3rd Jul 2014 11:42
LONDON (Alliance News) - Beale PLC Thursday said that its first-half pretax loss narrowed, aided by an improvement in gross margins and a fall in administrative expenses, but it warned that 2014 will be a tough year due to pressure on household disposable income in the UK.
In a statement, the specialist department store operator said that it made a GBP186,000 pretax loss in the 26 weeks ended May 3, compared with a GBP756,000 loss in the corresponding period a year earlier. Revenue fell to GBP34.8 million, from GBP35.6 million, due to the company's decision last year to close its Maidstone and Cinderford stores, to exit the television and audio sector, and to move away from the so-called mega-promotions it has called a detriment to margin.
Administrative expenses before exceptional items increased to GBP18.4 million, from GBP18.2 million, largely due to taking some catering operations in-house. Exceptional administrative income of GBP100,000 was recorded due to a credit on the Tonbridge lease agreement after refinancing and redundancy costs.
"The new financial year started slowly, reflecting the continuing pressure on household disposable incomes. Christmas started later but good like for like increases were seen during the key 14-day trading period, prior to start of the post Christmas sales," Chairman William Tuffy and Chief Executive Michael Hitchcock said in a joint-statement.
"2014 started encouragingly, before the detrimental impact of flooding and inclement weather experienced during late January and February. March sales were materially better than February showing a slight increase on the previous year on a like for like basis and April followed that trend," the executives added.
However, Tuffy and Hitchcock said that pressure on household disposable income has not abated, adding that they still believe 2014 will continue to be a tough year due to fragile retail consumer confidence. They said that the group is managing its cash very closely and met all of its banking covenants in during the first-half.
"Management will continue to work closely with its lender Burdale, to ensure that the ongoing provision of the necessary level of finance is available to the group. In addition to strategic initiatives to drive the business forward, management continues to proactively develop contingency plans that mitigate loss in the event that trading falls below expectation; self-help measures initiated by the management team and a healthier UK economy, have improved more recent trading results," Tuffy and Hitchcock said.
Beale shares were Thursday quoted flat at 13.00 pence.
By Samuel Agini; [email protected]; @samuelagini
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