Furniture Village has released details of strong results for the year ending 2nd April 2017, with order intake growing by over 10% to nearly £300m, driven by uplifts in both LFL store volumes and online, along with significant increases from new stores.
After opening three new stores during 2015/16, a further seven were opened during the 2016/17 financial year – a significant 25% uplift in the number of stores, from 40 to 50 in just a two-year period. Furthermore, two new stores in Chelmsford and Rugby are due to open in the 2017/18 financial year.
The retailer says that this growth has necessitated a step change in the infrastructure and allied operating cost base of the business, with additional costs also associated in the short term with the launch of a new online platform during the year and a major ongoing project to replace its ERP system.
These factors led to a commensurate fall in underlying trading EBITDA to £6.6m, yet the retailer says that the investment in both new stores, online and in the new ERP system will facilitate "much improved efficiencies and profitability" in the years ahead.
The closing cash position was £16.7m, after investment in fixed assets of £10.7m, with the business also remaining bank debt-free.
Peter Harrison, CEO of Furniture Village, says: “The muted GDP growth prospects for the UK, as outlined in the recent Autumn Budget, were a stark reminder of the combined impact of inflationary pressures and an allied reduction in real wage growth on both disposable incomes and business and consumer confidence, these factors hardly contributing to a buoyant retail market. Without doubt, the trading environment is set to become more challenging and, as ever, we must leverage the significant investments made in recent years in stores, online and in our systems to increase productivity and efficiencies, and continue to grow underlying profitability and cash, whilst remaining true to our ethos of ‘doing in properly’."
According to Peter, the 2017/18 financial year has started strongly and Furniture Village is performing "ahead of expectations".