…Athens expansion contemplated
Ermes Department Stores Public Ltd., announced that it has received approval from the Securities and Exchange Commission to proceed with its share offering, and at the same time the company revealed its first half results, profit projections and ambitious plans to expand both in Cyprus and Greece.
The Securities and Exchange Commission approved the supplementary Public Offer Document of Cyprus Trading Corp. Pcl (CTC), offering FWW shareholders the option to participate in the share capital of Ermes Department Stores Pcl through a share offering at 24 cent per share.
Ermes Department Stores Pcl presented its first half 2006 results in the supplementary Public Offer Document, which reveals that total turnover increased by 10.5% YoY in the first half 2006 reaching CYP 43 mln attributed to a wider range of Debenhams products being offered, as well as increased sales of other franchisees and particularly NEXT.
Gross profit margin increased by 1% to 34% leading to an improved first half gross profit of CYP 14.6 mln. Operating expenses increased by 9% YoY to CYP 13.1 mln, however, as a percentage of revenue they decreased by 40bps to 31% compared to the first half in 2005
Net profit increased by 43.2%YoY to CYP 1.58 mln yielding an improved EPS of 0.7 cent compared to 0.5 cent in the first half of 2005. The company noted that historically the second half of the year is better than the first (FY05 EPS at 1.4 cent).
2006 forecasts
Ermes expects 2006 turnover to reach CYP 95 mln, recording an increase of 6% YoY compared to CYP 89.7 mln in 2005. EBITDA is expected to post a 64% increase YoY reaching CYP 8.8 mln, while before non-recurring expenses, operating EBITDA is seen at CYP 9.35 mln in 2006 vs. CYP 7.5 mln in 2005.
Pretax profit are seen up 73.7% YoY to CYP 6.75 mln while net profit attributable to shareholders is seen up 110.7% YoY to CYP 5.2 mln from CYP 2.4 mln in 2005. Earnings per share are seen climbing to 2.9 cent from 1.4 cent.
Strategic Plan
Ermes announced its strategic plan for 2007-2008, which entails the following:
1. Fashion items and cosmetics: The opening within 2007 of the following new retail outlets:
The opening of 2 new Debenhams Department stores one in the Shacolas Emporium Park and one in the Engomi Retail Park. Both, Shacolas Emporium Park and Engomi Retail Park are expected to commence
operations within 2007.
The opening of 2 new Next stores one in the Shacolas Emporium Park and one in Larnaca.
The opening of 4 new Peacocks retail outlets one in the Engomi Retail Park, and one each in the towns of Limassol, Larnaca, and Paphos.
The opening of a 1.000 m2 retail outlet of a new fashion items representation in Nicosia.
2. DIY Super Home Center: The addition of 10.000 m2 of net retailing space within 2007 (an increase of 200% over 2006) through the following:
The opening of a new DIY Super Home Center in Limassol within 2007.
The opening of a new DIY Super Home Center in the Engomi Retail Park towards the end of 2007.
The extension of the existing Strovolos store.
Ermes is in an advanced stage of negotiations for the establishment of a Super Home DIY Centre in Athens expected to commence operations in 2008.
3. Further expansion in Greece: Ermes plans to further expand its operations in Greece as follows:
By establishing a DIY Super Home Center in Athens in 2008.
By establishing a joint venture with Debenhams Plc and Peacocks Ltd for the expansion of the above two companies in Greece.
Swap offer in progress
The share offer by Cyprus Trading Corporation Public Ltd offering the Ermes shares at the price of 24 cent is open until October 5 2006. The company reminds prospective investors that all shareholders of Ermes will be eligible to receive 1 free warrant for every 5 shares held after the offer is completed plus a dividend of 1.6 cent per share.
The Management of Ermes states that it shall conform with all the requirements and regulations of the SEC and the CSE, so that the company will become eligible to list its shares on the CSE during 2007.
It is further pointed out that shareholders of Woolworth (Cyprus) Properties Public Ltd., who have the preferential right to purchase the Ermes Department Stores Public Ltd shares at the price of 24 cent per share will continue to remain as shareholders of Woolworth, irrespective of whether or not they exercise their right.
