TRADING STATEMENT YEAR END 2022
TRADING STATEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER 2022
- After the unprecedented impact of the pandemic on sales in 2020 and 2021, trading conditions were expected to normalise in 2022 as the pandemic receded and consumers returned to their pre-COVID activities. However, the UK economy was then undermined by high inflation and rising interest rates, caused by disjointed post-pandemic reopening and the war in Ukraine.
- This meant that sales declined versus 2021 as people spent less time in their homes and gardens, and had less disposable income. Nevertheless, sales have grown significantly since 2019, which is a more relevant benchmark.
- Total sales increased by 1% against 2021, which means that our annual turnover was nearly £260m. Like for like sales fell by 2% overall as a decline of 8% in the garden centres was offset by an increase of 58% in the restaurants, which were open for the full year. The acquisitions of Blackdown Garden Centre Ltd and Van Hage & Company Ltd, along with 12 months' trading for Mere Park Garden Centre, contributed over £8m of sales.
- Compared with 2019, like for like sales growth was 30%, which underlines the progress the Group has made as we have invested in the portfolio over that time. We again outperformed the Garden Centre Association, the industry benchmark, in both garden centre and restaurant sales growth against 2019, with excellent performances from the Fashion and Home categories.
- We have continued to enhance our stores, with investment in the expansion of Newbridge Garden Centre, the full refurbishments of Sanders, Melbicks and Mere Park, and the development of new restaurants at Wilton, Cadbury, Springfields and Bridgemere.
- We acquired Blackdown Garden Centre Ltd in January 2022 and will carry out a redevelopment of this site in 2023. We also acquired Van Hage & Company Ltd, a group of three premier garden centres, in November 2022 and will invest significantly in them this year.
- Chairman Simon Burke commented, "We expected sales to decline in 2022 as consumers resumed their pre-COVID activities away from the home and garden, but this was magnified by the impact of the inflation shock and interest rate increases on consumer sentiment. Inflation has also compressed margins and driven our costs higher, particularly payroll and energy. Together this means that 2022 profit before tax will be somewhat below that for 2020. In the short term we are expecting further pressure on the UK consumer from lower real incomes, and continuing increases in costs, which mean that the outlook for 2023 is uncertain. We will continue to invest in our superior offer and portfolio and make selective acquisitions that increase shareholder value. In the medium to longer-term, the growth prospects for Blue Diamond remain compelling.
Richard Hemans MA FCA C Dir
Group Finance Director & Company Secretary
Direct: 01481 210285