Aldi posts £56m losses
Budget supermarket Aldi Stores has posted multimillion-pound losses for the second consecutive year, citing "competitive pressure" in the UK as its principle risk going forward. The Warwickshire-based company recorded an after-tax loss of £56.1m, a slight improvement on its previous £58m figure.
For the year ending 31 December 2010, Aldi Stores posted a slight rise in turnover against its post-tax loss. Group sales, which included joint venture operations, totalled £2.14bn against a £2bn result in 2009.
In accounts seen by Insider, Aldi Stores described "competitive pressure" in both the UK and Ireland as a "continuing risk for the group". Aldi said it tries to reduce the risk by improving the value of its products, investing in staff and increasing the number of stores it operates.
The accounts relate to the company's performance in the UK and Ireland.
During the financial year, Aldi opened a further 24 stores in the UK and Ireland. The group also continued with its disposal programme of older stores and surplus assets which began in 2009.
Despite increasing the number of stores it operates, 275 jobs were cut from the company's wage bill in 2010. The number of staff employed fell from 6,480 in 2009 to 6,205 in 2010.
After selling off several sites which it said "did not fit the core business model", Aldi was left with a £57m bill. This was accounted for in the company's profit and loss account.
The group's year-end cash balance reduced by more than £2m to £130.7m. This was attributed to the difference between the group's investment in its store and distribution network, as well as financing activities.
During the year, the company acquired the remaining 50 per cent of the equity of Omega Retail Properties 2 and gained "significant influence" over Omega Retail Properties.
Since the end of its financial year, Aldi also bought the entire share capital of Modus Beta for about £13m.
Aldi Stores is part financed by external loans, the company accounts reveal. Bank loans totalling £84m were refinanced after the financial year-end, on 14 March 2011.
Other loans relating to mortgage bonds are set for repayment in July 2024. These total £99.64m and attract interest at a fixed rate of 6.25 per cent.
Aldi Stores is ultimately owned by Germany-based Hiller GMBH.
