Timpson sheds more than 800 jobs as ‘traumatic transformation’ leads to profits surge
More than 800 jobs were shed by Timpson during its latest financial year after a “traumatic transformation” led to surging back into the black.
The family-owned group, which was founded in 1865, posted pre-tax profits of £24.5m for the 12 months to September 25, 2021, up from losses of £10.7m in the prior year.
The Manchester-headquartered company’s turnover also increased from £209.3m to £212.2m.
For the last year before the Covid-19 pandemic, the 12 months to September 28, 2019, the group’s turnover totalled £286.9m and its pre-tax profits were £20.6m.
The group closed 35 shops “where the rent was unviable” during the year but opened 25 supermarket car park pods.
“Record figures during a bumper holiday season” were also reported by the group’s two pubs on Anglesey, The Oyster Catcher and The White Eagle.
In April 2021, it acquired The Watch Lab Holdings Limited for £1. The group’s brands also include Johnsons, Jeeves, The Watch Workshop, Max Spielmann and Snappy Snaps.
A statement signed off by the board said: “The Covid rollercoaster continued throughout our latest financial year.
“In October 2020, sales were starting to recover to pre-pandemic levels, when we were affected by further lockdowns, which severely curtailed Christmas trading and went on into the spring, with shopping centres continuing to experience a shark drop in footfall.
“Changed habits, created by Covid, reduced the demand for many of our services. Working from home, a severe reduction in holidays abroad and the lack of weddings, parties and special celebrations reduced our turnover of shoe repairs, dry cleaning and photo, but key cutting and watch repairs have done well.
“However, our supermarket car park-based Timpson shops achieved 2019 turnovers and we opened 25 new pods during the year. Footfall on high streets steadily improved from April onwards, with a significant surge in September brining numbers near to the pre-Covid level.
“But city centres, especially central London still suffered from the number of almost empty offices.”
Timpson also provided details of its “traumatic transformation” it has experience since March 2020. The group said it was losing £1.5m a week when all of its shops were forced to close and its bank balance was “rapidly disappearing”.
Over the next 18 months it received about £37.5m from the furlough scheme and closed business grants. It decided to guarantee all of its employee’s basic pay beyond the furlough payments, which cost the group £15m and reduced he benefit of government support to about £22.5m.
The group also put in place a “cost saving exercise, which looked at every part of the business”.
It added: “This brought a major change to our business model – many of our shops are now run on fewer people, but, with a high percentage of top performing colleagues and a stronger support function, this is proving to be successful”.
The average number of people employed by the group during the year fell from 4,796 to 3,950.
Timpson also said: “Up to April we relied heavily on the government support to keep us going but during the summer our profitability improved and we will enter our new financial year with the prospect of maintaining profits without replying on extra money from the government.
“We therefore hope that 2021/22 will be more of less back to normal. But there could well be some headwinds.
“There are likely to be more unexpected consequences of Covid like the shortage of workers and delivery difficulties that appeared in August 2021. It is far too early to forecast trading with any confidence.
“The last year has brought extra pressure to our colleagues and their families, but a positive attitude has continued throughout the pandemic. We have continued to give personal support by providing hardship loans, mental health first aid and financial counselling. We have a great team of colleagues who are the cornerstone of our long-term success and I’m pleased we have been able to finish the year by giving everyone a 5% pay increase.”