CTC Group facing challenges, opportunities ahead

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The CTC Group of CSE-listed retail, motor, and property companies that announced a return to profitability with €39 mln in 2020 is consolidating its position in Cyprus, where it sees both challenges and opportunities.

The turnaround follows two years of losses, mainly due to property values’ impairment by affiliated and subsidiary companies.

This resulted in the continued downsizing of its property portfolio since the 2013 financial crisis, rebranding its retail division from Debenhams to ERA, focusing on quality fashion brands and acquiring new representations, such as Michelin tyres and Total lubricants.

After announcing key management changes, CTC said a new executive team is taking over the collective administration of all subsidiaries and affiliates.

Announcing the approval of final audited results for 2018 and 2019, the CTC Group said: “We are focusing and developing our main activities: import, distribution and handling of general consumer goods, DIYT retail trade and fashion, vehicles and equipment.”

Their boards approved the audited 2018 and 2019 results for Ermes Department Stores Plc and Woolworth (Cyprus) Properties Plc on March 12, and for the parent, Cyprus Trading Corporation Plc, on March 16 and will be posted at www.ctcgroup.com.

Consolidated results also include the subsidiaries Argosy Trading, Cassandra Trading, Artview, CTC Automotive, Superhome Center (DIY), and the Group stake in Hermes Airports, operator of Larnaca and Paphos international airports, where it is the biggest Cypriot shareholder.

From €312 mln in 2017, Group turnover increased to €336.4 mln in 2018 and then dropped to €327.2 mln in 2019, due mainly to off-loading E&G Electricplus its 50% stake in Novario Holding Ltd., the electrical retail arm of Scandia and Electroline.

Deleveraging of assets started in 2018 with a €220 mln deal struck with Bank of Cyprus for properties linked primarily to Cyprus Limni Resorts & GolfCourses Plc, owner-operator of the golf resort near Polis Chrysochous, followed by a second similar deal worth €19 mln with Hellenic Bank.

It resulted in after-tax losses of €124 mln (2017: €-6.3 mln) while operating profits dropped to €14 mln (2017: €18.1 mln).

In 2019, after-tax losses were €17.9 mln, of which €11.4 mln related to continued deleveraging of property assets.

In 2019, the Group had operating profits of €17.2 mln but adopted International Financial Reporting Standards (IFRS) 16 for “Leases”, which had a negative impact of €1.8 mln.

Without IFRS, operating profits would be €8.3 mln in 2019, compared to €14 mln in 2018.

For 2020, the parent Cyprus Trading Corporation announced consolidated preliminary results with after-tax profits of €39 mln on a turnover of €303 mln.

The company said improved results followed the conclusion of deleveraging of property assets. Operating profits were €17.5 mln compared to €17.2 mln in 2019.

Superhome Center DIY continues to be profitable and keeping to its strategic plan for expansion, including the new outlet in Lakatamia, previously occupied by Homemate.

“The impact of COVID-19, such as mandatory restrictions, rising unemployment, declining tourism, declining liquidity in the market, changing consumer habits and needs, increased the challenges we face, affect the way with which we operate as a business, creating the need for very careful steps and planning,” CTC announced.

Meanwhile, the boards of the parent CTC and subsidiaries Ermes Department Stores and Woolworth (Cyprus) Properties decided on March 12 to install a joint management board Plc, to ensure and implement group strategies, manage risks and potential returns, monitoring all Group operations.

Demetris Demetrious chairs the new group management board; other members are Yiorgos Louca, Eleni Shacola, Chrysoula Shacola, Christakis Charalambous and Stephos Stephanides.

On February 5, the company announced that Marios Shacolas, son of the group’s founder Nicos Shacolas, stepped down from all positions as executive chairman, managing director and board member of all the Group companies.

He will stay on at NK Shacolas Holdings, the largest shareholder in all the group companies.