The Range owner confident of sales success but Homebase rescuer struggles to return to profit
The owner of The Range has forecasted a continued rise in its sales as it carries on taking advantage of “high profile retail casualties” after rescuing Wilko and Homebase.
CDS (Superstores International) hit the headlines again recently when it snapped up part of strike DIY chain Homebase out of administration.
The move came after the Plymouth-headquartered retailer, which is owned by billionaire Chris Dawson, also rescued the Wilko brand last year.
Boosted by the addition of Wilko and the opening of 12 new stores, the owner of The Range achieved a revenue of £1.29bn in the the year to 28 January, 2024, according to newly-filed accounts with Companies House.
The new results come after the business posted a revenue of £1.26bn for its prior year.
However, despite its sales success, the owner of The Range saw its pre-tax loss widen from £18m to £22.8m over the same period.
The two loss-making years come after the firm raked in a pre-tax profit of £102.8m in the 12 months to 31 January, 2022.
Rising costs put pressure on earnings
On its trading during its current financial year, the owner of The Range said: “The group continues to face increases in its costs of goods, alongside the uncertainty surrounding energy costs.
“The material increase in National Living Wage is further squeezing profitability within the group.
“Whilst this impacts the group, it also has the potential to impact our customers who are seeing their disposable income squeezed.
“The group is well positioned to withstand these challenges operating in the value retail sector.
“Post period-end trading has been very strong with like-for-like sales above our budgeted rates.
“The group’s positioning as a value retailer has ensured the strong demand for our products and services continues throughout these times of continued uncertainty.
“The group continues to look for opportunities to expand its growing store portfolio and has gained market share over the last period on the back of some high profile retail casualties in the market.
“The director expects 2024/25 will show further growth in sales from continuing operations as the group continues to explore all facets of retailing.”
A dividend of £25m was paid in the year, which the company said was to part finance the construction of a distribution centre in Stowmarket.
During the period, the average number of people employed by the company rose from 11,831 to 12,238.
The Range’s parent company, Norton Group Holdings, posted a pre-tax loss of £14m for the year, having lost £4.2m in the prior 12 months.
The Range ‘striving’ for strong financial performance
A statement signed off by the board said: “The period… has been challenging as the business dealt with the continuing cost-of-living crisis which saw household incomes squeezed on the back of rising energy and commodity prices.
“The poor summer weather also had a detrimental impact on seasonal departments with customers choosing not to invest in patio and outdoor leisure lines.”
The Range added: “During the prior period, the business faced higher levels of discounting on products where price matching against competitors was undertaken as the industry sought to reduce its overall stock levels.
“These challenges have subsided in period which meant a return to ‘normalised’ levels of discounts across all departments resulting in an increased margin on these products.”
It also said: “The FY25 actuals plus forecast show a material uplift in both revenue and EBITDA for the period as the business continues on its journey of store expansion across the United Kingdom.
“One-off costs and operational in effieicneis experienced within the last two financial periods have been eliminated as the group strives to deliver a strong financial performance in the current period.”