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Wilkinson profits hit by rising costs, VAT hike and exchange rates

Wilkinson pre-tax profits fell from £65m to £61m in the year to January 28 as the value retailer was hit by rising commodity prices, the increase in VAT and fluctuating exchange rates.

The fall comes after a stellar performance in the previous year, when pre-tax profits more than doubled.

Operating profit declined from £63m to £58m while like-for-likes dropped 1.3% in the year to January 28.

Turnover was flat at £1.6bn. The value retailer said it had its best ever Christmas despite suffering in the “exceptionally severe weather” in the lead up to the Christmas period.

Wilkinson said that although the operating profit figure was “disappointing” when compared with record profits in 2010, it represents a “strong performance given the trading conditions during the year”.

In its Annual Review, Wilkinson said that its fourth quarter performance showed “a good recovery in late December and January after the difficult period in early and mid December”.

It said that it benefited from its continued focus on investment in stores, supply chain, people, and infrastructure, as well as cost reduction.

Wilkinson rolled out its new branding to 80 stores last year, and said it will rebrand a further 90 this year.

Source : Nicola Harrison – RetailWeek

16 August 2011
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