SHOE Shoe Zone Plc

TIDMSHOE

RNS Number : 2827Q

Shoe Zone PLC

17 October 2023

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. It forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Shoe Zone plc

("Shoe Zone" or the "Company")

Full Year Trading Update

Strong sales and highest recorded profits

Shoe Zone is pleased to announce its unaudited full year trading update for the 52 weeks to 30 September 2023 ("FY 2023").

Financial Highlights:

   --    Group revenue increased by 6.1% to GBP165.7m (FY 2022: GBP156.2m) 

-- Store revenue of GBP134.8m (FY 2022: GBP129.8m), digital revenue of GBP30.9m (FY 2022: GBP26.4m)

   --    Store numbers: 323 (FY 2022: 360) 
   --    Product margin of c.62.1% (FY 2022: 61.2%) 
   --    Net cash of GBP16.4m (FY 2022: GBP24.4m) 
   --    Adjusted profit before tax expected to be not less than GBP16.0m 1 (FY 2022: GBP11.2m) 
   --    Share buy-back programme continued with 3.8m shares bought back at a cost of GBP8.1m 

1 Adjusted to exclude the profit on sale of one freehold property and foreign exchange revaluations

Financial Summary

Revenue

In the 52 weeks to 30 September 2023 revenue was GBP165.7m (FY 2022: GBP156.2m). The 6.1% increase is due to strong second half trading particularly in peak summer and our key back to school period, and this is trading out of 37 fewer stores than last year.

Digital revenue was GBP30.9m (FY 2022: GBP26.4m) an increase of 17.0%. This represents 18.7% of Group revenue (FY 2022: 16.9%) and this continuing growth is validation of the ongoing investment in our digital platform.

Product margin

Product margin increased to c.62.1% (FY 2022: 61.3%). This is due to lower container prices part way through the year, and improved stock management due to less market volatility.

Profit before tax

Adjusted profit before tax is expected to be not less than GBP16.0m (FY 2022: GBP11.2m). This is adjusted for GBP0.3m profit on sale of one freehold property and a foreign exchange revaluation loss of GBP0.6m. Shoe Zone has traded positively during the period, particularly in the second half of the year which included our key Back to School period.

Net cash

The Company ended the year with net cash of c.GBP16.4m (FY 2022: GBP24.4m). The reduction in net cash balance was due to dividends paid of GBP8.2m, further share buy-backs in the year of GBP6.4m and an increased level of capital expenditure to gross GBP11.3m (net GBP9.6m), offset by the cash generated from profitable operations.

Dividend

A 2.5 pence per share interim payment amounting to GBP1.2m was made in August.

A final dividend, the amount of which is yet to be determined, will be proposed in January 2024 alongside our final results.

Share Buy-back programme

The Company continued its programme of share buy-backs, and as at the year-end had purchased in total 3.8m shares at a cost of GBP8.1m and at an average price of GBP2.14. We have cancelled 3.75m shares.

Store numbers

We ended the year trading out of 323 (FY 2022: 360) retail stores. We closed 72 stores, opened 35 and refitted 15. The total is made up of 188 original Shoe Zone stores, 42 Big Box and 93 Hybrid stores. We continue our strategy to expand the number of Hybrid and Big Box formats through relocations and refits of existing Shoe Zone stores.

Chief Executive Update, Anthony Smith

"I am pleased to announce that Shoe Zone has had a strong year, continuing the momentum gained from the positive year we had in 2022. We continue our strategy to expand our Hybrid and Big Box formats via refits (15) and relocations and new stores (35). Shoe Zone continues to show how resilient it is, with a proven track record of delivering robust results during times of economic uncertainty.

We look forward to updating shareholders in more detail at the time of our final results in January 2024.

I would like to thank all of our teams for their continued commitment and hard work that have produced these great results."

For further information please call:

Shoe Zone PLC Tel: +44 (0) 116 222 3001

Anthony Smith (Chief Executive)

Terry Boot (Finance Director)

Zeus (Nominated Adviser and Broker) Tel: +44 (0) 203 829 5000

David Foreman, James Hornigold, Ed Beddows (Investment Banking)

Dominic King (Corporate Broking)

About Shoe Zone

Shoe Zone is a Town Centre, Retail Park and Digital footwear retailer, offering low price, high quality footwear for the whole family.

Shoe Zone operates from a portfolio of 323 stores and has approximately 2,400 employees across the UK.

The store portfolio consists of 188 high street stores containing the core Shoe Zone product range and 93 hybrid high street stores and 42 larger Retail Park stores which also have additional brands such as Skechers, Hush Puppies and Kickers.

shoezone.com, combined with the store network, ensures a full multi-channel offering for great customer service.

During an average year Shoe Zone sells 14.1 million pairs of shoes per annum at an average retail price of cGBP13.50.

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October 17, 2023 02:00 ET (06:00 GMT)