On Friday, French retailer group, Casino, reported a 14% drop in share prices. According to analysts, the group’s poor sales performance in 2021 and a 12% fall in operating profit were two leading reasons for the current price dip. Cash flow remained low, even as debts rose due to the pandemic.

Debts Rise

The supermarket chain had a tough time due to Covid-19 curtailing its debt since it curtailed the sales of its assets. As a result, the group is in the midst of a two-part disposal plan, attempting to close the final 1.3 billion euro sale of the entire 4.5 billion euro debt-closure plan. 

The primary focus in 2022 appears to be a forward ‘sales’ momentum in France, on the back of which Casino hopes to improve its cash flow generation and ensure ‘high levels of profitability.’

Analysts Doubt Disposal Plan

The current results show that forecasts for 2021 could not allay investors’ concerns, as the French group’s share price fell by 14%. Predicting this financial year’s likely performance, analyst Clement Genelot at Bryan Garnier says that ‘cash-burn’ will continue in France, impacting Casino.

Analyst firm Jefferies that it would be challenging for the retail group to rework cash flow as the domestic market is already tough with high input pressures.

No Dividend payout

The company has also declared that it will not have a dividend payout for 2021 as it wants to prioritize reducing debt. The firm had closed 2021 with 562 million euros cash equivalents, with consolidated net debt at 5.9 billion euros compared to 4.6 billion in 2020.

Sales Growth: Monoprix Franchises

The retail group founded in 1898 is working on reworking its debts.

Chief Executive Jean-Charles Naouri is to accelerate its expansion – Monoprix, Franprix, and Naturalia – to boost sales. A franchise model will lead to the opening of 800 stores in 2022. 

Meanwhile, it will boost profitability by monetizing client data. It will also follow a savings strategy by concluding purchasing deals with Intermarché. Other areas expected to bring in profits are organic food, convenience stores, energy services, and e-commerce.