Laura Ashley FY profit slumps but online and fashion sales rise

Laura Ashley posted a drop in full-year profit on Wednesday as revenue fell amid challenging conditions, although the online and fashion segments were a bright spot.

In the year to 30 June, profit before tax and exceptional items slid to £5.6m from £8.4m the year before, while statutory pre-tax profit slumped to £100,000 from £6.3m. Revenue declined to £257.2m from £277m, with total like-for-like sales down 0.4%.

Still, online revenue rose to £59.7m from £57.3m, with LFL online sales up 4.1%. Meanwhile, fashion LFL retail sales were 9.7% higher than a year ago.

Chairman Tan Sri Dr Khoo Kay Peng said: "As set out at the time of the interim results, the trading environment for the first half of the year was challenging and the board expected these difficult trading conditions to continue into the second half of the year. This proved to be the case and, given the softer trading environment for the year ended 30 June 2018, we are disappointed to report a fall in profits. Continued margin pressure and the impact of a changing retail landscape have contributed to the overall reduction in profit before tax.

"We are, however, encouraged by the progress and continued growth being made by our online business and will be launching a new digital platform in the weeks to come. We are also pleased with the 9.7% like-for-like growth of our fashion business in what is an extremely competitive sector."

Also on Wednesday, Laura Ashley announced an agreement to sell its commercial property in Singapore for SGD54.5m (£30.3m).

The property in Singapore was initially purchased with a view to having an Asian headquarters based there to help expand into the Asian market, including China and India. The company said that while expansion into the Asian market continues to be its strategy, the retail environment, both domestically and internationally, has changed and it now believes this is an appropriate time to dispose of the Singapore property.

At 0908 BST, the shares were up 24% to 5.37p.