Costcutter deal takes Bibby’s turnover past £1bn
TURNOVER at acquisition hungry Bibby Line Group passed the £1bn mark for the first time thanks to its acquisition of Yorkshire-based convenience store chain Costcutter, newly filed accounts have revealed.
The privately-owned Liverpool-based conglomerate, which is in the midst of trying to buy convenience store group Nisa-Today’s, said 2008 turnover soared from £619m to £1.03bn, on the back of organic growth and the impact of the acquisition of the Costcutter grocery chain.
Profits before tax, asset sales and foreign exchange losses rose from £27.9m in 2007 to £33.2m, but at the bottom line were down from £59.3m to £23m.
This was due to the 2007 figures being skewed by a £25m gain from the sail of marine assets, a £6.3m gain on the termination of a charter. The 2008 profit figure was also impacted by a £9.3m foreign currency hit.
Bibby bought a 51 per cent stake in the Costcutter retail group in 2007 in a deal worth an estimated £100m.
Costcutter was founded by Yorkshire County Cricket Club chairman Colin Graves 
Bibby handles the ambient distribution for Scunthorpe-based retail buying group Nisa Today’s and Costcutter, which owns 28 shops and supplies more than 1,500 independent convenience stores is the largest member of the group.
In a comprehensive review of the group’s 2008 performance managing director Sir Michael Bibby said last year would be remembered for the credit crunch: causing the “rapid decline from boom to bust as the US, Japanese and European economies fell headlong into recession.”
He said the global downturn had not left Bibby Line unscathed, as the cost of borrowing had increased and a “dramatic decline” in the shipping market had “significantly reduced” the market value of its vessels.
Despite the tough outlook Sir Michael said the group is “much better placed to benefit from the opportunities” presented by the recession than most other companies.
He said a strategy to sell down some of the group’s marine assets to reduce debt and invest in new markets had proved to be sensible.
Sir Michael said: “The recession is providing opportunities in most areas in which we operate. Financial services has seen a large increase in new business as banks become more risk averse. Distribution is seeing a very strong pipeline of new enquiries as companies are forced to reveiwn their cost base and gain the cost benefits of contracting out their logistics requirements.
“Costcutter has seen continuing year on year growth as more independent shop owners seek to join fascia groups, consumers change their buying patters and new premises becoming available at reasonable cost as the retail sector struggles.”
Despite the weak oil price he said demand for Bibby’s offshore services had remained strong.
Looking ahead Sir Michael said the group was alive to the risks and challenges the economic situation brings, and that Biby’s strategy is to “utilise our strong cash flow and balance sheet to make the most of the opportunities a recession creates”.
He added: “We will continue to invest, not just in developing our existing successful services and offerings but we will also invest in the more cyclical businesses such as shipping, as we see the recovery starting.”
