TIDMMUL
RNS Number : 6265X
Mulberry Group PLC
09 December 2010
MULBERRY GROUP PLC
9 December 2010 - Embargoed until 7am
MULBERRY GROUP PLC ("Mulberry" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2010
Mulberry Group plc, the British luxury fashion brand specialising in the design,
manufacture and sale of leather goods and accessories, is pleased to announce a
strong performance for the six months ended 30 September 2010.
MULBERRY DELIVERS SIGNIFICANT SALES AND PROFIT GROWTH
HIGHLIGHTS
· Total revenues increased by 38% to GBP44.7 million (2009: GBP32.3
million)
· Retail sales up 30%, like-for-like up 29%
· Autumn/Winter 2010 orders up 100% compared to prior year. Wholesale
shipments up 76%
· Gross margin up to 63.9% for the period (2009: 55.0%)
· Operating profit before exceptional costs of GBP1.0 million increased by
219% to GBP5.6 million (2009: GBP1.7 million before exceptional costs of GBP0.2
million)
· Profit before tax increased by 207% to GBP4.7 million (2009: GBP1.5
million)
· Strong balance sheet with cash of GBP12.3 million and no debt (2009:
GBP4.3 million)
· New store openings in Hong Kong, Korea, Qatar and UAE
· Basic earnings per share up by 217% to 5.7 pence (2009: 1.8 pence)
CURRENT TRADING AND OUTLOOK
· Retail sales up 47% for the 10 weeks to 4 December 2010, like-for-like up
47%
· Like-for-like UK Retail sales in full price stores and department store
concessions up by 66% for the 10 weeks to 4 December 2010
· Spring/Summer 2011 orders up 91% compared to prior year with four months
of the selling season to go
· New store openings in Manchester, Sydney, Amsterdam as well as the
flagship store on New Bond Street, London
· Expansion of the Somerset factory creating 60 new manufacturing jobs
GODFREY DAVIS, CHAIRMAN AND CHIEF EXECUTIVE COMMENTED:
"Mulberry has continued to increase sales and profitability during the first
half of the year due to consistent demand for our products in all markets. Since
September 2010, the pattern of strong demand has continued and the outlook for
the second half of the year is very positive, with the full year performance
likely to exceed market expectations. Despite the positive outlook we remain
cautious about the global economic environment."
FOR FURTHER DETAILS PLEASE CONTACT:
+-------------------------------+----------------------------------+
| Pelham Bell Pottinger | |
+-------------------------------+----------------------------------+
| Daniel de Belder | 0207 861 3881 |
+-------------------------------+----------------------------------+
| | |
+-------------------------------+----------------------------------+
| Altium Capital | |
+-------------------------------+----------------------------------+
| Ben Thorne | 0207 484 4076 |
+-------------------------------+----------------------------------+
| Melanie Szalkiewicz | 0207 484 4187 |
+-------------------------------+----------------------------------+
CHAIRMAN'S STATEMENT
BUSINESS REVIEW
The Group has continued to deliver strong sales and profit growth during the six
months to 30 September 2010. Sales increased 38% to GBP44.7 million (2009:
GBP32.3 million).
Retail sales in our own stores have started the year well with the Autumn/Winter
2010 collection being well received. Retail sales for the six month period
increased by 30% compared to the prior year (like-for-like up 29%).
UK Retail sales increased for the period by 27% (like-for-like up 26%). Our UK
full price stores and concessions were up 36% (like-for-like up 35%). As a
result of the strong sales for the Spring/Summer 2010 season, the Group had
greatly reduced stocks available for the summer sale. Consequently, sales during
this period were lower than they would have been otherwise. As previously
announced however, once the sale had ended, like-for-like sales in our full
price stores for the ten weeks to 2 October 2010 were 79% higher than the prior
year. Similarly, lower stocks have caused sales at our four outlet stores to
remain in line with the prior year.
