Preliminary Results
August 17 2000 - 7:02AM
UK Regulatory
RNS Number:6059P
Mulberry Group PLC
17 August 2000
Mulberry Group plc
Preliminary Results for the Year to 31 March 2000
CHAIRMAN'S STATEMENT
I am pleased to report that the improved trading
performance forecast in my interim report in January, has
continued in the second half of the year. We have traded
profitably in the second half of the year and our
strategy of focusing on the core accessories products has
generated increased sales and improved margins. We are
strengthening the innovation and design flair that is the
foundation of the Mulberry brand and continue to improve
the efficiency of our operations.
Our innovative accessory designs for both Winter 1999 and
Spring 2000, combined with a new and very focused
marketing strategy, have produced good sales growth in
both wholesale and retail as the new designs and
materials have come on stream. This process has gathered
momentum throughout the year.
Sales, on a like for like basis, increased by #1.5
million in the second half of the year after adjusting
for sales of fabrics transferred to the new licensee
Kravet. This followed a slight decline in the first half
and sales for the year were #26.4 million compared with
#27.4 million in 1999. However gross profit for the year
increased by #1 million from 45.3% to 50.9%, a full 10%
improvement in margin, as the sourcing strategy that we
put in place two years ago came into full effect. The
result for the year is a substantially reduced operating
loss of #0.05 million compared to #0.9 million in 1999.
There was a loss before tax of #0.7 million compared to
#1.8 million for the previous year. Net borrowings were
reduced by #1.2 million to #7.7 million.
The improved sales performance in our own shops that I
reported at the half year has continued, driven primarily
by accessories. The key product area has been women's
handbags, followed by luggage and high tech products such
as our Psion and Palm V cases.
We experienced a similar trend in Europe where both our
own and franchised stores have shown increases in trade,
particularly in accessories, reflecting the same success
with image and product that we have recorded in the UK.
This would have been more beneficial if it had not been
for the negative effect of the increased strength of
sterling.
HOME
The home licensing agreement that we signed with Kravet
in August 1999, has been running for six months. During
this period, they have invested in dramatically expanding
the product range with new designs from our design team.
We expect to see increased royalties in the year to March
2001.
JAPAN
In Japan, we appointed Toray as our master licensees in
Autumn 1999. Their team has started work on developing
the new license structure. Our strategy of locating the
Mulberry flagship store in Marunouchi has paid off with
an increase in sales of 15.7%. Prada, Armani and Hermes
have now opened flagship stores in the same street making
this a prime retail location in Tokyo.
INTERNET
We launched our website in Autumn 1998 and have been a
live and profitable e-tailer for the last six months. We
are experiencing a steady and progressive growth in
access to our site and increasing levels of sales. We
remain convinced that this will become an important sales
channel and believe that we are well poised to exploit
it.
STAFF
I would like to thank both the Directors and staff who
have had to endure tremendous pressure during this
difficult period for the Company. Their belief in the
brand and our ability to succeed has been essential.
DIVIDEND
The Board is not recommending the payment of a dividend.
CURRENT TRADING AND OUTLOOK
We have maintained and improved our performance for the
six months of the Spring/Summer 2000 season with like for
like growth in our UK full price shops of 12%.
Early indications of wholesale sales for autumn and
winter are looking good, particularly on accessories,
which are showing significant increases over the same
period last year. As a result of the improved climate
for wholesale sales and the continuing sales growth in
our own shops, the Directors look forward to the future
with confidence.
SUBSEQUENT EVENT
Further to our announcement on 9 June 2000 that we were
in talks with an international organisation specialising
in luxury goods and fashion, owned by Mr. Ong Beng Seng
and Mrs. Christina Ong, with a view to their making a
significant investment in the Group, we are pleased to
announce that these talks have reached a successful
conclusion and we have agreed, subject to shareholders'
approval, the following:-
1. Challice Limited, wholly owned by the Ongs, will
subscribe for 15 million new ordinary shares of 5 pence
each at 32 pence per share and 8 million 7% convertible
redeemable preference shares of 5 pence each at 35 pence
per share. The proceeds of this subscription, in
aggregate, will be approximately #7.6 million.
2. The Company and Challice Limited will form a 50:50
joint venture company to develop the US market. The
investment by Mulberry will be limited to US$ 1 million
and the Ongs will procure the balance of any financing
required. The development of the US market has been an
objective of the Group for a number of years. This new
joint venture achieves both the market development
objective and the limited risk criteria set by the
Directors.
