Wilko posted a pre-tax loss due to one-off costs as sales rose, in what chief operating officer Sean Toal described as a “tough trading environment”.
Retail Week can reveal the general merchandise chain recorded a pre-tax operating loss of £65m in the 12 months ending February 3, 2018.
The retailer attributed its fall into the red to exceptional costs comprising a £40m hit on currency forward contracts and £36.5m worth of costs incurred by its store management restructure, property costs and early exit of its distribution contract.
Wilko recorded a 28% decline in operating profit to £13m due to continued investment in its stores and IT infrastructure, including a redesign of its website.
The value retailer’s EBITDA rose 2.7% during the period to £50.2m, spurred by a 7.1% increase in turnover to £1.6bn and a 3.7% upswing in like-for-like sales.
Over half of the retailer’s sales came from its own-brand lines and its ecommerce sales rose 47%, spurred by its click-and-collect service.
Toal told Retail Week: “Despite the tough trading environment, we have grown the business and won more customers as they are attracted to the quality and value of our offer.”
The retailer opened a net of 16 new stores during the year and ended the financial period with a 414-strong store estate, with a further seven store openings and two relocations slated for its current financial year.
The retailer kicked off its new strategy, ‘Shape Our Future 2030’, at the beginning of its last financial year. It is focused on a more simplistic leadership structure and dedication to product and design.
To date, seven store closures have taken place as a result of the strategy, four of which were closed in the current financial year.
“While we have taken some exceptionals during the year, the business is now set up to be in good shape as we undertake our new strategy for growth,” Toal said.
“We are excited about the new opportunities that lie ahead of us and look forward to bringing better value and better quality designed products to our customers.”
The retailer said trading in the current financial year to date was in line with management expectations.
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