Interim Results
January 25 2001 - 2:00AM
UK Regulatory
RNS Number:7960X
Mulberry Group PLC
25 January 2001
INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2000
HIGHLIGHTS
- Underlying sales up #700,000. Gross profit margins
rise to 53.5%. (1999: 49.4%)
- UK retail sales up 9% like for like, driven by 20%
increase in handbags and luxury accessories.
- Group borrowings under #1 million following completion
of investment by Challice.
- New York flagship opening on course for Spring 2002.
- Young British designer Scott Henshall appointed. His
first full collection to be shown to the trade in
February.
- Christmas like for like sales up 12%.
Roger Saul commented
"We are achieving strong sales growth in the UK and
abroad with our luxury accessories business. We are
investing heavily in design and marketing resources and I
believe that this, together with our new partnership with
Christina Ong, is building a strong platform for future
growth."
Contacts:
WMC Communications
James Chandler 020 7591 3999
Teather & Greenwood Limited
Mark Taylor 020 7426 9000
CHAIRMAN AND CHIEF EXECUTIVE'S REVIEW
I am pleased to report that the trading performance of
the Group has continued to make steady progress in the
six months to 30 September 2000. Like for like sales in
our full price UK retail outlets increased by 9% overall
and 20% for accessories. Wholesale orders for the
autumn/winter 2000 season showed an increase of 34% in
ready to wear and 8% for accessories compared to the
previous year.
The underlying trading losses for the period were reduced
by #550,000 compared to the previous year which had
benefited by approximately #500,000 from the one-off sale
of stock to Kravet, as a result of the agreement to
license the home furnishings business.
On 11 September 2000, we completed the inward investment
of #7.6 million by Challice Limited and have subsequently
reduced the Group's borrowing to less than #1 million,
giving us substantial facilities to finance the next
stage of our growth.
STRATEGY
The key to our improved financial performance has been
the focus on accessories. In particular we have invested
in the design function and focussed on sales in the UK to
strengthen the profitable base of the Group.
We are putting increased investment behind the ready to
wear design team. We have appointed the young British
designer, Scott Henshall, to take over the design
direction of womens ready to wear. The new autumn range
will be shown to the trade in February.
We have engaged leading design consultants, Four IV, to
work with us on a complete review of the brand as well as
the next generation of retail presentation.
These investments in the future will result in additional
overhead expenditure in the second half. I am confident
that they will lay the right foundations for the next
stage of our growth and our return to profitability.
FINANCIAL REVIEW
Sales were #10.6 million (1999:#12.1 million) producing a
reduced loss of #0.65 million (1999:#0.70 million).
Underlying sales increased by #0.7 million and trading
losses reduced by #0.55 million after adjusting for the
sales transferred to the home licensee and their one-off
purchase of stock in September 1999.
Gross profit increased from 49.4% to 53.5% reflecting
both the benefit of improved sourcing and a higher
proportion of sales being made through our own retail
outlets. Overheads were reduced by #0.4 million in the
period compared to the prior year as a result of
continuing tight cost control and the reduced home
division costs resulting from the license agreement. The
balance sheet, which is substantially stronger reflects
the benefit of the Challice investment.
UNITED STATES OF AMERICA
A key objective of the transaction with Challice Limited
was to enable Mulberry to develop the US market. We have
commenced work on the detailed planning of this project
and anticipate opening a flagship store in New York in
spring 2002. The timing of these plans will be affected
by the ability to find the appropriate properties as well
as the careful consideration of the product to be sold
and the positioning of the brand.
CURRENT TRADING AND OUTLOOK
Like for like sales in our full price UK retail outlets
for the quarter to 30 December 2000 increased by 10%,
despite the impact of the disruption caused by the rail
crisis and for the month of December increased by 12%.
The spring/summer 2001 wholesale order books show
significant increases over last year for both accessories
and ready to wear. Our major franchise shop partners and
wholesale customers in the UK and Europe have had a good
autumn season with the Mulberry brand. We expect the
sales growth experienced in the first six months to
continue in the second half.
