TIDMMUL
RNS Number : 3184F
Mulberry Group PLC
14 June 2012
MULBERRY GROUP PLC ("Mulberry" or the "Group")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2012
Mulberry Group plc, the English luxury brand, is pleased to
announce its results for the year ended 31 March 2012.
FINANCIAL HIGHLIGHTS
-- Total revenues increased by 38% to GBP168.5 million (2011: GBP121.6 million)
-- Profit before tax up 54% to GBP36.0 million (2011: GBP23.3 million)
-- Basic earnings per share up 47% to 43.9p (2011: 29.8p)
-- Proposed dividend of 5.0p per share (2011: 4.0p per share)
OPERATING HIGHLIGHTS
-- Bruno Guillon appointed CEO, with Godfrey Davis moving to Non-Executive Chairman
-- 14 new stores opened during the year in the UK, the
Netherlands, the USA, Korea, Singapore, Thailand and Taiwan
-- Global expansion continued with international revenues
growing 61% to GBP65.2 million (2011: GBP40.5 million), accounting
for 39% of Group revenues (2011: 33%)
-- Online sales grew 58% to GBP14.5 million, accounting for 9% of Group revenues (2011: 8%)
-- UK factory extension completed, increasing UK production
capacity by 30% and creating 60 jobs
CURRENT TRADING AND OUTLOOK
-- Retail sales up 12% for the 10 weeks to 9 June 2012. UK full
price stores like-for-like up 14%
-- Autumn/Winter 2012 third-party wholesale orders 11% higher
than the Autumn/Winter 2011 season at the same time last year
-- 16 new international store openings confirmed for 2012/13
-- Second factory to be built in Somerset, doubling UK capacity and creating 300 jobs
GODFREY DAVIS, CHAIRMAN COMMENTED:
"This year has seen us deliver another strong set of results and
we have performed well against expectations.
While the current economic conditions make the short term
trading outlook more challenging in some markets, we remain
confident about Mulberry's long term future. We continue to focus
on developing our business internationally, opening new stores and
building the foundations for long term growth.
The investment in a second factory in the UK will reinforce the
Group's position as the largest UK manufacturer of luxury leather
goods."
FOR FURTHER DETAILS PLEASE CONTACT:
Pelham Bell Pottinger
Daniel de Belder / Lucy Frankland 0207 861 3232
Mulberry Investor Relations
Amelia Fincher 0207 605 6771
Altium
Ben Thorne / Katherine Hobbs 0207 484 4040
Barclays
Jon Bathard-Smith / Nicola Tennent 0207 623 2323
Chairman's review
The Group has continued to deliver strong sales and profit
growth. Sales increased 38% to GBP168.5 million for the year to 31
March 2012 (2011: GBP121.6 million) and profit before tax increased
54% to GBP36.0 million (2011: GBP23.3 million). International sales
were GBP65.2 million, 61% up on the prior year. Gross margin
increased to 66.2% (2011: 65.4%).
As a result of sustained investment over a number of years, we
have been successful in developing international demand for the
Mulberry brand. This investment in people, product design,
marketing and new store openings is the driving force behind the
growing international success of our business which continues to
become less dependent upon customers in the UK or any other single
market.
Looking forward, we will continue our strategy of building the
brand in international markets by opening new stores and
progressively increasing our marketing activity to drive sales
growth.
RETAIL
Retail sales from our own stores, department store concessions
and online have increased by 36% compared to the prior year to
GBP99.7 million (like-for-like up 26%).
UK retail sales in our own 45 stores and department store
concessions increased for the year by 30% to GBP77.2 million
(like-for-like up 27%). In December, we opened a store in the
Westfield development in Stratford ahead of the 2012 London
Olympics.
Online sales grew by 58% to GBP14.5 million during the year,
accounting for 9% of Group sales (2011: 8%). In addition to being a
profitable and growing sales channel, the mulberry.com website is a
key marketing tool for the brand. We are currently developing a new
platform which will give us even greater functionality and creative
freedom and this will be launched by the end of the 2012/13
financial year.
During the year we opened a flagship store on Spring Street, New
York. This helped to increase North American retail sales to GBP5.4
million, up 69% compared to the prior year (like-for like up
20%).
In Europe, retail sales from France and the Netherlands were
GBP2.6 million, up 53% compared to the prior year (like-for-like up
7%), reflecting the opening of a new full price store in Amsterdam
during November and an outlet store in Roermond during March
2012.
