Panel raps Wyevale over tax accounting

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Wyevale Garden Centres was yesterday rapped on the knuckles by the authorities over its accounting policies as the operator said it was confident of growing market share.

The upbeat statement came as Wyevale, which last year bought rival Country Gardens, conceded that a strong second quarter had failed to mask a weak first quarter characterised by a period of heavy rainfall and low temperatures.

"March, a key gardening month, was particularly badly affected by the cumulative effects of this unprecedented period of rainfall, which started in mid-September and continued unabated until early April," the company said.

Like-for-like sales in the second quarter rose 10.6 per cent compared with a 28 per cent drop in the first quarter, producing a 2.9 per cent fall over the six-month period. Wyevale shares closed down 23.5p at 454p.

Nevertheless, Brian Evans, the chairman, said he was "confident" the company had the correct strategy to increase market share and profitability.

Separately, Wyevale was forced to restate last year's figures after an investigation into its accounts by the Financial Reporting Review Panel found its policies on depreciation and deferred tax to be out of step. Depreciation charges had to be raised by £821,000.

In the 26 weeks ended 1 July, the group reported a pre-tax profit before goodwill of £14.1m, up from £10.8m. Sales jumped 68 per cent to £98m while gross margins fell to 46.6 per cent from 47.7 per cent.

Without the contribution from Country Gardens, Wyevale's like-for-like sales in the first half of the year grew 4.7 per cent.