Group golf Which operates a chain of fashion and housewares stores, published positive financial statements for the summary of 2021, two weeks after the subsidiary Adika issued a profit warning – before reporting a loss of NIS 55 million last year – which resulted in a loss of about a third of its value.
At the group level, Golf’s revenues in 2021 amounted to NIS 959 million, a growth of 14.7% compared to 2020, which is explained by an increase in revenue per square meter in stores and a shorter closure period due to the Corona epidemic.
At the same time, there was an improvement in Golf’s gross profit margin of 59.9%, compared to 59.4% in 2020 (but lower than 61.7% in 2019). Bottom line, the net profit attributed to shareholders amounted to NIS 48.8 million – three times the profit in 2020.
Divided by areas of activity, in the field of apparel fashion (which includes the golf chains, Polgat, Intima and TopShop), golf revenues grew by 36.4% in 2021 to NIS 335 million, in the field of home fashion revenues increased by 11.6% to 443 NIS million, while Adika’s revenues fell by 6.6% to about NIS 180 million.
Adika, the online retailer, recorded a heavy loss of NIS 55 million last year, accompanied by a negative cash flow from operating activities of NIS 31 million. Adika has a surplus of inventory because it has made significant purchases, but its growth, especially in the international market, has not kept pace with the planned pace. Therefore, it made a provision for a decrease in inventory value of NIS 13 million. The excess inventory generated led Adika to sell its products at lower-than-usual prices, so there was also a decline in the gross profit margin.
The closure and supply chain difficulties weighed heavily
During the past year, a golf course was affected by the closure imposed due to the Corona plague, and its stores were closed for nearly two months until February 21, 2021. However, compared to 2020, the closure was shorter. The company refers to the period from the end of the closure to the end of the year and compares the data to 2019 and not to 2020, due to the closures that were in 2020. In this period in 2021 the average revenue per square meter was about 1.46 million, compared to 1.34 million in the corresponding period in 2019.
Another issue that affected golf activity in 2021 was the supply chain difficulties, and the company notes in particular the significant increase in international shipping costs, longer lead times and rising energy prices. The company stated in the reports that as of the end of last year it operated 312 stores after during 2021 it closed 20 stores, and from the beginning of 2022 it closed one more store.
Golf’s CEO is Eyal Greenberg, and in 2021 his salary cost amounted to NIS 2.3 million, of which NIS 1.6 million was a share-based payment. The main shareholders in Golf are Clal Industries, with 52.7% of the share capital, and Steimatzky with 15.7%. The company is traded on the stock exchange at a value of NIS 435 million after a 57% increase in the share price in the past year.