Waterstones in “strong position” despite 8.4% slump in profits

Waterstones trading update
Stores have been performing “above base forecast” since the April reopening
// Waterstones profits after tax drops 8.4% to £20.8m in the year to April 25
// The bookseller said it was entering the 2021/22 financial year “in a strong position”
// Revenue was down 4.3% to £376m during the period

Waterstones has recorded an 8.4 per cent drop in profits after tax to £20.8 million in the 12 months to April 25, despite maintaining that it had “another strong performance”.

The bookseller said that despite the “significant adverse impact” of the pandemic, it was entering the 2021/22 financial year “in a strong position and well placed for a return to growth in both sales and profits”.

Stores have been performing “above base forecast” since the April reopening.

READ MORE: Waterstones, Foyles & Amazon criticised for selling anti-vaccination books

Revenue was down 4.3 per cent on 2019 to £376 million, although the chain recorded an operating profit of £32.6 million, which was up 9.3 per cent on the previous year’s results.

“It was a good year and then it began to go a little bit wrong towards the end of January 2020,” managing director James Daunt said.

“Initially it took a while to sort of get to grips with it, you’ve got all the PPE costs, and putting yourself effectively into sort of hibernation.

“I think we sort of did that, we certainly acted very quickly and that stood us in pretty good stead to take us through the year that then followed which has obviously been pretty frustrating.

“Lockdown favoured all the ways in which people mentally occupy themselves, in which books are obviously the primary one.

“Waterstones literally sold every single puzzle that we could get hold of.

“I think, frankly, if in March 2020 we’d have said in June 2021 this is what it’s going to look like we’d have taken that every single time.

“The reality is that there’s a retail spending boom going on. People are not spending it on hospitality, they’re not spending it on foreign travel, there’s money in people’s pockets and they’re spending it in shops and online.

“It is a really good time for booksellers and for publishers, we just have to hope through decent policies and the vaccination program we’re able to stay open.”

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