Leekes reports 64% drop in pre-tax profits

DEPARTMENT store giant Leekes has suffered a massive 64 per cent drop in pre-tax profits.

J H Leeke and Sons, the parent firm of the business which runs stores at Cross Hands and Llantrisant, made £1,047,491 before tax for the year ending March 31 which was down from £2,912,425 the year before.

The poor performance was primarily put down to a lower level of completions in the group's development company, which has entered the final phase of conversion of the Hensol Castle Estate to luxury apartments and has been undertaken over the last few years.

The annual turnover at J H Leeke and Sons fell by 16 per cent to £61,868,698 from £73,940,948 the year before.

The Leekes Retail and Leisure Group opened a 180,000 sq ft flagship store in Coventry in September this year.

Emma Leeke, managing director of Leekes' retail business, said: "Initial trading at our new 'destination' Coventry store has exceeded all expectations, leading to a new recruitment drive for the store to ensure we consistently deliver on the Leekes point of difference.

"We acquired the former Makro building earlier this year and totally redeveloped the site, investing circa £8 million in order to create the Midlands' largest and most prestigious retail outlet in a 50-mile radius.

"We are confident the new store will hit its profit target within its first year of trading which, together with nearly 10 per cent like-for-like sales growth experienced across the retail business as a whole, will have a significant positive effect on the results of the overall retail operation in the current financial year.

"Despite the economic challenges of the recent months, we are delighted that sales in key home improvement lines have remained healthy.

"We have seen a steady increase in sales across all areas of our business, with furniture and furnishings following the big ticket items of kitchens and bathrooms. "There has also been a strong growth in bedrooms, carpets and home accessories.

"We are hopeful public confidence will continue to rise as we move into 2013 and shoppers are encouraged to keep spending for the economy to continue to show growth."

The Leekes Retail and Leisure Group is projecting the second half of 2012/13 to continue with the significant growth in overall profits, experienced in the first half of the year.

A spokeswoman for the business which employs 954 people across the UK said: "The £25 million financing package agreed earlier this year in March with Leekes' bankers, Lloyds Bank Wholesale Banking & Market and Barclays, has provided the war chest the group needs to continue its planned expansion across all the retail, leisure and property arms of the business."

Source : Rupert Hall - South Wales Evening Post
www.thisissouthwales.co.uk/Department-store-s-profits-drop-despite-new/story-17216629-detail/story.html