Annual report 2007
Ispis E-mailThe orientation of the MAGMA group has been constant improvement of the quality of services to buyers and partners. Over the past year, the Group made additional steps into regional markets by opening 14 new retail stores in countries of the region, including six in EU countries.
A key to achieving the objectives of the Group was also the successful Initial Public Offering (IPO) of shares, which was characterized by a signifi cantly larger demand over supply and an above average liquidity of shares upon listing in the fi rst quotation on the Zagreb Stock Exchange. The strong share performance also positively affected Magma shares in the CROBEX index.
The Group realized a strong increase in all three divisions, Turbo limaË, Turbo sport and Magma fashion. Turbo limaË increased by 21.3 percent, Turbo sport by 25.6 percent, and Magma fashion by 24.9 percent. The Group realized a signifi cant expansion in retail space and a continual increase in the contribution of its own brands to total sales. At the end of 2007, the Group operated in fi ve countries of the region including Croatia, and managed a network of 123 shops with a total gross area of 65,551 square meters.
The Group commenced construction of a distribution-logistical center in Jastrebarsko on a net exploitable area of 30,000 m2. The existing warehouse capacities did not meet the needs of the fast-growing retail sale network as well as the needs of other buyers of the Group's products and services. The new distributionlogistical center will optimize handling of products and their delivery and subsequently reduce operating costs by accelerating the fl ow of goods and raising margins.
The Group completed relocation of the warehouse and logistics operations on Mar. 12, 2008. The relocation of the management will be completed by Mar. 30, 2008. The new distribution-logistical center will have the capacity to receive up to 50 containers per day and upon implementation of the new information system for management of the warehouse (WAMAS), the existing capacities will increase several times over. The highest growth was registered by the Group’s own brands due to the extraordinary quality of the products. The entire production process has been improved with several levels of quality control.
In order to provide enhanced control over production processes and supply of goods from China, a representative offi ce, Magma International Ltd. Hong Kong, was opened in Shanghai. The Group made its distribution division stronger, securing exclusive distribution rights for products of popular international producers such as Hasbro, Giant, Crayola, Nikko and Lego. By the end of 2007, the Group entered into the ownership structure of the well-known Serbian distribution company MPC Kozmolina d.o.o. from Belgrade, with the objective to strengthen its distribution network in the region. The acquisition was completed early 2008.
The Group remains the proprietor of a series of well-known licenses for the region, relating to production and distribution of consumer goods, as well as sales of TV broadcasting and publishing. Having a unique and comprehensive approach, the Group has the possibility to create and develop each brand or licenses in the region, ensuring diversity to itself and its buyers. Monitoring latest trends in the region, the Group opened shops in all major shopping centers, while further development of its retail network will be tuned to the construction of high quality malls and availability of sales premises in the markets of the region.
The Group’s revenue in 2007 was HRK 827,007 thousand - a 24.5 percent increase over revenue in 2006. The year was marked by further strong growth of the Group's sales network, both in Croatia and the region. A total of 29 new retail stores were opened covering a total area of 23,272 square meters, which marks a 53.5 percent increase. The majority of the new stores were opened in the last quarter of 2007. The largest stores in the region were opened in the last month of the year, contributing signifi cantly to operating expenses and a reduction in the Group's profi t. The pre-tax profi t of the Group in 2007 was HRK 16,239 thousand. The Group continued issuing commercial bills, which were accepted by a wide spectrum of investors, including investment funds, banks, insurance companies and brokerage houses.
