Trading Statement February 2019
TRADING STATEMENT FOR THE YEAR ENDED
31 DECEMBER 2018
Dear Shareholder
I am pleased to provide you with an update on Blue Diamond Ltd's trading for the year ended 31 December 2018 in advance of the final results that we expect to announce in the middle of May 2019.
I am pleased to be able to report to you that the Group enjoyed very strong sales growth in 2018, both in total and on a like for like basis. The second half performance was stronger than the first half, both with and without the nine newly-acquired former Wyevale sites.
Total sales increased by 33% with like for like sales growth, excluding Bridgford and the former Wyevale centres, of 8%. Total sales in the UK rose by 37% with a like for like sales increase of 7%. Total and like for like sales grew by 9% in the Channel Islands.
There was a significant outperformance of the Garden Centre Association in garden centre sales. There were good results in all categories but notably strong performances in Fashion, Home and Plants. Customer numbers grew by nearly 3%, with growth also in average spend and margin. Our year end debt levels will be comfortably within the parameters set by the Board and our lenders.
The year was dominated by the acquisition of nine garden centres from Wyevale in August for £44m. We have already started the process of integrating these stores and moving them to the Blue Diamond standard, and the early signs are encouraging. Garden centre sales at these sites increased by 12% from 17 August to 31 December 2018 versus the same period in 2017 under previous ownership. In 2019 we plan to invest over £6m on redeveloping these centres, with particular focus on Bicester, Weybridge and Nailsworth although all sites will receive some investment as part of our three-year plan to improve them.
Bridgford, the garden centre we opened near Nottingham in late March 2018, has been an outstanding success. From a standing start the centre produced nearly £10m of sales in just over nine months, meeting its year five target already. It has received much critical acclaim from the industry, media and customers alike.
Chairman Simon Burke said, "We have had an exciting, eventful and successful year. I am pleased that the core business has continued to perform so well whilst we have been occupied with the acquisition and integration of nine new sites. The additional overhead and financing costs associated with this acquisition, coupled with early-stage losses, mean that I do not expect significant profit growth overall in 2018. However, the acquisition of the Wyevale centres will provide us with the platform to grow our profits in the coming years, subject always to the vagaries of the weather and the UK economy. Our business model is very robust, and continues to perform well in a difficult retail environment. The uncertainty presented by the Brexit situation is unhelpful and will undoubtedly have an impact on our business in the event of a negative outcome, but we remain focused on what we do well and we are confident in the future."
Yours faithfully,
Richard Hemans
Group Finance Director and Company Secretary