Russian retailer Magnit has reported a 27.7% increase in revenue in the third quarter of its financial year, boosted by its recent acquisition of the Dixy chain.
Total revenue came in at RUB 489.3 billion (€5.97 billion) for the period, while net retail sales reached RUB 475.5 billion (€5.81 billion), a 28.2% increase.
In like-for-like terms, sales were up 8.6% in the period, with this largely driven by average basket growth (+8.3%), while traffic rose marginally (+0.3%).
'Unique Strategic Acquisition'
“We are very pleased with Magnit’s remarkable performance during the third quarter," commented Jan Dunning, chief executive. "We completed a unique strategic acquisition which dramatically changed our market positioning.
"Our initiatives, recognised by customers and supported by the favourable trading environment, resulted in strong net retail sales growth of around 14% driven by LFL sales growth of almost 9%, driven again by mature stores. Net retail sales growth was accelerating month-to-month from 11% in July to 17% in September."
Excluding the Dixy acquisition, which brought 2,477 stores into the Magnit portfolio, the group opened a net 494 new stores during the third quarter, with 336 Magnit convenience stores opening, as well as 194 drugstores and five Dixy convenience stores.
Magnit closed 41 stores during the quarter, as part of its ongoing efficiency programme, while also redesigning 145 outlets. It has continued to open My Price hard discounter stores, with the total number of stores it operates under the banner standing at 141 as of 28 October.
It also recently hit a milestone for online orders, around 15 months on from the launch of its e-commerce platform.
Dixy Offers 'Significant Synergies'
Dunning added that embedding the Dixy portfolio will require "additional attention and profitability improvement", however it is confident that it can extract "significant synergies in the medium-term. This allows us to maintain our ambitious long-term targets.
"Furthermore, looking at the EBITDA margin in the third quarter of 7.2% after Dixy consolidation, we see further potential upside."
© 2021 European Supermarket Magazine. Article by Stephen Wynne-Jones. For more Retail news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.