15 September 2016
Crawshaw Group Plc
("Crawshaw" or "the Group")
At Crawshaw's AGM on 29 June 2016 it was announced that the Group had, during the prior couple of weeks, experienced some suppressed footfall patterns caused by a combination of the international football, adverse weather and Brexit. These factors persisted through to the end of the half year period, resulting in a further reduction in like for like sales for the half year, although this was partly mitigated again by a further strengthening of gross margin. We expect to report on our half year results on 29 September 2016.
Conditions have remained difficult in the weeks since the period end but we are acting quickly to restore sales momentum and feel that this can be achieved rapidly in readiness for the very important winter and festive season.
Over the last year or so we have actively sought to rationalise range, reduce the number of price-led promotions and drive higher margin lines, and the strategy has worked well. However, with our customers now being even more price focussed post Brexit, and with the supermarkets very recently launching some aggressive meat promotions, we are reacting to ensure we maintain the value-led approach that has proved successful in the past. This includes introducing more local choice and lower price point packs.
Whilst the same factors have impacted our new store sales performance, the initiatives described above will clearly benefit those stores as well. We are particularly pleased with our new standalone factory outlet store format, which significantly outperforms the high street format on every measure, as do our more established three mature outlets. Fit out costs are lower per square foot, property and running costs are very low, EBITDA margins are excellent, and without a food to go element the operation is even simpler to roll out.
Added to that, being out of town with parking, and therefore more of a destination, factory outlet stores are not so dependent upon local footfall. We are therefore currently reviewing our store roll out strategy with a view to adding more of these types of openings in our overall new store opening pipeline. We have one further site at an advanced stage, and another in the pipeline.
We are confident our actions can restore sales momentum, and we will be prepared to invest in margin to drive sales and sharpen our value proposition. We are disappointed with current trading and clearly the outlook for the full year will depend upon the result of our actions, upon trading during the important peak winter and festive season, and upon the timing of our store openings.
Crawshaw Group plc
Noel Collett, Alan Richardson 01709 369 600
Peel Hunt LLP
Dan Webster, Adrian Trimmings, George Sellar 020 7418 8900
This announcement includes inside information
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