Final Results
June 24 2004 - 3:00AM
UK Regulatory
RNS Number:0802A
Mulberry Group PLC
24 June 2004
MULBERRY GROUP PLC
24 JUNE 2004
MULBERRY GROUP PLC ("Mulberry" or the "Group")
PRELIMINARY RESULTS FOR
THE YEAR TO 31 MARCH 2004
Mulberry Group Plc, the AIM listed designer and manufacturer of a portfolio of
accessories, ready to wear clothing and interior design products, today
announced its preliminary results for the year ended 31 March 2004.
HIGHLIGHTS
Operating profit of #0.6 million achieved (2003: loss #1.7 million).
Profit before tax for the year of #41,000 (2003: loss #2.1 million).
Significantly strengthened balance sheet with borrowings reduced by #4.3 million
to #2.2 million.
Gross margin, increased from 45% to 50%.
Overheads reduced by #2.1 million (15%).
Continued repositioning of the Mulberry brand in the UK and overseas.
GODFREY DAVIS, CHAIRMAN AND CHIEF EXECUTIVE COMMENTED:
"We have achieved a substantial business turnaround. The first financial
objective for the year was to break the loss making pattern of previous years.
We have achieved this by focusing on our core accessories business, improving
margins, reducing costs and eliminating non profitable sales. The second was to
reduce borrowings and restore the balance sheet. This has been achieved by
the Open Offer completed in September 2003 and by generating cash from
operations. As a result, the Group is profitable, adequately funded and has a
sound base from which it can build. Our strategy for the brand is to invest in
design and to focus our marketing resources to significantly raise our game."
FOR FURTHER DETAILS PLEASE CONTACT :
WMC Communications
Alex Glover or Jo Livingston 0207 7591 3999
CHAIRMAN'S STATEMENT
We have achieved a substantial business turnaround. The Group made an operating
profit of #0.5 million (2003: loss #1.7 million). The balance sheet is greatly
strengthened with net debt reduced by #4.3 million to #2.2 million. Equally
importantly, Mulberry's product range and brand image have been transformed.
This has resulted in extensive press coverage in both the leading fashion
magazines and the national newspapers. Our Piccadilly, Bayswater and Roxy bags
are 'must have' fashion accessories carried by many of the most fashionable
celebrities. This renaissance has been recognised worldwide.
The first financial objective for the year was to break the loss making pattern
of previous years. We have achieved this by focusing on our core accessories
business, improving margins, reducing costs and eliminating non profitable
sales. The second was to reduce borrowings and restore the balance sheet. This
has been achieved by the Open Offer completed in September 2003 and by
generating cash from operations. As a result, the Group is profitable,
adequately funded and has a sound base from which it can build.
Our strategy for the brand is to invest in design and to focus our marketing
resources to significantly raise our game. This has resulted in strong demand
for our new more fashionable products and excellent reviews from the UK press.
RESULTS FOR THE YEAR ENDED 31 MARCH 2004
Sales for the year reduced to #25.3 million (2003: #28.2 million). The reduction
reflects the elimination of loss making and strategically flawed sales channels,
reduced clearance sales of discontinued lines and lower sales of men's and
women's clothing. Sales of our core accessory products are growing in our UK and
European markets.
Gross margin, increased from 45% to 50%. This reflected the continuing
improvement in accessories margins and the lower level of discounting to clear
stocks, which have fallen by a further #0.9 million after last year's reduction
of #1.7 million.
Overheads reduced by #2.1 million (15%) and the Group made an operating profit
of #0.5 million (2003: loss #1.7 million).
The Group made a profit before tax for the year of #41,000 (2003: loss #2.1
million) after accounting for the costs of shop closures and the related loss on
disposal.
Gearing reduced to 23% at 31 March 2004. Net bank borrowings reduced to #1.8
million. The Group has term loan and overdraft facilities of #7.5 million with
its principal bankers HSBC Bank plc.
THE MULBERRY BRAND
Our marketing effort has focused on the UK, with advertising and PR campaigns
which succeeded in their objective of bringing our brand to the attention of a
more fashion conscious customer. Our new campaigns for Autumn/Winter 2004 and
Spring/Summer 2005 will be designed to communicate our unique brand values to
develop demand from consumers outside the UK as well as continuing to build on
the progress we have achieved in the UK.
ACCESSORIES
Accessories, which are our core business, account for over 70% of Group sales.
Spring/Summer 2004 wholesale orders for accessories from department stores and
others in the UK have increased by 14% on the prior year. In Europe, orders have
increased by 2%, after several years of decline, despite the recession in
fashion retail in those markets. New designs of handbags for women and unisex
casual work bags in the new leathers, 'Darwin' and 'Matt Glove', have become
best sellers. In the forthcoming year, we will complete the updating and renewal
of the classic 'Congo' and 'Scotchgrain' product ranges.
MEN'S AND WOMEN'S CLOTHING
We have continued to restrict the distribution of the men's and women's wear
collections, which we are repositioning to bring them into line with our
accessories range. This has resulted in lower sales. These collections are
bringing a more fashion conscious consumer into our stores and have achieved
extensive press coverage. Our strategy will continue to be to limit the
distribution of men's and women's wear and to focus on growing the sales of
accessories.
HOME COLLECTION
Our licensed home furnishings and bath towel collections continue to develop
satisfactorily.
RETAIL
Like for like sales in our full price shops were 1% lower for the year. This was
due to reduced sales in the July and January mark- down sale periods, which we
were able to limit to a shorter period at reduced discounts due to improved
stock management. As a result, margins improved.
