A strong performance in home accessories and growth overseas today helped furniture-to-fashion retailer Laura Ashley post a 14% jump in half-year profits.
Defying difficult conditions on the high street, retail sales in the UK improved 6.1% to £127.5m (€159.6m), with the pace of growth in same-store sales this year accelerating from 3.9% at the end of July to 4.2% last Saturday.
Shares rose more than 7% as investors cheered the momentum and the better-than-expected underlying profits of £8.3m (€10.3m) for the six months to 28 July.
The firm’s fashion division, which makes up a fifth of its UK sales, saw flat like-for-like turnover but home accessories, which brings in a quarter of sales, grew 10.4% on a like-for-like basis.
The furniture division represents 30% of UK sales but it fared less well with sales down 0.3% on a like-for-like basis. Decorating products such as curtains, wallpaper and paint jumped 5.7%. Laura Ashley’s revenues from international franchises grew 15% to £13.7m (€17.1m) during the period.
The London-based firm, which makes around 40% of its products in the UK, aims to continue its expansion plans in e-retail and new markets, having opened stores in Russia, Japan, Taiwan and Australia in the first half of the year.
It will allow customers to reserve items to collect in stores later this year, after enjoying a 21.4% surge in online sales during the half-year.
Laura Ashley has 211 stores across the UK, the same as last year, and 263 franchised stores overseas.
The company also has a 49-bed hotel in Hertfordshire, acquired last November, which it aims to reopen before the end of the year.
Freddie George, an analyst at stockbroker Seymour Pierce, said the results were better than expected: “On the basis of our forecasts, we believe the stock is too lowly rated.
“This is unjustified considering the potential for overseas and internet development with both channels picking up momentum.”
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