Walker Greenbank plc (LON:WGB) saw its shares tumble in mid-morning on Tuesday after saying trading in its core UK market remained “challenging and uncertain” with no change to the downward trend in its brand sales segment.
In an update for the year ended 31 January 2019, the luxury furnishings group said UK sales of its brand portfolio, which includes names such as Sanderson, Morris & Co., Harlequin, Zoffany, Scion, and Anthology, had fallen 6.2% after a “modest improvement” at the start of the second half had not continued, blaming the downturn on a “weak” consumer environment.
READ: Walker Greenbank shares step lower as tough UK trading hurts first-half sales
The group’s wallpaper and fabric manufacturing operation in the UK had also seen a drop in orders from both its own brands and third parties.
“The UK remains both challenging and uncertain and the trend in brand product sales remains unchanged,” the company said, adding that its current focus was to mitigate some of the impact through “cost saving initiatives”.
The weakening of the UK market has dragged on Walker’s performance across the entirety of its latest financial year, with profits plunging 28.3% in the first half alone, while the company has also had to contend with a change at the top after its chief executive stood down in October.
In its other segments, the group reported 6.6% growth in its second largest market, the US, although this was the only division to advance as sales in Western Europe and the Rest of the World fell 3% and 7.9% respectively.
Overall, international brand sales were down 1.6% in the year, with total brand product sales dropping 4.1%.
Sales inch up as overseas orders and licensing come to the rescue
However, Walker’s total sales for the year were expected to inch up 1.1% to £113.3mln thanks to what it said was “strong growth” in overseas third-party manufacturing orders and digital fabric printing.
High-margin licence income also helped offset declines elsewhere and was expected to come in ahead of expectations at over £6mln from £3.3mln the year before, with an agreement with fashion retailer H&M helping to boost earnings.
Shares were down 10% at 77p.