Dobbies profits increase amid tough conditions

Trading at Dobbies has softened in recent months as poor weather this summer battered the garden market.

The retailer notched up increases in both sales and profits in the year to February 29 but Dobbies chief executive James Barnes said that spending on gardens had slowed since year end.

Barnes told Retail Week: “Given the recent weather, there’s no surprise that gardeners have been spending less in their gardens this season.”

However, he added the company’s restaurants business, which makes up 20% of sales, had enjoyed a strong summer.

“Dobbies is renowned as a day-out destination and the feel-good factor of time off work over the summer holidays has helped families to enjoy days out together – particularly spending time in our restaurants,” said Barnes.

Pre-tax profit increased 6% to £10.5m at Dobbies, as sales jumped 22% to £136.4m in the year.

EBITDA rose 11% to £18.7m. The retailer opened seven new stores in the period, which directors said had boosted sales.

Barnes said: “Despite a more challenging trading environment, investment in our business was our key focus last year. We have introduced more value lines into the business with our quality but value-driven Essentials brand which has gone down well with customers.”

Earlier this year Dobbies unveiled plans to open its first joint store with Tesco, covering 130,000 sq ft, and plans for a further dual store are underway.

Barnes’ stated aim is to become a £1bn retailer with 100 stores within the next 10 years, as it increasingly focuses growth in the south of England.

However Seymour Pierce analyst Kate Calvert sounded a note of caution of Dobbies’ growth.

“Most of Dobbies growth is through new stores,” she said. “Home, DIY and garden are very macro-driven industries so the poor weather patterns are not good in a sector that’s discretionary to a degree.”