Price and wage inflation, uncertainty linked to Brexit, and unseasonal weather patterns contributed to a tough year at Bonmarché (BON), according to the clothing retailer's management. Like-for-like sales were down 4.3 per cent in the 53 weeks reported, or a 4.7 per cent drop in 52 weeks. This, together with an increase in expenses, pushed the underlying pre-tax profit margin down from 5.6 per cent to 3.3 per cent.
The retailer was frank with investors about the internal factors also at play. Long lead times and a supply base mainly in China meant that the retailer could not react quickly to seasonal changes in demand, and this year’s casual ranges did not appeal to customers. Its loyalty club did not contribute as expected because "the focus had drifted away from signing up new customers" - this is being addressed - and the company was not making the most of the data it had on its existing users.
But recently appointed chief executive Helen Connolly remains optimistic that the company is well placed to benefit from the growing market of over-50s women, although she admitted that the effectiveness of the company's execution needs to improve.
Analysts at Cantor Fitzgerald expect pre-tax profits of £7.5m in the year to March 2018, giving an EPS of 11.9p, up from £6.1m and 9.5p for FY2017.
| BONMARCHÉ (BON) | ||||
|---|---|---|---|---|
| ORD PRICE: | 99.5p | MARKET VALUE: | £49.8m | |
| TOUCH: | 98-101p | 12-MONTH HIGH: | 133p | LOW: 75p |
| DIVIDEND YIELD: | 7.2% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 70p | NET CASH: | £5.5m | |
| Year to 1 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 147 | 4.8 | na | nil |
| 2014 | 164 | 8.0 | 23.4 | 2.1 |
| 2015 | 179 | 12.4 | 20.7 | 6.8 |
| 2016 | 188 | 9.6 | 16.1 | 7.14 |
| 2017* | 190 | 5.8 | 9.2 | 7.14 |
| % change | +1 | -39 | -43 | - |
Ex-div: 29 Jun Payment: 4 Aug *53-week period | ||||
