Shoe Zone posts record profit, announces special dividend

Value footwear retailer Shoe Zone reported a jump in full-year sales and profit on Wednesday and announced a special dividend despite a challenging backdrop.

In its preliminary results for the year to 29 September 2018, the company said statutory pre-tax profit increased 18.4% to £11.3m - its highest annual performance since its IPO in 2014 - on revenue of £160.6m, up 1.8% from the year before.

Earnings per share were up 20.7% to 19p and the group lifted its proposed final dividend by 17.6% to 8p a share. The total dividend was boosted by 91.2% to 19.5p per share. Shoe Zone also announced a special dividend of 8p per share, as it returns £4m of surplus cash to shareholders.

Digital revenue in the year was up 19.9% to £9.8m and contributed £2.6m to profit, versus a £2m contribution in 2017.

Shoe Zone said it continued to focus on the Big Box format, ending the year with 19 Big Box stores which contributed £7.1m sales and a further 20 stores targeted in 2019.

Chief executive Nick Davis said: "I am pleased to report that 2018 has been another successful year for Shoe Zone with the group delivering a record profit before tax since IPO driven from a strong performance throughout the business while operating in a challenging consumer environment.

"This positive performance is testament to the strength of the core business model and the effective focus on growing the Big Box and Digital channels. As a result of the strong performance, the board is pleased to again return excess cash to shareholders by way of special dividend.

"We continue to make good progress against our strategic objectives and the board remains positive about the outlook for the group. We are incredibly proud of all of our team's effort in delivering this progress and would like to thank them for all of their hard work."

At 1150 GMT, the shares were up 10% to 197.52p.

Paul Hickman, analyst at Edison Investment Research, said: "Nobody told Shoe Zone that there’s a retail crisis.

"Current trading is ahead of previous expectations, which in addition to the earnings beat, signals upgrades."