THE new leadership team at Dundee-based grocery wholesaler and retailer CJ Lang has signalled its determination to drive the near-century old business into a new era, as new accounts reveal a dip in profits for the company’s most recent financial year.
Chief executive Colin McLean, who was recruited from Scotmid to lead a new regime at the family-owned Spar business, said the new team had “drawn a line” under the past and is focused on building a platform for growth in the years to come.
That involves the family-owned firm, which owns 113 Spar stores and supplies a further 180 independents trading under that banner around Scotland, becoming more joined up, customer-focused and more adept at stock availability, while continuing to acknowledge its “strong heritage”.
Mr McLean’s comments came as CJ Lang, reported a 1.3 per cent fall in turnover to £183.1 million for the year ended April 30. The directors note in the accounts that the dip was “primarily driven by reduced footfall overall, coupled with national trend decline in cigarettes and newspapers.”
However, Mr McLean said that “margins are moving in the right direction”, having climbed to 23.9% from 23.3% over the period.
Underlying profits for the year were “broadly in line with last year” at £490,000, after one-off items relating to a clear-out of “obsolete stock” were stripped out.
“We reflect that in the accounts – it was a fairly significant cost,” Mr McLean said.
The firm made a pre-tax profit of £925,000 in its accounts for the previous year, when it turned over £185.4m.
Mr McLean said: “The 2017/18 financial year results were mostly in line with
expectations during a tough period for retail and wholesale as we continued to meet
changing customers need within convenience retailing.”
Mr McLean said the actions taken by the new board are beginning to bear fruit, noting that both its company-owned stores and sales to the independently-owned Spar stores it supplies have returned to growth.
While observing that the new regime was still in the early stages of its programme for growth, he said: “The last four months have seen some of the strongest like-for-like sales on record. We’re moving in the right direction.”
Mr McLean also observed that, in common with other retailers, CJ Lang was facing an “avalanche” of cost increases. These include the continuing rise of the National Minimum Wage, higher business rates and the Apprenticeship Levy.
Explaining there is “very much a change in focus” at the group, he added: “We are trying to balance growth while managing cost efficiency. “There are a lot of costs out there, on top of the Brexit uncertainty.”
Asked whether Brexit would have a direct impact on the company, he said CJ Lang could benefit from being a member of the
£34 billion Spar International buying group, which could offer an “opportunity to source products from elsewhere”.
On store numbers, Mr McLean said there were three new company-owned units in the pipeline, although he admitted that some “difficult decisions” may have to be made on the future of under-performing units.
He is also confident of adding more
independent Spar retailers to its supply base.
CJ Lang moved to ring the changes at the top earlier this year as a number of long-
serving executives approached retirement. Some had served the firm for “25 years plus”, including former managing director Scott Malcolm, who retired in January after 31 years at the business.
Mr McLean is joined in the new-look executive board at CJ Lang by non-executive chairman Jim Hepburn, formerly of Dawnfresh Seafoods, Premier Foods, Baxters and Scottish & Newcastle, and finance director Craig Tedford, who was recruited from Heineken.
Other additions to the senior team include Michael Leonard as sales director, and Colin Chapman as distribution director. Joan Scott-Adie, the former long-standing chairman and granddaughter of company founder Charles J Lang, has moved into the position of life president.
CJ Lang celebrates its centenary next year, when it will sponsor the Spar European Athletics Indoor Championships when they are staged in Glasgow in March.
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