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| Eight Future group firms report losses in 2009-10 |
| Raghavendra Kamath / Mumbai Aug 21, 2010, 00:09 IST |
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Eight out of the 37 companies in Kishore Biyani’s Rs10,000 crore Future Group have made losses of Rs1,835 crore in the financial year 2010.
According to the latest data published in the draft red herring prospectus (DRHP) filed by Future Ventures, the highest loss was incurred by Future Merchandising at Rs869.21 crore. Future Hospitality Management – the business dealing in managing and developing hotels, long stay apartments, service apartments and motels – made losses of Rs744.18 crore.
Future Ventures is planning to raise Rs750 crore through an initial public issue (IPO).
Future group, which runs the country’s largest listed retailer Pantaloon, runs over 1,000 stores (in over 16 million sq ft) in the country and employs over 30,000 people.
“I do not think there was any issue with the group’s core business (retail). Between 2006 and 2008, it diversified into a lot of things. Once the slowdown set in, the ventures faced a setback,” said a former executive of the group.
Even other retail chains, such as those run by Reliance Industries, are yet to achieve profitability. Most of the retail subsidiaries of RIL posted losses in 2009-10. Prominent among them are Reliance Fresh with a loss of Rs135.16 crore, Reliance Hypermart (Rs 42.51 crore), Reliance Wellness (Rs 11.36 crore) and Reliance Home Store (Rs 8.96 crore). RIL’s primary retailing arm Reliance Retail posted a loss of Rs7 crore.
However the tax refund helped it post a profit after tax (PAT) of Rs18.22 crore, RIL’s annual report shows.
After losses, the Future group has consolidated its non-core retail investments in financial services, brands and education, some of which were making losses, to retain its flagship entity Pantaloon Retail as a profitable business.
While groupwise performance figures are not available, Pantaloon Retail’s consolidated net profit fell by 54 per cent in FY 2009 at Rs10.1 crore compared with Rs21.9 crore posted in FY2008.
The net profit of the group’s financial services firm Future Capital have gone up 86 per cent in FY 2010 while revenues have come down by 58 per cent.
As part of a realignment plan, Pantaloon transferred its investments in Future Brands and subsidiaries such as Future Knowledge Services Ltd and Future Learning and Development Ltd to promoter group company PFH Entertainment Ltd.
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