Wilko posts £65m loss as it builds for future growth
DEFICIT INCLUDES REDUNDANCY PAYMENTS
NOTTINGHAMSHIRE-BASED high street retailer Wilko has pointed to a series of one-off costs after posting a pre-tax loss of more than £65 million in its annual results.
The firm, which has its headquarters in Worksop, highlighted “exceptional costs” of £36.5m in its report, which includes restructuring and redundancy payments and exiting a distribution contract early.
Also noted in the report is an unrealised loss of £39m on future purchases through forward contracts and currency options.
Despite the loss, the company has continued with its ambitious expansion programme, opening 20 new stores in the year to February 3, which has increased its portfolio to 416 venues.
Turnover also increased from £1.5 bn to £1.6bn, with a growth in like-for-like sales contributing towards this, while Wilko-branded products also performed strongly, hitting £1bn in sales.
In a statement, the directors described Wilko’s 2017-18 performance as “strong’” as it also saw growth in its online business of 47 percent.
Sean Toal, chief operating officer of Wilkinson Hardware Stores Limited, said: “Despite the tough trading environment, we have grown the business and won more customers as they are attracted to the quality and value of our offer.
“Our online business is growing rapidly and the popularity of our own brand products is rising and surpassed £1 billion of sales [VAT incl] in the year.”
Wilko employs more than 20,000 members of staff and was named the fourth-biggest private company in Nottinghamshire in this year’s Top 200 listing.
It has now set out a new strategy which aims to take the business forward to its centenary in 2030, with many of the losses incurred this year due to this.
This included reducing the number of management levels in its stores, a change in its transport provider and the closure of three stores, with a further three closures earmarked for 2018-19.
Mr Toal added: “While we have taken some exceptionals during the year, the business is now set up to be in good shape as we undertake our new strategy for growth.
“We are excited about the new opportunities that lie ahead of us and look forward to bringing better value, and better quality designed products our customers.”
The company also warned in the report about future risks facing the company, chief among these being the potential impact of Brexit, and stressing that work needs to take place to mitigate this.
The report stated: “Uncertainty remains over the trading agreements between the UK and EU after this date (March 2019).
“There is a risk that the UK’S departure from the EU could have a material impact in terms of cost and time upon a wide range of busines operations including buying, supply chain and retail activities.
“The Group has sought advice and insight on the potential impacts of Brexit and will continue to develop a plan to address the effects of Brexit.”