RNS Number:9292N
Mulberry Group PLC
23 June 2005
MULBERRY GROUP PLC
23 JUNE 2005
MULBERRY GROUP PLC ("Mulberry" or the "Group")
PRELIMINARY RESULTS FOR
THE YEAR TO 31 MARCH 2005
Mulberry Group Plc, the AIM listed luxury brand, today announced its preliminary
results for the year ended 31 March 2005.
HIGHLIGHTS
Sales increased by 19% to #30.1 million.
Profit after tax of #2.0 million (2004: #31,000).
Gross margin increased from 50% to 54%.
Significantly strengthened balance sheet with net cash #2.0 million (2004: net
debt #2.2 million).
Current trading and outlook positive:
The Autumn 2005 order book more than 80% ahead of last year.
UK full price like for like retail sales for 9 weeks to 4 June 2005 up by 47%.
GODFREY DAVIS, CHAIRMAN AND CHIEF EXECUTIVE COMMENTED:
"We have delivered sales growth and a substantial increase in profit.
The outlook is very positive with growing order books and retail sales. The
programme of expansion in the USA, Asia and Japan has made an encouraging
start."
FOR FURTHER DETAILS PLEASE CONTACT:
WMC Communications
David Wynne-Morgan or Charlie Geller 020 7930 9030
CHAIRMAN'S STATEMENT
The Group has made excellent progress achieving good sales growth in the UK and
Europe combined with strong order intake from the new markets of the USA, Asia
and Japan. This has generated a substantial increase in profit. This positive
trend has continued into the new financial year.
The Group made a profit on ordinary activities after tax for the year of #2.0
million (2004 : #31,000).
Sales for the year increased by 19% to #30.1 million (2004: #25.3 million).
Sales accelerated as the year progressed and in the six months to 31 March 2005
grew by 36% compared to the same period in the preceding year. This reflects
strong demand for handbags and accessories from existing and new markets.
Gross profit margin, increased from 50% to 54%. Accessories margins continue to
improve with increased volume, while sales of lower margin men's and women's
wear have declined.
Operating expenses increased by #1.8 million (14%) reflecting the increased
level of activity.
At 31 March 2005, the Group had net cash of #2.0 million (2004: net debt #2.2
million). The Group has term loan and overdraft facilities of #7.5 million with
its principal bankers HSBC Bank plc.
BUSINESS REVIEW
Accessories, which are our core business, account for over 85% of Group sales.
Spring/Summer 2005 wholesale orders from the UK and Europe increased by 36% on
the prior year and accounted for 82% of the order book. Orders from the new
markets of the USA, Asia and Japan grew to 17% of the total compared to less
than 1% in the previous year.
Sales of leather handbags were the main driving force behind these sales
increases.
The men's and women's wear collections support the brand image and positioning.
The strategy continues to be to limit the distribution of these collections and
to focus on growing the sales of accessories.
Like for like sales in our UK full price shops were 19% higher for the year. A
shop is included as 'like for like' if it was open throughout the period in
question and the comparative period in the prior year.
In November 2004, the new website, mulberry.com, was launched with a new
streamlined online shop, bringing the site into line with our new image and
marketing approach.
Our marketing effort has expanded to include the USA, Asia and Japan. The
advertising and PR campaigns have succeeded in their objective of bringing the
brand to the attention of a wide spectrum of fashion conscious customers
worldwide. The new campaigns for Autumn/Winter 2005 and Spring/Summer 2006 will
feature in leading UK, European, Asian and Japanese fashion publications.
NEW MARKETS
In Autumn 2004, Mulberry handbags were launched in the USA with Bergdorf
Goodman, New York. The launch achieved our objectives and sales have
substantially exceeded the initial plan. In Autumn 2005, Mulberry handbags will
be available in 63 carefully selected US department stores and independent
fashion retailers.
