THE GARDEN MARKET SUPPLEMENT 2018
Benchmark
RETURN ON CAPITAL: SHOW THIS TO YOUR BANK!
% gross margin
1. Woodcote Green Polhill
2.
3. Wyevale Frosts
4.
5. Gordale 6. Haskins Hillier
7. 8. Nottcuts
9. Barton Grange 10. Squires
11. Scotsdale 12. Klondyke
5-year Latest average year -1 year -2 year
34.6 36.5 52.2 37.1 28.8 38.2 30.2 27.9 17.5
158.4 14.6 14.5 48.0 0.1
14.2 13.1 14.7 15.0 14.1 14.1 15.6 16.2 13.9 15.3 13.7 7.7 12.3 16.7 9.5 12.1
23.8 9.7
11.8 13.2 10.5 11.7 11.4 15.8 14.6 11.9 11.2 14.2 13.0 6.1
13. Blue Diamond 11.2 13.6 14.7 13.4 14. Planters 11.0 7.8 7.0 8.8 15. Aylett 16. Bents 17. Webbs 18. Coolings
8.8 7.6 9.1 8.7 7.9 10.1 12.3 5.6 7.3 4.6 8.8 6.9 11.8 -2.6
11.0 10.3
19. Chessington 6.3 8.8 7.9 7.7 20. Whitehall 5.9 6.6 7.9 6.5 21. Hayes
5.2 22. Dobbies -1.2 32.1 4.7 5.6 9.9 0.0
23. Stewarts 4.5 3.9 6.3 4.8 24. Garsons
2.7 4.0 1.3 3.0
25. Millbrook 0.7 7.0 3.4 0.2 26. Van Hage Average
-1.6 1.8 -0.7 10.7 18.6 12.3 9.9
Source: DIY Week analysis of fi led company accounts.
www.diyweek.net
-3 year
39.9 20.8
-7.1 -30.7 6.9
9.9
14.7 11.1 31.4 3.5
-4
year 32.6
27.2
-47.9 7.6
13.5 13.7 1.2 8.2
14.2 14.0 12.1 10.5 12.5 8.6
12.2 8.0
15.2 8.6 6.2 6.6 9.1 5.8 5.5
10.6 6.4
16.0 10.3 5.4 5.7 5.7 1.4 3.0
1.7 -2.1 -4.4 3.8 4.3 4.2
-2.7 -4.5
4.5 -6.5 -7.0 8.2
5.4
4.2 3.1 0.9
11.0 6.1
D
on’t look at the names at the very top and very bottom
of this chart – they are the outliers. Instead, look at the solid middle ground. Look at Frosts, with a fi ve-year average return on capital of 14.5%, or at Whitehall, with an average of 5.9% – or at any of the 15 garden centre businesses between those two. And focus on the fact that for most of them, those averages are not the result of boom followed by bust – they are the result of consistent good performance, year after year. And that’s the message: that garden centre retailing is clearly and demonstrably a sound market to invest in. What other retail sector delivers this kind of return on capital, reliably and regularly? What other retail sector off ers such a broad product mix with so many leisure shopping opportunities? And what other retail sector has so comprehensively mastered the concept of doing WACD (What Amazon Can’t Do)? Re-calculating the annual averages without the top three and bottom three in the table spells it out even more clearly: a fi ve-year average of 9.4%, and with a steadily rising trend. Over the fi ve years, this ‘middle ground’ average rose steadily from 6.7% at the start, then 9.1%, then 9.3%, then 10.5%, and fi nally 11.6% in the latest fi nancial period. So if you’re in the garden
centre business – or if you’re thinking of getting into the garden centre business – this table would be well worth sharing with your bank, your shareholders and your prospective investors.
DIY WEEK GARDEN MARKET SUPPLEMENT 13
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