Family-owned business Leekes Retail & Leisure Group has announced another year of strong profitability despite the challenging economic conditions and inflationary environment.
The group reported EBITDA of £6m and a profit before tax and exceptional items of £3.1m for the year ending 31 March 2024.
The home retail market was significantly affected by lower consumer demand for high value home purchases brought about by the combination of both high inflation and higher interest rates. However, a gross margin improvement of 270 basis points to 42.6% and significant operational efficiencies ensured that the retail business remained cash generative with EBITDA of £2.8m and a profit before tax and exceptional items of £1.2m.
Commenting on the results, Emma Leeke, Managing Director of Leekes Retail said, “We are delighted to report continued strong results despite the well-publicised challenges faced in the retail sector. Our excellent profitability over the last four years has enabled us to continue our programme of investing in significant capital expenditure in our retail business. We are excited by the successful opening of our newest store in Cheltenham last week and the imminent start of the final phase of the refurbishment of our flagship store in Llantrisant, South Wales.”
The Vale Resort at Hensol, South Wales, which celebrates its 25th anniversary this year, has reported another outstanding trading year with a turnover growth of 7% and a gross margin uplift of 130 basis points more than compensating for the considerable overhead cost inflation which resulted in an EBITDA of £3.4m and a pre-tax profit of £2.2m.
The facilities available at the 650-acre resort also include a 143-bedroom 4-star hotel, two championship golf courses, Wales’ largest independent Health and Racquets club and award-winning spa. In addition, the Resort continues to house the training base for both the Wales Rugby and Football teams in its world-class sporting facilities.
Stephen Leeke, Managing Director of the Vale Resort commented, “We are incredibly pleased that the £50m of investment in the Vale Resort over the last 25 years continues to generate outstanding returns despite record levels of cost inflation. The turnover and profitability growth has been achieved following an excellent performance across golf, leisure, spa, and sporting sectors which have all contributed to the strong occupancy levels and profits we have delivered.
“We continue to make significant investment, including the enhancement of the pool area with whirlpool baths, new steam room and changing facilities. Our award winning spa has also undergone a major transformation with new treatment rooms and new relaxation zones to ensure our facilities remain market leading.”
The group’s newest business, its distillery operations based at Hensol Castle adjacent to the Vale Resort, has had an exciting year with listings across several supermarkets for its Hensol Castle ranges. The company continues to improve its production facilities with an additional £0.4m invested in the year.
The group also recently completed its triennial refinancing facility with a £25m Revolving Credit Facility agreed with Barclays Bank. Mike Fowler, Group Finance Director commented, “Barclays have been bankers to the group for 20 years and their support has been a key element in our balance sheet growth with net assets more than doubling from £41m to £92m over that 20-year period and gearing reducing to 15%.
“Having reduced our net bank debt by a third since the start of the pandemic on the back of strong trading and several property deals across the group, we can continue to invest heavily in our core operations with £15m of capital expenditure planned in the next 3 years. Whilst there has been significant cost pressure, we continue to benefit from favourable hedging agreements on both interest rates and utility costs to ensure that our strong profitability and cash generation continues.”
