The management of Elmec Sport Group of companies publishes the financial statements of the 1st semester of 2007, which reflect the financial position of the companies prior to the transfer of the majority of the stocks to Laskarides Group of Companies.
The 1st semester of 2007 indicates the end of the transitory period of the Group's restructuring, after the termination of the distribution of Nike products in Greece and Cyprus in June 2006, which represented about 20 million euros of turnover, the value of which had been included in the results of last year's corresponding period.
In parallel, the new management of Elmec Sport, following the persistently conservative policy of the new owners, performed a substantial restatement of its last years' financial statements, adopting a more conservative application of the International Financial Reporting Standards, mainly on the issues of goodwill, inventory valuation and intra-group transactions. These changes affected negatively the results of the period 1/1 - 30/6/2007 by 800 thousand euros approximately, due to the change in the computation method of the intra-group earnings on the inventories of the Group, while this change had more intense negative effect on the consolidated results of the current period (1/1 - 30/6/2007), and thus by 1,7 million euros approximately.
The above restatement of course does not affect the substance of the figures of the Group. In detail:
- The parent company Elmec Sport saw a drop in its turnover by 20 million euros that corresponds to the wholesale turnover of Nike products in Greece and Cyprus. This turnover is expected to be replaced by the wholesale distribution of Converse products, which started in the 2nd semester of 2007 and also by the new activities planned by the Company. Also, the company pursuits an integrated reorganisation aiming towards the reduction of operating expenses and the rise of productivity, in order to improve considerably its profit margins.
- The activities and the profitability of the affiliates of the Group in Romania and Bulgaria have improved substantially. In detail, their turnover increased to 20,4 mn euros versus only 12,5 mn euros in previous year's corresponding period.
- The choice of the Company to invest in the sector of department stores has proved correct. In detail, the turnover of 'attica, the department store', Factory Outlet and Factory Outlet Airport rose by 40%, while their operating profits doubled.
- Finally, on a consolidated basis, Elmec Sport Group has managed to maintain the turnover of 90 mn euros of previous year's corresponding semester, while net earnings after taxes reached 2,5 mn euros.
The management of the Company considers the results of the 1st semester of 2007 as being quite satisfactory since they incorporate the transformation of the business orientations of the Group. The Company now pursuits the acquisition of the minorities in the Factory Outlets as well as in Ipirotiki, aiming towards increased operating profits, while in the meantime it speeds up the investments for the reopening of 'Minion', the development of a new department store in the new Mall in Kifisias Avenue, and the exploitation of the two important real estate properties in Romania.