The UK arm of the Smyths Toys retail group recorded revenue of £1.01bn in 2025, the first time the unit has cleared the billion-pound mark. Pre-tax profit rose 10% to £20.5m on a 7% sales increase, though the dividend paid to the parent company was cut to £15m from £20m a year earlier.
The margin story is the real story
Gross margin expanded 50 basis points to 19.1%, which the directors attribute to both the volume uplift and continued cost reduction. That margin move is more meaningful than the top-line milestone: on £1bn of revenue, each 10 basis points is £1m of incremental gross profit. The operating profit line of £21.89m absorbed £1.39m of interest expense and £18.32m of non-cash depreciation, leaving a post-tax result of £14.5m after a £5.99m corporation tax charge.
Store count still growing
Five new outlets opened during the year, bringing the England, Scotland and Wales estate to 127. That follows seven openings in 2024. The Northern Ireland business, filed separately, added 7% revenue to reach £61.07m but saw pre-tax profit slip 7.5% to £1.42m on a headcount of 219. The UK unit's own headcount rose 60 to 3,623, with staff costs climbing £2.93m to £78.27m.
Cash generation and the inter-company dividend
Cash on the balance sheet moved from £8.55m to £10.38m. The £15m dividend was settled through an inter-company account, leaving shareholder funds at £9.7m including £6.7m of accumulated profits. Lease costs of £37.12m and depreciation of £18.32m together exceed operating profit, a reminder that the asset base required to run a big-box toy retailer is substantial.
What the directors actually said
The board stated it was pleased with the result "particularly given the current economic climate and the competitive marketplace." They also flagged further UK expansion through new store openings in the coming years. The revenue split shows £957.85m from retail sales of goods and £59.97m from services to group companies, meaning the external customer still drives the overwhelming majority of the top line.