Final Results
July 24 2002 - 6:20AM
UK Regulatory
RNS Number:0413Z
Mulberry Group PLC
24 July 2002
MULBERRY GROUP PLC
24 JULY 2002
MULBERRY GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR TO 31 MARCH 2002
CHAIRMAN AND CHIEF EXECUTIVE'S REVIEW
Notwithstanding what has been a difficult and traumatic year, the underlying trading performance of the Group has
continued to make progress.
Sales for the year increased by 8% to £27.8 million (2001: £25.7 million) despite the closure for refurbishment of
our flagship store in Bond Street for 18 weeks and the major effects on trade of the events of 11 September. The
increase in sales has been achieved primarily through strong growth in wholesale sales of accessories and menswear
and increased factory shop sales.
Gross profit for the year increased by £0.1 million with the gross margin reducing from 53.7% to 50.1%. Overall,
margins on accessories have been maintained but our ready to wear margins have been disappointing.
In my interim review last December, I indicated that the results for the full year would include the trading losses
and one-off costs of the closure of the stores in Tokyo and Brussels, the final costs of the brand review and the
write-off and loss of revenue associated with the Bond Street refurbishment. The consolidated profit and loss account
includes the Tokyo and Brussels losses of £1 million, as discontinued operations, whilst the brand review costs and
Bond Street write-off totalling £0.4 million are included in continuing operations. The Bond Street shop made sales
of £0.9 million in the same 18 week period in the prior year.
Including these one-off costs, the Group made a loss before tax for the year of £1.7 million (2001: profit £0.3
million).
Stock levels increased due to the decline in sales in our London stores post 11 September and the extended closure of
our Bond Street store. We have implemented tighter buying plans for our own retail shops for Autumn and stocks have
reduced since the year end.
THE MULBERRY BRAND
We have repositioned the Mulberry brand with considerable success in what has been a very testing year. Our marketing
and public relations activities have achieved exceptional coverage in the media.
We have opened two major stores showing the new brand image presentation in Bond Street and Brompton Road, London, in
October 2001 and February 2002 respectively and we have commenced the rollout of this programme into Europe with the
first new store in Copenhagen opening in April 2002.
This Autumn, we have agreed the opening of three new franchised stores in Russia, a new franchise store in The Hague
in Holland and the continuation of the refurbishment programme throughout our franchise network in Scandinavia.
It has been very encouraging to see growing demand for our new collections with key wholesale accounts throughout the
UK and Europe, particularly for our menswear and accessory collections.
MANAGEMENT
Over the last year we have restructured and appointed new management in both the ready to wear and Merchandising
functions with the aim of improving control of not only margin, but also product delivery and range size.
I am pleased to announce the appointment of Nicholas Knightly who joined Mulberry on 1 July as Womenswear Designer
and will take over from me the role of Design Director. This completes the reorganisation of the Design team.
HOME COLLECTION
Our licence relationship with Kravet Lee Jofa who produce and sell our Home furnishing collection continues to thrive
and sales have increased strongly during the year, particularly in the USA. We have just completed two new licence
agreements; the Mulberry bathroom collection with Eurobath Limited and the Mulberry bath towel collection with
Christy UK Limited. It is anticipated that the first products will be launched in 2003.
We have closed our home shop in the Kings Road, Chelsea because our partners Kravet Lee Jofa will open a new showroom
in the Kings Road in August.
OUTLOOK
We have begun the roll-out of the 'New' Mulberry look throughout Europe and are confident that this will bring
positive results in the medium term. In the USA, our partners have decided to hold back on commencing the agreed
store programme roll-out until the economic outlook is clearer.
In the UK we are finding that while conditions remain difficult, both retail and wholesale sales around the country
are strong whilst London continues to be hit by the lack of tourists, which is particularly evident in the department
stores. UK like for like retail sales for the first 14 weeks of this year are up by 1%, but margins have been
affected as we have cleared excess stock.
CHARITY
As a matter of policy we have actively involved the company recently in a campaign to focus public awareness on the
grave situation with HIV/AIDS which has reached epic proportions in Africa and a number of other countries. The
symbol for the campaign is the Mulberry Bottletop bag, which is made from used bottletops in Africa and converted
into a "must have" bag by us at Mulberry.
The press have responded enthusiastically and we believe it is a unique way of raising funding for the essential task
of education to halt the spread of the disease in a way that is also beneficial both to the way we are perceived and
our business relationships.
DIVIDENDS
The Board is not recommending the payment of a dividend on the ordinary or preference shares.
STAFF
I would like to say a particularly heartfelt thank you to all our staff who have had to cope with exceptional
circumstances this year whilst at the same time driving the brand forward with optimism and commitment.