Sales through our website, www.mulberry.com, grew by 32% during the period,
representing 7% of Group sales (2009: 7%). In addition to being a profitable
and growing sales channel, the website is a key marketing tool for the brand.
In the USA, our business is trading significantly ahead of the plan that we set
during October 2009, when we purchased two stores in New York and took back
responsibility for the full distribution rights to the North American market.
The stores have recorded sales increases of 102% compared to the prior year
whilst our wholesale and online businesses have also increased satisfactorily.
Under the terms of the purchase agreement, GBP1 million of deferred
consideration will become payable to Challice Limited should the turnover in the
North American market exceed a threshold of $6.0 million for the year ending 31
March 2012. Given the rapid growth currently being experienced in this market,
it is deemed prudent to make this provision for this exceptional cost now. The
GBP1 million consideration may be satisfied in either cash or shares at the
option of the Group following the end of the financial year ended 31 March 2012.
In France, sales in our small Rue St Honore store increased by 189% compared to
prior year.
Wholesale shipments to customers during the six months to 30 September 2010 were
up 76% compared to the prior year. The Wholesale business includes sales to our
European franchise partners, European and USA independent retailers and
department stores as well as our international franchise partners who run
Mulberry stores in Asia and the Middle East. In Asia, sales grew more quickly
than the rest of the world with the Korean market being a leading contributor.
Our partner stores report good sell through and that Mulberry's bestselling
products are successful in all markets.
The order book for Autumn/Winter 2010 finished 100% ahead of the previous year.
We have a mature wholesale business in the UK but despite this, orders increased
by 46% compared to Autumn/Winter 2009, with particularly strong growth from
Net-a-Porter and Selfridges. In the latter case, we opened a new larger
shop-in-shop within their Oxford Street flagship store during May 2010 which
resulted in a dramatic increase in business.
Gross profit margins have increased to 63.9% (2009: 55.0%). This significant
increase in gross margin is a consequence of a higher proportion of sales being
made at full retail price combined with a much reduced summer sale compared to
the prior year because there was relatively little end of season stock for
clearance. Underlying margins have also seen an increase of approximately 1%
largely as a result of increased volume.
Net operating expenses for the period increased by GBP7.7 million to GBP24.0
million (2009: GBP16.3 million). The main elements of this increase were:
GBP1.5 million variable rents and agents' commissions directly linked to the
sales growth, GBP1.5 million non-recurring property costs arising largely from
the fit out of the new flagship store that opened last week on New Bond Street
and the new corporate headquarters due to be completed during March 2011, GBP1.3
million additional spend on advertising and promotion, GBP1.3 million increased
employee costs and GBP1.0 million exceptional USA deferred consideration.
Operating profit before exceptional costs of GBP1.0 million increased by 219% to
GBP5.6 million (2009: GBP1.7 million before exceptional costs of GBP0.2
million).
Profit before tax has increased 207% to GBP4.7 million in 2010 from GBP1.5
million in 2009.
The Group balance sheet remains strong with cash of GBP12.3 million and no debt.
During the period, new Mulberry stores have been opened by our partners in Hong
Kong, Korea, Qatar and the UAE.
Bags and accessories remain our core business and continue to account for over
90% of Group sales. The Alexa handbag family has joined the successful
Bayswater, Daria and Mitzy ranges as one of a stable of best sellers. In
addition, we continue to develop and grow the women's apparel and women's shoe
businesses.
The rapid increase in demand continues to pose a challenge for our sourcing
team. We were unable to meet all of the demand during the period but the team
has been very successful in progressively increasing production and efficiency.
CURRENT TRADING AND OUTLOOK
The strong consumer demand for Mulberry products experienced during the six
months to 30 September 2010 continues.
During the ten weeks to 4 December 2010, total Retail sales were 47% above last
year with like-for-like sales up 47%. Within this figure, UK full price retail
sales have grown by 66% like-for-like compared to the outlet business decline of
6% like-for-like, boosting margins.
