Bonmarche FY profit slumps nearly 40%

Clothing retailer Bonmarche reported a near-40% drop in full-year pre-tax profit as it highlighted a more challenging backdrop than it had been expecting, with wage inflation, Brexit and unseasonal weather all contributing factors.

In the 53 weeks to 1 April, pre-tax profit fell to £5.8m from £9.6m the year before, on revenue of £190.1m, up 1.1% from 2016. Online sales grew 2.2%, but store like-for-like sales were down 4.3%.

The board recommended a final dividend 4.64 pence per share, taking the total payout for the year to 7.14p, in line with fiscal 2016.

Chief executive Helen Connolly said: "A combination of internal and external factors over the past year prevented us from improving at the rate we had aimed for. However, we believe that the business is now well positioned, with a compelling proposition and robust plan.

"As outlined previously, it is clear that the direction of travel is broadly right, albeit the effectiveness of execution needs to improve. Our update today provides further detail on the areas where we see the greatest opportunities and how we are already beginning to address these."

The company pointed to a more challenging market backdrop than it had been expected, citing wage inflation, uncertainty linked to the referendum on Brexit and unseasonal weather patterns as some of the reasons why it was not able to secure the increase in market share necessary to deliver the result it had aimed for.

Still, Bonmarche said trading since the start of the new financial year has been in line with the board's expectations and the financial position of the business continues to be sound, with no net debt and a balance sheet which provides a stable platform for the future.