Half Year Review 2017

02 | Wyevale Garden Centres Capital Limited | Half Year Review 2017

bringing the joy of the garden to everyone

We are pleased to present an update on the performance of Wyevale Garden Centres Capital Limited (the “Group”) for the six months to June 2017.

2017 half year update

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The Group has continued to deliver positive like-for-like sales in the first half of the year, following the return to sales growth in the second half of 2016. This improvement continues to reflect the positive impact the new strategy is having on both customers and colleagues. This is despite mixed fortunes in terms of the weather, where a fine April was followed by a particularly wet May. In addition, the Group’s transactional website

went live in January 2017 and has traded above expectations in the first half of 2017.

Margins have also improved in the first half of 2017. However, the cost pressures from the National Living Wage, and sale and leaseback transactions remain. These impacts, in addition to increased investment in our people, result in EBITDA being broadly in line with 2016.

Trading Update

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Wyevale Garden Centre’s vision is to become the leading destination for garden, home and leisure and to be famous for the advice and inspiration that it offers. In providing this, the Group hope to bring the joy of the garden to everyone.

Strategy Update

In order to deliver this, the Group’s six new strategic objectives were set out in the 2016 Annual Report and these continue to be implemented. Each is detailed on the following pages with an update on progress.

The Group has made significant progress towards achieving these objectives in the first half of 2017, with key customer and colleague metrics showing continued improvement.

In the first half of 2017, the Group’s net promoter score, an index that measures the willingness of customers to recommend a company’s products or services to others, further improved, reflecting the improvements the Group has made to both its proposition and customer experience.

The Group also tracks colleague engagement using an established third party employee engagement survey. In the latest survey undertaken in June 2017, the Group’s colleague engagement score improved from the previous result in August 2016, reflecting the increased focus the Group has made on listening to colleagues and ensuring Wyevale Garden Centres is a great place to work.

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Simpler, more compelling offers

Our new transactional website

Before After

Strategy Update (continued)

Improving our Trading and Customer Proposition

In the first half of 2017, the Group has focussed on delivering a better customer proposition through increasing the Group’s trading capabilities, making it easier for customers to shop centres and providing simpler, more compelling offers and product ranges.

To support this goal, the Group also launched its fully transactional, best-in-class website in January 2017, enabling customers to purchase from Wyevale Garden Centres in areas of the UK that previously weren’t possible, and to allow customers to gain inspiration and advice through its rich online content of guidance, tips and ideas.

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Investing in the Garden Centre environment

Before

After

The Group has made further improvements to the customer experience in the first six months of 2017.

A particular focus in the first half of 2017 has been on investing to improve “first and last impressions” in a large number of the Group’s garden centres. This initiative also fixed or replaced critical assets in garden centres that were customer or colleague facing.

The Group has also taken a number of steps to deliver consistently strong operating standards across its centres. This was reflected in the Group’s June 2017 customer satisfaction survey results, where staff friendliness and approachability, staff product knowledge, and store cleanliness/maintenance were given the highest customer ratings based on their last visit to a Wyevale Garden Centre.

Delivering a Compelling Customer Experience

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08 | Wyevale Garden Centres Capital Limited | Half Year Review 2017

Strategy Update (continued)

Delivering our Supply Chain ProcessesThe Group has made some significant improvements to its supply chain in the first half of 2017, with the ultimate goal of delivering a supply chain which is efficient, scalable and systematic.

Two key benefits resulting from the initiatives which have been implemented in the first six months of 2017, have been to improve the Group’s stock availability and to improve the quality of the Group’s stock position. This has helped the Group’s customers to purchase the products they demand at the time they want to buy them.

The Group has also focussed on providing an improved supply chain service to its Garden Centres which has allowed more garden centre colleagues to spend less time on in-centre task, and more time providing exceptional customer service to the Group’s customers.

Making our People a DifferentiatorIn the first half of 2017, the Group has made significant progress on making Wyevale Garden Centres a great place to join, work and grow. The Group remains fully focussed on creating a customer focussed retail culture through empowering, engaging and up-skilling colleagues. Our values are focused upon enabling the achievement of the company’s vision: Inspiration, Helpfulness, Ownership and Passion.

During these six months, the Group has focussed on establishing high performing teams and improving the level of colleague engagement. This has been achieved through new listening forums, improving business-wide communication to encourage cross-functional and collaborative working, and investing in training and development programmes to improve talent management and succession planning.

Upgrading our Systems and ControlsAs the Group continues its transformation to a central supply chain as part of an omni-channel roadmap, the Group has progressed its plan to upgrade its systems and processes and deliver a more simple, robust and scalable infrastructure.

In the first half of 2017 the Group has focussed on upgrading its infrastructure and associated services to enable the deployment of new or upgraded business systems. Of particular note, the programme to deliver a new Enterprise Resource Planning system across the business by Spring 2018 is well advanced and the subsequent deployment of a new EPOS system is also progressing well. These improvements will help deliver an improved customer experience.