WHOLESALE
Wholesale shipments to customers during the year were GBP68.8
million, up 43% compared to the prior year. The wholesale business
includes sales to our European franchise partners, UK, European and
North American independent retailers and department stores, as well
as sales to our international distribution partners in Asia-Pacific
and the Middle East. In Asia-Pacific, sales to our partner stores
and wholesale accounts grew by 70% to GBP25.1 million. Asia-Pacific
is now our largest geographical segment for wholesale sales,
representing 36% of the total.
During the year, ten Mulberry stores have been opened by our
partners in Singapore, Taiwan, Thailand and Korea (seven).
PRODUCTS
Leather goods and accessories remain our core business, with
women's and men's bags accounting for 77% of Group sales (2011:
76%). In Spring/Summer 2010 we launched the Alexa bag, which was an
immediate success and added an extra dimension to sales growth in
the year to 31 March 2011. A key challenge for the year to 31 March
2012 was to consolidate this bag family into our core business and
build upon it. The results for the year show that this has been
achieved and the Alexa has joined the Bayswater, Daria and Lily
families of best-selling bags which underpin sales from one season
to the next.
We continue to develop the women's apparel and women's footwear
businesses which were the fastest growing categories during the
year.
NEW CHIEF EXECUTIVE
One of the strengths of our business is the quality of our
people. We pay particular attention to succession planning in order
to meet the needs of the business as it grows and roles change. In
keeping with this approach, Bruno Guillon joined Mulberry as Chief
Executive on 1 March 2012. He brings with him a wealth of luxury
goods experience, having previously worked for Hermes and LVMH. We
have worked closely together for his first few months to ensure a
smooth management transition and, from the end of June 2012, I will
move to Non-Executive Chairman. On a personal note, I would like to
thank all of the Mulberry team, our partners around the world and
our shareholders for their enthusiasm, commitment and support over
the last ten years whilst I have been Chief
Executive. I would also like to wish Bruno every success in his new role.
Chief Executive's report
I have joined Mulberry at a very exciting time. The team has
produced another set of strong results for the year to 31 March
2012, continuing to build market share internationally, whilst
generating positive cash flows that will allow us to invest for
future growth.
The opportunity for the Mulberry brand is significant, with the
profits earned from its strong domestic position supporting the
increasing pace of international expansion. The challenge for the
next few years is to build upon the solid foundations that have
been laid, seize the international opportunity in a way that
maintains the careful positioning of the brand within the luxury
market, whilst continuing to make the enduring quality of our
products central to everything we do.
UK MANUFACTURING
Mulberry is a luxury fashion brand, anchored by the quality of
our products and our heritage of English craftsmanship. With this
in mind, during the year we completed the extension of our Somerset
factory allowing us to increase UK capacity by 30% and create 60
jobs. We are also delighted to announce that we will be opening a
second factory in Somerset. This project will create 300 jobs and
double our UK capacity. Our investment in the new factory will be
approximately GBP7.5 million, with GBP2.5 million coming from the
Regional Growth Fund to support the recruitment and training of new
employees. We expect to open the new factory by December 2013.
CURRENT TRADING
Demand for Mulberry products has continued since the year-end.
During the 10 weeks to 1 June 2012 total retail sales were 12%
above the same period last year (like-for-like up 3%). UK full
price retail sales have grown by 14% like-for-like and the outlet
business has decreased by 24% like-for-like largely due to the
tough comparative figures during the same period last year, when
outlet sales increased by 56%.
Within the 10 week period, April saw slower growth, but over the
last six weeks UK full price sales have improved, up 21%
like-for-like. However, we remain cautious as a result of the
adverse macro-economic climate.
The Autumn/Winter 2012 season has started well with the
third-party wholesale order book 11% higher than the Autumn/Winter
2011 season at the same time last year.
OUTLOOK
During May 2012, we launched the new Del Rey bag, inspired by
the American artist Lana Del Rey. The product illustrates the
elegance and timeless luxury of Mulberry and has been well received
which is encouraging for the rest of the Autumn/Winter 2012 season.
Sales of women's apparel and footwear remain strong. These
categories remain central to our strategy and we will also expand
other product categories, such as small leather goods, men's
accessories and other fashion accessories.
The Group's balance sheet remains strong with cash of GBP27.3
million and no debt at 31 March 2012. This means that we continue
to have the capacity to invest in new retail opportunities and
other projects.
