// Wilko swings to full-year profit thanks to cost-cutting drive
// Reported a full-year pre-tax profit of £34.8m, up from a loss of £65m the previous year
Wilko has revealed an increase in profits in its full-year results, which the British retailer attributed to cost-cutting.
The discount chain reported a pre-tax profit of £34.8 million in the 52 weeks to February 2, up from a loss of £65 million the previous year, according to Retail Week.
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Wilko also recorded a 2.3 per cent fall in turnover year on year to £1.6 billion.
The retailer cut its debt pile and ended the financial year with positive free cash flow of £26.9 million, which is an increase of £52.1 million on the previous year.
Although the specifics on the cost cuts have not been revealed by Wilko, a spokeswoman said: “Cost and cash discipline has played a significant role in our improved financial position.
“This has been accomplished through embedding more robust financial controls and challenge across all areas of the business.”
The retailer has opened eight new stores during the period and closed seven, making its overall store portfolio a total of 416.
Wilko’s own-brand products accounted for 54.7 per cent of its overall sales in the year, up from 52.7 per cent the previous year.
“We have focused this past year on controlling margin, costs and cash, helping us return to profitability,” Wilko chief financial officer Alex Russo said.
GlobalData senior retail analyst Hannah Thomson said: ‘‘Wilko is emerging from another turbulent year — one full of senior management changes — in which it suffered a £63.4 million dip in UK sales to £1555.7 million.
“However, in spite of this, Wilko has returned to profitability delivering an increase of £99.8 million in pre-tax profits, citing improvements in cost control.
“Despite a portfolio of 415 stores, Wilko continues to be threatened by rival value general merchandisers B&M and The Range, who are pressing ahead with ambitious expansion plans and opening larger format stores where shoppers can find everything under one roof.”
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