Asda slashes debt as value range sales surge
Asda has reduced its debt pile from £4.2bn to £3.9bn, according to its third quarter results, thanks to “strong cash generation” at the UK supermarket.
The ‘Big Four’ grocer, said that during the term like-for-like sales, excluding fuel, increased by 2.8 per cent to £5.4bn compared to the same period last year.
Food like-for-like sales rose 3.2 per cent led by a 21 per cent jump in sales of its Just Essentials value range of products.
Asda has been battling a mounting debt pile ever since the grocer swooped up the billionaire Issa Brothers in a highly leveraged £6.8bn deal back in 2021.
A host of other acquisitions made by the pair including petrol station chain EG and a slew of Co-op express sites have also added to its debt pile.
Asda said it has confirmed to investors that it had repaid a £200m loan facility used to acquire the Co-op’s convenience stores and forecourts business last year.
The firm said: “The repayment was made possible by Asda’s strong cash generation in the year to date, which reduces the retailer’s total debt leverage to 3.8x.”
Michael Gleeson, Asda’s chief financial officer, said: “Asda has a sustainable capital structure, strong cash generation and clear strategy to deleverage over time, as the early repayment of the loan facility used to acquire the Co-op business demonstrates.”