UK: Topshop owner Arcadia suffers FY profit plunge
Philip Green, owner of retail group Arcadia, will not pay out a dividend this year following a 20% slump in full-year pre-tax profit.
Last year Arcadia paid a record GBP1.3bn dividend with Green taking GBP1.2bn - almost four times the annual operating profit of the business - for himself.
During the 53 weeks ended 2 September, profit was GBP202.4m (US$381.78m) compared to GBP253.8m a year ago. Operating profit was down 8.1% to GBP300.6m, said the company, which operates brands including Topshop, Burton, Dorothy Perkins and Wallis.
Full-year sales grew 1.8% to GBP1.8bn but on an underlying basis sales fell 1.9%. Margins fell 1.8 percentage points, the company admitted.
The result follows a heavy profit fall at Green's Bhs chain from GBP107m to GBP42m.
Green, however, maintained the results represented "a strong performance when set against a competitive retail market." He added that rivals had significantly spent on new space and also cited underlying cost inflation throughout the market.
"Our operating margin at 16.7% is still among the best in the industry," he added.
Sales have fallen since the year finished but margins have been maintained via tight stock control, the company said. In addition, cash generation is strong, allowing continued investment across the group's brands.
The group has so far dedicated GBP30m to spend on new space and refurbishments this year.
Its Topshop chain has hit the headlines in recent months as brand director Jane Shepherdson quit amid reports of a clash with Green over the appointment of Kate Moss as a designer.
Topshop, however, maintained that both Shepherdson and Green were keen to get Moss on board.
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