Wilko profits and sales fall in ‘incredibly difficult’ year

The general merchandise retailer reported a 65% slump in pre-tax profits to £11.4m in the year to February 1, 2020, exacerbated by a 5.6% decline in sales to £1.5bn.

Wilko, which ended the year with a 416-strong store estate, reported a 6.1% fall in like-for-like sales during the period. Sales of own-brand lines grew during the year and represented 55% of overall sales.

The value retailer’s EBITDA rose 7.5% to £48.5m during the year.

Chief executive Jerome Saint-Marc said: “There’s no denying it has been an incredibly difficult year for retail, but our continued focus on product development, controlling our margins, cash and costs and driving further operational efficiencies means we are making the right decisions to offset the challenges of the current retail market and realise our long-term vision.”

The retailer did not draw on any banking facilities during the year and ended the financial period with net cash in the bank of £94.1m. Wilko said its improved cash flow had been achieved by prioritizing investment “on key store openings, strategic investments in IT and customer proposition.”

Saint-Marc was appointed as chief executive in February – the first time someone has held the role at Wilko since Stuart Mitchell stepped down in 2012.

Wilko qualifies as an ‘essential’ retailer under government guidelines and has remained open during the coronavirus pandemic.

“We quickly invested in safety and protection measures, we’re providing full pay for all our team members without seeking government assistance to do so, we’re working hard to protect as many jobs as we can and we’ve met all rent and supplier obligations in full to date,” said Saint-Marc.

“It’s reassuring to see the Wilko way of pulling together in action despite the many challenges our team members face at work and at home. It goes without saying that I’m incredibly proud of each and every one of our team members and thank them for coming to work each day to serve the families who rely on us and who are grateful we remain open for them. We have experienced a mixed and dynamic trading performance during the pandemic but are confident that our robust planning means that we’re prepared for the future, whatever it may bring”.