Monsoon lifted by summer styles

Fashion chain Monsoon today reported strong sales of summer ranges as it began to build on a 15% rise in annual profits.

The group, which also owns Accessorize, said like-for-like sales rose 5% during the 12 months to May 29 and profits before exceptional items reached £44.1m (€66.8m).

This momentum had continued during the six weeks to July 10 with same-store sales ahead by 4% after stripping out the impact of a change in the date of its clearance sale.

But the upbeat outlook was balanced by news that investors are unlikely to receive any dividend payments for several years.

Chairman Peter Simon said capital expenditure will rise to £33m (€50m) during the current year – nearly £20m (€30m) higher than the average for the past three years.

Much of the money will be spent on converting 21 stores bought from electricals retailer Dixons on June 30. The deal will boost the group’s trading space in the UK by 12%, giving it a presence in 16 more towns and creating 700 new jobs.

Mr Simon said: “It is unlikely that the group will pay dividends in future years while it remains in a period of high capital expenditure.”

Following the acquisition of the outlets of Dixons, the group will have 117 Monsoon shops, 135 Accessorize, 66 joint format stores and two concessions.

Turnover rose by more than 17% to £271.4m (€410.8m) despite an increasingly competitive market.

In the UK and Ireland, operating profits increased 11% to £38.2m (€57.8m) with revenues ahead by 17% at £251.3m (€380.3m).