The Spring/Summer 2011 season has started extremely strongly with the third
party wholesale order book already 91% higher than the Spring/Summer 2010
closing position with four months selling yet to go.
During January 2011, we will deliver the new Tillie family of bags, which has
been well received and will join the already strong product line up.
The Mulberry network of stores continues to develop. On 1 December 2010, we
opened our new flagship store at 50 New Bond Street, London and closed the old
flagship store at 40-41 New Bond Street. This week, we open our new
Spinningfields store in Manchester.
The residual net book value of the fixed assets at 40-41 New Bond Street of
GBP1.0 million was expensed during the previous financial year ended 31 March
2010. The landlord has now agreed to purchase back the lease on this property
for a payment to the Group of GBP0.9 million. It is anticipated that this
exceptional income will be recognised during the second half of the year when
the transaction completes. The non-matching of this exceptional income and
expenditure is a result of correctly applying the relevant accounting standards.
A new store has recently opened in Sydney, Australia as well as a concession in
the De Bijenkorf department store, Amsterdam.
Looking further forward, we are in the final stages of agreeing terms on a new
5,000 sq ft flagship store on Spring Street, Soho, New York, which will mark the
beginning of the next stage of development of our USA business.
During March 2011, the Group will move into its new London headquarters on
Kensington Church Street, bringing all the London teams under one roof for the
first time and providing excellent showroom facilities. The net cash cost of
this project will be in the region of GBP4 million which will be incurred
largely during the second half of the year.
We continue to build production capacity with our partners around the world, in
order to meet the rapidly growing demand. In the UK, we have planning consent to
expand our factory in Somerset and construction will start before the end of the
current financial year. This will add more than 30% to our UK capacity and is
projected to generate over 60 new manufacturing jobs, which will include school
leavers who we will train under our apprenticeship scheme.
As for all luxury brands, Christmas trading and the January mark down sales are
key contributors to revenue and profit for the financial year. With the UK VAT
increase during January 2011, some uncertainty exists for the foreseeable
future. The Group will not discount product during the lead up to Christmas.
On the basis of current trends, the Board expects the financial performance for
the full year to be ahead of market expectations.
DIVIDENDS
The full year dividend of 2.2 pence per ordinary share was paid on 20 August
2010. In line with prior years, the Board is not recommending the payment of an
interim dividend.
DIRECTOR CHANGES
During the period Edward Vandyk stepped down as a director after 8 years of
service and Melissa Ong was appointed to the Board bringing considerable
experience of the Asian markets.
STAFF
I would like to take this opportunity to thank all of our staff and our partners
for their enthusiasm and commitment to Mulberry and its strategy. The
significant achievements of the last six months would not have been possible
without them.
Godfrey Davis
Chairman and Chief Executive
9 December 2010
Consolidated income statement
Six months ended 30 September 2010
+----------------------------+------+-----------+-+-----------+-+----------+
| | Note | Unaudited | | Unaudited | | Audited |
| | | six | | six | | |
| | | months 30 | | months 30 | | year |
| | | Sept 2010 | | Sept 2009 | | ended |
| | | GBP'000 | | GBP'000 | | 31 Mar |
| | | | | | | 2010 |
| | | | | | | GBP'000 |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Revenue | | 44,668 | | 32,316 | | 72,052 |
+----------------------------+------+-----------+-+-----------+-+----------+
| Cost of sales | | (16,128) | | (14,528) | | (29,565) |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Gross profit | | 28,540 | | 17,788 | | 42,487 |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Other administrative | | (23,219) | | (16,197) | | (37,090) |
| expenses | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Exceptional costs | 4 | (1,000) | | (256) | | (987) |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Administrative expenses | | (24,219) | | (16,453) | | (38,077) |
+----------------------------+------+-----------+-+-----------+-+----------+
| Other operating income | | 235 | | 150 | | 446 |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Operating profit | | 4,556 | | 1,485 | | 4,856 |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Operating profit before | | 5,556 | | 1,741 | | 5,843 |
| exceptional costs | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Share of results of | | 104 | | 54 | | 192 |
| associates | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Finance income | | 62 | | 10 | | 74 |
+----------------------------+------+-----------+-+-----------+-+----------+
| Finance expense | | (14) | | (14) | | (26) |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Profit before tax | | 4,708 | | 1,535 | | 5,096 |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Tax | 5 | (1,445) | | (508) | | (2,124) |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Profit for the period | | 3,263 | | 1,027 | | 2,972 |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Attributable to: | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Equity holders of the | | 3,263 | | 1,027 | | 2,972 |
| parent | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | pence | | pence | | pence |
+----------------------------+------+-----------+-+-----------+-+----------+
| | | | | | | |
+----------------------------+------+-----------+-+-----------+-+----------+
| Basic earnings per share | 6 | 5.7 | | 1.8 | | 5.2 |
+----------------------------+------+-----------+-+-----------+-+----------+
| Diluted earnings per share | 6 | 5.6 | | 1.8 | | 5.2 |
+----------------------------+------+-----------+-+-----------+-+----------+
All activities arise from continuing operations.
