Spe­cial div­i­dend plans afoot af­ter Shoe Zone profit haul

The Daily Telegraph - Business - - Business - By LaToya Harding

SHOE Zone has de­clared a spe­cial div­i­dend on the back of record an­nual prof­its and in­creased rev­enues de­spite “a chal­leng­ing con­sumer en­vi­ron­ment”.

The re­tailer, which spe­cialises in cheap footwear, said pre-tax prof­its rose 18pc to £11.3m, boosted by its “big box” stores on re­tail parks. It was the high­est an­nual profit in­crease since float­ing in 2014.

To­tal rev­enue climbed 1.8pc to £161m in the 52 weeks to Sept 29, with on­line rev­enue in­creas­ing by al­most a fifth to £9.8m.

The 8p spe­cial div­i­dend will be on top of a fi­nal div­i­dend of 8p, and takes the to­tal pay­out this year to 19.5p.

In Oc­to­ber, the com­pany said that it would dis­trib­ute an ex­tra £4m of ex­cess cash to share­hold­ers af­ter bet­ter-than-ex­pected trad­ing in the se­cond half of the year. Shares jumped 12.3pc to close at 201.5p fol­low­ing the pos­i­tive re­sults, valu­ing the com­pany at just over £100m.

Nick Davis, chief ex­ec­u­tive, said the re­sults were driven by “strong per­for­mance through­out the busi­ness”.

“This pos­i­tive per­for­mance is tes­ta­ment to the strength of the core busi­ness model and the ef­fec­tive fo­cus on grow­ing the ‘big box’ and dig­i­tal chan­nels. We con­tinue to make good progress against our strate­gic ob­jec­tives and the board re­mains pos­i­tive about the out­look for the group.”

Later this year the re­tailer plans to launch its own pre­mium range of ladies’ shoes in a bid to drive mar­gins higher. Its av­er­age spend is just £12.98.

Shoe Zone, which sells brands such as Wran­gler, Crocs, Skech­ers and Clarks, has al­most 500 stores and about 3,500 em­ploy­ees in the UK.

Sofie Will­mott, of Glob­alData, said: “A de­ter­mi­na­tion to re­tain a port­fo­lio of this size may come back to haunt Shoe Zone as it seizes on­line sales op­por­tu­ni­ties.

“The big-box for­mat has how­ever been a clear win­ner for Shoe Zone, fill­ing the space left be­hind by Bran­tano, and the re­tailer should be com­mended for its strat­egy, as the stores pre­mi­u­mise its of­fer with the ad­di­tion of new brands and wider choice.”

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