Generating Value from Improving the EstateIdentifying value creation opportunities from both existing and potential acquisitions as well as the existing garden centre estate remains a key objective for the Group.

The Group has not acquired any garden centres in the first half of 2017. During the first half of 2017, the Group has focussed on refining its acquisition criteria and integration plans for future opportunities.

The Group has also invested in improving the customer journey and concession partner mix in a number of key centres and has identified a pipeline of excess land opportunities which may yield alternative use value in the future.

09 | Wyevale Garden Centres Capital Limited | Half Year Review 2017

Investing in our peopleThe Group undertook its first colleague engagement survey in 2016 and this was followed up in the first half of 2017 with a ‘Pulse’ survey. This survey was for the business to get an update on how our colleagues were reacting to actions put in place in response to the previous survey results. It was pleasing to see that the results from the Pulse survey were higher than the previous survey. The Group will continue to react to feedback from this most recent survey throughout the remainder of the year.

Protecting our planetMinimising our impact on the environment continues to be a key focus for us, being important to our customers and reducing costs in our centres. Through our Environment Champions and centre managers we have continued to embed good practices to reduce our utility use and improve our waste recycling. We have continued to deliver initiatives such as our ‘Turn it Off’ campaign to motivate our centres to reduce their utility usage and introduced a ‘Recycle it Right’ campaign to encourage better recycling behaviour in centres.

Sourcing with careThe Group continues to work with suppliers to ensure that the timber products we sell have been sustainably sourced and that they comply with the EU Timber Regulations.

Strengthening our communitiesWyevale Garden Centres have celebrated reaching another fundraising milestone, having raised £1.6m for Marie Curie since the partnership began in 2014.

This year, colleagues demonstrated a real passion for the charity, having undertaken numerous personal challenges. Just two great

examples are Don Ellwood, Codicote Garden Centre Manager, who swam 20 kilometres, and David Brett, Enfield Garden Centre Manager who cycled 50 miles from our Braintree Garden Centre to Syon Park.

In July, 36 colleagues from the Customer Support Centre took on the Yorkshire 3 Peaks. Tackling 26 miles of rugged terrain over 12 hours, the team raised a terrific £18,929 for Marie Curie.

Centres in our Sussex and Kent region really rose to the challenge, collectively raising over £10,000 holding family fun days over the May Bank Holiday weekend for colleagues and customers.

As part of their ongoing commitment to the CR strategy, Wyevale Garden Centres have supported Marie Curie’s Great Daffodil Appeal and Blooming Great Tea Party national campaigns, with a donation of the percentage of sales from key products.

In addition to the partnership with Marie Curie, Wyevale Garden Centres continues to support the NSPCC through their ‘boxes of care’ initiative. 700 sunflower growing kits were donated to 36 individual NSPCC service centres for a third year in a row, to be used in children’s therapy sessions.

Corporate Responsibility (CR)

We continue to make good progress on our ‘Growing Together’ CR Plan across the four pillars.

The Group has raised

£1.6 millionfor Marie Curie since the partnership began in 2014

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NorthAltrincham BirchencliffeBold HeathBolton BridgemereCarr GateFindernGosforth Heighley Gate Leyland Marple PenninePoppleton Stockton TarporleyWorld of Pets & Leisure

CentralAlbrighton AldridgeBarnett HillBicesterBournvilleChiltonCodicoteCoventryGardenlandsHarlestone HeathHemel HempsteadHitchinLeicester RowenaMelbicksNorthamptonOxfordPercy Thrower’sPodingtonRugbyShenstoneSolihullStevenageStratford-upon-AvonTelfordTringWoburn SandsWolseley BridgeWoodlandsWorcesterWorld’s End

EastBraintree Bressingham Bury St Edmunds Crowland Huntingdon Louth Ongar Rayleigh RoystonSpringfield Sprowston StanwaySudbury UpminsterWellingboroughWolds ViewWoodbridge

SouthAlfold Beaconsfield BinfieldBrighton CadnamCanterbury Chartham Chichester Chipperfield Crawley Croydon Purley Way DorkingDummerElm Court EnfieldFair Oak FindonHamstreet HandcrossHare HatchHarrow HastingsHavant Heathlands John BrownsKeston LandfordLewesLower DickerLower Morden Marlow Old BarnOsterleyPaddock Wood Playhatch

Potters BarPulborough RakeRamsgate Seven HillsSherfield-on-LoddonShirley Syon ParkThatcham Tunbridge WellsWest ParleyWeybridgeWillesboroughWindleshamWindsor WinnershWoking Woodcote Green Worthing Ferring Wych Cross

Wales West & South WestAndoverAshford BarnstapleBrockworth BrooksCadbury CardiffCarmarthenCheddar CheltenhamEndsleighGalton Gloucester HerefordHereford WellingtonHungerfordJack’s Patch KeynshamLechlade LelantMoreton ParkNailsworthParRaglanSalisburySandersSidmouthSwanseaSwindonSwindon Hay LaneTauntonThornburyWimborne