Footasylum sees shares dive 40% as its reports profits drop

Footasylum has seen its share prices plummet after warning investors about its profits for the coming year,

In the year to February 24, the footwear retailer said it had been “impacted by the widely-documented weak consumer sentiment”, announcing a 77 per cent drop in statutory pre-tax profits from £8.1 million to £1.9 million.

This saw share prices drop by 43 per cent in morning trading, despite revenues jumping 33 per cent to £194.8 million including an online sales jump of 41 per cent.

It attributed the drop in profits to costs incurred by entering the Alternative Investment Market (AIM) last year, reporting a four per cent rise in adjusted profits excluding exceptional costs to £8.4 million.

“While our core target market of the 16 to 24-year-old consumer has proved to be comparatively resilient in a downturn, our trading since the beginning of the new financial year has undoubtedly been impacted by the widely-documented weak consumer sentiment on the high street,” chief executive Clare Nesbitt said.

“Despite this, we are confident that continued investment in digital and in our stores will allow the company to deliver strong revenue growth for the full year in line with market expectations.

“This includes increased investment in our consumer offering ahead of our usual peak trading period in the second half and delivering additional store upsizes alongside new store openings.

“However, this will have an associated increase in both expected capital expenditure and property costs for the current year and, as a result, we now anticipate that, adjusted EBITDA (underlying earnings) for full-year 2018-19 is likely to show more modest growth than in full-year 2017-18.”

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