CI TRADERS chairman Tom Scott has heavily criticised Jersey’s goods and services tax - and praised Guernsey for not following suit. He did so as annual results from the Channel Islands’ largest private-sector employer, published yesterday, revealed a disappointing year.
Mr Scott said the group continued to be highly dependent on the retail and leisure markets, which had not shown any measurable growth. GST could make things worse.
‘The introduction of GST in Jersey in 2008 will not help the tourism sector to recover,’ he said. ‘Furthermore, gathering payroll taxes and preparations for GST are already placing additional cost burdens which will inevitably be recovered in higher prices, as operating margins are already unsustainably low.’
He said the Jersey States was largely ignoring calls from industry for tax-gathering schemes to be kept as simple as possible, but hoped common sense would eventually prevail.
Overall, the group saw turnover rise by 4.6% to £332.9m., with pre-tax profits up by 44.7% to £17.8m. The growth came primarily from retail. Turnover for CI Hospitality fell by £6.5m. to £29.4m. and profits dipped to £2.6m. from £2.7m. the previous year.
Mr Scott said he hoped to have more definitive news on the possible takeover. The bidder, who is as yet unnamed, first approached the board of CI Traders in July.
He said that since then discussions had been exhaustive but he added that the approach had had a long-overdue and beneficial effect on the market price of the company.
The CI Traders portfolio includes Checkers and Checkers Xpress and Safeway supermarkets in both islands, St Pierre Park, La Trelade and Green Acres hotels in Guernsey and the Ann Street Group, Victor Hugo Wines and the Marks & Spencer franchise in Jersey. The group employs more than 3,000 people.
An earlier approach from venture capitalist firm Alchemy Partners was rejected in October 2005.
Sales in the islands increased by just 1% last year to 87% of group turnover.
‘The resident population levels in each island are tightly controlled by the respective authorities and the visitor market is generally in shallow but steady decline.’
CI Traders shares were 92p yesterday, 22p up on January 2006, but down 2p this morning.
Article posted on 25th May, 2007 - 12.00am
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