As previously announced, Club 21 was appointed as the distributor for Asia
excluding Japan. They have taken over the successful relationship with Lane
Crawford, the leading department store chain in Hong Kong and China. The first
Mulberry standalone shop opened in an excellent position in Harbour City, Hong
Kong, in October 2004 and has made a good start. The second shop opened in
Bangkok in May 2005 followed by a third in Kuala Lumpur in June 2005. Further
shops throughout the region are planned over the next 2 years subject to
securing appropriate sites.
In Japan, our new distributors, Mitsui and Sanki Shoji have made a sound start.
The first major event was the opening, in February 2005, of a handbag sales area
on the ground floor in Isetan in Tokyo, which is generally considered to be the
most influential department store in Japan. Isetan has traded well and space has
been secured in 2 more leading department stores in Osaka for Autumn 2005. The
strategy in Japan is similar to that adopted in the USA, selecting the best
store in each location rather than making blanket agreements with department
store groups.
CURRENT TRADING AND OUTLOOK
As reported on 12 May 2005, demand for the Group's products continues to grow
strongly.
The Spring 2005 third party accessories wholesale order book closed at the end
of May 2005 65% ahead of the previous year. The accessories third party order
book for the Autumn 2005 season is approximately 80% ahead of the order book at
the same point in the prior year. It is estimated that more than three quarters
of the orders for the Autumn 2005 season have been taken at this date. Third
party wholesale sales account for approximately half of the Group's turnover. A
lower rate of growth is expected for Spring 2006 because of the significant
gains that were achieved in the previous year.
Mulberry's own stores continue to trade strongly and we opened a new shop in
Heathrow Terminal 1 in May. Like for like sales in the full price UK shops for
the first nine weeks of the new financial year continue to be up by over 47%.
This rate of growth is expected to decline as the year progresses because the
figures in the second half of the year will be compared to the period last year
when substantial sales growth was achieved.
DIVIDENDS
The Board is not recommending the payment of a dividend on the ordinary or
preference shares in respect of the year to 31 March 2005. The capital reduction
approved by shareholders at an Extraordinary General Meeting on 11 January 2005
was completed by the receipt of a court order from the High Court on 9 February
2005. The successful restructuring of Group reserves is expected to bring
forward the date at which dividends may be paid. The dividend on the preference
shares is a contractual commitment which must be paid before any dividend on the
ordinary shares. At 31 March 2005, the accrued but unpaid dividends on these
preference shares totalled #638,000 (2004 : #442,000).
STAFF
I would like to thank all our staff who have continued to drive the brand
forward with determination and commitment and without whom, the achievements of
the last year would not have been possible.
Godfrey Davis
Chairman and Chief Executive
23 June 2005
Contacts:
WMC Communications
David Wynne-Morgan or Charlie Geller 020 7930 9030
Teather & Greenwood Limited
Mark Dickenson 020 7426 9000
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 March 2005
2005 2004
Total Total
#'000 #'000
TURNOVER 30,064 25,327
Cost of sales (13,926) (12,539)
---------- ----------
GROSS PROFIT 16,138 12,788
Other operating expenses (net) (14,001) (12,248)
---------- ----------
OPERATING PROFIT 2,137 540
Group share of (loss)/profit of associated undertakings (17) 3
Loss on disposal of fixed assets - (166)
Interest receivable and similar income 27 -
Interest payable and similar charges (193) (336)
---------- ----------
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 1,954 41
Taxation on profit on ordinary activities 33 (10)
---------- ----------
PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION, BEING PROFIT
FOR THE FINANCIAL YEAR 1,987 31
7% preference dividend proposed on non-equity shares (196) (196)
1% preference dividend proposed on non-equity shares - 4
Non-equity finance costs (53) (53)
---------- ----------
RETAINED PROFIT/(LOSS) FOR THE YEAR 1,738 (214)
