Wyevale Garden Centres issues annual report for "challenging year"

The report for the year ending 27 December shows turnover of £311.1m, up from £290.4m.

Chairman Stephen Murphy said EBITDA was down from £56.1m to £55m, in a "challenging year for our profitability", which was "attributable to both unseasonal weather pattern and to adverse gross margin impacts resulting from the transition of the group’s supply and stock management systems.

"From a trading perspective, the year began strongly, with solid growth in like-for-like sales across most key categories. Unfortunately, the latter half of the year was marked by extended periods of unfavourable weather, in which we saw autumn and Christmas trade suppressed by unseasonal conditions."

The report said this was because of higher stock loss, wastage and discounting as we made major changes to our supply chain systems and processes as well as increased investment in IT.

Profit on sale and leaseback of eight centres in December 2015 was £32.7m, helping grow operating profit to £47.9m, up from £32.5m.

In June 2016, the group completed sale and leaseback of five freehold sites, raising a further £40.1m.

Overall margin decreased form 56.5 to 54 per cent.

Transaction numbers rose from 13.09m to 13.23m, with footfall conversion falling from 28.7 per cent to 28.6 per cent. Average transaction grew from £18.95 to £19.28.

Murphy added that strengthening supply chain was a focus with centralised distrbution. Murphy said 2015’s "focus has been around initiating major transformation of the group as we focus on building  a scalable and sustainable platform to support our ambitious growth plans".

Wyevale bought four centres (two Armitages, Sidmouth and Wych Cross for a combined £21.6m) and closed one (Westonbirt) in 2015 and has bought two more (Woodcote Green and Crowders) in 2016.

The group has refurbished 78 centres since the start of its programme and added 125 concessions with 13 Costas, five Botanic Kitchens and nine Coffee Grounds. There were 93 concessions added in the year, with 47 restaurant refurbishments and 11 new play areas, five restaurants and 13 coffee shops.

Food contribution went up from 16.5 per cent to 18 per cent, with 7.55m transactions, up from 6.760m.

Concession income grew from £18.1m to £20.7m. The group spent £55.9m on property, plant and equipment for the business, up from £34.6m. Manned concessions numbered 659, up from 566.

Wyevale changed it management with Kevin Bradshaw, and directors Jason Danciger, Tim Patten, Sarah Fuller, Dan Zinner and Nils Steinmeyer leaving.

Roger Mclaughlan is new chief executive, Anthony Jones new chief financial officer, Paul Emslie trading and marketing director and Richard Morgan supply chain director.

Murphy said the "unexpected Brexit result and consequent changes in the political landscape have created a volatile near term economic backdrop. The immediate impact is uncertainty and the long term prognosis for the UK economy is difficult to assess at this early stage. However, I believe the underlying fundamentals of the UK economy are positive and that the financial institutions that support this are well capitalised and prepared."

Mclaughlan said complex changes are underway to IT systems and supply chain. He said he wants to put the customer at the forefront fo the business. He said he was "excited" about the planned, delayed launch of ecommerce in 2016.

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