John Lewis of Hungerford plc (LON: JLH) have seen their shares dip despite reporting increased revenues.
The kitchen and bedroom firm said that they had reported an annual narrowed loss, as it alluded to wider retail challenges as a dampener on trading.
For the year ended June 30, the company’s pretax loss narrowed to £228,640 from £373,838 but revenue increased 24% to £8.3 million. The figures compared to the 10 months to the end of June 2018.
The firm said that financial 2018 revenue was lower due to a year-end change to June 30 from August 31.
For its new financial year, the company added that despatched sales and forward orders for the initial 24 weeks totaled £3.8 million, which fell 17% from a year ago.
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John Lewis of Hungerford said the results reflect “mixed fortunes within the business”, with the many of the stores outperforming, though it acknowledged several showrooms were underperforming.
“The last twelve months have seen the company operating within an unprecedented retail landscape. Although the economy is not technically in recession, the current uncertainty within the economy, mainly resulting from Brexit and structural issues facing retail in the high street, has made it more difficult for retail than the recessions in 1990 and 2008,” Chair Gary O’Brien said.
“We have seen significant store closures: 2,868 stores have closed in the first half of 2019, and numerous financial restructurings during this period – with some of the High Street’s best-known brands being affected. We have seen this within our own sector of kitchen retail with several companies reporting challenging conditions,” O’Brien added.
Notable departures from the UK high street came as Thomas Cook collapsed in September.
Earlier this year, the travel operator said that it was set to close 21 stores, placing 300 jobs at risk. It had been under pressure recently with falling profits – in May the travel group reported a £1.5 billion loss for the first-half of the year, and this led to its ultimate demise.
John Lewis of Hungerford said economic conditions are continuing to be difficult and the December UK general election has “further deteriorated the retailing environment”.
John Lewis of Hungerford said design quotation activity within the business is 10% up on the previous year. This, it said, “points to an underlying latent demand”, and noted decisions are being delayed by customers as a result of the current UK political climate. It expects to see order conversions to improve once there is more clarity around Brexit.
“Whilst the impact on consumer demand continues, we are reacting, by reducing costs in the business and increasing flexibility to respond to changing demand. The board continue to monitor the situation closely and work to improve efficiency and agility in the business to ensure the company is well set to benefit from any improvement in consumer confidence,” said Chief Executive Officer Kiran Noonan.
Shares of John Lewis of Hungerford trade at 0.5p dipping 4.57%. 19/12/19 13:58BST.
