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Wyevale profit surge triggers sale speculation

The owner of the Wyevale garden centre chain is thought to be considering a sale after a surge in profits last year.

The chain is owned by Guy Hands’ private equity business Terra Firma, which is understood to be looking at various options including a refinancing of its debt.

It is understood to have valued the business at about £700million based on current earnings. It was bought in April 2012 in a deal valuing the business at £276million.

Wyevale has been cashing in as Britons spend more time gardening and spending in its restaurants and coffee shops.

It increased profits excluding tax, interest, depreciation and amortisation – the favoured private equity measure of business health – by 42 per cent to £42.7million last year.

Sales in the same period rose 6.5 per cent to £276million, helped in part by the addition of 10 more outlets, taking the chain to 139.

Terra Firma declined to comment this weekend. The garden centre sector is still highly fragmented with many outlets owned by family firms or regional chains.

Annual spending on gardens is about £5billion, but many centres, including Wyevale, have broadened product categories to include home furnishings and food services to boost winter sales.

Source : Neil Craven - Mail on Sunday

31 August 2014

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