Laura Ashley, the high street retailer that has been struggling to transform its fortunes for years, rewarded its long-suffering investors yesterday with its first dividend payout since 1997.
It has taken 11 chief executives and a major strategic shake-up in the UK and abroad but finally the quintessentially British brand believes it is back on track. The group is using the £22.1m cash surplus on its balance sheet to resume dividend payments, starting with a 0.5p-a-share handout.
Mike Kingsbury, the chief operating officer, said the company "was hoping" it had cemented its recovery. "It's early days, but we're moving in the right direction," he added. Shares in the company bounded 15 per cent higher to 19.25p.
The group, which is focusing on growing its home furnishings business, reported a 39 per cent jump in underlying pre-tax profits to £6.1m. The figure excluded the benefit of property gains. The company has cut the cost of doing business by switching its store estate to cheaper locations off main high streets.
Lillian Tan, the chief executive who has ended the company's revolving boardroom door policy, said the decision to cut its exposure to fashion was paying off. The group is anxious to be known for more than just the floral-sprigged tea dresses that made its name in the 1960s and 1970s.
Its decision to reduce the size of its fashion business meant group turnover dropped 12 per cent to £211m. Fashion is now the smallest division of its business, accounting for 17 per cent of sales. Its other revenue streams are furniture, home accessories and decorating.
Although demand has dropped for home furnishings because of a softer do-it-yourself market, the group is benefiting from the shift from minimalism to more decorative, vintage-inspired styles. That said, fashion drove the 11.2 per cent rise in underlying sales in the 10 weeks to 8 April.
Separately, Austin Reed, which is also attempting to return to former glories, revealed it had edged back into the black last year. It reported pre-tax profits of £228,000 for the 12 months to 28 January against losses of £7m the previous year, despite a drop in revenues to £103.2m from £110.5m. The improvement in its fortunes prompted its shares to rally 9 per cent to 98.5p.
The company has been a takeover target in the past and the broker Seymour Pierce suggested yesterday its eradication of debt meant it could be back on "someone's shopping list".Reuse content