In Europe, we opened a store in Zurich on 24 May. In Germany, we
will be opening shop-in-shops within the KaDeWe and Oberpollinger
department stores in Berlin and Munich respectively and a store in
Frankfurt Airport. We have signed leases for stores in Cologne and
Berlin which will open around the end of the financial year.
In North America, a store opened in the Short Hills Mall, New
Jersey on 23 May and our first West Coast store will open in San
Francisco during June. We will open a store in Washington DC later
in the year.
Our partner in Korea, which started the current year with 19
stores, has already opened another store and is planning a further
four before the end of March 2013.
Club 21, our partner for the rest of Asia-Pacific, plans to open
stores in Singapore, Japan and Shanghai.
In total, we are targeting 15 to 20 new international store
openings for the current financial year (with three already opened
and another 13 confirmed to date).
DIVIDEND
The Board is recommending the payment of a dividend on the
ordinary shares of 5.0p per ordinary share (2011: 4.0p) which will
be paid on 17 September 2012 to shareholders on the register on 17
August 2012.
Financial review
Gross margin
The Group's gross profit as a percentage of revenue has
increased to 66.2% from 65.4% for the prior year. This increase is
due primarily to the economies of scale achieved from increased
volume.
NET OPERATING EXPENSES
Net operating expenses for the year increased by GBP19.6 million
to GBP76.1 million (2011: GBP56.5 million). The main elements of
this increase were: GBP5.7 million increased employee costs; GBP4.3
million additional spend on advertising and promotion; GBP3.8
million variable rents and agents' commissions directly linked to
the sales growth and GBP3.3 million costs relating to the operating
costs of new stores.
EXCEPTIONAL ITEMS
There are no exceptional items in the current year. In the prior
year, an exceptional cost of GBP1.0 million was incurred in
relation to deferred consideration for the USA business and GBP0.9
million of exceptional income was recognised following the
surrender of the lease on the former flagship store on New Bond
Street.
SHARE OF RESULTS OF ASSOCIATES
Our associate in Norway had another successful year with our
share of its results increasing to GBP0.6 million (2011: GBP0.3
million).
FINANCE INCOME AND EXPENSE
The decrease in net finance income to GBP22,000 (2011:
GBP30,000) has resulted from the continued low rates of interest
available in the market.
Taxation
The Group has an effective tax rate of 29.7% for the year (2011:
26.9%) resulting in a tax charge of GBP10.7 million (2011: GBP6.3
million). We expect to see a future decrease in the effective tax
rate in line with the announced reduction in the UK corporation tax
rates over the next three years to 22%.
Balance Sheet
Investments in property, plant and equipment for the year
totalled GBP10.0 million (2011: GBP12.8 million) and included
GBP1.2 million investment in the extension of our existing Somerset
factory and GBP8.2 million investment in new stores. The
expenditure of GBP2.4 million on intangible assets reflects the
on-going development of the Group's ERP system online
capabilities.
Inventory levels have increased by GBP10.1 million to GBP32.5
million (2011: GBP22.4 million) which reflects the increased scale
of the business and a build-up of inventory to meet Autumn/Winter
orders.
Cash flow
The cash generated from operations for the year amounted to an
inflow of GBP30.1 million (2011: inflow of GBP26.6 million). The
net cash balance has increased to GBP27.3 million at 31 March 2012
(2011: GBP21.4 million) due to the operational performance of the
Group.
earnings per share
The basic earnings per share for the year increased by 47% to
43.9p (2011: 29.8p).
