The Garden Centre Group is reporting an increase in revenues by £17 million to £276.2 million for the year ending December 29, 2013, while operating profits showed a decline of £6.1 million to £22.0m. The figures were issued today by Trellis Capital Limited, the holding company for TGCG, in its Annual Report and financial statements.
Stephen Murphy, Chairman of The Garden Centre Group, said: “I am pleased that 2013 was a year of successful progress and development for The Garden Centre Group. We completed several acquisitions, which further strengthened our market position, continued our focus on strengthening the management team, and made major improvements, which led to the profitability of the business significantly improving.”
Meanwhile, Kevin Bradshaw, Chief Executive Officer of The Garden Centre Group, commented: “In my first full year as Chief Executive, I am delighted at the overall performance of the Group.
"Despite a year of challenging weather conditions for the industry, we delivered a positive increase in revenue while exceeding prior year performance on all profit and margin metrics.
"Our strategy brings a sharp focus on the most valuable opportunities to build and develop the business, and I am confident we will be able to grow significantly in the coming years.”
2013 Operational Highlights
- Strengthening the executive team: Appointments have been made throughout the year that have brought a wealth of skill and experience to the executive management team to drive the business forward and improve the value and quality of products and services offered to customers.
- Growing concessions: The Group introduced many new concessions partners including WHSmith, Laithwaites Wines, Viners, and Bonmarche reflecting our emphasis on ‘weather proofing’ the business and increasing footfall to the garden centres.
- Introducing new sales channels: The Group has introduced a ‘Click and Collect’ service, which allows for plants to be ordered online and collected in its stores. The Group plans to further expand the online offering.
- Expanding through acquisitions: During the year the Group completed the acquisition of ten garden centres: Bolton Garden Centre was acquired from Barton Grange Group, Cheddar and Lechlade Garden Centres from Park Garden Centres, and the Garden and Leisure Group from Louis Delhaize Group. These acquisitions further strengthen the market position of the Group and the Board is confident that these will deliver a strong return.
2013 Financial Highlights
- Reported EBITDA: EBITDA, TGCG's key indicator for measuring performance, grew by 50% to £42.7 million, highlighting the focused effort management has made on strengthening margins and reviewing the cost base.
- Revenue: While overall it was a challenging year for the industry, as mixed weather patterns impacted footfall into our centres, revenue for the year increased by £17 million to £276.2 million on a pro forma basis.
- Concession income: The Group continued to focus on growing concession income and recorded an increase of 6.6% on 2012PF[1], rising to £14.4 million.
- Gross margin: Pricing initiatives, coupled with a more rigorous approach to executing key promotions served to increase gross margins by 3.7%, as did a strong focus on refining business mix and reducing the cost of goods sold via improving rigour behind tendering processes.
- Operating profit: The Group’s operating profit shows a decline of £6.1 million to £22.0m as result of exceptional items. In 2013, total net exceptional costs were £6.1 million, driven by restructuring expenses, costs related to strategic projects helping to establish the strategy of the Group, and acquisition related costs. Operating profit in 2012 was impacted by an exceptional gain of £16.8 million as a result of negative goodwill. With the exclusion of this gain, operating profit has increased in 2013 compared to 2012.
- Cashflow: The Group generated £37.8 million from operating activities, up by £29.2 million on 2012 actual reported numbers for the eight month period to December 2012. The increased operating cashflow was reinvested to improve the estate and expand the Group.
- Net Assets: The Group’s net assets grew from £18.4 million to £38.3 million, mainly driven by additional shareholder equity contributions, reflecting the strength of the Group’s financial backing.
[1] 2012 pro-forma results for the 12 month period ending 30 December 2012, including the four months of trading pre- the acquisition of The Garden Centre Group by Terra Firma.
The full report can be found at http://www.thegardencentregroup.co.uk.
