Waterstones has reported a near fourfold increase in profits, attributing the surge to employees returning to offices in major º£½ÇÊÓƵ city centres. The bookseller's pre-tax profit soared from £11.2m to £42.9m for the 12 months leading up to 27 April, 2024.
According to the latest accounts filed with Companies House, Waterstones credited "encouraging growth in London" and a rise in tourist numbers for bolstering its financial performance. Revenue for the retailer also climbed from £452.4m to £528.3m over the year, as reported by .
These figures emerge after Waterstones experienced an 80% drop in profit in the previous financial year due to issues with a new warehouse system. Despite the recovery, the chain's latest pre-tax profit still falls short of the £50.6m reported in the year ending April 2022.
The discussion around the return to office work has been prominent recently, especially following the controversy surrounding WPP’s four-day working week policy. Earlier in the month, Waterstones' chief James Daunt revealed plans to open numerous new bookshops in 2025 across the º£½ÇÊÓƵ and hinted at a potential stock market listing in either London or New York.
A statement from the board highlighted that "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 reaped the benefits of a resurgence in the popularity of reading and brick-and-mortar bookstores, which has been notably bolstered by social media and favourable 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."
The bookseller outlined that it had seen an improved profitability due to lowered costs from "system implantation offset by the inflationary impact on other operational costs".
Moreover, the retailer underscored its strong online business performance, adding: "The online business continues to deliver a strong performance."
Emphasising its commitment to excellence in retail, Waterstones stated: "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."
Further expansion in the digital realm for Waterstones involves embracing new online platforms. "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."
Additionally, the accounts for Waterstones detailed a substantial corporate financial adjustment. A capital reduction of £71m was executed in April 2024, followed by a declaration of a dividend worth £72.9m, aimed at balancing intercompany debts within the group.
Accordingly, this dividend was channelled to counterbalance an intercompany receivable owed by Waterstone's immediate parent entity, Book Retail Bidco. Examining the financials of the parent company reveals that its revenue climbed from £499.5m to £552.4m over the year.
The company also bounced back from a pre-tax loss of £3.7m, reporting a pre-tax profit of £25.6m.
