Wilkinson's profits rise 21% but fall short of expectations

Pre-tax profits at Wilkinson have risen 21% to £27.5m in the past year but came in lower than expected, the retailer has said in its annual review.

For the 53 weeks up to February 6 2013 sales fell slightly from £1.57bn to £1.53bn, a decline of 2.3% “reflecting a tough retail environment”, Wilko said.

Staffing costs rose by £5.5m, largely driven by an increase in wages, and despite reducing headcount by around 332. However Wilko managed to cut total sales costs by £42m.

During the year the retailer refurbished 27 stores and opened seven new stores bringing the total number to 372. It also trialled new-look concept stores at Crawley, Edmonton Green and Pwllheli and said it is “assessing these changes for future store developments”.

Profits still remain less than half of the £60.8m reported in 2011.

In June 2012 Wilko’s CEO Stuart Mitchell left the retailer after six years.

“The good news is that we continue to trade solidly with respectable sales, a loyal customer and supplier base, controlled costs and a strong balance sheet. Our vision for 2012/13 was a strong one: to deliver extraordinary shopping in the heart of the community. This year has seen us take decent steps forwards in our pursuit of this,” family directors Karin Swann and Lisa Wilkinson said in a joint statement.

“2012 has been another challenging year in which the business has had to face some difficult decisions - but significant achievements have been made.  As always, this progress would not have been possible without the hard work and commitment of our 23,000 team members, suppliers and family shareholders,” said Wilko’s chief finance officer Ian Ellis.

Compensation for loss of office amounting to £406,000 was also accounted for the annual review, although Wilko declined to comment on the details of the recipient.