CLOTHING and home furnishings retailer Laura Ashley is offering its first dividend in nine years after a 39% rise in annual pre-tax profits.
Shares soared 13% to hit their highest level in 20 months as the group said its strategy of slimming down fashion to focus on home products was continuing to pay off.
The board's decision to pay a dividend of 0.5p a share "represents a major milestone in the recovery of the business", Laura Ashley said.
The group, famous for its floral fabrics, said sales for the year to January 28 dropped 11.6% to £211.1m largely due to the planned reduction in fashion in the UK.
However, like-for-like UK retail sales for the 10 weeks to April soared 11.2% on last year, thanks mainly to an improvement in the quality of the reduced fashion ranges, the group said.
Clothing accounts for 17% of the business in the UK, with furniture, home accessories and decorating making up the rest. The company currently has 180 UK stores.
Laura Ashley said the better-than-expected pre-tax profits of £6.1m for the year was largely due to cost cutting, the move away from fashion to home and increased efficiency. The figure for 2005 was £4.4m.
Chief executive Lillian Tan said: "Laura Ashley's improved profitability in 2005 is the result of management's focus on increasing efficiency, the store realignment programme and the ongoing cost
controls in all area of the business, whilst maintaining margins in a difficult retail environment.
"Although the retail market remains challenging, we believe our enhanced product offering,
increased productivity and new format store opening programme will enable us to increase top line sales in 2006."
Mail order and e-commerce now represents 13% of the total UK retail business, the group said.
While mail order sales were down 10.2% on the year, internet sales rose 45.8%.
The group took the decision to trim its fashion business after a number of turbulent years, during which 450 staff lost their jobs.
RSS News Feed