Germany's largest optical retailer recorded a pre-tax profit of €48.1 million for the first six months of this year, or 38.2 percent more than in the same period of last year. The company anticipates a clear rise in sales and profits for the full year. Analysts are predicting pre-tax profit of €95-105 million on 7-10 percent higher turnover for the year, although the 2nd quarter was marked by a temporary decline in pre-tax profit to €23.0 million from €24.7 million.
In fact the 1st quarter had been much better than the corresponding 2005 period, where Fielmann had invested more than €20 million in the launch of its insurance scheme for glasses, followed by a quarter where its advertising costs were cut down sharply. Advertising expenditures remained relatively constant for the full 1st half of 2006.
On the other hand, investments for the expansion of Fielmann's retail network rose to €15.0 million from €14.1 million. The company executed 13 new openings during the period. It still intends to open a total of 25 new branches throughout the year 2006, mostly in Germany where it already has 485 stores. Out of the new sites due to come on stream this year, 4 are in Austria, 2 or 3 in Switzerland and one in Poland. The total door count including Austria, Switzerland, Poland and the Netherlands is 551.
Improved results in the group's operations in Austria and Switzerland, which represent 10 percent of total revenues, led them to contribute 30 percent of the group's net income for the 1st half of this year, which went up by 37.3 percent to €31.8 million. As previously reported, Fielmann's consolidated sales rose by 8.7 percent to €389.8 million during the period. Adding external sales to franchisees and others, sales after VAT were up by 8.8 percent to €452.9 million for the six months.
For the 2nd quarter, consolidated revenues grew by 4.1 percent to €197.5 million, due in part to the later Easter holidays this year and a consumer rush for Fielmann's new insurance scheme in the same period a year ago. However, same-store sales and the product mix improved as customers spent more on progressive lenses and other high-priced items in the run-up to the World Cup. The number of customers ordering cheap generic glasses from its special insurance scheme remained constant at about 200,000 during the quarter, representing about one-quarter of all the transactions. Fielmann sold a total of 1.4 million pairs of glasses during the quarter and more than 2.8 million glasses throughout the 1st half.