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Arcadia’s profits plummet

Arcadia’s parent company Taveta Investments has reported a drop in annual sales and profits in a “disappointing” year for the business.

The group experienced a 42% drop in group operating profit before goodwill, amortisation and exceptional items, to £124.1m for the year to 26 August 2017.

Taveta had an exceptional charge of £29m, as a result of fixed asset impairments, provision for onerous leases and revaluation of investment properties.

Meanwhile, total sales were down 5.6% year on year to £1.9bn.

There was a 35% drop in cash generation compared to the previous year, down to £185.8m.

The business continued to invest during the year, with capital expenditure increasing to £214.9m, up from £97.8m last year.

The group had a year end cash balance of £157.2m, compared to £223.1m the previous year.

Ian Grabiner, CEO, said: “The retail environment remains highly competitive and challenging. Our worldwide digital sales were up 11.5% [compared to] last year. This increase in digital sales is taking place at the expense of traditional bricks and mortar retailing, as consumers embrace the opportunity to purchase across all channels available to them.

“Whilst we have found headline sales and profits disappointing we remain a strongly cash generative business.

”We are continuing to invest and have a projected spend of £81.5m this [financial] year. We are developing a new state of the art 1 million net sq ft freehold distribution centre in Daventry, which is being fitted out for opening in 2019. We look to be as efficient as we can be given the challenging retail environment.”

 

Readers' comments (1)

  • Always the good news story. Even when it isn’t.

    Anyone who supplies these businesses knows the problems. Rose tinted leadership convinces staff it’s all okay. Bet this story gets worse.

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