Oasis Stores PLC - Final Results
April 05 2000 - 10:10AM
UK Regulatory
RNS Number:5282I
Oasis Stores PLC
5 April 2000
Oasis Stores Plc
Preliminary Results Announcement
For the 52 weeks ended 29 January 2000
Oasis Stores Plc, the women's fashion retailer, today announces preliminary
results for the 52 weeks ended 29 January 2000.
Summary:
- Turnover up 18% to #131.8 million (1999: #111.8 million)
- Oasis like-for-like sales increased by 5%
- Operating profit down 13% to #10.2 million (1999: #11.7 million)
- Profit before tax down 15% to #11.1 million (1999: #13.0 million)
- Performance impacted by difficult trading conditions in Q4 1999 and a pre-
tax loss of #1.1 million at Coast
- Management team strengthened and restructured; Derek Lovelock appointed as
Chief Executive in November 1999
- Coast management team strengthened to accelerate development of brand and
critical mass
- Oasis sales in the first 7 weeks of the year up 15%; like-for-like sales
ahead by 5%
Commenting on the results, Derek Lovelock, Chief Executive said:
"Oasis has a clearly differentiated product offer and a strong, successful
brand that we will continue to leverage. The low inflation environment
continues to set stiff challenges for all high street retailers; however I am
confident that the skilled and experienced teams we have in place at both
Oasis and Coast will deliver profitable growth going forward."
Enquiries:
Oasis Stores Plc 020 7452 1000
Derek Lovelock, Chief Executive
Dominic Lavelle, Finance Director
Financial Dynamics 020 7831 3113
Tom Baldock
Preliminary Statement
Financial summary
Last year we achieved an increase in sales of 17% to #126.1m in the Oasis
brand and an increase in Coast of 53% to #5.7m. This substantial sales
increase was not matched by pre-tax profits, which fell back by 15% to #11.1m.
At Oasis, the trend of sales and profits for the first three-quarters of the
year did not continue through the final quarter. This in turn impacted on
gross margin, which declined from 51.8% to 50.5%, as lost sales at full price
turned into discounted sales during the January 'Sale' period.
Coast is an exciting new brand that has limited market exposure. There were
only 8 shops and 14 concessions trading at year-end and of these only 5 of the
shops traded for the full year. In order to build the brand we have put in
place a first-class management team, but we have not yet reached critical mass
in terms of sales. Coast incurred pre-tax losses of #1.1 million.
A total of #12.7 million of capex (1999: #10.2 million) was invested in the
period, #0.8 million in Coast and #11.9 million in Oasis. Expenditure on new
computer systems was #1.9 million. The new Oasis stores cost #6.8 million and
#2.5 million was spent refurbishing existing stores. Coast expenditure
comprised #0.2 million on existing store refurbishment and #0.6 million on the
new stores. Various enhancements to the Distribution Centre cost #0.4 million.
Distribution costs were #47.7 million and net administration costs were #7.5
million.
Operating Review
Oasis Retail
In the UK, like-for-like sales increased by 4%, and overall sales grew by 18%,
to #108.5 million. We opened 15 new branches, comprising 5 relocated
branches, an Accessories branch and 9 others. We closed one concession and
one Accessories branch resulting in a net increase in UK outlets of 8, from
115 to 123.
Trading square footage at the end of the period was 201,000, or 15% higher
than last year (175,000). Average trading square footage was 188,000, or 13%
higher than last year. Four new stores have opened since the year-end,
including two relocations. Seven other new stores are planned for the
remainder of the year, including a further relocation. We plan to moderate the
pace of openings in the current year to maintain a more balanced relationship
between our cash generation and capital expenditure.
Ireland continued its steady growth, with like-for-like sales increasing by
16%, and overall sales up 23% to #9.8 million. No new stores opened in the
period and the number of stores at the end of the period was 7.
In Germany, overall sales declined by 2% to #3.7 million and like-for-like
sales were flat. Two new concessions were opened during the period and the
branch in Oberhausen was closed in the first half, leaving a total of 16
concessions at the end of the period.
We have strengthened further the in-house design team to provide more depth.
We will continue to invest in our unique handwriting, which gives us brand
distinction on the High Street. Our customer is becoming much more fashion
aware through the new media influences. Our designers aim to keep Oasis in
the forefront of trends and to interpret them in our own commercial style.
Our buyers have also maintained our reputation for providing product with an
Oasis twist yet offering recognisable value. They are currently developing
new product areas in order for us to meet more of our customers' aspirations.
It is vital that Oasis remains innovative in its' approach to all future
technological developments and extending the Oasis Brand to the internet was
an important initiative. www.oasis-stores.com launched early February 2000
and, whilst the site is not transactional, it is an important tool in
reinforcing and extending brand awareness and differentiating Oasis.
