PG Group, the publicly listed company operating the Pama and Pavi shopping villages and the Maltese franchisee for Zara and Zara Home, posted profit after tax of €10.56 million thanks an increase in its supermarket revenues of almost 11 per cent.

The Group’s net profit is a 9.4 per cent increase over the €9.65 posted in its previous financial year, which in turn, despite the challenges posed by the COVID-19 pandemic, was 8 per cent higher than that posted for the 2018/19 financial year.

Overall revenues meanwhile increased by 7.9 per cent over the preceding year.

While acknowledging that the local supermarket sector has suffered a reduction in sales since the pandemic started, driven mainly by a reduction in expatriate workers resident in the country and by the reduction in tourism in self-catering accommodation, the Group said that the phenomenon has not “to date” impacted its own supermarkets, which are not located in resorts popular with tourists.

In fact, the PG Group said, “the two supermarkets performed very strongly, and were the driver behind the overall growth in turnover registered during the year”.

Pavi is located in Qormi, while the newer Pama is situated in Mosta, close to the town borders with Naxxar, Lija, and Attard – all residential localities.

The Group’s trading operations were materially impacted by the COVID-19 pandemic, with the financial year commencing with the non-essential retail and catering sectors reopening for business following the first lockdown.

“The recovery in these sectors was slow and in recognition, by way of supporting its clients, the Group waived all rentals at Pama and Pavi for May 2020,” the statement reads.

“Furthermore, given that sales activities in certain retail and catering sectors continued at subdued levels for much of the year, the Group waived minimum rent requirements, allowing its tenants to operate solely on a ‘percentage of turnover’ basis.”

PG Group waived rents again in early 2021 for those tenants whose operations were impacted by the second COVID-19-related six-week lockdown.

These relief measures, the Group pointed out, were implemented on its own initiative, negatively impacting the performance for the year. However, it says that they “were considered by the board as an investment in the long term success of the Group’s tenants and business partners”.

Similar considerations applied to the Group’s own franchise operations which, in the case of the Group’s flagship outlet in Sliema, were also impacted by the downturn in tourism, although some lost ground was recovered by an extremely positive sales performance of on-line orders and of Zara Home products.

Overall, turnover within the Group’s franchise operations decreased by 7.5 per cent compared to the year ended 30th April 2020, with the statement noting that “this reduction is relatively contained when considered in the context of the prevailing circumstances”.

About PG Group

PG Group is engaged in the retailing of food, household goods and other ancillary products through the Pavi Shopping Complex and Pama Shopping Village, and the selling of Zara® clothing and Zara Home® household goods as a franchisee of the Inditex Group.

The Group also leases a number of retail outlets within Pavi Shopping Complex and Pama Shopping Village to third parties.

The business model of the Group with respect to the two supermarket complexes remains that of focusing its activities on areas closely aligned to its core expertise and attain an adequate spread of risk.

Revenue is generated from three types of activity, namely:

• the retailing of food and non-food products, directly procured by the business and carried at its own risk;
• rental arrangements with third party operators in respect of certain specialist activities carried out from designated areas within the supermarkets; and
• the management, operation and letting of other retail and commercial outlets within the two complexes.

The Group’s stated overall objective is that of “creating destinations that cater for a number of the day-to-day needs of shoppers, going beyond a routine visit to a supermarket, albeit that the latter remains of fundamental importance to the Group.”