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Spar owner blames a decline in oil prices as firm announces its first drop in turnover for 15 years

By Margaret Canning

Published 02/09/2016

The Creightons Eurospar on the Upper Lisburn Road in Belfast
The Creightons Eurospar on the Upper Lisburn Road in Belfast
Martin Agnew from Henderson Group

Henderson Group, the owner of the Spar franchise in Northern Ireland, has said the falling cost of crude oil has cost it £23.5m, disrupting 15 years of sales growth.

The Mallusk-based company, which is split into wholesale, retail, foodservice and property divisions, blamed the fall in oil prices for its first drop in turnover in 15 years.

Revenues in 2015 were £659.1m, down 0.7% on 2014, according to results revealed by the company but not yet filed at Companies House.

The company's pre-tax profits were £21.9m, up 3.9%.

The firm, which is led by brothers Geoffrey and Martin Agnew, said the latest fall in turnover was "entirely due to the deflationary impact of fuel pricing" as oil prices fell from the highs of 2014.

During 2015, oil prices reached their lowest levels in 11 years due to over-supply and tension in the Middle East. But despite the impact of oil prices on Henderson Group's bottom line, company director Paddy Doody said it remained confident "despite challenges such as Brexit and the uncertainty that creates".

"We expect continued growth in 2016 and will invest accordingly," he added.

Without the fall in oil prices, the company would have earned another £23.5m in sales, it said, as litres of fuel sold on its forecourts had increased by 6.7%.

But in a statement, the company said it was "pleased with the satisfactory performance of all parts of the business particularly in the light of a very challenging, competitive and economic landscape".

The company, which won Overall Business of the Year in the Belfast Telegraph Business Awards 2016, owns the Spar, Europsar and Vivo brands in Northern Ireland.

Its retail arm runs 79 company-owned Spar/Eurospar supermarkets, and supplies to another 343 independently owned outlets. And in its wholesale business, the new Enjoy Local brand enjoyed £23m in sales. Its catering arm, Henderson Foodservice, also grew across Ireland.

Chief financial officer Ron Whitten added: "Maintaining such a strong set of results against a difficult economic backdrop of deflationary pressures, ever increasing competition from the discounter channel and other competitor groups to produce an underlying growth in turnover of 4.8% is an excellent outcome, particularly when contrasted with the performance of the multiple sector during the period under review.

"This has enabled capital investment totalling £34m during the year in new store acquisition, refurbishment of existing retail sites and associated expansion."

Belfast Telegraph

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