Interim Results
December 13 2004 - 2:00AM
UK Regulatory
RNS Number:2960G
Mulberry Group PLC
13 December 2004
MULBERRY GROUP PLC
13 DECEMBER 2004
MULBERRY GROUP PLC ("Mulberry" or the "Group")
INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2004
CHAIRMAN AND CHIEF EXECUTIVE'S REVIEW
We have continued to make good progress and have taken important steps to
develop the worldwide potential of the Mulberry brand.
The Group made a profit in the first half for the first time since its flotation
on AIM in 1996. The profit for the period was #17,000 (2003: loss #615,000).
The underlying trends, since September, continue to be positive and the results
for the full year are likely to exceed current market expectations.
Sales for the period were #12.1 million (2003: #12.1 million). This reflects
increased sales of accessories offset by the continuing rationalisation of the
men's and women's wear business and the impact of shop closures in the six
months under review and the previous financial year.
Gross profit margin increased by 6.4 percentage points to 52.7% from 46.3% for
the same period last year. Accessories margins continue to improve with
increased volume, while sales of lower margin men's and women's wear have
declined. Margins improved in our shops due to reduced clearance activity.
Operating expenses increased to #6.2 million (2003: #6.0 million). This modest
increase reflects increased levels of activity balanced by continued tight cost
control across the business.
At 30 September 2004, net debt was #2.6 million, compared to #4.8 million at the
same time last year.
In the six months to 30 September, we have launched Mulberry in the USA and, as
announced previously, have concluded separate agreements in Japan and the rest
of Asia. These developments position Mulberry with strong and experienced
partners in the key international markets. The next task for management is to
build the business in each of these markets. In keeping with the approach that
we have adopted over the last two years, we will develop each market with a
careful progressive strategy. Our objective is to build a significant and
resilient long term business.
STRATEGIC RESTRUCTURING OF GROUP'S RESERVES
The Board of Mulberry have concluded that this is an appropriate moment to
restructure the Group's reserves. It is proposed that the accumulated deficit of
distributable reserves be cancelled against the substantial balance on the share
premium account. This will bring forward the date at which the Group is able to
pay dividends to shareholders. An extraordinary general meeting of shareholders
will be called to vote on this proposal. This is a positive development for
shareholders. A circular explaining this proposal and the implications will be
mailed to shareholders with the interim results in the next few days.
At 31 March 2004 the accrued but unpaid dividends on the preference shares were
#442,000. The dividend is payable at the rate of 7% of the subscription value
and accrues at the annual rate of #196,000. These dividends are a contractual
commitment which must be paid before any dividend on the ordinary shares.
In view of this, the Board do not expect to propose a dividend on the ordinary
shares in relation to the current year ending 31 March 2005.
BUSINESS REVIEW
Accessories are our core business and account for over 80% of Group sales.
Autumn/Winter 2004 wholesale orders from third parties increased by 9%. A large
proportion of this growth is related to the success of the Bayswater and Roxanne
bags introduced over the last two seasons. These bags together with their family
of related products have led the transformation of Mulberry into a must have
fashionable brand attracting new younger customers.
Like for like sales in our UK full price shops were 7% higher for the six months
to 30 September. In September, we opened a shop in Notting Hill in London and we
have agreed with BAA to open a shop in Heathrow Terminal 1 in the Spring.
Our marketing and public relations activities have continued to achieve
outstanding coverage in the UK media. The New York launch at Bergdorf Goodman
with Theodora Richards was very successful and we have achieved good coverage in
the USA press.
In November, Mulberry won the British Fashion Council award for the Accessory
Designer of the year, for the first time in the Group's history. This is a
further endorsement of the transformation that we have achieved.
In November, we launched our new website at Mulberry.com which brings the site
into line with our new image and marketing approach.
NEW MARKETS
Following the American launch of accessories at the end of August, sales have
been very strong in Bergdorf Goodman, New York, and in three Barneys stores. For
Spring 2005, we have orders from Neiman Marcus for a number of stores and
Bergdorf Goodman will launch the women's wear collection.
In Asia, our distributor Club 21, an associated company of our majority
shareholder Challice, opened their first Mulberry shop in Harbour City, Hong
Kong, at the end of October. Initial feedback from the opening has been
positive. They plan to open in Singapore and Bangkok in the next six months.
