Shoe Zone highlights 'burden' of business rates as profits fall

Discount footwear retailer Shoe Zone posted a rise in full-year revenue on Wednesday but a drop in profit as it pointed to the "burden" of business rates.

In its preliminary results for the 53 weeks to 5 October 2019, the company said revenue rose 0.9% to £162m while statutory underlying pre-tax profit fell to £9.6m from £11.3m, which was a touch better than the retailer’s revised expectations.

Earnings per share declined to 11.4p from 19p in 2018 and the group proposed a final dividend of 8p per share, in line with the previous year.

Chief executive Anthony Smith said: "Despite it being a difficult year for Shoe Zone, the business has achieved revenue growth, and delivered underlying profit before tax marginally ahead of our revised expectations following our revaluation of freehold property.

"Town centre stores remain an important component of our proposition and we don't agree with doomsayers referring to the inevitable ‘death of the high street’. However, it's stark that over the past 10 years the rates paid as a proportion of our rent has increased from 26.4% in 2009 to 54.3% in 2019. Despite rationalising our store estate, the value of rates paid has increased by £700k despite having 38% fewer stores and 30% lower sales."

Smith said it was "vital" that the government "recognises the impact of the increasing financial burden placed on businesses on the High Street by successive governments and their policies".

Shoe Zone said it had made a "solid" start to the year and is trading in line with market expectations.

At 0940 GMT, the shares were down 1.9% at 158.88p.