27th Mar 2014 11:20
LONDON (Alliance News) - Clothing and home-furnishings retailer Laura Ashley Holdings PLC Thursday reported a drop in revenue but an increase in profit for its financial year just ended, prompting it to pay a bonus dividend to its shareholders.
Laura Ashley said it had a challenging first half of the year, but trading picked up in the second half, with like-for-like sales growth of 1.2%, after a 2.2% decline in the first half.
It warned that the retail environment continues to be both competitive and challenging, but said it has seen as encouraging start to its current financial year, with like-for-like sales growth of 2% in the first two months of the year.
The group also declared a total dividend of 3.5 pence per share for the year, up from 2.0 pence a year earlier. To this, the retailer added a bonus interim dividend of 1.0 pence a share for its 2014 financial year, a payment it said shows its appreciation of the continued support of shareholders.
Shares in Laura Ashley were up 8.4% Thursday morning, trading at 24.94 pence.
The British homesware retailer has been focused on growing its international franchise business, expanding its product ranges, improving its systems and enhancing its online business.
Pretax profit for the year ended January 25 was GBP20.5 million, only marginally higher than its pretax profit of GBP20.1 million a year earlier, boosted by an exceptional gain of GBP1.2 million from the disposal of short term investments, although the retailer said this was partially offset by the cost of store closure, and a much smaller share of operating profit of associates.
Net profit for the year was GBP15.7 million, up from GBP14.7 million the prior year.
The group said that total group revenues were down 1.4% to GBP294.5 million, compared with GBP298.8 million a year earlier, partially due to a huge drop in licensing revenues as well as fall in retail space, as it decreased its UK store portfolio.
Laura Ashley said that furniture accounted for 30% of sales from its UK business during the year, followed by home accessories with 29%, decorating product 23%, and then its fashion clothing with 18%. It said 40% of its home furnishings sales are from products manufactured in the UK.
The group said its international business now accounts for 11% of total revenue. At year end it had a total of 286 franchised stores in 32 territories worldwide, including stores in Armenia, Poland, Estonia and Qatar. It said it expects to sign further agreements later this year.
It said franchise revenues grew by 4.2% to GBP28.2 million over the year, but licensing income declined by 21% to GBP3.3 million, as one-off promotional licensing during 2012 was not repeated the following year.
During the year, the British homeswares chain refurbished and launched its first Laura Ashley boutique hotel. The group said it expects the hotel revenue to grow significantly this year.
In January, Laura Ashley sold its entire 9.6% stake in the men's formal-wear chain Moss Bros Group PLC for just under GBP8 million.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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