Roger Saul
Chairman and Chief Executive
Contacts:
WMC Communications
David Wynne-Morgan 020 7591 3999
Teather & Greenwood Limited
Mark Taylor 020 7426 9000
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 March 2002
2002 2002 Unaudited Audited
2002 2001
Continuing Discontinued Total Total
Operations Operations
£'000 £'000 £'000 £'000
TURNOVER 26,916 901 27,817 25,723
Cost of sales (13,387) (486) (13,873) (11,904)
---------- ---------- ---------- ----------
GROSS PROFIT 13,529 415 13,944 13,819
Other operating expenses (net) (13,712) (1,045) (14,757) (13,149)
---------- ---------- ---------- ----------
OPERATING (LOSS)/PROFIT (183) (630) (813) 670
Loss on disposal of fixed assets (262) (331) (593) -
Group share of profit of associated undertakings 1 - 1 27
Finance charges (343) - (343) (394)
---------- ---------- ---------- ----------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION (787) (961) (1,748) 303
Tax on (loss)/profit on ordinary activities - (6) (6) (2)
---------- ---------- ---------- ----------
(LOSS)/PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION, BEING (787) (967) (1,754) 301
(LOSS)/PROFIT FOR THE FINANCIAL YEAR
========== ==========
7% preference dividend on non-equity shares (196) (107)
1% preference dividend on non-equity shares (3) (4)
---------- ----------
(LOSS)/PROFIT FOR THE YEAR TRANSFERRED (FROM)/TO RESERVES (1,953) 190
========== ==========
(LOSS)/EARNINGS PER ORDINARY SHARE
- BASIC (5.40p) 0.65p
========== ==========
- DILUTED (5.40p) 0.65p
========== ==========
CONSOLIDATED BALANCE SHEET
31 March 2002
Unaudited Audited
2002 2001
£'000 £'000
FIXED ASSETS
Tangible assets 6,952 5,013
Investments 75 78
---------- ----------
7,027 5,091
---------- ----------
CURRENT ASSETS
Stocks 9,096 7,378
Debtors 3,938 3,923
Cash at bank 151 332
---------- ----------
13,185 11,633
CREDITORS: Amounts falling due within one year (8,623) (4,771)
---------- ----------
NET CURRENT ASSETS 4,562 6,862
---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 11,589 11,953
CREDITORS: Amounts falling due after more than one year (2,654) (1,036)
---------- ----------
NET ASSETS 8,935 10,917
========== ==========
CAPITAL AND RESERVES
Called-up share capital 2,457 2,457
Share premium account 8,941 8,941
Revaluation reserve 204 235
Capital redemption reserve 154 154
Preference dividend reserve 51 -
Profit and loss account (2,872) (870)
---------- ----------
SHAREHOLDERS' FUNDS 8,935 10,917
========== ==========
Shareholders' funds may be analysed as:
Equity interests 6,125 8,158
Non-equity interests 2,810 2,759
---------- ----------
8,935 10,917
========== ==========
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March 2002
Unaudited Audited
2002 2001
£'000 £'000
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (2,248) 784
Returns on investments and servicing of finance (579) (394)
Taxation (6) (2)
Capital expenditure (2,146) (328)
---------- ----------
Cash (outflow)/inflow before financing (4,979) 60
Financing 829 4,111
---------- ----------
(DECREASE)/INCREASE IN CASH IN THE YEAR (4,150) 4,171
========== ==========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Unaudited Audited
2002 2001
£'000 £'000
(Decrease)/increase in cash in the year (4,150) 4,171
Cash (inflow)/outflow from (increase)/decrease in debt and lease financing (829) 2,743
---------- ----------
(4,979) 6,914
Inception of finance leases (997) (24)
---------- ----------
Movement in net debt (5,976) 6,890
NET DEBT, BEGINNING OF YEAR (775) (7,665)
---------- ----------
NET DEBT, END OF YEAR (6,751) (775)
========== ==========
NOTES
1. The financial information set out above does not constitute the Company's statutory accounts. Statutory accounts
for the year ended 31 March 2001 have been filed with the Registrar of Companies. The statutory accounts for the year
ended 31 March 2002 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 2001 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 2002 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, except for the policy on deferred taxation, which has been changed to comply with
FRS 19. No prior year adjustment was required as a result of this change.
3. Basic and diluted earnings per ordinary share has been calculated by dividing the profit/(loss) on ordinary
activities after taxation and dividends on non-equity shares for each financial year by 36,147,123 (2001: 29,380,490)
ordinary shares, being the weighted average number of ordinary 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.
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.
END
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