Bonmarché FY17 sales and profit drop

Total sales for the 53 weeks ended April 1, 2017 at Bonmarché decreased by 0.5 percent to 228.1 million pounds (291 million dollars) compared with the same period ended April 2, 2016. The company’s store LFL sales decreased by 4.3 percent or 4.7 percent on a 52-week basis, while online sales grew by 2.2 percent. The Group's profit before tax was 5.8 million pounds (7.4 million dollars) against 9.6 million pounds (12.2 million dollars) last year, while underlying PBT was 6.3 million pounds compared to 10.6 million pounds (13.5 million dollars).

Commenting on the company’s full year trading, Helen Connolly, Chief Executive of Bonmarché, said in a media release, "A combination of internal and external factors over the past year prevented us from improving at the rate we had aimed for. However, we believe that the business is now well positioned, with a compelling proposition and robust plan.”

Fall in LFL sales impacts Bonmarché profits

The company said that Bonmarché's profits suffered due to the fall in LFL sales. The company blamed both internal and external factors for the decrease in sales.

During the year, the company opened four new Solus stores, six stores within garden centres and 12 other concessions, and relocated three Solus stores and closed seven stores. The average number of outlets open during the year was 321. The net additional sales accruing in FY17 as a result of opening and closing stores was 7.1 million pounds (9 million dollars). During the coming year, Bonmarché expects to open approximately five new Solus stores and approximately 10 concessions/other locations, and, as part of the ongoing management of the store portfolio, will close approximately six stores/concessions at the end of their leases or at lease break points.

The company added that the majority of stores closed were concessions, which, having traded for a year, did not meet the required performance criteria. In addition, two "pop up" stores were closed, which the company had traded on a short terms basis with an option to extend the term if the location proved appropriate for a more permanent store and, three other stores were closed as part of an exercise to relocate within the same town.

Online sales increased by 2.2 percent or 1.8 percent on a 52 week basis, and represented 7.1 percent of total FY17 sales compared to 6.9 percent last year. The company saw significant improvement in online sales during the year from the first quarter's 4.1 percent sales decline contrasting with 15.2 percent growth in the fourth quarter and expects to see this trend continue as the benefits of its new Demandware web platform are realised.

Earnings down but board recommends a dividend of 4.64 pence

The statutory basic earnings per share for the year were 9.2 pence compared to 16.1 pence last year. The underlying basic earnings per share (pre-exceptional costs) were 10.1 pence compared to 18.3 pence in FY16.

The company’s board has recommended a final dividend of 4.64 pence per share in respect of FY17 which is in line with last year's final dividend, making total dividends for the year 7.14 pence per share, also in line with the total dividends paid in respect of FY16. If approved by shareholders at the AGM on July 27, 2017, the dividend will be paid on August 4, 2017.

The company anticipates the challenging clothing market conditions experienced during FY17 are likely to prevail during the new financial year. However, it expects the size of the target market to increase due to the established changes in the demographic makeup of the population. The company said that trading since the beginning of the new financial year has been in line with the board's expectations and the financial position of the business continues to be sound, with no net debt and a balance sheet which provides a stable platform for the future.