30 JUNE 2018

Dear Shareholder

I am pleased to be able to provide a positive trading update for the first six months of 2018.
  • After a very difficult start to the gardening season in March and April when the weather was cold and unsettled, trade in May and June has been exceptionally strong. Total sales for the first half of 2018 were 14% higher than 2017 and 6% higher on a like for like basis, excluding East Bridgford Garden Centre. Total sales increased by 14% in the UK and 5% on a like for like basis. It was also pleasing that sales in the Channel Islands rose by 9%.

  • The Group's overall sales growth in the garden centres was again higher than the industry in the first half of 2018 according to the latest report from the Garden Centre Association. There were notable outperformances in the Plants, Garden Sundries and Home categories.

  • At the end of March 2018 we opened East Bridgford Garden Centre near Nottingham after a £4.5m fit-out. The Centre has clearly resonated with customers and by the end of June it had already reached a turnover of nearly £4m. We are optimistic that it will produce a turnover greater than £10m in its first year of trading. We will be spending a further £0.5m on the Play Barn in the second half of 2018.

  • At the beginning of May, we acquired a 25% shareholding in the company that owns Orchard Park Garden Centre in Gillingham, Dorset for just over £1m, with a put and call option to acquire the remaining 75% of the shares in 2020. This is a centre producing a turnover of £2.5m that we believe can grow significantly within five years with the right investment. It is a leasehold site that we are now managing and operating on a daily basis. There is planning permission to extend the garden centre that we are currently reviewing.

  • The improvement in profits in the first half is likely to be subdued, as I signalled in the Annual Report, not least because of the introduction of the retail profits tax in Jersey and we therefore remain cautious about the year as a whole. Although we have enjoyed a very welcome rebound from the poor trading conditions earlier in the year, many of the underlying concerns about the UK economy remain.  Clearly the Wyevale acquisition will have a material effect in the second half, and we expect it to be the driver of significant profit growth in the medium term.


Yours faithfully,

Richard Hemans 
Group Finance Director and Company Secretary