Consolidated statement of comprehensive income
Six months ended 30 September 2010
+----------------------------+----+-----------+-+-----------+-+---------+
| | | Unaudited | | Unaudited | | Audited |
| | | six | | six | | |
| | | months 30 | | months 30 | | year |
| | | Sept 2010 | | Sept 2009 | | ended |
| | | GBP'000 | | GBP'000 | | 31 Mar |
| | | | | | | 2010 |
| | | | | | | GBP'000 |
+----------------------------+----+-----------+-+-----------+-+---------+
| | | | | | | |
+----------------------------+----+-----------+-+-----------+-+---------+
| Net profit for the period | | 3,263 | | 1,027 | | 2,972 |
+----------------------------+----+-----------+-+-----------+-+---------+
| Exchange differences on | | (90) | | (26) | | (108) |
| translation of foreign | | | | | | |
| operations | | | | | | |
+----------------------------+----+-----------+-+-----------+-+---------+
| Total comprehensive income | | 3,173 | | 1,001 | | 2,864 |
| for the period | | | | | | |
+----------------------------+----+-----------+-+-----------+-+---------+
| | | | | | | |
+----------------------------+----+-----------+-+-----------+-+---------+
| Attributable to: | | | | | | |
+----------------------------+----+-----------+-+-----------+-+---------+
| Equity holders of the | | 3,173 | | 1,001 | | 2,864 |
| parent | | | | | | |
+----------------------------+----+-----------+-+-----------+-+---------+
Consolidated balance sheet
At 30 September 2010
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | Unaudited | | Unaudited | | Audited |
| | | 30 Sept | | 30 Sept | | |
| | | 2010 | | 2009 | | 31 Mar |
| | | GBP'000 | | GBP'000 | | 2010 |
| | | | | | | GBP'000 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Non-current assets | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Intangible assets | | 2,528 | | 2,568 | | 2,499 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Property, plant and equipment | | 8,781 | | 8,603 | | 7,876 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Interests in associates | | 300 | | 351 | | 347 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Deferred tax assets | | 193 | | - | | 38 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | 11,802 | | 11,522 | | 10,760 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Current assets | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Inventories | | 12,883 | | 12,268 | | 9,090 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Trade and other receivables | | 16,720 | | 7,207 | | 8,263 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Cash and cash equivalents | | 12,329 | | 4,267 | | 12,171 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | 41,932 | | 23,742 | | 29,524 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Total assets | | 53,734 | | 35,264 | | 40,284 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Current liabilities | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Trade and other payables | | (24,043) | | (10,259) | | (12,197) |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Current tax liabilities | | (1,567) | | (498) | | (1,622) |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | (25,610) | | (10,757) | | (13,819) |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Non-current liabilities | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Deferred tax liabilities | | - | | (71) | | - |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Total liabilities | | (25,610) | | (10,828) | | (13,819) |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Net assets | | 28,124 | | 24,436 | | 26,465 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Equity | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Share capital | | 2,943 | | 2,871 | | 2,943 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Share premium account | | 7,007 | | 7,007 | | 7,007 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Own share reserve | | (631) | | (34) | | (107) |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Capital redemption reserve | | 154 | | 154 | | 154 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Special reserves | | 1,467 | | 1,467 | | 1,467 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Foreign exchange reserve | | 295 | | 467 | | 385 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Retained earnings | | 16,889 | | 12,504 | | 14,616 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
| Total equity | | 28,124 | | 24,436 | | 26,465 |
+--------------------------------+-+-----------+-+-----------+-+----------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+----------+
