Supermarket group Franklins has finally begun turning a profit – 7 years after South African retailer Pick n Pay bought the chain from Hong Kong conglomerate Dairy Farm International.
Franklins managing director Aubrey Zelinsky said the business had made a full-year trading profit of $2.3 million for the 12 months to the end of February – an $11 million rise on the previous 12 months – on sales of $820 million.
The result was boosted by a $7.9 million profit on the sale of 2 stores. But Mr Zelinsky said the second half of the financial year saw a profit of $1.2 million without the benefit of 1-off items, and Franklins expected to continue posting profits.
‘We’ve now reached critical mass in our business, and we’re starting to see the benefits of investing in our own distribution and supply chain,’ he said.
‘We’ve turned the corner, and I think that from now on, we should be able to grow the base and the profits.’
Until 2005, Franklins had a supply contract with Metcash, the wholesaler behind the IGA chain of independent supermarkets, but has now opted to take control of its own supply chain to reduce costs.
The 2 companies are involved in legal action over discounts Franklins claims were not passed on by Metcash during their 3-year relationship.