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Ali Group’s biggest UK subsidiary feels the pinch of supermarkets cutting spend

Supermarket refrigeration

Ali Group’s largest UK entity said supermarkets bought less catering equipment in 2018 after it reported a 2% reverse in turnover for its most recent financial year.

AFE Group, which is comprised of Falcon, Williams and Mono Equipment, as well as two services organisations, saw turnover reach £121.2m for the year to 31 August 2018, compared with £123.6m the prior year.

The group said the decline was “primarily attributed” to reduced capital equipment spend from its UK supermarket client base during the year.

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It also cited “uncertainties” in consumer confidence and spend as a result of the mixed economic outlook and said these had given rise to increased challenges and a cautionary market outlook to elements of the UK casual dining market.

In their review of the business, directors said: “We predicted that 2018 would see cautionary and changeable market conditions that would impact on new business opportunities. The competitive headwinds and outcomes of currency-led cost increases and inflationary employment costs have been absorbed within the business, hence impacting upon operating margins and profitability levels.”

Operating profit during the year fell from £13.6m to £12.4m, with AFE bosses insisting they remain committed to a focus on continual improvement and lean activities to underpin its profit achievements.

They also claimed that the “rapidly evolving” market landscape, particularly in terms of food-to-go and home delivery, would serve it well in future.

“The emerging trends and innovation in dining experiences offer a continued opportunity for business development and growth prospects in the year ahead.”

Commenting on Brexit, the company revealed that it is preparing for the possibility no agreement and the resultant risks of border delays, customs processing and obligations to comply with new regulations.

“We are working with our European and international suppliers in order to maintain continuity of production and supply through increased inventory and warehousing,” it said.

Tags : afe groupAli Groupsupermarkets
Andrew Seymour

The author Andrew Seymour

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