Ontex, which owns the Moltex and Lille brands among others, has posted a 6.8% increase in like-for-like sales in the first quarter of its financial year, to €574.2 million.
Like-for-like growth in its Europe business was up 7.7%, while its AMEAA region saw 10.7% growth.
'Higher Than Expected'
The group said that the 'higher-than-expected' revenue for the three-month period to 31 March was primarily due to a 'surge' in consumer purchases in Europe after the first week of March, in anticipation of government measures to curb the spread of COVID-19.
The impact of currencies on its Q1 sales was a negative €9.0 million, of which a €11.2 million drop was recorded in March alone due to currency depreciation mainly in the AMEAA division (including the Mexican Peso, Brazilian Real, and to a lesser extent the Turkish Lira).
A weaker British Pound also had an 'unfavourable impact' on its Europe division, it added.
'As a leading supplier of quality retail brand hygiene products, in particular in Europe, and as the operator of strong local brands in our other markets, we believe that we are well positioned to withstand the tougher economic environment ahead of us that will affect consumers’ purchasing power,' the group said in a statement.
It said that it has a 'strong liquidity position', with no near-term maturities, and was taking steps to strengthen the funding of its operations.
Looking Ahead
In terms of the coming year, Ontex said that despite the positive Q1 2020 performance, it was suspending the 2020 outlook it announced in its 2019 full-year results, due to the continued impact of the coronavirus on its operations, supply chain partners and customers.
It is also suspending its dividend payment, adding that this will be revisited later in the year.
On the effect of COVID-19, Ontex said that its 18 production facilities remain open and are 'operating with limited disruptions', however, due to the spread of the pandemic, it added that maintaining its current level of activity is 'increasingly challenging'.
'The health of our employees and business partners is our primary concern, and we are focused on their safety, that of their families and that of the communities in which we operate,' it said.
'We have taken and will continue to take the necessary measures to slow the spread of COVID-19 and protect our employees. This will remain our absolute priority throughout this difficult time.'
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
