TIDMFOOT
RNS Number : 4930Z
Footasylum PLC
03 September 2018
3 September 2018
This announcement contains inside information
Footasylum plc
("Footasylum" or the "Company")
Trading Update
Footasylum, a UK-based fashion retailer focusing on the branded
footwear and apparel markets, announces an update on trading
performance for the six months ended 25 August 2018 (the "Period"),
and on guidance for the year ending 23 February 2019.
Trading
Footasylum expects to report revenue of GBP98.6 million for the
Period, an increase of 18.5% compared to the corresponding period
in the prior year (HY18: GBP83.2 million). Store revenue was up
12.4% to GBP66.3 million (HY18: GBP59.0 million), online revenue
grew 28.5% to GBP30.2 million (HY18: GBP23.5 million), accounting
for 30.6% of the total revenue (HY18: 28.2%), and wholesale revenue
trebled to GBP2.1 million (HY18: GBP0.7 million).
Footasylum had 66 stores in the UK at the Period end, of which
64 were the core Footasylum fascia.
Revenue by channel for the six months to 25 August 2018
HY19 HY18 Revenue Growth
GBPm GBPm GBPm %
----- ----- ------- --------
Total Revenue 98.6 83.2 15.4 18.5
* Store 66.3 59.0 7.3 12.4
* Online 30.2 23.5 6.7 28.5
* Wholesale 2.1 0.7 1.4 200.0
----- ----- ------- --------
Footasylum expects to report a small adjusted EBITDA loss for
the Period reflecting a lower gross margin and higher costs from
investment in the Company's operations. The Company will also
report over GBP2 million of exceptional income (excluded from
adjusted EBITDA) from the early termination of the lease on one of
the Company's Birmingham stores.
Outlook
Whilst trading since the beginning of the current financial year
has been impacted by weak consumer sentiment on the high street,
the Company's store performance for May and June was positive, as
reflected when the Company gave guidance for FY19 in June. However,
store performance during July and August was more challenging
which, in the context of there being no sign of a recovery in the
short-term on the high street, has led the Board to reassess its
overall expectations for the balance of FY19. While online and
wholesale revenue continues to perform strongly year-on-year, store
sales have been disappointing, which has been exacerbated by some
unforeseen delays in the Company's new store openings and
upsizes.
Despite an ongoing programme of investment to drive sales,
Footasylum's revenue growth for FY19 is now expected to be below
current market expectations. As a result of this, and a lower
overall gross margin from a higher amount of clearance activity in
stores, the Board now expects adjusted EBITDA for the full year to
be significantly lower than previous guidance, at less than half of
the FY18 adjusted EBITDA of GBP12.5 million.
Footasylum continues to invest in improving the Company's
consumer offering ahead of peak trading, and the Board has been
encouraged by the progress made to date, including the successful
delivery of several technology projects in the Period. The strategy
to deliver additional store upsizes alongside new store openings is
also progressing, with six new store openings and further upsizes
expected to be completed by December.
The Board believes that upsizing certain stores will materially
improve Footasylum's existing strong brand relationships while
enhancing the consumer experience in store. Reflecting this
investment, capital expenditure and associated depreciation is
expected to increase in the medium-term, with capital expenditure
peaking at around GBP16 million in FY19. Overall the Company's year
end cash position is expected to remain in line with market
expectations as a result of the exceptional income and working
capital management.
In the longer-term, the Board remains confident in the strategy
set out at Footasylum's FY18 results, and is encouraged by the
progress made to date in strengthening its partnerships with core
suppliers and improving its technology and consumer systems.
Barry Bown, Executive Chairman of Footasylum, commented:
"These are undoubtedly challenging times in the retail industry
and, in common with many other businesses, Footasylum's trading has
continued to be impacted by weak consumer sentiment. On top of
that, increased clearance in stores has led to a reduction in gross
margin, and we have also had some unforeseen delays in our new
store openings and upsizes. However, we have continued our
programme of investment, both in upsizing our stores and in our
digital capabilities, and are working hard on a number of
initiatives to maximise the Company's performance during the
upcoming peak trading period.
Despite the challenging outlook, we are encouraged by the
continuing progress that we are making in improving our online
performance, rolling out our store opening programme, and further
enhancing our supplier relationships, and therefore remain
confident in the Company's long-term prospects."
Enquiries:
Footasylum Tel: +44 (0) 1706 714 265
Barry Bown, Executive Chairman
Danielle Davies, Chief Financial Officer
GCA Altium Limited (Financial Adviser & Nominated Adviser) Tel: +44 (0) 20 7484 4040
Phil Adams
Sam Fuller
Tim Richardson
Liberum Capital Limited (Broker) Tel: +44 (0) 20 3100 2222
John Fishley
Jill Li
Powerscourt (Financial Public Relations) Tel: +44 (0) 207 250 1446
Rob Greening
Lisa Kavanagh
Isabelle Saber
Customer website: https://www.footasylum.com/
Investor website: http://investors.footasylum.com/
Disclaimer
This announcement contains inside information for the purposes
of article 7 of EU Regulation 596/2014. The person responsible for
making this announcement on behalf of Footasylum is Nancy Kelsall,
Company Secretary.
Certain statements in this financial report are forward-looking.
Where the financial report includes forward-looking statements,
these are made by the Directors in good faith based on the
information available to them at the time of their approval of this
report. Such statements are based on current expectations and are
subject to a number of risks and uncertainties, including both
economic and business risk factors that could cause actual events
or results to differ materially from any expected future events or
results referred to in these forward-looking statements. Unless
otherwise required by applicable law, regulation or accounting
standards, the Company undertakes no obligations to update any
forward-looking statements whether as a result of new information,
future events or otherwise.
About Footasylum
Footasylum is a UK-based fashion retailer focusing on the
branded footwear and apparel markets. The Company retails
"on-trend" product ranges which are predominantly aimed at 16 to
24-year-old fashion-conscious consumers and are sourced from an
extensive stable of third-party and own brands. These include
well-known sports and casual footwear and apparel brands, as well
as up-and-coming brands and own label products.
Examples of third-party brands include: adidas; Nike; The North
Face; Gym King; Converse; New Balance; EA7; Vans; Nicce London;
Under Armour; Tommy Hilfiger; and Calvin Klein. Examples of
Footasylum's own brands include: Kings Will Dream and Alessandro
Zavetti.
The Company operates a multi-channel model which combines a
66-strong store estate - in a variety of high street, mall and
retail park locations in cities and towns throughout Great Britain
- with a fast-growing online platform and a recently launched
wholesale arm for distributing its own brand ranges via a network
of partners.
Footasylum was founded in 2005 and the Company's ordinary shares
were admitted to trading on AIM in November 2017.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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