Consolidated statement of changes in equity
Six months ended 30 September 2010
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| | Equity attributable to equity holders of the |
| | parent |
+----------------+-----------------------------------------------------------------------------------+
| | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| | Share | Share | Own | Capital | Special | Foreign | Retained | Total |
| | | premium | share | reserves | reserves | exchange | earnings | |
| | capital | account | reserve | | | reserve | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| As at 1 April | 2,871 | 7,007 | (49) | 154 | 1,467 | 493 | 12,441 | 24,384 |
| 2009 | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Total | - | - | - | - | - | (26) | 1,027 | 1,001 |
| comprehensive | | | | | | | | |
| income for the | | | | | | | | |
| period | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Charge for | - | - | - | - | - | - | 184 | 184 |
| employee share | | | | | | | | |
| based payments | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Own shares | - | - | 15 | - | - | - | - | 15 |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Ordinary | - | - | - | - | - | - | (1,148) | (1,148) |
| dividends paid | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| As at 30 | 2,871 | 7,007 | (34) | 154 | 1,467 | 467 | 12,504 | 24,436 |
| September 2009 | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Total | - | - | - | - | - | (82) | 1,999 | 1,917 |
| comprehensive | | | | | | | | |
| income for the | | | | | | | | |
| period | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Issued share | 72 | - | - | - | - | - | - | 72 |
| capital | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Charge for | - | - | - | - | - | - | 113 | 113 |
| employee share | | | | | | | | |
| based payments | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Own shares | - | - | (73) | - | - | - | - | (73) |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| As at 31 March | 2,943 | 7,007 | (107) | 154 | 1,467 | 385 | 14,616 | 26,465 |
| 2010 | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Total | - | - | - | - | - | (90) | 3,263 | 3,173 |
| comprehensive | | | | | | | | |
| income for the | | | | | | | | |
| period | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Charge for | - | - | - | - | - | - | 275 | 275 |
| employee share | | | | | | | | |
| based payments | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Own shares | - | - | (524) | - | - | - | - | (524) |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| Ordinary | - | - | - | - | - | - | (1,265) | (1,265) |
| dividends paid | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
| As at 30 | 2,943 | 7,007 | (631) | 154 | 1,467 | 295 | 16,889 | 28,124 |
| September 2010 | | | | | | | | |
+----------------+---------+---------+---------+----------+----------+----------+----------+---------+
Consolidated cash flow statement
Six months ended 30 September 2010
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | Unaudited | | Unaudited | | Audited |
| | | six | | six | | |
| | | months 30 | | months 30 | | year |
| | | Sept 2010 | | Sept 2009 | | ended |
| | | GBP'000 | | GBP'000 | | 31 Mar |
| | | | | | | 2010 |
| | | | | | | GBP'000 |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Operating profit for the | | 4,556 | | 1,485 | | 4,856 |
| period | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Adjustments for: | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Depreciation of property, | | 984 | | 907 | | 2,879 |
| plant and equipment | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Amortisation of intangible | | 167 | | 145 | | 289 |
| assets | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Loss on sale of property, | | - | | - | | 74 |
| plant and equipment | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Effects of foreign exchange | | (6) | | 22 | | (14) |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Share based payments charge | | 275 | | 184 | | 351 |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Operating cash flows before | | 5,976 | | 2,743 | | 8,435 |
| movements in working capital | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| (Increase)/decrease in stocks | | (3,793) | | 2,562 | | 5,740 |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Increase in debtors | | (8,623) | | (1,177) | | (2,065) |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Increase/(decrease) in | | 11,784 | | (450) | | 829 |