Roger Saul
Chairman & Chief Executive
25 January 2001
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudite Unaudite Audited
d 6 d 6 12
months months months
to to to
30.9.00 30.9.99 31.3.00
#'000 #'000 #'000
TURNOVER 10,577 12,149 26,390
Cost of sales (4,923) (6,143) (12,945)
-------- -------- --------
- - -
GROSS PROFIT 5,654 6,006 13,445
Other operating expenses (5,981) (6,374) (13,492)
(net)
-------- -------- --------
- - -
OPERATING LOSS (327) (368) (47)
Group share of profit of
associated company - - 16
Interest payable and similar
charges (319) (330) (635)
-------- -------- --------
- - -
Loss on ordinary activities
before taxation (646) (698) (666)
Tax on loss on ordinary
activities (note 2) - - (14)
-------- -------- --------
- - -
LOSS FOR THE PERIOD (646) (698) (680)
Dividends - - -
-------- -------- --------
- - -
RETAINED PROFIT/(ACCUMULATED (646) (698) (680)
LOSS)
======== ======== ========
= = =
Loss per share (2.86p) (3.32p) (3.24p)
Dividend per share Nil Nil Nil
pence pence pence
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
30.9.00 30.9.99 31.3.00
#'000 #'000 #'000
FIXED ASSETS 5,311 5,803 5,522
CURRENT ASSETS
Stocks 7,020 6,178 6,278
Debtors 4,718 5,661 3,628
Cash 7 7 212
--------- --------- ---------
11,745 11,846 10,118
CREDITORS: Amounts falling
due within one year (5,878) (12,029) (11,679)
--------- --------- ---------
NET CURRENT ASSETS 5,867 (183) (1,561)
--------- --------- ---------
TOTAL ASSETS LESS CURRENT
LIABILITIES 11,178 5,620 3,961
CREDITORS: Amounts falling
due after one year (1,057) (1,934) (88)
PROVISIONS FOR LIABILITIES
AND CHARGES - - -
--------- --------- ---------
NET ASSETS 10,121 3,686 3,873
========= ========= =========
CAPITAL AND RESERVES
Called up share capital 2,458 1,049 1,299
Reserves 7,663 2,637 2,574
--------- --------- ---------
10,121 3,686 3,873
========= ========= =========
CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months 6 months 12 months
to to to
30.9.00 30.9.99 31.3.00
#'000 #'000 #'000
Operating loss (327) (368) (47)
Depreciation 376 409 831
Decrease/(increase) in (742) 218 118
stocks
Decrease/(increase) in (1,090) (805) 1,233
debtors
Increase/(decrease) in 1,060 75 (393)
creditors
--------- --------- ---------
NET CASHFLOW FROM (723) (471) 1,742
OPERATIONS
Interest (319) (330) (644)
Taxation 0 0 (19)
Capital expenditure (165) (7) (117)
Dividends paid 0 0 0
--------- --------- ---------
NET CASHFLOW BEFORE (1,207) (808) 962
FINANCING
Financing 4,410 (654) (554)
--------- --------- ---------
INCREASE/(DECREASE) IN CASH
IN THE PERIOD 3,203 (1,462) 408
========= ========= =========
RECONCILIATION OF NET
CASHFLOW TO MOVEMENT IN NET
DEBT
Increase in cash in the 3,203 (1,462) 408
year
Cash outflow from decrease
in debt and lease finance 2,660 654 804
--------- --------- ---------
5,863 (808) 1,212
Inception of finance leases (24) (38) (30)
--------- --------- ---------
Movement in net debt 5,839 (846) 1,182
NET DEBT, BEGINNING OF (7,665) (8,847) (8,847)
PERIOD
--------- --------- ---------
NET DEBT, END OF PERIOD (1,826) (9,693) (7,665)
========= ========= =========
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 2000.
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 2000,
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 24
January 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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