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The growth in operating profits across all
segments, reflects another period of sound performance and growth. The
period under review had been challenging.
Retail activities: household goods and building
supplies
The United Kingdom (UK) retail operations had a
good result, especially against the background ofthe turnaround to
profitability achieved by the retail division, comprising Harveys,
Cargo and Beds Division (Bensons, Bed Shed and Sleepmaster). The
retail division’s performance should be viewed in perspective to a
substantial reduction in net trading space caused by the closure of
loss-making stores and Beds concessions lost. The results confirmed
that the remedial steps previously taken have successfully addressed
some key supply chain issues that adversely impacted on the business
in the past. Improvements include: improved image, changed product
offerings, staff training, aggressive advertising and better supply
chain and customer complaint management which resulted in enhanced
service levels, shorter lead times and substantially reduced goods
returns levels. The rationalisation of distribution centres and
optimisation of logistics capacity utilisation and management changes
have also had the desired results. The entire property portfolio is
being actively managed in terms of store closures, trading space
reductions and re-allocations in order to optimise the coverage of the
entire retail division’s footprint. Due to its importance, it is
appropriate to report on Harveys’ Winter Sale results, even though
they do not fall within the reporting period. Confirmed sale orders at
good margins, over the period from December 2007 to February 2008
represent an 8% year-on-year increase which were achieved with 5%
fewer staff and 8% less trading space. These results are in contrast
to the trading updates of listed competitors which announced
like-for-like sales figures over the comparable period ranging from
16% to 22% down on last year. The Cargo chain achieved pleasing
results.
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