Interim Results
December 21 2001 - 2:00AM
UK Regulatory
RNS Number:0792P
Mulberry Group PLC
21 December 2001
MULBERRY GROUP PLC
21 DECEMBER 2001
MULBERRY GROUP PLC ("Mulberry" or the "Company")
INTERIM RESULTS FOR
THE SIX MONTHS ENDED 30 SEPTEMBER 2001
Chairman and Chief Executive's Review
The trading performance of the Group has continued to make steady progress in
the six months to 30 September 2001 and is in line with expectations. Sales
increased by 14% to #12.1m (2000: #10.6m) despite the 16 week closure, for an
extensive refurbishment, of our flagship store in Bond Street. The Bond Street
store re-opened on 18th October 2001.
The sales increase has been achieved through strong growth in wholesale sales
of both Accessories and Ready to Wear with shipments 30% higher than the prior
year. Like for Like sales in our UK retail stores excluding Bond Street rose
by 7% in the period. Royalties received from our interior design products
licensee, Kravet, increased by 40% directly reflecting the increase in sales.
As expected with the closure of Bond Street the loss for the period increased
by #313,000 compared to the previous year. Included in this period are costs
of #100,000 related to the completion of the brand review and a one-off asset
write off of #200,000 in relation to Bond Street to expense previous
structural work superseded by the extensive refurbishment project. Retail
space in the shop has been increased by 22%.
Stock levels peak in September and October due to the normal trading cycle.
The higher level of stocks and borrowings compared to the previous year
reflect earlier deliveries from suppliers, the extended closure period of the
Bond Street store and the growth in activity.
MAJOR NEW STORE
We are realising increasing benefits of our relationship with Challice Limited
and their related companies, who made the inward investment of #7.6 million in
September 2000. In particular, we will open a major new Mulberry store of
6,000 sq ft in a prime position in Brompton Road in Spring 2002. This major
new London store, which will fully reflect the new design style of the Bond
Street flagship, will be operated and financed by them.
STRATEGY
As previously reported, we have been working with leading design consultants
over the last twelve months on developing the brand image. The reopening of
our Bond Street flagship store is a key part of this programme, creating the
next generation of retail presentation for Mulberry, which will become the
model for all our shops. The same design concepts feature in the new men's
accessories concession opened on the ground floor of Selfridges in October,
which is trading strongly, and the planned Brompton Road store. The next phase
of this programme will occur when our Copenhagen franchisee refits their store
with the new look in Spring 2002. Shareholders will also find a new outlet
store in Bicester village, which is trading well.
In the USA discussions have started on specific premises in Manhattan as the
site for the New York flagship. Whilst at an early stage we are still aiming
to see this store open in late 2002.
Subsequent to the end of the half-year, with Bond Street now open and progress
being made on the opening in the USA, the Board has decided to close the only
remaining store in Japan, which, with that country still in deep recession, is
incurring significant losses. As a result, we will incur costs of
approximately #1.0m in the second half in respect of trading losses and the
cost of closure.
We are commencing a strategic review of the whole of the Far East in
conjunction with Challice Limited, who through their associated companies have
extensive contacts and knowledge in the area. The result of this review will
be a new clear and cohesive strategy for the whole region.
FINANCIAL REVIEW
Sales for the period increased by #1.5 million to #12.1 million (2000: #10.6
million). The loss increased to #0.96 million (2000: #0.65 million).
The gross profit margin increased from 53.5% to 54.2%.
Overheads, excluding the one-off costs of the brand review were #1.1 million
higher in the period compared to the prior year reflecting the ongoing
investment in design and marketing.
CURRENT TRADING AND OUTLOOK
We are continuing with our strategy for the development of the brand. We are
reviewing and refitting existing stores and will open new stores and
concessions reflecting the new design concepts, starting in the New Year with
Brompton Road and Copenhagen. This programme has included the review of any
marginal or unprofitable stores, which led to the decision to close both Tokyo
and Brussels in the next six months.
There has been a significant reduction in footfall in London since the tragic
events of 11 September. Like for Like sales in our UK stores excluding Bond
Street increased by 7% in the first half. Our sales for the same stores in
the 11 weeks to 15 December, have been 8% lower than the previous year. Due
to this and the provision to be made for closing the Tokyo store in Japan, we
expect the Group's performance to be significantly below market expectations
for the full year ended 31 March 2002.
Our wholesale order position remains positive with Autumn / Winter 2001 third
party orders increased year on year by 21% for accessories and 34% for Ready
to Wear. Our wholesale order book for Spring 2002 remains ahead of last year
in all categories with particularly strong growth in menswear.
