High street retailer Wilko has announced a loss of £65 million after "exceptional items and movements of derivative financial instruments", the company has reported.
However, the business has seen sales rise 7.1% as the online offer expands and own label products grow in popularity, with the website also posting significant uplift in both visits and conversions. and like-for-like sales rose for a third consecutive year, up by 3.7%.
Wilko reported accelerating store openings with 20 new outlets being added to the estate during the year, taking the total estate to 416 stores.
Operating profit was down by £5 million to £13 million, reflecting continued investment in stores.
The company referred to its new strategy known as "Shape Our Future 2030" which was created to take the business to the next stage of growth. In this the company has simplified its leadership structures in store and closed three stores to ensure the business has a store portfolio that delivers on its new strategy of the way it reaches and transacts with its customers.The impact of the store management restructuring, store closures and reduction in the fair value of its property portfolio, resulted in the Group taking a number of significant one-off charges amounting to £36.5 million which have been classified as exceptional in the financial year.
Chief operating officer of Wilkinson Hardware Stores Limited, Sean Toal said: "Despite the tough trading environment, we have grown the business and won more customers as they are attracted to the quality and value of our offer. Our online business is growing rapidly and the popularity of our own brand products is rising and surpassed £1 billion of sales [VAT incl] in the year."
"Our significant investment in IT infrastructure is beginning to bear fruit and we are transforming the business as our customers demand more both in terms of quality and value. We are excited about the future and look forward to taking the business to its next stage of growth," said Mr Toal.
During the past year, Wilko has invested in excess of £60 million in the business to capitalise on future growth. It forged strategic partnerships with new suppliers including Hybris who have redesigned the company’s website and Wincanton, who have been hired to provide improved delivery performance and better value for money.
A further exceptional charge of £39.9 million was also incurred due to a notional loss on some foreign exchange derivatives relating to dollar purchasing.
"While we have taken some exceptionals during the year, the business is now set up to be in good shape as we undertake our new strategy for growth. We are excited about the new opportunities that lie ahead of us and look forward to bringing better value, and better quality designed products our customers," said Mr Toal.