Revenue Increases At The Range; Profitability Declines

CDS (Superstores International) Ltd, the trading subsidiary of the parent company of The Range, Wilko and the newly-acquired Homebase business, has filed its annual accounts at Companies House for the 52 week period ended 28th January 2024.

Revenue reached £1.297m, up from £1.263m in the previous financial year. The £34m increase was primarily driven by the opening of 12 new stores and the strong underlying performance of the business. The Range has opened six further stores since the period ended and trading has been strong, with like-for-like sales above budgeted rates.

Pre-tax losses increased from to £22.8m from £18m, a stark contrast to the £102.8m in pre-tax profits for the year ended 31st January 2022. The business noted the elimination of one-off costs and operational inefficiencies experienced within the last two financial periods, stating, “During the prior period, the business faced higher levels of discounting on products where price matching against competitors was undertaken as the industry sought to reduce its overall stock levels."

“These challenges have subsided in period which meant a return to ‘normalised’ levels of discounts across all departments resulting in an increased margin on these products."

Staffing levels increased from 11,831 to 12,238 during the year.

The accounts said that trading had been challenging during the year as the cost-of-living-crisis saw household incomes squeezed on the back of rising energy and commodity prices. The poor summer weather also had a detrimental impact on seasonal departments with customers choosing not to invest in patio and outdoor leisure lines.

The group predicts a 'material uplift in both revenue and EBITDA for FY25' as it continues to expand across the UK, noting that it continues to face increases in its costs of goods, alongside the uncertainty surrounding energy costs.

The National Living Wage is expected to squeeze profitability and its impact on customer spending has been noted, but the business said, “The group is well positioned to withstand these challenges operating in the value retail sector", adding, “The group’s positioning as a value retailer has ensured the strong demand for our products and services continues throughout these times of continued uncertainty."

“The group continues to look for opportunities to expand its growing store portfolio and has gained market share over the last period on the back of some high profile retail casualties in the market."

The wilko.com domain and IP rights were acquired out of administration on 13th September 2023, enabling the growth of the group's omnichannel offering, alongside the opportunity to open smaller store concepts in high streets and shopping centres under the Wilko brand. Five Wilko branded stores have been opened since the acquisition and a more aggressive expansion is in the pipeline. 

A £25m dividend was paid and used to partially finance the construction of a distribution centre in Stowmarket. 

Source : Insight DIY

Image : Nigel Harris / iStock / 1997974329

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