---------- ----------
PROFIT/(LOSS) PER ORDINARY SHARE - basic 3.56p (0.49p)
========== ==========
- diluted 3.49p (0.49p)
========== ==========
CONSOLIDATED BALANCE SHEET
31 March 2005
2005 2004
#'000 #'000
FIXED ASSETS
Tangible assets 4,904 5,385
Investments 60 73
------------- ----------
4,964 5,458
------------- ----------
CURRENT ASSETS
Stocks 5,379 6,565
Debtors 3,522 3,441
Cash at bank and in hand 2,183 1,245
------------- ----------
11,084 11,251
CREDITORS: Amounts falling due within one year (4,383) (3,912)
------------- ----------
NET CURRENT ASSETS 6,701 7,339
------------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 11,665 12,797
CREDITORS: Amounts falling due after more than one year (53) (3,178)
------------- ----------
NET ASSETS 11,612 9,619
============= ==========
CAPITAL AND RESERVES
Called-up share capital 2,839 2,838
Share premium account 6,495 11,371
Revaluation reserve 111 142
Capital redemption reserve 154 154
Preference dividend reserve 638 442
Special reserve 1467 -
Profit and loss account (92) (5,328)
------------- ----------
SHAREHOLDERS' FUNDS 11,612 9,619
============= ==========
Shareholders' funds may be analysed as:
Equity interests 8,359 6,615
Non-equity interests 3,253 3,004
------------- ----------
11,612 9,619
============= ==========
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March 2005
2005 2004
#'000 #'000
NET CASH INFLOW FROM OPERATING ACTIVITIES 4,857 1,684
Returns on investments and servicing of finance (162) (345)
Taxation (11) -
Capital expenditure (460) 303
------------- -----------
Cash inflow before financing 4,224 1,642
Financing (3,286) 3,511
------------- -----------
INCREASE IN CASH IN THE YEAR 938 5,153
============= ===========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/DEBT
2005 2004
#'000 #'000
Increase in cash in the year 938 5,153
Cash outflow/(inflow) from decrease/(increase) in debt 3,297 (690)
and lease finance
------------- ----------
4,235 4,463
Inception of finance leases - (130)
------------- ----------
Movement in net debt 4,235 4,333
NET DEBT, BEGINNING OF YEAR (2,231) (6,564)
------------- ----------
NET FUNDS/(DEBT), END OF YEAR 2,004 (2,231)
============= ==========
NOTES
1. The financial information set out above does not constitute the Group's
statutory financial statements for the years ended 31 March 2005 and 2004,
but is derived from those financial statements. Statutory accounts for the
year ended 31 March 2004 have been filed with the Registrar of Companies.
The statutory accounts for the year ended 31 March 2005 will be filed at
Companies House upon receiving the approval of the Annual General Meeting.
The auditors have reported on the accounts for the year ended 31 March 2004
and their report was unqualified and did not contain a statement under
section 237 (2) or (3) of the Companies Act 1985.
2. The results for the year ended 31 March 2005 contained in this report have
been prepared using accounting policies consistent with those used in the
preparation of the Annual Report and Financial Statements for the year
ended 31 March 2004.
3. Basic earnings per ordinary share has been calculated by dividing the
profit/loss on ordinary activities after taxation and appropriations of
profit in respect of non-equity shares for each financial year by
48,765,968. (2004: 43,453,282) ordinary shares, being the weighted average
number of ordinary shares in issue during the year.
Diluted earnings per share has been calculated by dividing the profit/loss
on ordinary activities after taxation for each financial year by 56,945,735
(2004:51,582,722) potential ordinary shares taking account of the potential
conversion of the preference shares and exercise of unexercised options.
4. Copies of the Annual Report and Financial Statements will be posted to
shareholders. Further copies can be obtained from Mulberry Group plc's
registered office at Kilver Court, Shepton Mallet, Bath, BA4 5NF.
Copies of this announcement are available for a period of one month from the
date hereof from the Company's registered office, Kilver Court, Shepton Mallet,
Bath, BA4 5NF and from the Company's nominated adviser, Teather & Greenwood
Limited, Beaufort House, 15 St. Botolph Street, London, EC3A 7QR.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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