In Japan, Sanki have opened a small shop in Maruzen,Tokyo. For Spring 2005,
Mulberry accessories will feature in Isetan, in the Shinjuku district of Tokyo
and a small number of opinion leading fashion stores.
CURRENT TRADING AND OUTLOOK
Like for like sales in our full price shops for the nine weeks to 27 November
2004 were 13% ahead of the same period last year and the accessory order book
for Spring 2005 is showing substantial growth. Current indications are that
sales will grow in the second half of the year, subject to reasonable results in
the key Christmas trading period.
DIVIDENDS
The Board is not recommending the payment of a dividend on the ordinary or
preference shares.
STAFF
The commitment and enthusiasm of our staff is one of the core strengths of the
Group. I would like to thank them again for their continuing support and
dedication.
GODFREY DAVIS
CHAIRMAN AND CHIEF EXECUTIVE
13 December 2004
ENQUIRIES:
For further information, please contact:
WMC Communications
Alex Glover / Jo Livingston - 020 7591 3999
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30.09.04 30.09.03 31.03.04
#'000 #'000 #'000
TURNOVER 12,073 12,050 25,327
Cost of sales (5,716) (6,467) (12,539)
GROSS PROFIT
6,357 5,583 12,788
Other operating expenses (net) (6,224) (5,997) (12,248)
OPERATING PROFIT / (LOSS) 133 (414) 540
Loss on disposal of fixed assets - - (166)
Group share of profit of associated company - - 3
Interest payable and similar charges (116) (201) (336)
PROFIT / (LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 17 (615) 41
Tax on profit / (loss) on ordinary activities (note 2) - - (10)
PROFIT / (LOSS) FOR THE PERIOD 17 (615) 31
(98) (99) (192)
Difference between non-equity finance costs and the
related dividends (26) - (53)
ACCUMULATED LOSS (107) (714) (214)
Loss per share (0.22p) (1.87p) (0.49p)
Dividend per ordinary share Nil pence Nil pence Nil pence
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
30.09.04 30.09.03 31.03.04
#'000 #'000 #'000
FIXED ASSETS 5,350 6,371 5,458
CURRENT ASSETS
Stocks 7,146 7,450 6,565
Debtors 3,753 4,506 3,441
Cash 694 41 1,245
11,593 11,997 11,251
CREDITORS: Amounts falling due within one year (4,234) (5,066) (3,912)
NET CURRENT ASSETS 7,359 6,931 7,339
TOTAL ASSETS LESS CURRENT LIABILITIES 12,709 13,302 12,797
CREDITORS: Amounts falling due after one year (3,073) (4,104) (3,178)
NET ASSETS 9,636 9,198 9,619
CAPITAL AND RESERVES
Called up share capital 2,838 3,088 2,838
Reserves 6,798 6,110 6,781
SHAREHOLDERS' FUNDS 9,636 9,198 9,619
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30.09.04 30.09.03 31.03.04
#'000 #'000 #'000
Operating profit / (loss) 133 (414) 540
Depreciation 398 396 798
(Increase) / decrease in stocks (581) (15) 870
(Increase) / decrease in debtors (312) (479) 586
Increase / (decrease) in creditors 286 (368) (1,110)
NET CASH FLOW FROM OPERATIONS (76) (880) 1,684
Interest (116) (201) (345)
Taxation - - -
Capital expenditure (206) (131) 303
NET CASH FLOW BEFORE FINANCING (398) (1,212) 1,642
Financing (153) 4,893 3,511
INCREASE / (DECREASE) IN CASH IN THE PERIOD (551) 3,681 5,153
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Increase / (Decrease) in cash in the year (551) 3,681 5,153
Cash outflow / (inflow) from decrease / (increase) in
debt and lease finance 153 (1,855) (690)
(398) 1,826 4,463
Inception of finance leases - (38) (130)
Movement in net debt (398) 1,788 4,333
NET DEBT, BEGINNING OF PERIOD (2,231) (6,564) (6,564)
NET DEBT, END OF PERIOD (2,629) (4,776) (2,231)
NOTES
1. ACCOUNTING POLICIES
The interim results contained in this report, which have not been reviewed
or 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 2004.
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 2004, 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, Deloitte & Touche LLP, 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 10 December 2004 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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