LONDON (Alliance News) - Shoe Zone PLC on Wednesday reported a slight rise in profit in its last financial year as it booked slightly lower distribution costs and finance expenses, but revenue slipped as it continues cutting the size of its store estate.
The value shoe retailer said pretax profit in the year ended October 1 rose to GBP10.3 million from GBP10.1 million the year before, although revenue fell to GBP159.8 million from GBP166.8 million.
Profit was helped by a decrease in distribution costs and finance expenses, pushing product gross margin up to 62% from 61.5%, but revenue was hit by the planned closure of some loss-making stores and difficult trading conditions in the first half.
Shoe Zone plans to operate 500 stores in total and has been closing, opening and relocating stores in order to reach that target. It finished the year at 510 stores, after reducing store numbers by a net 25 branches.
Still, the average transaction value improved by 5.0% in the year, while online revenue increased by 11%.
Shoe Zone added that it saw an encouraging performance from its trial of the larger, out-of-town 'Big Box' stores, having opened two stores during the year and one post period-end.
"We continue to make good progress on our strategic objectives and have traded in line with expectations for the first quarter of the year. The board remains positive for the outlook of the group and looks forward to updating shareholders on the progress of our Big Box trial," Chief Executive Nick Davis said in a statement.
"The outlook for consumer spending looks challenging with the current difficult economic conditions likely to continue. Despite this, we are well positioned given our strong value proposition that has proven to be robust in challenging market conditions. We are exposed to fluctuations in the value of sterling but have put significant work into managing the risk through foreign currency hedging and re-sourcing. While we anticipate this pressure may be here for some time we expect to broadly maintain our gross margin percentages," the company added.
Shoe Zone will pay a total dividend of 10.1 pence, up from 9.7p the year before, plus a special dividend of 8.0p, up from 6.0p the year before.
Shares in Shoe Zone were trading up 2.7% at 187.50p on Wednesday morning.
By Karolina Kaminska; karolinakaminska@alliancenews.com; @KarolinaAllNews
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Shoe Zone (SHOE)