... but the rain fails to sink Wyevale's rising profit

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The Independent Online
WYEVALE GARDEN CENTRES, the biggest company selling plants, bulbs and garden appliances from out-of-town retail parks, managed to smile through the bad weather of April and June to lift its half-yearly profits by 9 per cent to pounds 7.2m.

Sales rose by 18.6 per cent to pounds 42m on a volume increase of 4 per cent, but price promotions and a shift of product mix reduced gross margins.

The board, led by chairman Brian Evans, said Easter was "a washout" with flooding in many parts of the country, and June was one of the wettest on record. But May was good, with sales up 30 per cent and strong sales of lower-margin "indoor products". Sales of barbecues, houseplants, books and giftware helped offset lower sales of high-margin "core outdoor products" such as plants, bulbs and seeds.

Boosting the half-year dividend by 10.1 per cent to 4.57p, the company said it was bullish about the current half-year period due to rising sales in July and the warmer weather so far this month.

Wyevale - like its quoted rival Country Gardens earlier this week - brought forward its figures by a month after its shares slid from a peak 320p in March on speculation of a trading setback due to the weather. Profit warnings had already come from garden hose group Hozelock and Flying Flowers. The move appears to have succeeded in reassuring the market, as Wyevale's shares recovered 17.5p to 255p yesterday and Country Gardens perked up 4.5p to 194p.

Wyevale, which has a 3 per cent share of the fragmented garden centre business, against Country Gardens' 1.5 per cent, has a policy of adding new outlets through acquisition and expanding older outlets. In March it bought Great Gardens of England, including Syon Park garden centre, and says its progress has been good.

Wyevale's house broker, BT Alex.Brown, is looking for profits of pounds 9.8m this year, followed by pounds 11.1m in 1998/99. The forecast puts its shares at 252p on 14.7 times prospective earnings.