AN upbeat report on sales in the last two months helped boost the shares of Storehouse, which reported a 9% rise in annual pre-tax profits to #118.3m. Its flagship BhS chain is to create 1000 jobs as part of a #120m group investment programme.

The shares spurted 22p at one stage but closed only 7p higher at 223!sp.

Group chief executive Keith Edelman said sales for the eight weeks to May 17 were 15.5% ahead of 1996. He added: ''We have been aware that there have been scurrilous comments about our sales performance over the last few weeks, so we thought we'd put some facts down.''

The company usually reserves its first trading update for the annual meeting in July.

''The results were bang in line with expectations and the trading numbers were quite reassuring,'' said retail analyst Nathan Cockerill at NatWest Securities.

The BhS clothing and housewares chain had a successful year, raising profit by 14%, but Mothercare achieved an 11% profit increase only through its international franchising. Like-for-like sales were down 3%, as the stores suffered from the inroads made into the two-to-fives market by the specialist sportswear chains.

Mr Edelman admitted Mothercare was ''below expectations''. But he said the acquisition from Boots of Childrens World had gone very well. The chain's 57 stores have now been re-ranged with Mothercare merchandise and the two chains operate as one business.

Rationalising Childrens World cost #16.4m, and there was a further #4.1m exceptional charge on the sale of Blazer to Moss Bros.

Group turnover was up 15.3% but less than half of that was attributable to existing businesses. Profit from retail operations rose 16.7%. Earnings per share before exceptionals were up 11% to 19.4p and the final dividend is 4.8p (4.2p), making a total of 8.1p.

The group's #120m investment plans include four new stores, a three-year modernisation of management information systems, the conversion of Childrens World to Mothercare World, and the extension of its ''millennium'' refurbishment trial. Key elements of the concept are to be rolled out into most of the existing 283 stores.

Finance director Chris Martin, who impressed analysts on his debut, said the new stores would cost #30m, the millennium format another #25m to #30m and the new systems another #25m to #30m.

BhS had reported an 18% sales gain in the run-up to Christmas, and admitted that the final quarter was below forecast. Its international franchise outlets increased from 51 to 72, including new markets in Russia and Hong Kong. UK sales were 7.5% ahead, with menswear, gifts and the restaurant division trading most strongly. Strength in schoolwear helped offset a tough market in childrenswear.

Mothercare opened 11 stores and achieved much better margins at the new Mothercare World stores. Internationally, Mothercare powered ahead, adding 29 franchise outlets to reach 138, with new markets in five countries, including Israel and Lebanon. Childrens World sales for its first 45 weeks were 4% ahead of the previous year. The group is to test ''a completely new concept'' for the biggest stores this autumn.

Mr Edelman said the investment programme was essential for future growth. ''We also look for progress this year, both in the UK and internationally, from steadily improving the quality and competitiveness for our businesses.''

Asked about the Government's plans for a minimum wage, Mr Edelman said that as it was unlikely to take account of additional benefits, such as pensions, it ''might mean some adjustments''.

CommentPage 25


Full year19961995


Pre-tax profit#118.3m#108.7m