Pension reform to give a lift to Bonmarche

Extra cash for older shoppers could drive up sales. Picture: Jon Savage
Extra cash for older shoppers could drive up sales. Picture: Jon Savage
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Bonmarche, the over-50s focused womenswear retailer, has posted a jump in annual profits and said recent reforms to free up pension pots may boost sales.

The business said pre-tax profit before exceptional items lifted 10.4 per cent to £12.4 million for the year to the end of March.

“I am satisfied with the current year’s performance”

Beth Butterwick

Strong summer sales were followed by a slower second half of the year amid mild weather – a period which left many retailers finding it hard to shift unwanted heavy winter coats and boots.

The firm, which employs just over 3,100 staff across 292 shops and concessions, said its full-year same store sales grew 4 per cent, driven by its popular David Emanuel designer range and the introduction of a new menswear line.

Chief executive Beth Butterwick said she was “satisfied” with this year’s results. She warned that the overall outlook for consumer spending and the clothing market “remains uncertain given the macroeconomic challenges which are still to be overcome”.

But she added that over the coming year pension reforms and a rise in real incomes “may have some positive impact” on the business.

In April, the UK government introduced changes that mean pensioners can access their pension pots without having to buy an annuity, which would provide a lifetime income.

Bonmarche said it managed to raise average prices by 1.8 per cent over the year. It opened 29 stores that contributed £8.3m of additional sales to a business that saw overall revenues lift 8.7 per cent to £178.6m. The group added that this year it planned to open five stores and between 15 to 20 concessions.

It added that this year it wanted to grow its ranges of t-shirts, tops, trousers, lingerie and nightwear, as its offer had “previously been incomplete”.

Last summer it launched a range by designer Ann Harvey in 23 stores and online. It will follow this up with a plus sized range autumn/winter 2015 with, sizes ranging from 16 to 32.

It also plans to grow its menswear line, which has so far been rolled-out to 50 stores.

The group’s statutory full-year pre-tax profit showed a jump of 55 per cent to £12.4m, but this is primarily because it did not have to pay costs related to its November 2013 flotation as it did last year.

Butterwick said: “I am satisfied with the current year’s performance, in a year of contrasts between a strong performance in the first half, supported by good weather, versus a more challenging second half of the year.”

The firm recommend a final dividend of 4.5p per share, taking the full-year payment to 6.8p.

Brokerage Investec noted: “The full-year 2015 results highlight how far Bonmarche has come, with increased operational flexibility enabling it to deliver strong growth against a volatile and difficult trading backdrop.”