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17 February 2012

Sustained growth as Imerco once again reports a profit in a challenging market

Imerco A/S, Denmark’s undisputedly largest housewares chain, with 153 own stores nation-wide, today released its annual report for the financial year 2010/11:

  • Revenue rose to DKK 1,138 million, an increase of 4% relative to last year.
  • EBITDA was DKK 46 million and Imerco generated a profit before tax and interest rate swaps of DKK 12 million.
  • Imerco opened three new stores and refurbished or relocated four existing stores.
  • Own central warehouse commissioned, IT platform upgraded and the Imerco+ loyalty programme successfully launched.
  • After the end of the financial year, Imerco has taken over 70% of the design company erik bagger a/s.

Highlights of 2010/11

Imerco A/S, an 83%-owned subsidiary of the M. Goldschmidt Holding Group, generated revenue of DKK 1,138 million, operating profit of 46 million and profit before tax and interest rate swaps of DKK 12 million in the 2010/11 financial year, which ended on 30 September 2011.

The market remains very competitive, and fierce price competition resulted in a slightly lower gross margin compared to last year.

In many ways, this was a year of transitions as Imerco implemented a new IT system making operations more efficient and commissioned its own central warehouse, which now supplies most of the goods directly to the Imerco stores. These transitions involved non-recurring costs that affected the results for the 2010/11 financial year, but it also meant that Imerco now stands much better prepared for the future, among other things because the company now imports goods directly and due to greater efficiency in the internal supply chain and lower fixed costs going forward.

CEO Villy Gravengaard said: "The 2010/11 financial year was an eventful year for Imerco. The revenue growth the company has experienced since the spring of 2010 continued despite a general reluctance to spend among consumer. Focusing on strong brands at reasonable prices has created the foundation for growth. We aim to set the agenda in the housewares industry and to expand our position as the market leader and continue to win market share, and of course improve our earnings."

Imerco opened three new stores, in Ålborg Storcenter, Lyngby Storcenter and Helsingør Bycenter, respectively, while the stores in Frederiksberg Centeret, Field's shopping centre, Nyborg and Middelfart were relocated to better premises or refurbished and expanded.

Significant events after the balance sheet date

In December 2011, Imerco A/S acquired a 70% controlling interest in the Danish design company erik bagger a/s. The acquisition of erik bagger a/s gives Imerco an even stronger position to attract Danish consumers in search of design gifts, glassware and porcelain. The acquisition will give Imerco very special know-how and significant product development skills, which will add new opportunities and qualities in the efforts to ensure that Imerco has the most attractive and unique product offering available to the Group's many customers.

Principal shareholder and chairman of the Board of Directors of Imerco A/S, Mikael Goldschmidt, said: “The conversion of Imerco from a voluntary chain into a capital chain is now finalised. Imerco is positioned second to none in the industry and we are generally much better prepared to meet future challenges within the retail trade: having our own logistics and an upgraded IT platform, and the successful implementation of Imerco+ and the acquisition of erik bagger a/s means that taking over a larger share of the value chain will bring substantial benefits to Imerco, will bring attractive new products to Imerco’s customers and, in turn, strengthen earnings.”

Outlook for the 2011/12 financial year

Imerco will continue to optimise its nation-wide store network by opening new stores, expanding existing stores and taking over better store locations. Imerco will also focus on strengthening and differentiating the Group's market position by increasing the share of brands in exclusive distribution and by developing own goods, specifically the “erik bagger denmark” and “Cook & Baker” brands.

Overall, Imerco has created a strong platform for earnings growth and increased cash flows in 2011/12. Management expects a profit improvement in the 2011/12 financial year.

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