Timpson profits fall 22% after year of investment

TIMPSON profits fell 22% in 2008, as the shoe repairer counted the cost of acquisitions and investment in more shops.

Pre-tax profit stood at £8.3m, a 21.6% fall on the £10.6m the company made a year earlier, newly filed accounts show.

The group, which employs around 1,600 people,  increased revenues to £97m for the year to the end of September 2008 (£2007: 92.3m), which chairman John Timpson announced in December with VAT included at £113m.

Mr Timpson told TheBusinessDesk that profits were down because the company had made several acquisitions during the year and had been investing in new shops.

In May 2008, the company bought Persil Services out of administration for £98,000 – more than doubling the group’s dry cleaning capability.

It also bought the trade of nine further businesses for a total of £556,000; and paid £13,500 for a 7.5% stake in JBCM Holding, the holding company of London-based private client portfolio management company James Baxter Capital Management.

The book value of Timpson Group’s fixed assets rose by £2.5m over the year to £15.8m.

The directors’ report said the business was impacted by “the thickness of heels on ladies shoes and the amount of wet weather”. It added that business was also affected, to a lesser degree, by the general economic climate and UK consumer spending.

However, Mr Timpson said: “We have proven to be very resilient in the downturn and have not suffered during the recession as others have.”

The director’s report added that it would continue to expand the core business and develop supermarket concessions, as well as the locksmiths and house sign businesses.

Mr Timpson added that he was not planning on making any more acquisitions during this financial year, after buying  187 Max Spielmann and Klick shops from administrators for an undisclosed sum in December.

However, the company would be opening “a number” of new shops for photo processing and shoe repair.

Mr Timpson added that the group “will do better this year” as it starts to see a return on some of its investments and acquisitions and that he expects turnover for 2009 to stand at around £105m (£125m with VAT).

An interim dividend of £1.18m was paid during the period with no final dividend recommended.