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Benchmark


2018 THE GARDEN MARKET SUPPLEMENT


OPERATING MARGIN: CONSISTENCY PAYS OFF


Operating margin


1. Gordale 2. Haskins 3. Klondyke Squires


4. 5-year Latest average year -1 year


12.5 13.3 13.3 12.0 12.5 12.0 10.8 12.2 11.6 8.9 8.6 8.9


5. Blue Diamond 8.4 9.9 9.7 6. Webbs


7. Barton Grange 8. Woodcote Green 9. Aylett 10. Polhill


11. Whitehall 12. Scotsdale


8.3 7.8 7.0


-2 year


12.6 13.0 8.2 9.0 8.7


9.2 4.3


6.6 5.9 7.0 6.6 7.4 6.9 6.5 7.6 9.2 6.4 8.3 8.5


13. Chessington 6.0 5.4 7.4 14. Wyevale 15. Hillier 16. Bents


17. Coolings 18. Stewarts 19. Planters 20. Garsons 21. Notcutts 22. Frosts


23. Millbrook 24. Hayes


25. Van Hage 26. Dobbies Average


5.1 -22.8 15.4 4.9 7.1 5.9 4.7 5.6 6.8


8.4 8.4 6.6 6.5 7.0 6.0 8.0


-3


year 12.2


12.0 11.7 9.2 7.2


5.6 9.7 12.2 7.8 7.1 9.6


11.2 4.7 3.4


4.7 8.3 -2.6 8.1 4.2 4.2 5.0 4.1 5.6 5.2 2.0 3.7 1.2 1.9 2.4 1.9 1.3 0.7 0.0 1.2 1.0 0.2


4.1 3.7 2.1 1.7 1.8


4.5 0.1 1.5


-2.7


2.7 3.8 0.7


5.6 5.2 6.6


Source: DIY Week analysis of fi led company accounts 10 DIY WEEK GARDEN MARKET SUPPLEMENT


0.4 7.8 -31.6 5.0


7.1 5.7 6.6 5.1 5.3 5.0 6.8 8.0 5.2 3.8 6.0 4.3 5.3 2.8 0.6 2.3


-4


year 11.3


10.4 10.4 8.5 6.2 6.0 7.4 6.8 6.9 7.1 3.3 4.4 2.4


13.7 1.4 3.8 3.6 3.4 0.5 0.5 3.1 1.9


1.1 -0.4 -1.8 2.3 0.1 -1.1 1.6 -1.3 -1.4 4.7 5.5


5.3 4.8


D


IY Week has long regarded operat ing margin as one of the three most important


indicators of a business’s overall health (the other two are sales growth and stockturn), and this table gives a massive vote of confi dence to the garden centre market.


Looking at the average operating


margin over the past fi ve years, 25 of our 26 listed companies are positive. In the latest year, only one of them recorded an operating loss (Wyevale, where the accounting procedures have tended to change from year to year). In fact over the whole fi ve years, the 26 companies between them have recorded a total of eight negative operating margins, against 122 positives.


Looking at the averages for the


26 collectively, the lowest fi gure recorded was fi ve years ago at 4.8%, followed by 5.5%, 5.0%, 6.6%, and 5.2%, giving an average for the whole sample across the fi ve years of 5.6%. That’s not a spectacular fi gure, but it is very solid. For comparison, B&Q’s average operating margin over the same period was 1.2%. Homebase, its nearest rival, managed an average of just 0.8% over the four years 2013-2016, before Wesfarmers launched its catastrophic rethink of the business and brought the company close to oblivion. In the high street, both Robert Dyas and Wilkinson recorded a fi ve- year average operating margin of just 1.5%. The only home improvement retailer to match the garden centre sector was Wickes, with a fi ve-year average of 5.7% Conclusion: in an intensely competitive retail market, garden centre retailers are holding their own. Their margins are sound, and consistent. They – and their investors – have a great deal to be proud of.


www.diyweek.net


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