Overseas
In the period, 2 new overseas franchise stores were opened - another store in
Portugal and our first store in Japan - and one store closed in Taiwan,
increasing the number of stores to 24. Income from licensees in the period
was #0.9 million, including #0.2 million from our mail order agreement.
Our Hong Kong office, which moved to larger premises, has been a notable
success. We have recently started to ship product directly from Hong Kong to
our partners in Japan, Taiwan and the Gulf. This activity is set to increase
in importance and this will facilitate, particularly in Japan, the
implementation of our partners' expansion plans.
Coast
This was the first full year of trading for Coast and sales increased by 53%,
from #3.7 million to #5.7 million. During the period, three further branches
were opened and 8 unprofitable concessions were closed, reducing the number of
stores to 22, comprising 8 branches and 14 concessions. There are plans to
open three more branches and several concessions during this year.
The management team has been strengthened significantly, the product is now
being well received and sales densities are rising.
Management
An important change has been the splitting of the Chairman's role following
the Board's appointment of Derek Lovelock as Chief Executive last November.
Since his arrival we have developed our management and reporting structures
and through a more rigorous business planning process all key management now
have clearer benchmarks against which they can regularly measure performance.
The benefits of these changes should be felt in the coming years. We plan to
make sure that we create a framework which whilst more structured will
maintain and strengthen the environment in which entrepreneurial flair can
flourish so that we keep our brands exciting and different.
Strategy
The fashion retail landscape is changing as many traditional middle market
operators find themselves competing in the value sector on price. This change
has reinforced our belief that the brand strategy and positioning at Oasis is
correct. Oasis has a clearly differentiated, design driven product offer and a
positioning which is successful and sustainable.
Management's short-term priority is to focus on profit growth. Through better
management of our sources of supply and tighter management of markdowns, our
aim is to increase gross margins. With greater operational efficiency and
close control of costs, operating margins will be further improved.
We will also continue the physical expansion of Oasis, building on our
knowledge of locations where we either trade a concession or small unit to
ensure that we match our store size to the market opportunity. In terms of our
product offering, we are currently undertaking a review of the scope and focus
of Oasis' non-clothing product range with a view to upgrading and expanding
the offer.
At Coast our immediate priority is to grow profitability. We remain convinced
that there is a gap in the market for the older, more discerning customer who
requires the appropriate fashion interpretation. The senior management team
has been upgraded and will be focusing initially on accelerating the brand's
development - through department store concessions, where there is a high
footfall of target customers - as well as appropriate smaller stores. We are
determined to leverage the expertise used in establishing and growing the
Oasis brand to achieve the same success with Coast.
Finally, our two strong brands will in the future enable us to exploit other
distribution channels, for example additional international franchise
opportunities, mail order, e-commerce, digital TV and licensing agreements
where appropriate.
Dividend
The board proposes paying a final dividend of 5.6 pence per share (1999: 5.6
pence) on 28 July to shareholders on the register on 23 June 2000. This makes
a total dividend for the year of 8.5 pence, an increase of 3% on the previous
year (1999: 8.25 pence).
Outlook
The current year has started reasonably well, with Oasis like-for-like sales
in the first 7 weeks of the year ahead by 5% and total sales up by 15%. The
impact of Easter is not yet known as it is very late this year.
This will be a demanding year, but we are confident that by sharpening our
focus on gross and operating margins, leveraging the strong Oasis brand and
accelerating the development of Coast we will deliver consistent and
profitable growth.
OASIS STORES PLC
Profit and Loss Account
for the 52 weeks ended 29th January, 2000
2000 1999
#m #m
Turnover 131.8 111.8
Cost of sales (66.4) (55.3)
Gross profit 65.4 56.5
Distribution costs (47.7) (37.6)
Administrative expenses (7.5) (7.2)
Other operating income 0.0 0.0
Operating profit 10.2 11.7
Interest receivable and 1.1 1.3
similar income
Interest payable and similar (0.2) (0.0)
charges
Profit on ordinary activities 11.1 13.0
before taxation
Taxation (3.5) (4.2)
Profit for the financial
period and profit on ordinary 7.6 8.8
activities after taxation
Dividends (4.5) (4.4)
Retained profit 3.1 4.4
2000 1999
pence pence
Earnings per share - basic 14.49 16.71
Other than the profit for the period, which was entirely derived from
continuing activities, there were no recognised gains or losses during the
current and previous period.
Historical cost profits are identical to those profits disclosed above.
