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Wyevale reports biggest loss in garden centre history

Percy Throwers Gdn Centre 2

Wyevale Garden Centres' has reported the single biggest loss in garden centre history, losing £122m in the full year ending 25th December 2016.

In their newly reported accounts, the company which runs 149 garden centres in the UK, recorded an increase in turnover to £325m a 4.5% increase over the £311m achieved in 2015. Like for like sales declined by 2% year on year, although their accounts say 'the business returned to like for like sales growth in the second half of 2016 with some early signs of recovery in key customer metrics".

Read - Terra Firma forced to prop up Wyevale

The company delayed publishing their accounts until almost the last minute, as they were required to be sent to Companies House before the end of September, or risk receiving a fine.

Read - Wyevale under pressure to re-finance business before publishing accounts.

The new financial arrangement includes the replacement of the outstanding debt with £141.5m of new debt, plus a revolving £30m credit facility to support the firms working capital requirements. Also included is a £10m capex facility to support new initiatives and a £35m facility with Accordion to support their future growth plans including acquisitions.

Weevil Group CFO Anthony King commented on the balance sheet "two key adjustments are a £51.3 million impairment of fixed assets and a £20.0 million write down of inventory following a change to the inventory provisioning methodology. These items have been separately presented as non-recurring items in order to better reflect the underlying performance of the Group. These non-cash impairment charges are the main contributing factors that have led to a loss after tax of £122.4 million."

Group chairman Justin King said 2016 "was not without challenges" and that a change in strategy "resulted in the recognition of a significant impairment of tangible and intangible fixed assets and the introduction of a new stock provisioning methodology. This new provisioning methodology together with a focus on dealing with legacy stock issues has led to a dilution of margin in 2016, which will benefit future years as we move towards a cleaner stock position".

He went on to say: "I am also pleased to report that a refinancing of all external bank debt facilities has been successfully completed subsequent to the year end in September 2017 which provides the Group with the required financing for the next five years and ensures the business can fully focus on delivery of the new strategy.

"The fundamentals of the garden centre market remain strong with estimated growth at an average rate of 2.5% per annum (source - Mintel) through to 2021. The Group has a loyal customer base and experienced colleagues who have a real passion for horticulture and helping our customers. I firmly believe that Roger and the team, with their strong retail backgrounds and transformation experience, are now well placed to complete the initial phase of the strategy and set the business up for future growth."

Chief executive Roger Mclaughlan said a new Supply Chain Team, a focus on product range reviews, rationalisation of ranges and the launch of a Central Distribution Centre (CDC) in Milton Keynes had hit the figures.

Source: Insight DIY Team & Wyevale Accounts

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26 September 2017

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