One Stop has declared significantly reduced profits for the financial year in the wake of the Tesco accounting scandal and set-up costs for the franchising scheme.
Pre-tax profit for the year ending 28 February 2015 was £10m, compared to £21m in 2014, on the back of new accounting practices introduced across the group. Sales increased by 17% to £925m.
The franchise operation continued to grow, although start-up costs, such as store investment funds for new retailers joining the scheme, meant that it reported a trading loss of £3m. At the year end of 28 Feb, 75 independent stores were trading as One Stop franchises, generating total revenue of £15.8m to One Stop during the year.
A company statement said: “The fall in operating profit primarily reflects the application of new accounting policies on impairment, in line with the wider Tesco Group. Revenue grew from £789m to £925m over the year and the business has continued to perform well in a challenging market.
“We’re pleased with the progress we’ve made in growing our franchise business since its launch in early 2014, forming successful partnerships with great independent retailers across the country. The loss reflects start-up costs as we build the business and invest in our franchise partners.”