Accrington’s Studio ups revenue 33% to £578m

Accrington-based home shopping firm Studio Retail Group plc (SRG) — formerly known as Findel — said on Wednesday its revenue from continuing operations rose 33% to £578.6 million in the year to March 26, 2021, with adjusted profit before tax from continuing operations up 79% to £48.8 million.

Studio Retail Group undertook a strategic review during the year which included the sale of Hyde-based Findel Education for £30 million in April 2021 to West Moorland 221 Limited, a newly formed company owned by investment funds managed by Leeds-based private equity firm Endless LLP.

On dividends, Studio Retail Group chairman Ian Burke said in his statement: “Although it does not have plans to reinstate dividend payments at this stage, the strong trading performance of Studio during FY21 enabled intra-group dividends to be made that brought the financial position of the parent company into accumulated profits of £9.9m (FY20: accumulated losses of £73.3m).”

On current trading and outlook, Burke said: “The first quarter of the new financial year has seen Studio’s product sales in line with the same period at the start of the pandemic last year, which in turn represents an increase of 51% on the first quarter of FY20. 

“Product margin rates are c.340bp higher than last year due to the non-recurrence of Studio’s significant discounting of clothing and footwear ranges seen at this point last year. 

“We expect that there will be a resumption of more competitive market conditions later in the year, alongside inflationary impacts on some raw material and shipping costs.

“Financial services revenue is up 15% in Q1, although this is expected to moderate later in the year. 

“Studio is implementing changes to some elements of its financial services products this year to improve outcomes for customers. 

“At this early stage of the new financial year, we anticipate that group adjusted profit before tax for the 52 weeks to 25 March 2022 will be in the range of £42m-45m.”

Studio Retail Group CEO Paul Kendrick said: “The Covid-19 pandemic showed the resilience and agility of Studio, and we emerge from it a much stronger business.

“The changes over the last few years, to transform Studio into a digital value retailer with integrated financial services, meant we could react quickly to changing market conditions, and deliver record levels of growth in sales, profit and customer numbers. 

“The success of the last year could not have been achieved without the commitment and hard work of all our colleagues and I am proud of how they have strived through the year to deliver for our customers.

“With the strong performance last year, and having sold the Findel Education business, Studio is in a stronger financial position and is now focused on pushing forward with a well-defined purpose that delivers great value, affordable products for our customers. 

“The business has a clear growth strategy, fuelled by its digital capabilities, service enhancements, and ability to utilise data to drive better customer targeting, credit underwriting and product offers. 

“All of this bodes well as we emerge from the pandemic and I am confident Studio can go from strength to strength and benefit all stakeholders.”

The digital retailer also announced changes to its board.

Francois Coumau will retire at the AGM in September 2021 having completed seven years as an independent non-executive director, and Elaine O’Donnell has indicated that she does not intend to stand for re-election having served her initial term of three years as an independent non-executive director. 

Coumau will be succeeded as chair of the remuneration committee by Clare Askem. An announcement on O’Donnell’s successor as chair of the Audit Committee will be made in due course.