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Benchmark


GARSONS: SALES RISING STEADILY The Numbers


Sales £m Gross profi t £m


Operating profi t £k Pre-tax profi t £k Staff


Salaries £m


The Ratios Stockturn


Gross margin %


12.5 12.5 13.0 14.6 1.6


1.5 1.7 2.2


102 3.5


2018 THE GARDEN MARKET SUPPLEMENT GORDALE: LOWEST STAFF COSTS


12/13 13/14 14/15 15/16 16/17 %change 11.2 1.2 52 77


12.1 29.8


346 259 161 534 231.7 353 258 111 459 313.5 97 203 215 216 3.9


3.8 5.4 5.5 0.7


2.1 2.1


3.0 4.0 5.7


1.2 0.9


1.3 4.3 5.9


3.7 3.1


4.0


0.5 6.6


12/13 13/14 14/15 15/16 16/17 %change 5.0


3.8


Operating margin % 0.5 Net margin %


0.9


10.6 12.9 12.3 13.2 15.3 2.8 2.8


Staff costs/turnover % 30.9 30.7 30.9 30.8 29.3 Return on capital % DIY Week index


4.2 -26.3 171.7 1.3 26.1 262.8


Things are looking pretty good at Thompson Bros (Esher) Ltd, the owner of Garsons. Sales have been rising steadily, and were 30% in 2016/17 up on the fi gure fi ve years earlier. Operating and net profi ts saw a huge jump in the latest period; the stockturn was well above average, and still improving; and the staff costs were in line with the industry average. Against all that, the return on capital has been pretty modest, but the company has also been re-investing profi ts in improving and expanding its premises. And we can’t comment on its gross margin performance, because the company accounting policy is to load the ‘cost of sales’ line with more than the costs of goods for resale alone, so the true gross profi t is unknown.


HASKINS: SOLID RETURNS The Numbers


Sales £m Gross profi t £m 15.8


195.8 268.8 -4.9


205.6


The Numbers Sales £m


Gross profi t £m


Operating profi t £k Pre-tax profi t £k Staff


Salaries £m


The Ratios Stockturn


Gross margin %


12/13 13/14 14/15 15/16 16/17 %change 8.5 2.9


9.6 10.6 10.9 10.8 3.2


3.5 3.5 3.5


961 1,166 1,335 1,451 1,432 973 1,175 1,345 1,464 1,435 84


85 1.2 1.2 5.7 90 1.3 6.4 1.3 6.4


97 93 1.4


6.6


-0.7 -1.5 -1 -2 -4


2.0


12/13 13/14 14/15 15/16 16/17 %change 5.7


2.7 34.5


Operating margin % 11.3 Net margin %


11.5


Staff costs/turnover % 13.6 Return on capital % 13.5 DIY Week index


33.7 33.0 32.4 32.1 12.2 12.6 13.3 13.3 12.3 12.7 13.5 13.3 12.6 12.1 12.3 12.6


-30.8 875.7 854.2 235.7 -56.9


Gordale’s staff costs remain a mystery, and rival garden centre operators can only speculate as to how they manage with so few people and such a low salary bill. Polhill, with exactly the same turnover, needs twice as many people. One thing is for sure – it translates into a very healthy operating margin, which in turn leads to a very healthy return on capital. Other than this, the main conclusion to be drawn from the company’s accounts is that they are happy to run with a modest gross margin, in return for one of the highest stockturn fi gures in the market. Sales were on a satisfactory growth trends until 2016/17, when they fell slightly – but even so, Gordale looks like a very healthy business.


12/13 13/14 14/15 15/16 16/17 %change 26.6 29.4 31.6 31.5 32.4 9.5 10.6 12.3 11.6 12.0


Operating profi t £k 2,757 3,531 4,113 3,781 4,055 Pre-tax profi t £k Staff


Salaries £m


The Ratios Stockturn


Gross margin % 6.9 7.3 7.6


2.8 3.1 7


3,282 3,989 4,645 4,950 4,911 559 575 595 596 601 6.4


7.9 5.1 4.9 5.4 4.9


-1 1


4.3


12/13 13/14 14/15 15/16 16/17 %change 4.8


35.7 36.2 38.8 36.9 37.1


Operating margin % 10.4 12.0 13.0 12.0 12.5 Net margin %


Staff costs/turnover % 24.0 23.5 23.1 24.1 24.4 89.0 655.8 483.1 -27.5 173.0


-9.1 0.3 4.3


12.4 13.6 14.7 15.7 15.2 -3.5 1.5


Return on capital % 13.7 11.1 16.2 15.6 14.1 -9.2 DIY Week index


Year after year, Haskins delivers double-digit return on capital, which must keep the shareholders happy. And while the company saw a slight dip in sales in 2015/16, in common with many other garden centre businesses, the latest accounts show a return to growth in both sales and profi ts – particularly at the operating level. Although the gross margin is at the low end of the table, the staff costs are close to the top of the table, and the overall result is that Haskins consistently delivers one of the highest operating margins in the industry. And its DIY Week Index scores over the past fi ve years give it a long-term average Index score which places it at number six in our list of 26 operators – a highly creditable achievement.


18 DIY WEEK GARDEN MARKET SUPPLEMENT


HAYES: CONSISTENT SALES GROWTH The Numbers


Sales £m Gross profi t £m


Operating profi t £k Pre-tax profi t £k Staff


Salaries £m


The Ratios Stockturn


Gross margin %


8.0 3.4


9.0 3.7


9.3 10.0 3.8


9 206 352


-0.9 -0.7 -1.3 2.7


14.7 15.0 14.7 13.1 -11.2


12/13 13/14 14/15 15/16 16/17 %change 8.3 3.4 -91


7.0


3.4 -10.7 9 -97


-213


126 120 121 130 141 1.8


1.6 2.9 1.8 3.5 2.3 1.9 3.0 3.8 2.1 4.2 0.1


-98 83 2073 -78 -104 8


9.2


12/13 13/14 14/15 15/16 16/17 %change 2.5


40.5


Operating margin % -1.1 Net margin %


-2.6


41.1 42.8 41.1 41.0 34.2 0.1


-1.2 -2.1


Staff costs/turnover % 21.2 20.2 19.6 20.2 20.6 Return on capital % -4.4 DIY Week index


9.4 -1.3 99.8 42.8


-16.5 -97.6


0.9 22.2 -0.8 -103.5 2.0


1.7 32.1 -1.2 -103.9 2.6


Hayes Gardenworld has recorded consistent sales growth at its destination centre at Ambleside in the Lake District in recent years, even though profi ts took a bit of a knock in 2016 – which the company ascribes to “adverse weather conditions which resulted in reduced demand”. Historically the business has tended to record very low margins at operating and net level, anyway. The fact that the gross margin diminished abruptly in the latest accounts, and simultaneously the stockturn fi gure improved dramatically, seems to point to a change in accounting policies. The same isn’t true of the staff costs, however: Hayes consistently shows one of the lowest staff costs to turnover ratios of any garden centre operator.


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