Wyevale Garden Centres announces shift away from acquisitions
Wyevale Garden Centres has issued its 2016 Annual Report and Accounts to include a detailed update on the new business strategy. It has also announced the successful refinancing of external bank debt facilities, which stabilises the capital structure enabling the leadership team to focus on delivering the new strategy, centred on building a better business for customers.
2016 financial and operational highlights
Overall footfall has increased year on year with 46.5m visitors coming to our GCs
Revenue is up 5.5% year on year at £328.3m
Horticulture accounts for 30% of revenue
Gardening accounts for 34% of revenue
Home & Leisure accounts for 17% of revenue
Food & Beverage accounts for 19% of revenue
Like for like sales decreased by 2% in 2016 but grew in the second half of 2016
Gross margin reduced by 1.8 percentage points due to higher clearance activity as legacy inventory issues addressed
Operating costs increased due to acquisitions, additional rental expense from sale and leaseback transactions and investment in people, including impact of National Living Wage
EBITDA down 31% year on year at £29.1m
New strategy update
WGC’s strategic priorities are focused on building a strong foundation at the core of the business. As well as delivering a more compelling customer proposition and experience, WGC aims to achieve its strategic goals by investing in people, upgrading systems and controls and improving the supply chain process.
The management team aims to a deliver best-in-class retailing experience that offers greater choice, value and quality to customers. Having been in place for a year, CEO, Roger Mclaughlan, and CFO, Anthony Jones, have already introduced a number of new initiatives to improve customers’ experience and the Group recently achieved its highest net promoter score to date, a critical measure of customer satisfaction.
So far in 2017, WGC has seen early signs of progress following the implementation of the first phase of its strategy as the business has returned to like-for-like growth.
Justin King, Chairman of WGC, said: “2016 was a transitional year. In order for the business to achieve sustainable growth a change of strategy, and a change in the leadership team to implement it, was needed as a critical first step. During 2016 the team made significant progress in setting out this new strategy and in dealing with legacy issues, particularly stock. I am pleased to note that this progress has continued throughout the year and with the successful completion of the debt refinancing, we now have a more stable capital structure to support the business’ needs.”
Roger Mclaughlan, CEO of WGC said: “We have spent a lot of time over the past year in gathering in-depth customer insight and feedback from colleagues across the business. At the heart of our new strategy is enhancing our customer experience by focusing on building and strengthening the fundamentals of our business. There’s been a significant shift in our financial priorities away from acquisitions and other capital intensive growth initiatives to investment in the core infrastructure, systems and processes required to develop a scalable and sustainable platform to underpin the Group’s future growth plans.”