Dobbies profits grow after sales shoot up

Published on Tuesday 10 February 2004 00:00

DOBBIES Garden Centres today reported a 13.6 per cent rise in full-year profits following a 20.2 per cent jump in sales at the Midlothian firm, which has set aside £50 million to fund its expansion.

Lasswade-based Dobbies, which currently has 17 stores across Scotland and England, also said it was keen to grow further, having invested 56m on new and existing centres over the past five years.

The group has also benefited from introducing a wider range of products at its centres, which stretch from Aberdeen in north-east Scotland to Atherstone in Warwickshire, which is the group’s newest store and the UK’s largest garden centre.

Along with gardening products, Dobbies now sells homewares and gifts such as books, ceramics and stationery.

For the 12 months to the end of October, the firm reported an adjusted pre-tax profit of 4.15m, up from 3.61m a year earlier once an exceptional gain of 2.4m following a property deal was factored out.

Earnings per share, adjusted for the exceptional gain in 2002, rose 12.4 per cent to 29.6p, and shareholders will receive a total dividend of 8.05p per share, a ten per cent increase over the previous year’s payout.

Sales rose to 46.1m, up from 38.4m last time, with a ten per cent rise in like-for-like sales, which strips out the effect of new selling space. Chief executive James Barnes said: "We continue to put the building blocks in place to develop and grow the business further over the coming years.

"We currently have a number of sites under investigation, two planning permissions submitted and a new store under construction."

Mr Barnes said owning the freehold on sites was an important part of Dobbies’ strategy, and the firm now has total financing in place of up to 50m to assist with its continued expansion. He added: "In the current year we will accrue the benefit of a full year's trading from our new Atherstone store and remain confident about our long-term future."

Along with the group’s desire to add new centres to its portfolio, Mr Barnes said Dobbies also has a number of "immature" stores which have further potential for redevelopment.

Alex Hammond-Chambers, the firm’s chairman, said Dobbies was keen to see a "certain level of growth" at its existing outlets before any further expansion of its garden centre base. He said: "At present we are building a new centre near Ayr and adding visitor attractions to our centres at Atherstone and Dundee.

"Furthermore, we have a good number of new opportunities that we are working on and development potential at some of our older centres."

Finance director Sharon Brown said if the weather followed its traditional pattern:

"We would expect that, whilst full year growth will not be affected, it is possible that profits in the first half will be lower than the same period last year."