OASIS STORES PLC
Balance Sheet
as at 29th January, 2000
2000 1999
#m #m
Fixed assets
Intangible fixed assets - 0.2 0.2
goodwill
Tangible fixed assets 26.9 21.4
27.1 21.6
Current assets
Stock 18.2 14.9
Debtors 6.5 5.3
Investments - 0.9
Short term deposits and cash 3.5 3.8
28.2 24.9
Creditors
Amounts falling due within one (22.2) (16.5)
year
Net current assets 6.0 8.4
Total assets less current 33.1 30.0
liabilities
Creditors
Amounts falling due after more (0.2) (0.2)
than one year
Provision for liabilities and (0.5) (0.5)
charges
Net assets 32.4 29.3
Capital and reserves
Called up share capital 5.2 5.2
Profit and loss account 27.2 24.1
Equity shareholders' funds 32.4 29.3
OASIS STORES PLC
Cash Flow Statement
for the 52 weeks ended 29th January, 2000
2000 1999
#m #m
Net cash inflow from operating 13.8 13.7
activities
Return on investments and
servicing of finance
Interest received 1.1 1.3
Interest paid (0.2) (0.0)
Net cash inflow from returns on
investments and servicing of 0.9 1.3
finance
Tax paid (4.4) (3.5)
Capital expenditure and
financial investment
Purchase of fixed assets (12.7) (10.2)
Sale of tangible fixed assets 0.1 0.4
Sale/purchase of current asset 0.9 (0.9)
investment
Net cash outflow from capital
expenditure and financial (11.7) (10.7)
investments
Equity dividends paid (4.5) (4.1)
(Decrease) in cash (5.9) (3.3)
NOTES TO THE ACCOUNTS
1.Turnover and profit on ordinary activities before taxation
Turnover arises from the sale by the Company to third parties net of
discounts and value added tax and royalty income.
2000 1999
#m #m
Geographical Analysis
Turnover
United Kingdom:
- Oasis retail 108.5 92.3
- Oasis mail order 0.2 0.2
- Coast retail 5.7 3.7
- Total 114.4 96.2
Ireland - Oasis retail 9.8 8.0
Germany - Oasis retail 3.7 3.7
Rest of Europe, Middle
and Far East - 3.9 3.9
overseas licensing
131.8 111.8
Turnover by country of destination is not materially different from
turnover by country operation. Turnover arises entirely from fashion
retailing and may also be analysed as follows:
2000 1999
#m #m
Turnover:
European retailing:
- Oasis retail 122.0 104.0
- Oasis mail order 0.2 0.2
- Coast retail 5.7 3.7
- Total 127.9 107.9
Overseas licensing 3.9 3.9
131.8 111.8
Net profit before
unallocated net
expenses:
European retailing 17.0 18.3
Overseas licencing 0.7 0.6
17.7 18.9
Unallocated net (7.5) (7.2)
expenses
Operating profit 10.2 11.7
2.Reconciliation of operating profit to net cash inflow from operating
activities
2000 1999
#m #m
Operating profit 10.2 11.7
Depreciation charges 6.6 4.7
Loss on sale of fixed assets 0.5 0.3
(Increase) in stocks (3.3) (5.0)
(Increase) in debtors (1.2) (1.2)
Increase in creditors 1.0 3.2
Net cash inflow from 13.8 13.7
operating activities
The Directors recommend a final dividend of 5.60 pence per share (1999:
5.60p) which added to the interim dividend of 2.90 pence (1999: 2.65p),
gives a total dividend payable for the year of 8.50 pence per share (1999:
8.25p). The final dividend will be paid on 28th July, 2000 to shareholders
whose names appear on the Register on Members at the close of business on
23rd June, 2000. The Annual General Meeting of Oasis Stores Plc will be
held at the offices of SG Securities (London) Ltd, Exchange House, Primrose
Street, London EC2A 2DD on 8th June, 2000 at 11am.
Copies of the Annual Report and Accounts will be sent to shareholders in
due course and additional copies will be available from the Company's
registered office: 13-16 Lakeside, Stanton Harcourt, Witney, Oxon, OX8 1SL.
3.Earnings per share
The calculation of basic earnings per share is based on the profit on
ordinary activities after taxation of #7,599,000 (1999: #8,765,000) and a
weighted average of 52,457,175 ordinary shares in issue during the year
(1999: 52,457,175)
4.Financial statements
The financial information for the fifty-two weeks ended 29th January, 2000
is unaudited and does not constitute full accounts within the meaning of
Section 240 of the Companies Act 1985. The financial information for the
fifty-two weeks ended 30th January, 1999 has been extracted from the full
accounts for that period which have been delivered to the Registrar of
Companies and on which the auditors have issued an unqualified audit
report.
END
FR EANLLEEDEEFE
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