THE Dorset-based arts and craft chain Hobbycraft is to open more stores and create jobs after revealing rising profits.

The Christchurch-based business said it had "multiple new initiatives" on the go although it was starting to see the cost of living crisis hit demand.

The company said its adjusted pre-tax profit for the 2022 financial year was £15million, up from £13.8m the previous year.

Total revenue rose 14.8 per cent from £203.1m.

In the coming financial year, the company is set build new stores in Bromborough, Merseyside; Biggleswade, Bedfordshire; and Southend, Essex.

The store openings will create 40 new retail jobs.

Chief executive Dominic Jordan said the company was “incredibly well placed” but added the 2023 financial year will be “challenging”.

He said: “As we emerge from the pandemic the business is incredibly well placed to build on the excellent performance in full-year 2022, with multiple new initiatives including the new website, workshop channel, further new stores and a subscription model which launches in the coming year.

“However, we are conscious that the year ahead will be very challenging, particularly given the significant inflationary pressures on our customers and we are starting to see this impact on market demand in the early part of full-year 2023.”

Mr Jordan also said Hobbycraft faced problems because of the ongoing cost of living crisis and pandemic, which include a significant increase in freight costs and the company having to close for seven weeks in 2021 as it was not classed as an essential retailer.

The company turned its efforts to the digital space, and saw e-commerce sales grow 58.2 per cent from the point stores reopened in April 2021 compared with pre-pandemic levels in 2020.

The group also hailed strong growth for its benefits scheme – Hobbycraft Club – which has now reached 5.9m members.

Seven new stores and 100 new jobs were created over the 2021-22 financial year across regions including Leicester, Rochester and Boucher Crescent in Northern Ireland.

Founded in 1995, Hobbycraft has more than 100 stores across the country. It is headquartered at Bournemouth Airport’s Aviation Park.