Belgian retailer Colruyt Group has called on the Belgian government to simplify the “complex and administratively cumbersome Belgian tax system”, in order to make it easier for businesses to generate positive growth.
In a letter to shareholders, chairman Jef Colruyt said that “sustainable growth also requires an efficient government”, and added that the group is ‘pleased with the government decision to reform the corporation tax by lowering the nominal rate and drastically simplifying the deduction items, while preserving specific incentives for investments, innovation, research and development’.
In July, Belgium’s government announced a reduction of the corporate income tax rate to 25% in 2020, from 33.99% today, as well as a number of other measures.
Positive Investment Climate
Government action on tax reform, Colruyt added, will ‘contribute to a positive investment climate and support Belgian competitiveness’.
However he noted that the group does “not anticipate a significant upturn in the economic climate in Belgium and France in 2017 and early 2018 that would positively impact the consumer.”
Consolidated group revenue rose by 3.4% to €9.5 billion in the 2016/17 financial year, with comparable revenue growth rising 2.8%, taking into account the sale of French foodservice business Pro à Pro to Metro Group.
“The revenue growth was also driven by sales price inflation and the further expansion of our store network to a total sales surface of 665,000 square metres,” said Colruyt. “The growth was partly offset by an unfavourable calendar effect, as Easter did not fall within the financial year.
“In Belgium the market share of our Colruyt Lowest Prices, OKay and Spar food stores expanded further to 31.7% or 15 basis points above last year's share.”
Share Buyback Scheme
Elsewhere, Colruyt has launched a share buyback programme, which will see it purchase treasury shares for a maximum amount of €350 million. The purchase programme will start on 2 October.
“The aim of the purchase programme is to reduce the company's excess cash and decrease the capital by cancelling shares acquired under the purchase programme in full or in part,” said Colruyt.
© 2017 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.