A circular to shareholders giving further details of the
subscription and which convenes an extraordinary general
meeting of Mulberry to seek the necessary shareholder
approval has, today, been sent to shareholders.
Roger Saul
Chairman and Chief Executive
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 March 2000
2000 1999
#'000 #'000
TURNOVER 26,390 27,393
Cost of sales (12,945) (14,974)
-------- --------
- -
GROSS PROFIT 13,445 12,419
Other operating expenses (net) (13,492) (13,291)
-------- --------
- -
OPERATING LOSS (47) (872)
Group share of profit/(loss) of
associated company 16 (47)
Finance charges (635) (860)
-------- --------
- -
Loss on ordinary activities
before taxation (666) (1,779)
Tax on loss on ordinary
activities (14) (8)
-------- --------
- -
LOSS FOR THE YEAR (680) (1,787)
Dividends - -
-------- --------
- -
LOSS FOR THE YEAR TRANSFERRED
FROM RESERVES (680) (1,787)
======== ========
= =
Loss per share (3.24p) (8.57p)
Dividend per share Nil Nil
pence pence
CONSOLIDATED BALANCE SHEET
31 March 2000
2000 1999
#'000 #'000
FIXED ASSETS 5,522 6,168
CURRENT ASSETS
Stocks 6,278 6,396
Debtors 3,628 4,856
Cash at bank 212 -
--------- ---------
10,118 11,252
CREDITORS: Amounts falling due
within one year (11,679) (10,986)
--------- ---------
NET CURRENT (LIABILITIES)/ASSETS (1,561) 266
--------- ---------
TOTAL ASSETS LESS CURRENT 3,961 6,434
LIABILITIES
CREDITORS: Amounts falling due
after more than one year (88) (2,050)
--------- ---------
NET ASSETS 3,873 4,384
--------- ---------
CAPITAL AND RESERVES
Called-up share capital 1,299 1,049
Reserves 2,574 3,335
--------- ---------
SHAREHOLDERS' FUNDS 3,873 4,384
--------- ---------
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March 2000
2000 1999
#'000 #'000
Operating loss (47) (872)
Depreciation charge 845 879
(Profit)/loss on sale of tangible fixed (14) 4
assets
Decrease in stocks 118 1,538
Decrease in debtors 1,233 1,256
Decrease in creditors (261) (417)
Effect of foreign exchange rate changes (132) (73)
--------- ---------
NET CASH INFLOW FROM OPERATIONS 1,742 2,315
Interest (644) (843)
Taxation (19) 233
Capital expenditure and investment (117) (806)
Dividends paid - (55)
--------- ---------
NET CASH INFLOW BEFORE FINANCING 962 844
Financing (554) (429)
--------- ---------
INCREASE IN CASH IN THE YEAR 408 415
--------- ---------
RECONCILIATION OF NET CASH FLOW TO
MOVEMENT IN NET DEBT
Increase in cash in the year 408 415
Cash outflow from decrease in debt
and lease financing 804 429
--------- ---------
1,212 844
Inception of finance leases (30) (54)
--------- ---------
Movement in net debt 1,182 790
NET DEBT, BEGINNING OF YEAR (8,847) (9,637)
--------- ---------
NET DEBT, END OF YEAR (7,665) (8,847)
--------- ---------
NOTES
1. The financial information set out above does not
constitute the Company's statutory accounts. Statutory
accounts for the year ended 31 March 1999 have been filed
with the Registrar of Companies. The statutory accounts
for the year ended 31 March 2000 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 1999 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 contained in this report, which have not
been audited have been prepared using accounting policies
consistent with those used in the preparation of the
Annual Report and Accounts for the year ended 31 March
1999.
3. Earnings per share are calculated on 20,975,943
(1999: 20,849,442) ordinary shares being the weighted
average number of shares in issue during the year.
4. Copies of the Annual Report and Accounts 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.
5. The Annual General Meeting will be held at Mulberry
Group plc's registered office, Kilver Court, Shepton
Mallet, Bath, BA4 5NF on 4 October 2000.
Copies of this announcement are available for a period of
14 days from the date herof from the Company's registered
office, Kilver Court, Shepton Mallet, Bath, BA4 5NF and
from the Company's nominated adviser, Teather &
Greenwoood Limited, Beaufort House, 15 St. Botolph
Street, London, EC3A 7QR.
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