Wyevale profits continue to blossom

Pensioners looking for a bargain on their begonias have helped sales grow at Wyevale Garden Centres in the past six months, after the company discounted products for the over 60s.

The company, based in Hereford, yesterday said like-for-like sales in the 26 weeks to 29 June had grown 2 per cent. It launched a series of discount initiatives to help draw in customers earlier this year. In March it began giving all customers aged over 60 a 10 per cent discount on their goods every Tuesday. It has also launched a number of special offer weekends, where all goods have a 10 per cent discount, to combat increasing competition and discounting from DIY and supermarket chains. Wyevale's total sales for the 26 weeks ending on 29 June grew 8.6 per cent.

"B&Q and Focus have both been promoting their discount offers for some time. We have to compete with them for business and it has been successful for us," Stephen Murfin, the finance director at Wyevale, yesterday said.

An unseasonably wet May, however, which is Wyevale's busiest month, did hamper growth in the first half of the year. "We had a difficult period in May, when it rained non-stop for three weeks. That does take the shine off the figures as it is our most important month," Mr Murfin said. "But since then, we have had a very hot and sunny June, and people have been enjoying their gardens. Sales of barbecues have been very strong."

Like-for-like sales in the first quarter of the year were up 4.4 per cent, but this slowed considerably in the second quarter, when like-for-like sales grew 0.9 per cent.

The company's profitability is skewed to the first half of the year, when its customers are more active in the garden. Mr Murfin is now expecting its stores to be quiet over the holiday period, before picking up in the run up to Christmas.

Mr Murfin said the discount initiatives had proved successful in maintaining Wyevale's market share, which is about 30 per cent of gardening products business.

But despite the discount pricing tactics employed by the group, Mr Murfin said margins would be similar to last year as its buyers had managed to broker better deals with their suppliers. Analysts expect the company to post profits in the region of £23m, up from £19m last year. Shares in Wyevale, chaired by Brian Evans, rose 1.5p yesterday, closing at 377.5p.