John von Spreckelson, the German retailer brought in to steer Budgens out of trouble in 1991, said: 'Our objectives haven't changed. But it may take a little longer to get there.'
Operating margins improved from 2.1 per cent to 2.7 per cent. But the company now admits that it will not achieve the April 1994 target of 5 per cent it set itself at the time of its refinancing in July 1991.
Pre-tax profits increased 37 per cent to pounds 3.1m in the 28 weeks to 8 November, boosted by the full impact of the pounds 22m capital injection. Earnings per share fell from 1.46p to 1.45p.
Sales fell 1.6 per cent to pounds 154.2m. Budgens said that in 1992 competitors opened 800,000 sq ft of grocery space in its catchment areas, equivalent to more than its entire floor space.
Mr von Spreckelson said: 'To hold turnover in the face of such competition indicates the improvements we have made to our stores to enhance customer loyalty and this augurs well for the future.'
There was no interim dividend, but the company promised a final payout in respect of the year as a whole.
Four stores were closed during the period, costing an exceptional pounds 250,000, compared with an pounds 842,000 exceptional profit last time from the sale of Betta Stores.
Budgens stands to benefit from the Central Buying Company, which it set up with other small food retailers last November. However, it is also faced with higher costs as a result of recruiting new store management and installing scanning equipment.
Tony MacNeary, food stores analyst with County NatWest, lifted his full-year profits forecast from pounds 6.2m to pounds 6.8m, but remains cautious about the long-term prospects for Budgens.Reuse content