Trading Statement July 2020
TRADING STATEMENT FOR THE SIX MONTHS ENDED
30 JUNE 2020
Dear Shareholder
The first half of 2020 has been dominated by the impact of COVID-19, which has inevitably affected the Group's trading and financial performance. Our UK garden centres and restaurants were closed on 23 March and the garden centres did not re-open until 13 May, whilst our restaurants did not resume operations until after the period end on 4 July
Total garden centre and restaurant sales were down only 3% thanks to the contribution of the seven centres we acquired from Wyevale in September 2019. Like for like sales decreased by 15% with a 17% decline in the UK and 3% in the Channel Islands, where our Jersey garden centre remained open throughout the period. Total garden centre sales were up 7%, but 6% down on a like for like basis, whilst total restaurant sales were down 52% and like for like sales fell by 58%. It was pleasing that garden centre sales in the nine former Wyevale stores acquired in August 2018 were flat during the first half, whilst sales in the seven former Wyevale centres acquired in September 2019 were up by 9% (against their sales whilst under Wyevale ownership in H1 2019), in spite of them all being closed for 51 days.
The Group continued to outperform the benchmark provided by the Garden Centre Association (GCA), however, with the industry experiencing a contraction of over 15% in the garden centres. We performed particularly well in Plants and Garden Products.
Our response to COVID-19 has been wide and far-reaching as previously communicated, which has enabled us to mitigate much of the financial impact of COVID-19. The benign weather and the re-opening of our garden centres in mid-May enabled us to recover much of the sales lost during the period of lockdown, and trade has continued to grow in July. Our cash position was strong at the end of June, which should provide us with some buffer against the risks of the virus returning in the winter. We continue to review dividend options and investment in light of the improving financial position.
Chairman Simon Burke commented, "Given the very difficult position we found ourselves in at the end of March, the turnaround in our fortunes has been remarkable. Trade has been very positive since the garden centres re-opened and early signs are encouraging in the restaurants. However, we are certainly not out of the woods yet. Social distancing measures, a sense of anxiety and looming or existing financial hardship are all affecting the UK consumer. We do not know what restrictions we may face later in the year. We are preparing for any additional impact on the business, but the strong financial position we find ourselves in at the half-year gives me confidence in our ability to manage the uncertainty we face over the next six months."