We have continued to refit our shops with the new retail format. The most recent
is our shop in Heathrow Terminal 4.
OUTLOOK
Early indications for the Autumn/Winter 2004 wholesale season for our core
accessory business are encouraging and show growth in both the UK and export
markets. Like for like sales in our full price shops for the first 9 weeks of
the new financial year are 4% higher than last year.
We are planning to open a limited number of new shops in the UK to sell
accessories but will only consider these where the property deals are
attractive.
We have agreed to launch Mulberry in the USA this autumn with Bergdorf Goodman,
the leading New York store. Mulberry USA LLC, the joint venture formed at the
time of the original share subscription by Challice Limited, has commenced
trading and is the distributor for this market. The impact on the current year
will be small but is expected to increase thereafter.
In parallel with these developments in the USA, we are working on opportunities
in Japan and the rest of Asia.
DIVIDENDS
The Board is not recommending the payment of a dividend on the ordinary or
preference shares.
STAFF
I would like to thank all our staff who have continued to drive the brand
forward with determination and commitment and without whom, the achievements of
the last year would not have been possible.
Godfrey Davis
CHAIRMAN AND CHIEF EXECUTIVE
24 June 2004
Contacts:
WMC Communications
Alex Glover or Jo Livingstone 020 7591 3999
Teather & Greenwood Limited
Christopher Hardie 020 7426 9576
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 March 2004
2004 2003
Total Total
#'000 #'000
TURNOVER 25,327 28,177
Cost of sales (12,539) (15,499)
---------- ----------
GROSS PROFIT 12,788 12,678
Other operating expenses (net) (12,248) (14,340)
---------- ----------
OPERATING PROFIT/(LOSS) 540 (1,662)
Group share of profit of associated undertakings 3 1
Loss on disposal of fixed assets (166) -
Interest payable and similar charges (336) (450)
----------
----------
PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 41 (2,111)
Tax on profit/(loss) on ordinary activities (10) (91)
---------- ----------
PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER TAXATION, BEING PROFIT FOR THE FINANCIAL 31 (2,202)
YEAR
7% preference dividend proposed on non-equity shares (196) (196)
1% preference dividend proposed on non-equity shares 4 (3)
Difference between non-equity finance costs and the related dividends (53) -
---------- ----------
RETAINED LOSS FOR THE YEAR (214) (2,401)
---------- ----------
LOSS PER ORDINARY SHARE - basic (0.49p) (6.64p)
========== ==========
CONSOLIDATED BALANCE SHEET
31 March 2004
2004 2003
#'000 #'000
FIXED ASSETS
Tangible assets 5,385 6,533
Investments 73 76
------------- ----------
5,458 6,609
------------- ----------
CURRENT ASSETS
Stocks 6,565 7,435
Debtors 3,441 4,027
Cash at bank and in hand 1,245 71
------------- ----------
11,251 11,533
CREDITORS: Amounts falling due within one year (3,912) (10,996)
------------- ----------
NET CURRENT ASSETS 7,339 537
------------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 12,797 7,146
CREDITORS: Amounts falling due after more than one year (3,178) (373)
------------- ----------
NET ASSETS 9,619 6,773
============= ==========
CAPITAL AND RESERVES
Called-up share capital 2,838 2,457
Share premium account 11,371 8,931
Revaluation reserve 142 173
Capital redemption reserve 154 154
Preference dividend reserve 442 250
Profit and loss account (5,328) (5,192)
------------- ----------
SHAREHOLDERS' FUNDS 9,619 6,773
============= ==========
Shareholders' funds may be analysed as:
Equity interests 6,615 3,764
Non-equity interests 3,004 3,009
------------- ----------
9,619 6,773
============= ==========
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March 2004
2004 2003
#'000 #'000
NET CASH INFLOW FROM OPERATING ACTIVITIES 1,684 1,293
Returns on investments and servicing of finance (345) (453)
Taxation - (2)
Capital expenditure 303 (600)
------------- -----------
Cash inflow before financing 1,642 238
Financing 3,511 (328)
------------- -----------
INCREASE/(DECREASE) IN CASH IN THE YEAR 5,153 (90)
============= ===========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2004 2003
#'000 #'000
Increase/(Decrease) in cash in the year 5,153 (90)
Cash(inflow)/outflow from(increase)/decrease in debt and lease financing (690) 318
------------- ----------
4,463 228
Inception of finance leases (130) (41)
------------- ----------
Movement in net debt 4,333 187
NET DEBT, BEGINNING OF YEAR (6,564) (6,751)
------------- ----------
NET DEBT, END OF YEAR (2,231) (6,564)
============= ==========
NOTES
1. The financial information set out above does not constitute the
Group's statutory financial statements for the years ended 31 March 2004
and 2003, but is derived from those financial statements. Statutory
accounts for the year ended 31 March 2003 have been filed with the
Registrar of Companies. The statutory accounts for the year ended 31 March
2004 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 2003 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 2004 contained in this report have
been prepared using accounting policies consistent with those used in the
preparation of the Annual Report and Financial Statements for the year
ended 31 March 2003.
3. Basic earnings per ordinary share has been calculated by dividing the loss
on ordinary activities after taxation and dividends on non-equity shares
for each financial year by 43,453,282 (2003: 36,147,123) ordinary shares,
being the weighted average number of ordinary shares in issue during the
year.
4. 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 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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