Latest news with #ProjectFuture
Yahoo
6 days ago
- Business
- Yahoo
Asda swings to £600m loss as debt pressures mount
Asda fell to a loss of almost £600m last year as its soaring debt burden and a costly IT overhaul weighed on the beleaguered supermarket. Sales at the Leeds-based grocer grew by more than £1bn to £26.8bn in 2024, latest accounts show, but it posted a £599m pre-tax loss, compared with a £180m profit the previous year. Like-for-like sales excluding fuel were down too, falling by £750m to £21bn. Writing in the accounts, Michael Gleeson, Asda's chief financial officer, admitted: 'Trading has been challenging and food sales have been behind expectations.' Bosses have been battling to reduce the burden of Asda's £3.6bn debt pile, which has put the company under increasing pressure as interest rates have risen in recent years. The cost of servicing the debt pile grew by £170m to £611m last year. The supermarket said it had been forced to pay higher interest rates after refinancing debts during the year. Asda's debts were built up during its takeover by the billionaire brothers Mohsin and Zuber Issa and the private equity firm TDR Capital in 2021, which lumbered the company with billions in borrowings. The supermarket was acquired from long-time owner Walmart and the deal has prompted Asda to undertake a costly project to divorce its computer systems from its former US parent. Dubbed 'Project Future', Asda has spent heavily on the transition, shelling out £867m on it to date and £310m in 2024 alone. Mr Gleeson said 2024 was an important year for the retailer, in which it oversaw a transition to the new IT systems, insisting it would be 'stronger and fit for the future as a result of the transformation progress made in FY24'. However, the transition has been beset with issues and delays, such as an incident in March 2024 that saw thousands of workers receive incorrect payslips. The plunge in profits comes as Allan Leighton, Asda's chairman, attempts to restore the supermarket to growth after a loss of market share to grocery rivals since its takeover. Asda commanded 13.6pc of the UK grocery market at the beginning of 2024, but that figure had fallen to a record low of 11.9pc this month, according to Kantar. Mr Leighton, a veteran retailer credited with turning around Asda's fortunes during a difficult period in the late 1990s, was drafted in to lead the company once more last November. Since then he has kicked off a price war with supermarket rivals and embarked on a major cost-cutting push. The businessman has called many of Asda's issues 'self-inflicted', saying he wants to 'turn it into what it was'. An Asda spokesman said: 'Asda's core business remains strong and profitable, delivering a pre-tax profit of £115m before exceptional items. 'The reported overall loss is the result of two significant one-off costs: a £378m non-cash impairment charge, which reflects updated asset valuations, and £310m in one-time costs related to Project Future – our strategic programme to separate Asda's IT systems from our former owner, Walmart. 'These are not recurring costs and do not reflect the underlying performance of the business. 'A more accurate indicator of our ongoing strength is our adjusted EBITDA after rent, which increased to £1.14bn from £1.078bn the previous year.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Telegraph
6 days ago
- Business
- Telegraph
Asda swings to £600m loss as debt pressures mount
The supermarket was acquired from long-time owner Walmart and the deal has prompted Asda to undertake a costly project to divorce its computer systems from its former US parent. Dubbed 'Project Future', Asda has spent heavily on the transition, shelling out £867m on it to date and £310m in 2024 alone. Mr Gleeson said 2024 was an important year for the retailer, in which it oversaw a transition to the new IT systems, insisting it would be 'stronger and fit for the future as a result of the transformation progress made in FY24'. However, the transition has been beset with issues and delays, such as an incident in March 2024 that saw thousands of workers receive incorrect payslips. The plunge in profits comes as Allan Leighton, Asda's chairman, attempts to restore the supermarket to growth after a loss of market share to grocery rivals since its takeover. Asda commanded 13.6pc of the UK grocery market at the beginning of 2024, but that figure had fallen to a record low of 11.9pc this month, according to Kantar. Price war Mr Leighton, a veteran retailer credited with turning around Asda's fortunes during a difficult period in the late 1990s, was drafted in to lead the company once more last November. Since then he has kicked off a price war with supermarket rivals and embarked on a major cost-cutting push. The businessman has called many of Asda's issues 'self-inflicted', saying he wants to 'turn it into what it was'. An Asda spokesman said: 'Asda's core business remains strong and profitable, delivering a pre-tax profit of £115m before exceptional items. 'The reported overall loss is the result of two significant one-off costs: a £378m non-cash impairment charge, which reflects updated asset valuations, and £310m in one-time costs related to Project Future – our strategic programme to separate Asda's IT systems from our former owner, Walmart. 'These are not recurring costs and do not reflect the underlying performance of the business. 'A more accurate indicator of our ongoing strength is our adjusted EBITDA after rent, which increased to £1.14bn from £1.078bn the previous year.'
