Full-year profits at homeware chain Laura Ashley fell by a third after it booked an impairment charge on the sale of a property in Singapore and sales stagnated. The group has also paid no dividend for the first time in more than a decade.
The Singapore property was bought as Laura Ashley’s Asia headquarters and will be sold for £30.4m, not far off the group’s £31m market capitalisation. It said the disposal, which requires shareholder approval, will reduce debt by £20m. “While expansion into the Asian market continues to be the group’s strategy, the retail environment both domestically and internationally has changed,” it said.
Profit before tax and exceptional items was £5.6m for the year to June 30, against £8.4m for the previous year. Laura Ashley has warned on profits three times over the past 18 months.
International sales from more than 200 franchised stores accounted for just 7 per cent of revenue in the year to the end of June.
In the UK, store sales fell to £236m from £252m the previous year, while online sales increased slightly to £59.7m. Fashion, once the group’s main offering, now accounts for less than a fifth of revenue, with homewares, furniture and decorating accounting for the rest. Store numbers were reduced last year, and will fall in the current year too. However, the group plans to expand its franchised hotels and tea rooms business.
Khoo Kay Peng, the Malaysian tycoon who bought into Laura Ashley 20 years ago and has chaired it since, said trading in the seven weeks to August 18 was in line with expectations and that he remained “resolutely confident in the underlying strength of this much-loved brand”.
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