The Terra Firma-owned group delayed issuing accounts until a £100m refinancing deal with Hayfin/Barclays was in place and is focusing on a new strategy.
The new arrangement comprises the replacement of the outstanding principal senior debt with £141.5 million of new term debt along with a £30 million revolving credit facility to support the group’s working capital requirements, a £10 million capex facility to support capital initiatives and a £35 million Accordion facility to support the group’s future growth plans and the recommencement of acquisitions at the appropriate time.
All of the new facilities secured will mature in March 2022 and will pay interest based on LIBOR plus applicable margins.
Chief financial officer Anthony Jones said after a review of the balance sheet "two key adjustments are a £51.3 million impairment of fixed assets and a £20.0 million write down of inventory following a change to the inventory provisioning methodology. These items have been separately presented as non-recurring items in order to better reflect the underlying performance of the Group. These non-cash impairment charges are the main contributing factors that have led to a loss after tax of £122.4 million."
The 149-centre group's chairman Justin King said 2016 "was not without challenges".
A change in strategy "resulted in the recognition of a significant impairment of tangible and intangible fixed assets and the introduction of a new stock provisioning methodology. This new provisioning methodology together with a focus on dealing with legacy stock issues has led to a dilution of margin in 2016, which will benefit future years as we move towards a cleaner stock position".
He added: "I am also pleased to report that a refinancing of all external bank debt facilities has been successfully completed subsequent to the year end in September 2017 which provides the Group with the required financing for the next five years and ensures the business can fully focus on delivery of the new strategy.
"The fundamentals of the garden centre market remain strong with estimated growth at an average rate of 2.5% per annum [Mintel figures] through to 2021. The Group has a loyal customer base and experienced colleagues who have a real passion for horticulture and helping our customers. I firmly believe that Roger and the team, with their strong retail backgrounds and transformation experience, are now well placed to complete the initial phase of the strategy and set the business up for future growth."
Chief executive Roger Mclaughlan said a new Supply Chain Team, a focus on product range reviews, rationalisation of ranges and the launch of a Central Distribution Centre (CDC) in Milton Keynes had hit the figures.
The Group generated revenue before non-recurring items of £328.3 million for the financial year ended 25 December 2016, an increase of 5.5% on the prior year. This growth has been driven from acquisitions. Like for like sales decreased by 2% in 2016 compared to 2015, "although the business returned to like for like sales growth in the second half of 2016 with some early signs of recovery in key customer metrics", the report states.
EBITDA was £29.1m, down from £42.2m.
Concession income rose £2m to £22.8m.
Wyevale reports freehold property value at £381m from a Knight Frank review in May 2016. It had 86 freehold and 65 leasehold centres at the end of 2016.
During the year a total of £32.5 million was spent on property, plant and equipment for the business (2015: £55.9 million).
Investing activities resulted in an outflow of £13.6 million (2015: inflow £25.6 million), primarily due to £24.8 million used to acquire two garden centres in the year (Woodcote Green and Wolds View-formerly Crowders) and £32.5 million spent on capital expense projects (2015: £19.2 million on acquisitions, £55.9 million on capital expense), offset by a £43.6 million inflow in relation to sale and lease back transaction of five centres completed during the period and the sale of two freehold properties.