Cofix closes 13 branches, reduces losses

Rami Levy and Cofix: Photos PR and Eyal Izhar
Rami Levy and Cofix: Photos PR and Eyal Izhar

The transfer of control in the Cofix chain of cafes and supermarkets to Rami Levy Chain Stores is starting to produce results.

The transfer of control in the Cofix Group (TASE: CFX) chain of cafes and supermarkets to Rami Levy Chain Stores Hashikma Marketing 2006 Ltd. (TASE:RMLI) is starting to produce results. Rami Levy holds 51.4% of Cofix's capital.

Cofix yesterday reported its results for the fourth quarter of 2018 and the full year. The chain's sales dropped 8% in the fourth quarter of 2018, compared with the corresponding quarter in 2017, but this was caused mainly by the closing down of money-losing branches. Sales at the chain's cafes totaled NIS 19.6 million in the fourth quarter, 12% less than in the fourth quarter of 2017, while sales of the chain's supermarkets were down 7% to NIS 48 million.

Cofix's gross profit grew 7% to NIS 16.6 million in the fourth quarter of 2018, following a change in the terms of trade with the company's suppliers as a result of its acquisition by Rami Levy. Gross profit on supermarkets rose 9% to NIS 11.6 million in the fourth quarter, while gross profit on cafes in the fourth quarter was up 4% to NIS 5 million.

Cofix posted an NIS 800,000 net loss in the fourth quarter, compared with a NIS 2.4 million net loss in the corresponding quarter in 2017, partly because of a NIS 2.4 million increase in the value of the shares in Rami Levy received by Cofix in the acquisition deal.

Cofix currently has 145 branches: 114 cafes and 31 supermarkets, after closing 13 cafes.

Cofix's revenue in 2018 as a whole totaled NIS 287 million, 5.5% less than in 2017. Revenue from supermarkets dipped 1.4% to NIS 201 million, while revenue from cafes shrank 14% to NIS 81 million.

Total gross profit in 2018 was down 2% to NIS 68.4 million, while the chain's operating loss leaped 130% to NIS 13 million. Cofix's 2018 net loss totaled NIS 7 million, 161% more than its 2017 net loss.

Cofix Group CEO Iram Graiver said, "Our gross profit ratio improved to 24.6% in the fourth quarter, compared with 20.9% in the corresponding quarter in 2017. There was a clear improvement in both cafes and supermarkets. The improvement in profit is attributable to the acquisition of control in the company by Rami Levy, which upgraded the system for procurement from suppliers, reduced financing expenses, and enabled us to introduce a private brand into the company's stores."

Graiver added, "In 2019, we will increase sales by upgrading the marketing and distribution system, improving the range of products, adding premium products, changing pricing of products, increasing the number of supermarkets, and optimizing the commercial space. Last month, we opened the supermarket chain's first branch in Herzliya as a pilot on the "Super Rami Levy in the Neighborhood" format, and we are already seeing lively customer attendance. We plan to expand the format in 2019 by opening three more supermarkets, while using the Rami Levy group's brand name."

Published by Globes, Israel business news - en.globes.co.il - on March 27, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Rami Levy and Cofix: Photos PR and Eyal Izhar
Rami Levy and Cofix: Photos PR and Eyal Izhar
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