Pama makes €36 million in sales in first year of operation

Sales at the Naxxar supermarket have consistently increased since the shopping village opened in November 2015.

matthew_vella
Matthew Vella
4 April 2017, 9:00am
P.G. plc to start massive Zara expansion with five new floors to be constructed at Alhambra complex in Sliema
P.G. plc to start massive Zara expansion with five new floors to be constructed at Alhambra complex in Sliema
Pama supermarket managed to almost double Christmas sales, with monthly revenues jumping by 44% to over €4.5 million in December 2016, over the year before when the new supermarket had just opened.

Sales at the Naxxar supermarket, which is spread over 4,800 square metres and comes with a 5,000 sq.m shopping complex and car park, have consistently increased since the shopping village opened in November 2015.

This week, owner P.G. plc revealed commercial details of supermarkets Pama and Pavi, and the Zara franchise, in a prospectus for a €25 million share issue. The holding company owns 49% of Pama.

The €12.9 million Pama site on Valletta Road, on the outskirts of Mosta, lies at the centre of a large urban residential configuration that comprises Attard, Balzan, Birkirkara, Iklin, Lija, Mosta and Naxxar.

Monthly sales for Pama supermarket climbed steadily from January 2016 to December 2016, from just over €2 million monthly to over €4.5 million during the Christmas peak.

P.G. plc chairman Paul Gauci. His business group is issuing €25 million in shares to the public
P.G. plc chairman Paul Gauci. His business group is issuing €25 million in shares to the public
“This is a business that is still maturing… gross profit in the six months to October 2016 was almost double that recorded in the first six months of operation,” P.G. plc said in its prospectus.

“The increased turnover and additional rental income, particularly from the Pama retail mall, is expected to result in increased profitability,” the company added in an optimistic note.

Forecast turnover for both the Pama and Pavi supermarkets for 2016 shows an increase of €21.7 million (41%) when compared to 2016, driven primarily by the impact of the first full year of operation of the Pama supermarket.

“It is difficult to project the level at which the supermarket’s sales will stabilise, or whether an element of customer rebalancing between Pavi and Pama will continue,” P.G. plc said. “On the basis of the experience gained over the years since the inception of the Pavi Shopping Complex and their understanding of the manner in which the market has evolved… no significant change to the existing competitive landscape will materialise.”

The group, owners of the Zara and Zara Home franchise in Malta, will also be expanding their Sliema outlet at the Alhambra complex in 2017, with a €4.2 million spend. The outlets are valued at over €25 million.

“Inditex [owners of the Zara brand] is favouring the opening of larger stores that permit the stocking and display of a wider elections of products than is possible within the existing Alhambra outlet,” P.G. plc said, adding that this will lead to the construction of five additional levels on the back of the two-storey Alhambra complex.

At a total of 4,400 sq.m it will be one of the largest Zara department stores in Europe.

Between 2014 and 2016, the franchise operations generated a total €34 million in sales, with profit after taxation doubling from €761,000 in 2014 to €1.42 million in 2016.

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Matthew Vella is executive editor at MaltaToday.