ROGER SAUL
Chairman & Chief Executive
21 December 2001
For Further information:
David Wynne-Morgan
WMC Communications 020 7591 3999
CONSOLIDATED PROFIT & LOSS ACCOUNT
for the six months ended 30 September 2001
Unaudited Unaudited Audited
6 months 6 months 12 months
to 30 September to 30 September to 31
2001 2000 March 2001
#'000 #'000 #'000
TURNOVER 12,060 10,577 25,723
Cost of sales (5,521) (4,923) (11,904)
------------- -------------- -----------
GROSS PROFIT 6,539 5,654 13,819
Other operating (7,159) (5,981) (13,149)
expenses (net)
------------- -------------- -----------
OPERATING (620) (327) 670
(LOSS)/PROFIT
Loss on disposal of (200) - -
fixed assets
Group share of - - 27
profit of
associated company
Interest payable (139) (319) (394)
and similar charges
------------- -------------- -----------
(Loss)/profit on (959) (646) 303
ordinary activities
before taxation
Tax on - - (2)
(loss)/profit on
ordinary activities
(note 2)
------------- -------------- -----------
(LOSS)/PROFIT FOR (959) (646) 301
THE PERIOD
Preference (99) - (111)
dividends proposed
and paid
------------- -------------- -----------
(ACCUMULATED (1,058) (646) 190
LOSS)/RETAINED
PROFIT
============== ============== ===========
(Loss)/Earnings per (2.93p) (2.86p) 0.65p
share
Dividend per Nil pence Nil pence Nil pence
ordinary share
CONSOLIDATED BALANCE SHEET
for the six months ended 30 September 2001
Unaudited Unaudited Audited
30 September 2001 30 September 2000 31 March 2001
#'000 #'000 #'000
FIXED ASSETS 6,636 5,311 5,091
CURRENT ASSETS
Stocks 9,652 7,020 7,378
Debtors 5,155 4,718 3,923
Cash 13 7 332
------------- ------------- ----------
14,820 11,745 11,633
CREDITORS: Amounts (9,526) (5,878) (4,771)
falling due within
one year
------------- ------------- ----------
NET CURRENT ASSETS 5,294 5,867 6,862
------------- ------------- ----------
TOTAL ASSETS LESS 11,930 11,178 11,953
CURRENT LIABILITIES
CREDITORS: Amounts (2,071) (1,057) (1,036)
falling due after
one year
------------- ------------- ----------
NET ASSETS 9,859 10,121 10,917
============= ============= ==========
CAPITAL AND RESERVES
Called up share 2,457 2,458 2,457
capital
Reserves 7,402 7,663 8,460
------------- ------------- ----------
9,859 10,121 10,917
============= ============= ==========
CASH FLOW STATEMENT
for the six months ended 30 September 2001
Unaudited Unaudited Audited
6 months 6 months 12 months
to 30 September to 30 September to 31 March
2001 2000 2001
#'000 #'000 #'000
Operating loss (620) (327) 670
Depreciation 566 376 756
Increase in stocks (2,274) (742) (1,100)
Increase in (1,232) (1,090) (295)
debtors
Increase in 157 1,060 753
creditors
-------------- -------------- ----------
NET CASH FLOW (3,403) (723) 784
FROM OPERATIONS
Interest (139) (319) (394)
Taxation 0 0 (2)
Capital (1,278) (165) (328)
expenditure
Preference (156) 0 0
dividends paid
-------------- -------------- ----------
NET CASH FLOW (4,976) (1,207) 60
BEFORE FINANCING
Financing 952 4,410 4,111
-------------- -------------- ----------
(DECREASE) / (4,024) 3,203 4,171
INCREASE IN CASH
IN THE PERIOD
=============== =============== ===========
RECONCILIATION OF
NET CASHFLOW TO
MOVEMENT IN NET
DEBT
(Decrease) / (4,024) 3,203 4,171
increase in cash
in the year
Cash (inflow) /
outflow from
(increase) /
decrease in
debt and lease (952) 2,660 2,743
finance
-------------- -------------- ----------
(4,976) 5,863 6,914
Inception of (75) (24) (24)
finance leases
-------------- -------------- ----------
Movement in net (5,051) 5,839 6,890
debt
NET DEBT, (775) (7,665) (7,665)
BEGINNING OF
PERIOD
-------------- -------------- ----------
NET DEBT, END OF (5,826) (1,826) (775)
PERIOD
============== ============== ==========
NOTES
1. Accounting policies
The interim 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
2001 with the exception of the adoption of FRS19 'Deferred tax' the effects
of which are not material.
2. Taxation
The corporation tax charge for the period is based on the effective rate
which it is estimated will apply for the full year.
3. Comparative figures
The comparative figures for the year ended 31 March 2001, which do not
constitute statutory accounts, are abridged from the company's statutory
accounts which have been filed with the Registrar of Companies. The report of
the auditors on these accounts was unqualified and did not contain a
statement under section 237(2) or (3) of the Companies Act 1985.
4. Approval and distribution
This report was approved by the Board of Directors on 20 December 2001 and is
being sent to all shareholders. Additional copies are available from the
Company Secretary at the Registered Office Kilver Court, Shepton Mallet,
Bath, BA4 5NF.
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