Friday, 2 June 2017

Nisa eyes £120m debt deal amid convenience sector shake-up

The convenience store supplier Nisa Retail is in talks about a £120m refinancing deal amid a sector shake-up given extra impetus by Tesco's proposed £3.7bn takeover of the wholesaler Booker.
Sky News has learnt that Nisa, which trades through about 1,400 members under brands such as Nisa Local‎, is close to finalising new banking facilities with HSBC and Wells Fargo.

The new arrangements, which would replace an existing £100m deal with Barclays, would give Nisa Retail additional headroom to expand, according to insiders.

It would mark a significant turnaround from two years ago, when Nick Read, the then-new chief executive of Nisa Retail, inherited an organisation in crisis.

Nisa Retail, which is one of the UK's biggest mutuals, is owned by its members, and serves almost 3,500 stores across the country.

Some of Nisa Retail's members trade under their own names, with the group supplying stock and retail support in return for a fee.

After losing almost £3m in 2015, Mr Read has launched an ambitious transformation plan which includes a target of growing sales to £2bn by 2019.

Last year, it recorded a £7.3m profit on sales of £1.3bn, enabling it to kick off fresh refinancing talks with lenders, according to a banker.

In 2017, the comparable earnings figure is expected to be £8.5m.

It grew its membership base by ‎a further 225 stores in the fourth quarter of its last financial year, and said last month that it was "in a positive position for the new financial year".

Despite the improved performance, Nisa Retail and rivals like Costcutter face challenging conditions, with growing competition from the major supermarket chains as well as discount-focused retailers.

Palmer‎ & Harvey, a delivered wholesaler which supplies Tesco and other big retail groups, has been put up for sale following a struggle to negotiate its own refinancing.

SKY     News.