The PG Group attained a turnover of €120.0 million in the year ended 30th April 2020, representing a growth of 11.1 per cent on the previous year, which had registered a turnover of €108.0 million.

Operating profit amounted to €15.1 million, compared to €12.6 million in 2019.

PG Group Chairman John B Zarb, in his report, commented that the group performed particularly well in the first ten months of the financial year, bolstered by the successful operation of its Sliema Zara® outlet, a steady performance at Pama and sustained growth at Pavi, which has benefited from a substantial refurbishment programme that is now in its final stages.

In the final two months of the financial year, however, the group’s operations were inevitably materially impacted by the outbreak of COVID-19.

“Our Pama and Pavi supermarket operations are an essential component of the food supply chain, and our first priority since the outbreak of the COVID-19 pandemic has been that of safeguarding continuity of service through ensuring the safety of our customers and staff.

“Various measures were and continue to be taken to ensure this continuity of service, in full cooperation with public health authorities, and to date our outlets have not been linked to any known cases of infection.”

This success has inevitably come at a cost – both in terms of higher operating expenses and, more importantly, in terms of an element of personal risk to our staff, the chairman continued.

“We have taken prudent measures to protect all our employees but remain conscious that certain members of our staff, particularly our cashiers and shop staff, are in continual contact with large numbers of customers.”

COVID-19 inevitably impacted the group’s results in March and April, particularly through the closure of its Zara® and Zara Home® operations, and the closure of retail operations at Pama and Pavi.

Within the food supermarkets, an initial surge of panic buying quickly subsided as clients noted that the stores remained well supplied, and was inevitably followed by a quieter period, one that was characterised by a higher focus on basic commodities and less impulse buying, the chairman noted.

In spite of these setbacks, PG Group’s overall performance in the second half of the financial year remained in line with that recorded a year earlier, and the improvement in results that were reported in the first half of the year have not been diluted.

The group’s net profit after taxation for the year ended 30th April 2020 amounted to €9.7million, compared to €8.9 million in 2019, representing an increase of 8 per cent.

Net cash generated from operating activities totaled €15.5 million, compared to €10.0 million in 2019.

Capital expenditure incurred during the period was relatively contained, and the opportunity was taken of accelerating the repayment of long-term bank borrowings, said Mr Zarb.

The group’s net bank liabilities as at 30th April 2020 totaled €14.9m, compared to €22.0m in 2019, and “are relatively contained in the context of our business activities”.

The group currently has no major capital commitments, and in the absence of unforeseen events would expect to effect further accelerated reductions in borrowings in the current financial year.

An interim net dividend of €2.0 million was distributed to shareholders in December 2019, while a second interim net dividend of €2.8 million was paid in July 2020.

These two distributions, totaling €4.8 million, entail a growth of 6.7 per cent over the dividends paid in respect of 2019. Looking ahead, the group expects that COVID-19 will continue to impact its operations.

“It is inevitable that consumer confidence suffers in a period of high economic uncertainty. While Zara® and Zara Home® franchise operations resumed operations in May, the performance of the group’s main outlet in Sliema has also been, as expected, adversely impacted by the downturn in tourism.”

Sales levels at retail and catering operations at Pama and Pavi remain below pre-pandemic levels.

“Unfortunately, at the time of writing this report the Maltese islands are experiencing a significant surge in the number of reported COVID-19 cases, pointing to the possibility of the re-introduction of precautionary restrictions.

“On the positive side, the current economic climate may also bring investment opportunities, and the group’s operating cash flows and low borrowing levels would enable it to capitalise on such openings.”

Mr Zarb said that the group remains committed to pursue growth, particularly in the supermarket and associated retail sector.

In terms of FY 2021, PG Group are projecting a 3 per cent and a 5 per cent revenue increase from the Pama and Pavi shopping villages and an overall 30 per cent shortfall in rental income.

In terms of the franchise operation, sales will fall by 50 per cent up to August, declining to 40 per cent and to 25 per cent in following quarters. Expectations have been built on the assumption that there will be no further lockdowns, especially throughout the Christmas period.