ILG delivers record profit; adds 170 stores

Independent Liquor Group (ILG) has delivered its best half-year profit result in over six years, according to CEO Allen De Costa, who said the company has added more than 170 stores to its banner groups over the last 12 months.

At the ILG Annual Chairman's Dinner held last week, De Costa said ILG – which had posted net losses including abnormals for the last four years – delivered EBIT of $1.6 million for the six months to December, a massive turnaround of $1.5 million on the same period last year.

He told TheShout the improved performance could be attributed to cost savings as a result of an organisational restructure and the increased volume coming through its warehouses.

"There were a number of upper management and middle management positions gone, so we've saved about $1.8 million per annum in expenses and wages," he said.

"We've rehashed our Little Bottler offer and we've come out with our new offer for Super Cellars, and that's where we've attracted the 170-odd stores over the last 12 months."

De Costa said that out of the 170 new members, about 80 to 90 had joined from Local Liquor, the banner group he founded prior to joining ILG.

A further 30 or 40 of the new members were already buying from ILG in a non-bannered format, and another 30 or 40 had come across from either Bottlemart or Cellarbrations.

He said the closure of Liquor Marketing Group's wholesale operation, HLW, had also delivered a "huge free kick" to ILG, which is continuing to pick up retailers who did not want to be a part of LMG's new supply agreement with Australian Liquor Marketers (ALM).

"We've got one of the best offers in the marketplace for banner group members to join. We are a co-operative, so it does stand to reason that we've got something very good to offer as compared with ALM, our opposition," De Costa said.

He said that on a like-for-like basis ILG is tracking at about 6 to 6.5 per cent sales growth, which compares very favourably with the 3.8 per cent reported last week by Coles food and liquor and the 4.8 per cent reported by Woolworths.

At last week's dinner, De Costa said the "remarkable" result was the culmination of great support from new members, existing members, suppliers and hard-working, dedicated employees.

"I thank you all," he said. "It is a privilege to work for a co-operative formed by proactive retailers some 38 years ago that wanted to control and own their own destinies and it is great to see the co-op is bigger and better than ever."

Source: The Shout, 4 February 2013