AIM-listed value women's fashion retailer Bonmarche posted a 38.1% jump in full-year pre-tax profit on Tuesday even as revenue declined, as the online segment provided a boost in tough markets.
In the year to the end of March 2018, pre-tax profit increased to £8m from £5.8m in 2017, while revenue slipped to £186m from £190.1m. Online sales were a bright spot, growing 34.5% during the year, driven by "multiple improvements" to the online customer experience and more effective marketing.
The strength of the online business helped to offset "disappointing" store like-for-like sales, which fell 4.5%, although the group said the performance was not even throughout the year. The store LFL was strong during the first quarter and September, leading to strong first half growth compared to the previous year, but store sales weakened significantly in the second half, with October, December and March especially poor.
"Whilst opportunities remain to improve the proposition, the online performance suggests that the proposition was competitive, and we therefore conclude that external market factors were a significant contributor to the store performance," the company said.
Gross margins were down just 20 basis points on the previous year to 58.4%, largely due to a reduction in discounting and the company recommended final dividend of 5.25p per share, bringing the total for the year to 7.75p, up 8.5%.
Chief executive Helen Connolly said: "Against the backdrop of challenging trading conditions, I am pleased that we have delivered an increase in profit before tax compared to last year.
"We have made good progress in all areas, particularly online, where we have seen strong growth, whilst also making improvements through a number of other self-help initiatives including the product proposition, the loyalty scheme, and developing a more agile supply base.
"Whilst we expect the market to remain difficult, trading since the beginning of the new financial year has been stronger than during H2 of FY18, and is in line with the board's expectations. We have a clear strategy in place to continue to improve our proposition, which we expect to do during FY19 and beyond. We remain confident that with its unique offering, aimed at fashion and value conscious women, Bonmarche is well positioned for future growth."
Independent retail analyst Nick Bubb said: "After that bad news from Debenhams and Footasylum, we were expecting gloomy noises from the struggling womenswear chain Bonmarche, but today's finals (y/e March) show that the profit recovery has continued."
At 0918 BST, the shares
were up 11.2% to 114p.