Consolidated income statement
Year ended 31 March 2012
Note 2012 2011
GBP'000 GBP'000
Revenue 168,451 121,645
Cost of sales (56,964) (42,144)
Gross profit 111,487 79,501
Administrative expenses (76,565) (58,147)
Other operating income 495 1,656
Operating profit 35,417 23,010
Operating profit before exceptional items 3 35,417 23,110
------------------------------------------- ----- --------- ---------
Share of results of associates 562 305
Finance income 72 74
Finance expense (50) (44)
Profit before tax 36,001 23,345
Tax (10,700) (6,282)
Profit for the year 25,301 17,063
========= =========
Attributable to:
Equity holders of the parent 25,301 17,063
========= =========
Pence pence
Basic earnings per share 5 43.9 29.8
Diluted earnings per share 5 43.4 29.1
Consolidated statement of comprehensive income
Year ended 31 March 2012
2012 2011
GBP'000 GBP'000
Profit for the year 25,301 17,063
Exchange differences on translation of
foreign operations (207) 1
Total comprehensive income for the year 25,094 17,064
========= =========
Attributable to:
Equity holders of the parent 25,094 17,064
========= =========
Consolidated balance sheet
At 31 March 2012
2012 2011
GBP'000 GBP'000
Non-current assets
Intangible assets 3,984 2,134
Property, plant and equipment 24,212 18,207
Interests in associates 357 210
Deferred tax assets - 69
28,553 20,620
Current assets
Inventories 32,546 22,408
Trade and other receivables 14,912 12,186
Cash and cash equivalents 27,293 21,373
74,751 55,967
Total assets 103,304 76,587
--------- ---------
Current liabilities
Trade and other payables (34,627) (30,476)
Current tax liabilities (6,188) (4,079)
(40,815) (34,555)
--------- ---------
Non-current liabilities
Deferred tax liability (26) -
Total liabilities (40,841) (34,555)
--------- ---------
Net assets 62,463 42,032
========= =========
Equity
Share capital 2,982 2,943
Share premium account 11,578 7,007
Own share reserve (3,966) (621)
Capital redemption reserve 154 154
Special reserves 1,467 1,467
Foreign exchange reserve 179 386
Retained earnings 50,069 30,696
Total equity 62,463 42,032
========= =========
Consolidated statement of changes in equity
Year ended 31 March 2012
Equity attributable to equity holders of the parent
Share Own Foreign
Share premium share Capital Special exchange Retained
capital account reserve reserve reserve reserve earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1 April
2010 2,943 7,007 (107) 154 1,467 385 14,616 26,465
Total comprehensive
income for the
year - - - - - 1 17,063 17,064
Charge for employee
share-based payments - - - - - - 701 701
Exercise of share
options - - - - - - (418) (418)
Own shares - - (514) - - - - (514)
Ordinary dividends
paid - - - - - - (1,266) (1,266)
As at 31 March
2011 2,943 7,007 (621) 154 1,467 386 30,696 42,032
Total comprehensive
income for the
year - - - - - (207) 25,301 25,094
Issue of share
capital 10 3,782 - - - - - 3,792
Charge for employee
share-based payments - - - - - - 701 701
Exercise of share
options 29 789 - - - - (4,319) (3,501)
Own shares - - (3,345) - - - - (3,345)
Ordinary dividends
paid - - - - - - (2,310) (2,310)
As at 31 March
2012 2,982 11,578 (3,966) 154 1,467 179 50,069 62,463
========= ========= ========= ========= ========= ========== ========== ========
Consolidated cash flow statement
Year ended 31 March 2012
2012 2011
GBP'000 GBP'000
Operating profit for the year 35,417 23,010
Adjustments for:
Depreciation of property, plant and equipment 3,992 2,261
Amortisation of intangible assets 494 837
Loss on sale of property, plant and equipment (8) 152
Effects of foreign exchange (109) 24
Share-based payments charge 701 701
Operating cash flows before movements in
working capital 40,487 26,985
Increase in inventories (10,151) (13,318)
Increase in receivables (2,750) (3,848)
Increase in payables 2,530 16,805
Cash generated from operations 30,116 26,624
Corporation taxes paid (8,495) (3,856)
Interest paid (50) (44)
Net cash inflow from operating activities 21,571 22,724
--------- ---------
Investing activities:
Interest received 96 47
Dividend received from associate 408 308
Purchases of property, plant and equipment (8,632) (11,176)
Proceeds from sale of property, plant and 33 -
equipment
Acquisition of intangible fixed assets (2,153) (503)
Net cash used in investing activities (10,248) (11,324)
--------- ---------
Financing activities:
Dividends paid (2,310) (1,266)
Proceeds on issue of shares 818 -
Settlement of share awards (4,358) (418)
Investment in own shares 447 (514)
Net cash used in financing activities (5,403) (2,198)
--------- ---------
Net increase in cash and cash equivalents 5,920 9,202
Cash and cash equivalents at beginning of
year 21,373 12,171
Cash and cash equivalents at end of year 27,293 21,373
========= =========
Notes
1. Basis of preparation
The financial information in this announcement, which was
approved by the Board of Directors on 13 June 2012, does not
constitute the Company's statutory accounts for the years ended 31
March 2012 or 2011, but is derived from those accounts.
Statutory accounts for the year ended 31 March 2011 have been
delivered to the Registrar of Companies and those for the year
ended 31 March 2012 have been approved and will be delivered to the
Registrar of Companies following the Company's Annual General
Meeting. The auditors have reported on those accounts, their
reports were unqualified and did not draw attention to any matters
by way of emphasis without qualifying their reports and did not
contain any statement under section 498 (2) or (3) of the Companies
Act 2006.
