Group Overview
Brakes Group has delivered an encouraging performance in the first half of 2012, with revenues and profits in line with our original budget expectations for the year.
UK
The UK economy continues to remain challenging, with weak consumer demand and declining market volumes. Within this environment, Brakes has been able to secure significant profitable new business and has maintained its high levels of customer retention. This has helped Brakes in the UK to deliver strong top line growth and, with stable margins, this has generated EBITDA growth. In addition, we have been working on new projects and investments in H1 2012. This has included the roll out of two significant large scale contract wins requiring deliveries to a large number of new sites, as well as the opening of the new multi-temperature depot in Reading, depot rationalisation plans and planning for deliveries around the Olympics events. The successful roll out of these large scale programmes has been made possible by the dedication and team work of all our employees.
Brake France
There has been significant economic and political uncertainty across France during the first half of 2012, and there has been a declining trend in French foodservice market volumes. However, Brake France has continued to increase its market share significantly with encouraging sales growth in each of its three key business sectors: independent accounts, corporate accounts and the public sector. Brake France remains focused on implementing its five year strategic plan, improving customer service and proposition and ensuring an optimum distribution platform to maximise efficiency.
Menigo (Sweden)
Whilst the economy in the UK and France has remained depressed, the Swedish economy has been more buoyant. This is reflected in Menigo’s performance, where excluding a lost convenience contract, Menigo has been achieving double digit sales growth. This is an encouraging performance, particularly given the opportunities that still remain to leverage synergies with the rest of the Brakes Group.
Strategy Update
Brakes Group continues to be focused on identifying opportunities to deliver sustainable long term growth in sales and profit. Over recent months we have refreshed the five year strategic plans for each of our geographies, and the roll out of these plans and investments is now well underway.
H1 2012 has seen the successful execution of the first stages of our supply chain infrastructure investment in the UK, with the opening in April in Reading of the first new multi-temperature depot. The total network plan will help us to deliver improved customer service and drive operational efficiencies.
We are making similar investments in France to drive distribution efficiency, as well as developing improved e-commerce functionality for our customers and equipping our sales team with more insightful tools.
In Sweden, continued investment in our independent account sales force and their sales tools remains key to the ongoing growth of the core business.
Corporate social and environmental responsibility
We remain committed to ensuring that our business develops in an environmentally sustainable and sociably responsible manner, which will drive benefits for our customers, our people and the communities in which we work. In March 2012, Brakes Group in the UK progressed to achieve Gold in Business in the Community's 2012 Corporate Responsibility Index, the UK's leading voluntary benchmark of corporate responsibility. The initiatives that enabled us to achieve Gold status included a continued reduction in road miles and CO2 emissions, collaborative projects with suppliers to reduce packaging and continued focus on responsible British sourcing.
Conclusion
We remain committed to working with our customers to develop long term relationships in order to further enhance our market leading position. Our commitment to this is demonstrated by our investments in people, infrastructure and our distribution network. Whilst the short term market outlook still remains challenging, the underlying characteristics of the foodservice market remain attractive and we are committed to making the investments necessary to support growth in the medium term.
