction with growing momentum. We look forward to another year of growth and continuous progress as we transform TSC for sustainable and long term success. ”
FY2017 TSC Kuwait Retail Financial Highlights
● Gross Profit: KD 25.2 million, up by KD 1.1M or 4.4 percentage points compared to last year;
● Operating Expenses: KD 17.1 million, down by KD 3.3M or 16% compared to last year;
● EBITDA: KD 8.0 million, up by KD 4.4M or 120% compared to last year;
● Net Income: KD 6.1 million, up by KD 4.3M or 245% compared to last year.
FY2017 TSC Consolidated Group Financial Highlights
● Revenue: KD 220.5M; Down by 11% compared to last year (drop is mainly due to stopping non-profitable practices);
● Gross Profit: KD 46.2 million, up by 1 percentage point (as % of sales) compared to last year;
● General, administrative and selling expenses: KD 37.1 million, down by 13% compared to last year;
● EBITDA: KD 9.0M, million, up by 29% compared to last year;
● Net Income before provisions: KD 4.7 million, up by KD 1.0M or 29% compared to LYR;
● Net Loss: (KD 4.6 M) improvement by almost 81% compared to last year.
The ‘Kuwait Retail First” Turnaround Plan aimed to refocus the company on its core retail business by divesting from non-core assets and non-performing activities on the one-hand, and on the other hand focusing on improving its core retail business. Below are result highlights from the first phase of the Turnaround Plan:
2017 Turnaround Plan Highlights “Kuwait Retail First”
- Significant improvement in commercial practices led by better variety and assortment management, competitive pricing and promotions, optimized inventory management, enhanced product availability and service levels, and improved business terms with over 200 vendors;
- New pricing strategy rolled out across Wholesale Centers, offering lowest prices in the market, guaranteed;
- 750% growth in online shopping business;
- Partnerships established with best-of-breed vendors, complementing the offering to customers;
- Upgrades of retail stores operational standards, customer shopping experience, customer services, and operational controls;
- Improved customer ‘loyalty program’, by generously rewarding and doubling benefits to TSC loyal customers;
- Divestment of non-core investments and assets with total value of KD13.5 million.
- Restructuring of debt portfolio with key lenders, and currently in advanced stages of finalizing the main terms with full support of lenders.
2018 Turnaround Plan Priorities
- Complete debt restructure, sign term sheets with lenders;
- Continue divestment program of non-core assets;
- Focus and grow Kuwait retail business;
- Expand strategically into new retail stores;
- Further grow e-commerce and online shopping channels;
- Upgrade IT systems and complete process automation;
- Introduce new complementary partners, products and services to customers;
- Continue to build and improve business relationships with all vendors.
In March 2017 the company’s board requested a voluntary suspension of trading to shield investors, especially minority shareholders, from fluctuations that may arise from unfounded rumors and speculation while the Board pursued the initial phases of the turnaround strategy. The suspension period continued for almost 12 months with continuous collaboration with Capital Market Authorities and Boursa Kuwait. The company will resume trading on the 18/3/2018 after the successful execution of key milestones in its turnaround plan “Kuwait Retail First”.
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