RP-Sanjiv Goenka Group flagship CESC Ltd is embarking on a lot of measures to boost financial performance of Spencer’s Retail.
RP-Sanjiv Goenka Group flagship CESC Ltd is embarking on a lot of measures to boost financial performance of Spencer’s Retail. Spencer’s is revamping its senior management team and launching a whole new apparel section as listing of this multi-format retailer is on the cards. “Spencer’s is right for listing for sure, it is absolutely right for listing. It clocked company level Ebitda positive for six month in a row…We are very optimistic about the performance of the company as we go forward,” CESC Limited chairman Sanjiv Goenka told a media conference on Friday.
For Spencer’s Retail (SRL), a wholly-owned subsidiary of power utility CESC, average revenue per square foot per month rose to Rs.1740 in the third quarter this fiscal from Rs.1452 during last fiscal. “Rs. 1740 per square foot revenue is way highest in the industry. We hope that it will be a continuing sign. So we are very much getting set for a company net profit,” Goenka said.
The group expects that Spencer’s will turn PAT positive by next fiscal. The firm’s gross revenue stood at Rs. 1865 crore at the end of last financial year, while Ebitda was at negative Rs.53 crore.
In order to improve performance, Goenka said, the retailer has made changes in the management team and hired senior level managers from other companies. “There were lots of approach changes, a lot of costs cutting efforts were made. We have changed our recruitment process. Now, we are going for nothing but the best. And we are demanding very high performance, and we are getting it. All of which have resulted in very significant bottomline and topline improvement,” he said. The firm, which offers groceries, home & personal care products, apparel & accessories, consumer durables and lifestyle products, has opened six stores in December quarter.
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Apart from food segment, SRL is now also focusing more on apparel as it is going to launch a vast range of products under Spencer’s brand next week. “Apparel contributes much higher margin than foods. The launch next week should add to our margins,” said Goenka, also chairman of RP-Sanjiv Goenka Group.
CESC, the integrated power utility of the Rs. 19,000 crore group, is expected to go for a restructuring soon as the consultants appointed for this exercise will shortly present the plan before the board of directors. “It is (restructuring) something that our advisors are evaluating and would come back to us shortly. And then the board would consider it,” Goenka informed on Friday.
He said power distribution business was going to be an area of focus for CESC and the company would be focusing on winning more distribution franchise. The company has recently bagged a power distribution franchisee for supply of electricity to Bikaner in Rajasthan. Bikaner became the fifth city for power distribution for the company.
The power utility firm reported a 4.8% year-on-year rise in its standalone net profit to Rs 152 crore in the third quarter ended December 31, 2016 from Rs 145 crore in the same period a year ago.
The company said in the next four-five weeks 94 MW capacity of wind power will come to its generation. “Total investment made for this is about Rs. 600 crore. It will take our total renewable capacity to 207 MW,” Goenka said, adding the company had invested Rs. 1400 crore in renewable energy sources in the last two years.