Otago Daily Times
07-05-2025
- Business
- Otago Daily Times
NZ Rugby reports $19.5m loss
NZ Rugby (NZR) has recorded a $19.5 million loss for the 2024 financial year. The result was announced at Thursday's AGM in Wellington; however the loss was offset by a record level of income and continued growth in revenue. World Cup winning All Black captain and NZR Chair David Kirk said that while the book loss of $19.5m was noteworthy, it should be recognised it was not a cash loss and should not detract from NZR's solid operational performance and pointed to the organisation's $174.5m in reserves. Foreign exchange hedging on sponsorship revenue and investment into revenue growth initiatives through New Zealand Rugby Commercial (NZRC) have resulted in the net deficit. The hedging impact resulted from the turbulence on global foreign exchange markets and a need to reclassify foreign exchange hedging contracts at the December 31 balance date. "Achieving a new high watermark of $285m income, healthy commercial revenue streams in what is a difficult international operating environment, and reinvesting into the game at all levels, are grounds for optimism. NZR retains an incredibly strong balance sheet which is vital for rugby in New Zealand and its ability to weather any major shocks," said Kirk. NZR CEO Mark Robinson admitted that further work was needed to achieve a sustainable financial model for rugby, but the organisation had continued to grow revenue while preserving its strong cash position. "Pleasingly, we continued to grow our commercial revenue, with strong results in sponsorship and matchday revenue, we retained our cash position and reserves, and operationally, delivered a near break-even result," said Robinson. "However, we are committed to working on a sustainable financial model for our game as this year's result again demonstrates that the high fixed-cost structure we live within is not sustainable, even as we grow our overall revenue. That work will step up in earnest this year." Robinson said the 2024 financial year saw a further tranche of investment into commercial revenue growth opportunities through NZR as part of the Project Future deal with Silver Lake. "In total $38m was tagged to use for future commercial initiatives, and in 2024 we drew down $11.7m to invest in NZR+ to continue to grow its reach and tell our stories. While this is about the long-term, we also believe this is generating positive commercial outcomes in the short-term."
