Waterstones: Return to the office helps profit almost quadruple
The return of employees to offices in major UK city centres helped profit almost quadruple at Waterstones during its latest financial year.
The bookseller cited the trend of the return to work as a key factor in its pre-tax profit surging from £11.2m to £42.9m in the 12 months to 27 April, 2024.
In newly-filed accounts with Companies House, Waterstones also said “encouraging growth in London” and increased tourist numbers also boosted its finances.
The results also show that the retailer’s revenue jumped from £452.4m to £528.3m in the year.
The accounts come after Waterstones’ profit plunged by 80 per cent in its prior financial year after it was hit by problems with a new warehouse system.
Its latest pre-tax profit total is still below the £50.6m the chain reported in the year to the end of April 2022.
The topic of employees returning to the office has been in the headlines in recent days after the fallout from WPP’s four-day mandate continued.
Earlier this month the boss of Waterstones, James Daunt, said he is planning to open dozens of new bookshops in 2025 in the UK.
He also hinted at a potential flotation in London or New York.
Online sales success boosts Waterstones
A statement signed off by the board said: “Footfall and sales continue to grow year on year with encouraging growth in London and other metropolitan city centres as tourist numbers increase and workers return to offices.
“Waterstones has benefited from the increased popularity of both reading and physical bookshops, supported notably by social media and positive press coverage.
“The company continues to invest in both our people and our shops to improve the standards of bookselling and has successfully opened further new bookshops.”
Waterstones said its profitability had improved because of the reduced costs of “system implantation offset by the inflationary impact on other operational costs”.
The retailer added: “The online business continues to deliver a strong performance.
“Waterstones continues to seek to improve the standards of bookselling within its shops by enhancing the range of books and related product offerings, continues training and enhanced career development of its booksellers and targeted investment in the shops and operational infrastructure.
“Blackwells.co.uk and Wordery.com have been added to our existing online brands of Waterstones.com and Foyles.com and have expanded book sales to a wider customer base.”
The accounts for Waterstones also detail how, as part of a move to reduce intercompany balances across the group, a capital reduction of £71m took place in April 2024, after which a dividend of £72.9m was declared.
That money was used to offset an intercompany receivable due from Waterstone’s immediate parent, Book Retail Bidco.
The accounts for that parent company show that its revenue increased from £499.5m to £552.4m in the year.
It also recovered from making a pre-tax loss of £3.7m to report a pre-tax profit of £25.6m.