Fashion and homewares retailer Laura Ashley has revealed it barely broke even after “difficult” trading and hefty writedowns on a property sold in Singapore saw profits crash to just £100,000.
The group, which is famous for its floral print designs, saw annual statutory pre-tax profits tumble from £6.3 million the previous year as retail like-for-like sales slid 0.4%.
But its under-pressure shares surged 15% as underlying profits came in better than feared, despite dropping a third to £5.6m for the year to June 30, against £8.4m the previous year.
The group said its statutory profits were dragged lower by a £4.7m hit on the sale of the Singapore property, which had originally been bought to become its Asian headquarters under plans to expand into the region.
Laura Ashley chairman Khoo Kay Peng said “difficult trading conditions” seen in the first half had continued into the final six months, with “margin pressure and the impact of a changing retail landscape” also pushing profits lower.
He said trading was set to remain “challenging”, but added the group is “resolutely confident in the underlying strength of this much-loved brand”.
Sales since the year-end have been in line with its expectations, the group said.
UK retail sales dropped 6.3% to £236m over the year to June 30 amid uncertainty in the market and the closure of stores.
Laura Ashley opened one store and shut eight across the UK over the year and revealed it plans to close another five in the year ahead, with two new outlets opened.
It said furniture sales were knocked in particular by weak consumer confidence, falling 4.1% on a like-for-like basis as shoppers put off buying expensive items, such as sofas and beds.