| creditors | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Cash generated by operations | | 5,344 | | 3,678 | | 12,939 |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Corporation taxes paid | | (1,655) | | (1,095) | | (1,693) |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Interest paid | | (14) | | (14) | | (26) |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Net cash from operating | | 3,675 | | 2,569 | | 11,220 |
| activities | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Investing activities: | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Interest received | | 62 | | 10 | | 74 |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Dividend received from | | 308 | | - | | - |
| associate | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Purchases of property, plant | | (1,827) | | (659) | | (1,365) |
| and equipment | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Proceeds from sale of | | - | | - | | 6 |
| property, plant and equipment | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Acquisition of intangible | | (271) | | (215) | | (340) |
| fixed assets | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Net cash used in investing | | (1,728) | | (864) | | (1,625) |
| activities | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Financing activities: | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Dividends paid | | (1,265) | | (1,148) | | (1,148) |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Proceeds on issue of shares | | - | | - | | 72 |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Acquisition of own shares | | (524) | | - | | (58) |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Net cash used in financing | | (1,789) | | (1,148) | | (1,134) |
| activities | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Net increase in cash and cash | | 158 | | 557 | | 8,461 |
| equivalents | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Cash and cash equivalents at | | 12,171 | | 3,710 | | 3,710 |
| beginning of period | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
| Cash and cash equivalents at | | 12,329 | | 4,267 | | 12,171 |
| end of period | | | | | | |
+--------------------------------+-+-----------+-+-----------+-+---------+
Notes to the condensed financial statements
Six months ended 30 September 2010
1. General information
Mulberry Group plc is a company incorporated in the United Kingdom under the
Companies Act 1985. The half-year results and condensed consolidated financial
statements for the six months ended 30 September 2010 (the interim financial
statements) comprise the results for the Company and its subsidiaries (together
referred to as the Group) and the Group's interest in associates.
The information for the year ended 31 March 2010 does not constitute statutory
accounts as defined in section 434 of the Companies Act 2006. A copy of the
statutory accounts for that year has been delivered to the Registrar of
Companies. The auditor's report on those accounts was not qualified, did not
include a reference to any matters to which the auditors drew attention by way
of emphasis without qualifying the report and did not contain statements under
section 498(2) or (3) of the Companies Act 2006.
The interim financial statements for the six months ended 30 September 2010,
have not been reviewed or audited.
2. Significant accounting policies
The accounting policies and methods of computation followed in the interim
financial statements are consistent with those as published in the Group's
Annual Report and Financial Statements for the year ended 31 March 2010, except
for the adoption of the following Standards and Interpretations which have not
had a material impact on the interim financial statements:
· IFRS3 (revised 2008) - Business Combinations
· IAS38 (amendment) - Intangible assets
· IAS36 (amendment) - Impairment of assets
· IAS27 (revised) - Consolidated and separate financial statements
· IAS39 (amendment) - Eligible hedge items
The Annual Report and Financial Statements are available from the Group's
website (www.mulberry.com) or from the Company Secretary at the Company's
registered office, The Rookery, Chilcompton, Bath, England, BA3 4EH.
3. Going concern
After making enquiries, the Directors have a reasonable expectation that the
Company will have adequate resources to continue in operational existence for
the foreseeable future. Accordingly, they continue to adopt the going concern
basis in preparing the half year results.
