18th Dec 2024 11:23
(Alliance News) - Shoe Zone PLC shares plunged on Wednesday as it cut its profit expectations in half and said the UK government's budget policies have forced it to close some stores.
Shares in Shoe Zone fell 40% to 83.50 pence in London on Wednesday morning. Earlier, the stock set a new 52-week low of 70.00p.
The Leicester, England-based footwear retailer cut its adjusted pretax profit expectations for the financial year ending in September 2025 in half to "not less than" GBP5.0 million from GBP10.0 million.
Adjusted pretax profit for financial 2023 was GBP16.5 million. The company will announce results for financial 2024 in January.
The company also said it will not pay a final dividend for financial 2024. Last year, the company declared a final dividend of 8.90 pence per share in addition to a special dividend of 6.00 pence. Alongside an earlier 2.5 pence interim dividend, the company paid a total dividend of 17.40 pence for the year.
Shoe Zone proposed an interim dividend of 2.50 pence in its 2024 half-year results, matching the year before.
On Wednesday, Shoe Zone said it has experienced "very challenging trading conditions" in the financial year to date, which started on September 29.
Weakening consumer confidence and "unseasonal weather" have decreased revenue and profit, Shoe Zone said.
The company said it will "incur significant additional costs" due to increases in national insurance and the national living wage announced in the UK government's budget in October.
"These additional costs have resulted in the planned closure of a number of stores that have now become unviable. The combination of the above will have a significant impact on our full-year figures," Shoe Zone said.
By Michael Hennessey, Alliance News reporter
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