The Nisa board is claiming to have exceeded its profit target for the year in the full-year results, released today.

Adjusted earnings (EBITDA) for the year ended 2 April 2017 were £8.6m, exceeding the target of £8.5m. Profit before tax was declared as £2.8m, an improvement of £8.1m compared to the previous year’s loss.

Turnover was 2.6% lower than last year at £1.25bn, although the group claimed that sales were actually 3.8% higher when adjusting for movements in large accounts (namely the demise of My Local and the acquisition of 298 former Co-op stores by Nisa member McColls Retail Group). Overall there were 515 new member stores within the group, up from 476 joining last year.

Distribution costs per case were reduced by 0.7%, while overhead costs overall were cut by 4.1% during the year. Delivery on time ran at 95%, with delivery on day at 99.92%. Nisa recently renewed its distribution contract with DHL for a further two years with improved cost savings.

The Heritage own-brand continued to grow, up by 4.9% year on year, with notable increases in frozen red meat (up 79.8%), loose salads (62.4%) and chilled vegetables (45.1%).

Chief executive Nick Read said: “The uplift in performance throughout FY17 continued to build on the foundations laid in FY16, when Nisa returned to profitable growth. It has also helped us to convey a message of long-term sustainability, key to securing the confidence of our banking partners in our recent refinancing discussions. The business now has the security of a £120m facility for a period extending to five years, the terms of which are more favourable than our previous facility. Nisa is well placed to continue the execution of its three-year strategy, to grow profitably and create a sustainable business model for the benefit of all its members.

“We are entering the third year of our three-year strategy and have agreed our targets which include reaching £2bn turnover by FY19 and delivering EBITDA greater than 1% of turnover whilst achieving 10% cash headroom in our banking facilities. We will keep challenging ourselves to deliver greater benefits to our members and to create a rewarding business for all concerned.”

On potential takeover activity, Read made the following comment: “Following a number of enquiries from interested parties, the Nisa Board, which comprises nine member directors, three independent non-executive directors and two executives, has been running a process, with the help of professional advisors, to weigh up the merits of any possible offer for the company.

“The Board has determined that one such proposal is of sufficient merit to grant the party involved a period of exclusivity in order to carry out due diligence. Should that party wish to make a formal offer for the company, the Board will at that stage determine whether it is appropriate for this offer to be put to members. It will then be for the members to determine whether or not they wish to accept the offer.”