Yahoo
14-03-2025
- Business
- Yahoo
Asda sacks staff behind Mohsin Issa's IT upgrade disaster
Asda has launched a fresh round of job cuts as the grocer races to axe workers involved in a botched £800m IT upgrade that had been championed by co-owner Mohsin Issa. More than 200 employees have been sacked without consultation at the troubled supermarket, which is battling to cut costs as part of a radical turnaround plan. The latest departures were triggered as the retailer finally prepares to conclude a long-running process aimed at disentangling its technology systems from former owner Walmart. Hundreds of employees were hired to work on the three-year 'Project Future', which was championed by Issa and deemed 'mission-critical' to Asda's success. However, the project has been beset by problems and delays over the past year, recently leading Walmart to extend the completion deadline to help Asda swerve a multimillion-pound penalty. It marks the second round of redundancies in five months under Allan Leighton, the new chairman who was presented as a 'man of the people' in an interview last week. He swung the axe in January following Asda's worst Christmas trading performance since 2015, sacking 13 regional managers as part of an internal restructuring. This came after he also scrapped 10,000 staff bonuses, raising concerns over the impact on morale across the retailer's workforce. Questions may also be raised over the decision to again sack staff without any forewarning. Asda made 500 staff redundant without a consultation period last November, fuelling criticism from union chiefs who threatened to bring discrimination claims. Government rules typically require companies to carry out a 45-day consultation when dismissing 100 employees or more, although there is no suggestion Asda has broken any laws. Lord Rose, then Asda chairman, insisted at the time that no employee rules had been breached, instead claiming that it was the most 'humane way' to carry out the lay-offs. The latest job cuts have emerged as Asda continues to lose customers to rival supermarkets. Over the past year its market share has fallen from 13.7pc to 12.6pc. This faltering performance prompted Asda's majority owner, TDR Capital, to appoint Mr Leighton late last year. He was credited with turning Asda into a retail powerhouse during his first stint at the company in the 1990s, and he has since pledged to restore what he calls the 'Asda DNA'. However, he is already facing an uphill battle. The most recent trading figures from Kantar revealed sales at Asda dropped by 5pc in the four weeks to Feb 23 compared with the same period last year. This meant it was the only major grocer to suffer a decline in sales in February. In contrast, sales at Tesco grew by 5.8pc and Sainsbury's posted growth of 4.8pc. An Asda spokesman said: 'The majority of our operations have successfully transitioned to new systems as part of Project Future. For many teams the work is done and so it is natural that colleagues leave the project as the specific workstreams they are working on are completed or as their contracts finish.' Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Telegraph
12-03-2025
- Business
- Telegraph
Asda makes more job cuts after Mohsin Issa's botched IT upgrade
Asda has launched a fresh round of job cuts as the grocer races to axe workers involved in a botched £800m IT upgrade that had been championed by co-owner Mohsin Issa. More than 200 employees have been sacked without consultation at the troubled supermarket, which is battling to cut costs as part of a radical turnaround plan. The latest departures were triggered as the retailer finally prepares to conclude a long-running process aimed at disentangling its technology systems from former owner Walmart. Hundreds of employees were hired to work on the three-year 'Project Future', which was championed by Issa and deemed 'mission-critical' to Asda's success. However, the project has been beset by problems and delays over the past year, recently leading Walmart to extend the completion deadline to help Asda swerve a multimillion-pound penalty. Radical restructuring It marks the second round of redundancies in five months under Allan Leighton, the new chairman who was presented as a 'man of the people' in an interview last week. He swung the axe in January following Asda's worst Christmas trading performance since 2015, sacking 13 regional managers as part of an internal restructuring. This came after he also scrapped 10,000 staff bonuses, raising concerns over the impact on morale across the retailer's workforce. Questions may also be raised over the decision to again sack staff without any forewarning. Asda made 500 staff redundant without a consultation period last November, fuelling criticism from union chiefs who threatened to bring discrimination claims. Government rules typically require companies to carry out a 45-day consultation when dismissing 100 employees or more, although there is no suggestion Asda has broken any laws. Lord Rose, then Asda chairman, insisted at the time that no employee rules had been breached, instead claiming that it was the most 'humane way' to carry out the lay-offs. Falling behind the competition The latest job cuts have emerged as Asda continues to lose customers to rival supermarkets. Over the past year its market share has fallen from 13.7pc to 12.6pc. This faltering performance prompted Asda's majority owner, TDR Capital, to appoint Mr Leighton late last year. He was credited with turning Asda into a retail powerhouse during his first stint at the company in the 1990s, and he has since pledged to restore what he calls the 'Asda DNA'. However, he is already facing an uphill battle. The most recent trading figures from Kantar revealed sales at Asda dropped by 5pc in the four weeks to Feb 23 compared with the same period last year. This meant it was the only major grocer to suffer a decline in sales in February. In contrast, sales at Tesco grew by 5.8pc and Sainsbury's posted growth of 4.8pc. An Asda spokesman said: 'The majority of our operations have successfully transitioned to new systems as part of Project Future. For many teams the work is done and so it is natural that colleagues leave the project as the specific workstreams they are working on are completed or as their contracts finish.'
