Wilko posts £65m loss as it builds for fu­ture growth

DEFICIT IN­CLUDES RE­DUN­DANCY PAY­MENTS

Nottingham Post - - NEWS - By MATTHEW BUNN

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.”

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