4. Exceptional items
On 5 October 2009, a transaction to assume operational control of the two New
York stores and the distribution rights to the North American market previously
held by our joint venture partner, Mulberry USA LLC, was completed. As part of
the agreement, deferred consideration of up to GBP1 million, will become payable
to Challice Limited (the previous 50% shareholder of Mulberry USA LLC and the
majority shareholder of Mulberry Group plc) on a stepped basis if sales
generated from the USA operations during the third year post completion exceed
certain agreed thresholds. The consideration will be payable in cash or, at
Mulberry Group plc's option, new Mulberry shares, the number of shares being
calculated at the then prevailing share price. Following the growth in the USA
operations, as at 30 September 2010 the Directors have concluded that it is
probable that the deferred consideration will become payable. As such a
provision for the GBP1 million has been made and disclosed as an exceptional
item within the Income Statement.
As part of the Group's future growth strategy, the decision was made during to
year ended 31 March 2010 to relocate the flagship New Bond Street store to an
alternative site on New Bond Street. Consequently, the residual net book value
of the leasehold improvements and fixtures and fittings at the existing store on
the anticipated date of closure of GBP987,000 was deemed to be impaired. Given
the one-off nature and size of the impairment, the costs were disclosed
separately on the face of the Income Statement. The Directors do not expect to
incur any lease costs beyond the date of the closure of the store and so no
further provision has been made. Furthermore, an agreement has been made with
the landlord to purchase back the lease of the old New Bond Street store in
return for a payment to the Group of GBP0.9 million. It is anticipated that this
exceptional income will be recognised during the second half of the year when
the transaction completes.
The exceptional expense appearing on the face of the Income Statement for the
period to 30 September 2009 relates to the transaction fees associated with the
North American acquisition covered in more detail above.
5. Taxation
The tax charge is calculated by applying the forecast full year effective tax
rate to the interim profit.
6. Earnings per share ('EPS') and share issue
+--------------------------------+----------+----------+----------+----------+----------+---------+
| | | Six | | Six | | Year |
| | | months | | months | | ended |
| | | 30 Sept | | 30 Sept | | 31 Mar |
| | | 2010 | | 2009 | | 2010 |
| | | p | | p | | p |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| Basic earnings per share | | 5.7 | | 1.8 | | 5.2 |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| Diluted earnings per share | | 5.6 | | 1.8 | | 5.2 |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| Adjusted basic earnings per | | 7.6 | | 1.8 | | 6.9 |
| share | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| Adjusted diluted earnings per | | 7.5 | | 1.8 | | 6.9 |
| share | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| | | Six | | Six | | Year |
| | | months | | months | | ended |
| | | 30 Sept | | 30 Sept | | 31 Mar |
| | | 2010 | | 2009 | | 2010 |
| | | GBP'000 | | GBP'000 | | GBP'000 |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| Earnings per share is | | | | | | |
| calculated based on the | | | | | | |
| following data: | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| | | | | | | |
| Profit for the year for basic | | 3,263 | | 1,027 | | 2,972 |
| and diluted earnings per share | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| Adjustment for exceptional | | 1,000 | | 256 | | 987 |
| costs | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| Adjusted profit for the year | | 4,263 | | 1,283 | | 3,959 |
| for adjusted basic and diluted | | | | | | |
| earnings per share | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
+--------------------------------+----------+----------+----------+----------+----------+---------+
| | | 30 Sept | | 30 Sept | | 31 Mar |
| | | 2010 | | 2009 | | 2010 |
| | | million | | million | | million |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| Weighted average number of | | 57.3 | | 57.4 | | 57.4 |
| ordinary shares for the | | | | | | |
| purpose of basic EPS | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| Effect of dilutive potential | | 0.7 | | - | | 0.1 |
| ordinary shares: share options | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
| Weighted average number of | | 58.0 | | 57.4 | | 57.5 |
| ordinary shares for the | | | | | | |
| purpose of diluted EPS | | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+---------+
On 8 October 2009, 1,450,000 5p ordinary shares were issued at par. These
shares were issued to the Mulberry Group plc Employee Share Trust for share
awards.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FSMFMAFSSELE
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