JSE-listed investment group Tradehold has reported a significant reduction in profit for the year to February, attributing this to poor trading in a retail business in which it owns a controlling interest.

Tradehold, which has interests in UK retail and property, reported on Friday that its profit after taxation attributable to ordinary shareholders was £3,17m, a drop from £8,9m in the previous year.

The company said this was due to poor trading results reported by Instore, the listed British retail business in which Tradehold owns an interest of 55,2%.

Tradehold warned in February its full-year profits would be substantially below market expectations, saying Instore had experienced a significant shortfall in sales against internal expectations in the four weeks to February.

This was despite relatively strong sales through the Christmas and New Year trading period.

Tradehold said Instore had had a "disappointing year" with turnover down 2,7%, to £268,6m. Operating profit was 49% lower, at £3,5m.

Tradehold said Instore CE Angus Monro had resigned at the end of the reporting period and had been succeeded by Trevor Coates. The company said Coates had extensive experience of retailing, in the UK and elsewhere.

"He (Coates) is at present leading a comprehensive review of all aspects of the business and is paying particular attention to refining and improving Instore's trading formats," said Tradehold.

But the company said its property interests, consisting of a "much improved portfolio of commercial and retail buildings", substantially increased their profit contribution. Tradehold's property interests are vested in several companies in which it holds the controlling interest.

These interests consist of a portfolio of predominantly retail properties, some of which are occupied by outlets of Instore.

The company said although the property business underpinned Instore's retail operations, it was an independent profit centre that was required to maximise its returns.

The property business reported an after-tax profit of £3,7m, a significant increase on the £2,7m reported last year. The gross value of the portfolio increased from £15,6m last year to £26,9m.

Business Day
 
Publisher: I-Net Bridge
Source: I-Net Bridge