22nd Aug 2018 10:01
LONDON (Alliance News) - Home furnishing and fashion retailer Laura Ashley Holdings PLC said Wednesday its annual profit plummeted due to a challenging trading environment.
Shares in the retailer, however, were trading up 20% at 5.20 pence each, as the company said its fashion division like-for-like sales increased in an "extremely competitive sector".
The company said it was "disappointed" to report a fall in profit, with the "softer" trading environment leading to a 98% drop in pretax profit to GBP100,000 from GBP6.3 million a year ago.
Part of the drop was profit to the sale of the company's property in Singapore which led to a GBP4.7 million impairment charge.
For the year to June 30, revenue dipped to GBP257.2 million from GBP277.0 million the year prior.
During the year, total retail like-for-like sales were down 0.4% but like-for-like sales in the company's fashion division increased by 9.7%.
The company's online performance continues to grow with like-for-like sales up 4.1% year-on-year. The online division reported revenue of GBP59.7 million, accounting for 25% of total retail revenue.
"We are encouraged by the progress and continued growth being made by our online business and will be launching a new digital platform in the weeks to come," Chairman Tan Sri Khoo Kay Peng said.
The company decided not to propose a dividend for the year. Last year it paid a 0.5 pence per share dividend.
Looking ahead, the company said trading fro the first seven weeks of the new year has been in line with the board's views.
In a separate release, the company said it accepted an offer to sell its freehold property in Singapore which, although it led to an impairment charge for the group will significantly reduce its net debt and improve cash flow.
The consideration for the sale, which is conditional on shareholder's approval, amounted to GBP30.3 million, which will be used to repay the mortgage on the property and strengthen the company's balance sheet.
Laura Ashley expects to hold a general meeting on October 16 where shareholders will be able to vote on the property sale.
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