Billionaire Sir Philip Green will not pay himself a dividend this year after profits at his Arcadia retail empire were slashed by a fifth.
Sir Philip banked a #1.2 billion windfall from Arcadia last year in the world’s largest ever dividend payment after the company defied the downturn in spending on the high street.
But yesterday he said no dividend would be paid this time after pretax profits at Arcadia – which includes Topshop, Miss Selfridge, Burton and Dorothy Perkins – fell from #253.8 million to #202.4 million. Operating profit slipped 8.1 per cent to #300.6 million.
It came as like-for-like sales at Arcadia dropped 1.9 per cent in the 12 months to September 2.
The slump at Arcadia follows problems at the other part of Sir Philip’s retail business Bhs, which last month reported tumbling annual profits and a 7.1 per cent fall in like-for-like sales.
The Arcadia stores have come under pressure from strong growth at Primark and a recovery at Marks & Spencer.
But Sir Philip hailed a "strong performance" at Arcadia, given the tough conditions on the UK high street.
He said total sales were up two per cent to #1.8 billion and margins were the same as last year.
Sir Philip added that like-for-like sales were down just one per cent since September 2 – an improvement on the whole of last year.
Retail analyst Richard Ratner, of Seymour Pierce, said a decline of just one per cent was "relatively good, given anecdotal evidence from other retailers".
He added that the annual results were "pretty decent" considering the trading conditions.
Sir Philip said: "This represents a strong performance when set against a competitive retail market, significant investment in new space by our competitors, and underlying cost inflation for all retailers.
"Our operating margin at 16.7 per cent is still among the best in the industry. Like-for-like sales since the year end are down one per cent. However, our disciplined stock control has enabled us to maintain margins."
Arcadia did not give a breakdown of results at its different chains, which also include Evans, Outfit and Wallis.
It is thought that Topshop performed well while analysts suggested Dorothy Perkins lost about #3.5 million.
Capital expenditure rose to #123 million from #65 million last year. Some 46 new outlets were opened and a further 20 re-sited.
In the year so far Arcadia has committed #30 million to new space and refurbishments which Sir Philip said demonstrated the group's confidence in its businesses and their management teams.
Sir Philip acquired Arcadia for #850 million in 2002. His family owns 92 per cent, with the balance owned by HBOS which backed the takeover.
He recently secured the services of supermodel Kate Moss to design and create a new range of clothing for Topshop.
The appointment of Moss coincided with the resignation of Topshop boss Jane Shepherdson, who has been credited with growth at the high street store.
Both Sir Philip and Ms Shepherdson denied she left the company over the appointment of Moss.
Last month Topshop lost its title of "best shop on the high street" to River Island after three years at the top.