ASDA TURNS AROUND TO NET $282 MILLION

LONDON (FNS) -- ASDA Group here said it continued to outperform the U.K. food retail industry with an after-tax profit of $282.19 million (178.6 million pounds) on an 8.2% rise in sales to $8.35 billion for the year ended April 29.This compares with after-tax losses of $279.49 million on sales of $7.71 billion the previous year.The loss resulted from exceptional items related to property writedowns.

LONDON (FNS) -- ASDA Group here said it continued to outperform the U.K. food retail industry with an after-tax profit of $282.19 million (178.6 million pounds) on an 8.2% rise in sales to $8.35 billion for the year ended April 29.

This compares with after-tax losses of $279.49 million on sales of $7.71 billion the previous year.

The loss resulted from exceptional items related to property writedowns. Earnings per share before exceptional items rose 35.3% to 9.32 cents from 6.9 cents.

Currency conversions were made at the rate of $1.58 per pound.

ASDA, which three years ago was close to bankruptcy with significant debts and no clear focus, has now turned around to surpass Safeway and become the United Kingdom's third-largest food retailer with 9.7% of the market. Safeway has a 7.8% share. The largest food retailer is Tesco, followed closely by J. Sainsbury.

Archie Norman, the group's chief executive, said the turnaround resulted from an increased focus on value, customer service and fresh foods. Like-for-like sales at the company rose 8.4% despite increasingly competitive conditions, he said. ASDA, unlike other food retailers, is reskilling its meat and bakery departments to further emphasize fresh items, Norman said. Norman sees significant potential for growth in nonfood, which currently represents only 15% of sales. The company is halfway through remodeling its 200 stores and also plans to open six new stores a year over the next three years. It will invest $395 million (250 million pounds) a year during that time.

ASDA is moving toward even larger units, with four of the six stores being 50,000 to 55,000. It currently has 15 stores of this size. It is aiming to give its stores a market-hall environment and also drive up the penetration of private-label products from the current 32%.

The company also plans to invest $110.6 million over the next three years to update its information systems, where it admits it lags behind its competitors. ASDA plans to introduce systems for sales-based ordering, automated cash office, trading and store management information and integrated personnel systems.

It also is building a new ambient warehouse in Didcot, England, which will open in October, and is expanding the chilled and frozen capacity at five other distribution centers by 30%.