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Profits drop 4m at Wilkinsons

Pre-tax profits have fallen from £65m in 2010 to £61m at retailer Wilkinson Hardware Stores over the last year. Revenues remained static at the Worksop-based company, while 475 retail jobs were culled within the year. The retailer attributed the stagnant sales to commodity prices and poor exchange rates.

Although revenues of £1.55bn did not budge over the 12 months to 28 January 2011, pre-tax profits dropped from £64.9m to £60.8m.

Net cash inflow from operating activity also fell from £124.4m in 2009/10 to £88.7m.

In its financial accounts submitted to Companies House, Wilkinsons said pressures arose from "commodity prices, the increase in VAT and the dollar exchange rate".

Over the 12-month period, staff numbers dropped from 23,384 to 23,063. Although Wilkinsons upped its members of staff in administration roles by 70 and logistics employees by 84, retail staff numbers dropped by 475. This left a staff member shortfall of more than 320 from the previous year.

Despite a drop in employee numbers, the amount the company spent on wages increased in its latest 12-month period. It spent £277.8m on staff costs in 2009/10, which was upped to £279.1m in its latest financial year.

The company is now preparing to launch a 'Premium Own Brand' line in October this year, after full-year sales of its basic home brand items soared 10 per cent to £700m. The premium division will launch with an initial 100 products, Wilkinsons confirmed.

Over the year, the company opened 14 new stores – nine in England and five in Scotland. Two more are scheduled to open in Manchester and Norwich in September.

Wilkinsons said: "No matter how many new stores we open, and how much success we have, we never sit back and relax. We’re constantly looking to the future and searching for new ways to expand the business and deliver great Wilkinsons value to more people; we’re already quickly filling up space on our store opening programme for the next two years."

The retailer opened an office in Hong Kong in 2008. The division, which sources products and trades under the brand Wilkinson Asia, has grown from an initial two members of staff to 50 by January 2011.

Of its Wilkinson Asia brand, the company said: "Over the next 12 months, the team will continue to drive improvements in cost savings, quality, innovation, and delivery across all our ranges of Far East sourced products."

In 2010/11, the company rolled out a rebrand programme to celebrate its 80th trading year. Wilkinsons said it would continue with the scheme, developing 90 stores over the each of the next two years.

The 80 stores already rebranded produced an additional 4 per cent of sales during the year, said Wilkinsons.

Source : Insider Media Ltd
www.insidermedia.com/insider/midlands/58011-profits-drop-4m-wilkinsons/

30 August 2011
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