Nisa Retail has reported positive half-year trading figures as it attempts to rebuild from the trading loss of its previous financial year.
EBITDA for the first half of the financial year hit £3.3m, an improvement of £3.5m on the same period last year, with the management team predicting an eventual profit of £7.2m for the full financial year.
The Nisa management team attribute the increase to better trading negotiations with suppliers, plus distribution efficiencies and significant cuts in overheads. Volumes have consistently reached the two million cases per week level.
The profitable trading position has enabled the group to secure an increased and extended banking facility with Barclays. After last year’s posted loss of £7.2m, the group was unable to obtain suitable credit insurance with some high-value suppliers, leading to shortages for key lines such as tobacco. However, more profitable trading since then means that Barclays extended its banking cover last month in a two-year agreement.
Nisa chief executive Nick Read said: “In April, we were in a tough position. Losses were worse than expected, and one-third of the group’s net asset value had disappeared. Without insurable credit, suppliers are unable to supply us, and so a secure banking facility gives confidence to the market.
“We are doing this for the benefit of the members,” he continued. “The reality is, we have to make a profit for the bank, and we need reserves on the balance sheet so that our banking partners have confidence in us as a business. And we need a strong balance sheet if we want to continue to grow, and to invest in things like IT.”
Read added that there were a handful of members within the group who were currently unprofitable to service, and said that steps would be taken to ensure that they were “contributing”.
The group recently secured the contract to supply the new My Local chain in a five-year deal worth £1bn, as well as a five-year contract extension with Ramsden International worth £250m.