Tradehold, the JSE-listed investment group with interests in UK retail and property, has announced its subsidiary Instore has experienced a significant shortfall in sales against internal expectations in the four weeks to February.

As a result, full-year profits for the 12 months to February would be substantially below current market expectations, the company said yesterday.

This is despite reporting relatively strong sales through the Christmas and New Year trading period.

Tradehold announced its intention in its annual report last year to convert a number of its Poundstretcher stores in the UK to its new, more successful Instore format.

This is despite like-for-like sales for the six weeks to January 15 ending up 3,8% for the group, with Instore up 5,4% and Poundstretcher up 2%.

However, in the subsequent weeks like-for-like sales "are broadly level, but significantly below internal expectations", the company said.

Instore chairman Christo Wiese said the trading downturn was against expectations, and was "disappointing".

Tradehold said its board now expected profit before tax and exceptional items for the year to be significantly below last year's profit of £6,8m.

The company said margins for the period had been slightly behind expectations, although they continued to be 1% ahead of last year?s.

Operating costs, in particular in Tradehold?s new distribution centre, had continued to run ahead of forecast.

Tradehold said it had embarked on an external review of its distribution centre processes in order to bring down operating costs.

It said it was also taking the "actions in other areas" to reduce its cost base in readiness for the new financial year.

Business Day
 
Publisher: I-Net Bridge
Source: I-Net Bridge