TRADING STATEMENT HALF YEAR 2022
TRADING STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2022
- The significant impact on our business of COVID-19 and its unwinding has been seen clearly during the first half of 2022. All restrictions were ended in the UK at the end of February, Government support came to an end (to the extent it hadn't already), and our customers were able to pursue other activities that were previously restricted, such as foreign travel, which has had a direct impact on spending in our garden centres.
- Having a full period of trading generated an increase of 291% (284% like for like) in restaurant sales, but the profit from this was offset by the ending of Government support, meaning that there was little overall profit impact. Meanwhile sales in the garden centres declined by 8% (10% like for like), which has had a significant negative effect on profit. Overall like for like sales increased by 1%, and we continued to outperform the Garden Centre Association (GCA) when comparing sales with 2019, the most recent comparable trading year.
- This outcome was foreseen by Alan and his team, and we prepared accordingly. As a result, we do not have serious concerns about stock, and our cash flow has remained strong. We have continued with our capital expenditure programme and with integrating the Mere Park and Blackdown acquisitions. The significant expansion and refurbishment of Newbridge Garden Centre is almost complete, and we have redeveloped the retail spaces and restaurants at Melbicks and Sanders Garden Centres. In the second half of 2022, we plan to redevelop Mere Park and Blackdown Garden Centres to bring them up to the Blue Diamond standard, as well investing in the restaurants at Wilton, Cadbury and Bridgemere.
- Chairman Simon Burke commented, "The pandemic was very beneficial for garden centres, and it was inevitable that the ending of restrictions would lead to time and money being spent elsewhere. The UK economy has also weakened in 2022, with high inflation putting pressure on the UK consumer and leading to margin pressure and large cost increases, particularly in payroll and energy costs. Blue Diamond has not been immune to this and we are expecting profits for 2022 to fall back towards the level reported in 2020, which is still materially ahead of 2019 and in line with our pre-pandemic projections. We continue to invest in the business and remain confident in the outlook for Blue Diamond.
Richard Hemans MA FCA C Dir
Group Finance Director & Company Secretary
Direct: 01481 210285