Whilst the financial information included in this preliminary
announcement has been completed in accordance with International
Financial Reporting Standards (IFRS), this announcement itself does
not contain sufficient information to comply with IFRS.
2. Accounting policies
The Group's financial statements for the year ended 31 March
2012 have been prepared in accordance with the measurement criteria
of the International Financial Reporting Standards (IFRS) as
adopted for use in the European Union.
During the current year the following new and revised Standards
and Interpretations have been adopted but have not had an impact on
the Group:
-- IAS 24: Related party disclosures
At the date of authorisation of these financial statements, the
following Standards and Interpretations which have not been applied
in these financial statements were in issue but not yet
effective:
-- IFRS 9: Financial instruments
-- IFRS 10: Consolidated Financial Statements
-- IFRS 11: Joint Arrangements
-- IFRS 12: Disclosure of Interests in Other Entities
-- Amendment to IAS 27: Separate Financial Statements
-- Amendment to IAS 28: Investments in Associates and Joint Ventures
-- IFRS 13: Fair Value Measurement
-- IAS 19: Employee Benefits
The Directors anticipate that the adoption of these Standards
and Interpretations in future periods will have no material impact
on the financial statements of the Group.
For the year ended 31 March 2012, the financial year runs for
the 53 weeks to 31 March 2012 (2011: 52 weeks ended 26 March
2011).
3. Exceptional income and expenses
There was no exceptional income or expenses in the current
year.
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 this agreement,
deferred consideration of up to GBP1,000,000 would become payable
to Challice Limited (the remaining 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 exceeded certain agreed thresholds. The
consideration was to 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 31 March 2011 the Directors concluded that it was
probable that the deferred consideration would become payable and
as such a provision for GBP1,000,000 was made and disclosed as an
exceptional cost. This has subsequently been paid in full during
April 2012.
As part of the Group's future growth strategy, the decision was
made during the year ended 31 March 2010 to relocate the flagship
New Bond Street store to an alternative site on New Bond Street. An
agreement was made with the landlord to take back the lease of the
old New Bond Street store in return for a payment to the Group of
GBP900,000. This was received during January 2011 and disclosed as
exceptional income.
4. Dividends
The dividends approved and paid during the year are as
follows:
2012 2011
GBP'000 GBP'000
Final dividend for the year ended 31 March 2011 of 4p
(2011: 2.2p) per share paid in August 2011 2,310 1,266
--------- ---------
Proposed final dividend for the year ended 31 March 2012
of 5p per share (2011: 4p) 2,982 2,367
--------- ---------
This proposed final dividend is subject to approval by
shareholders at the Annual General Meeting and has not been
included as a liability in these financial statements.
5. Earnings per share ('EPS')
2012 2011
pence pence
Basic earnings per share 43.9 29.8
Diluted earnings per share 43.4 29.1
Adjusted basic earnings per share 43.9 30.4
Adjusted diluted earnings per share 43.4 29.7
Earnings per share is calculated based on the following
data:
2012 2011
GBP'000 GBP'000
Profit for the year for basic and diluted earnings per
share 25,301 17,063
Deferred consideration - 1,000
Lease income - (900)
Tax impact of exceptional lease income - 252
--------- ---------
Adjusted profit for the year for adjusted basic and diluted
earnings per share 25,301 17,415
========= =========
2012 2011
million million
Weighted average number of ordinary shares for the purpose
of basic EPS 57.6 57.3
Effect of dilutive potential ordinary shares: share options 0.7 1.4
Weighted average number of ordinary shares for the purpose
of diluted EPS 58.3 58.7
========= =========
The weighted average number of ordinary shares in issue during
the year excludes those held by the Mulberry Group Plc Employee
Share Trust.
6. Information
Copies of the Annual Report and financial statements will be
posted to shareholders. Further copies can be obtained from
Mulberry Group plc's registered office at The Rookery, Chilcompton,
Somerset, BA3 4EH. Copies of this announcement are available for a
period of one month from the date hereof from the Company's
registered office, and from the Company's nominated adviser, Altium
Capital Limited, 30 St James's Square, London, SW1Y 4AL.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GMGMVKFRGZZM
Mulberry (LSE:MUL)
Historical Stock Chart
From Jul 2024 to Aug 2024
Mulberry (LSE:MUL)
Historical Stock Chart
From Aug 2023 to Aug 2024
