RNS Number:3295S
Ted Baker PLC
11 October 2000
Ted Baker PLC
Interim Results for the 28 weeks to 12 August 2000
Highlights
* Turnover up 23.8% to #19.9 million (1999: #16 million)
* Excellent growth in womenswear, up 43.5% and now representing 39.1% of
total sales
* Significant investment in infrastructure for future development including
new head office and new distribution centre
* Successful launch of Endurance crease-resistant suit and introduction of
Endurance for women
* Profit before tax of #2.1 million (1999: #2.9 million) reflecting increased
seasonality of profits towards second half, as a result of one off step up
in cost base, retail growth and phasing of wholesale sales
* Earnings per share of 3.7p (1999: 4.9p)
* Interim dividend of 2.4p per share (1999: 2.1p) up 14.3%
* Launch of Ted's The Business, homeware and sunglasses
Commenting, Ray Kelvin, Chief Executive, said,
"The performance of our womenswear and the success of our Endurance collection
reinforces our strategy of extending the brand into new areas. This has
been a period of significant investment for the future development of the
brand."
Enquiries: Ray Kelvin, Chief Executive
Lindsay Page, Finance Director
020 7255 4800
Piers Hooper/Justin Strong
Hudson Sandler
020 7796 4133
CHAIRMAN'S STATEMENT
OVERVIEW
During the period under review we have continued to introduce new collections,
extend our ranges and expand our channels of distribution. We have also
invested significantly in the long-term development of our brand, moving to
new headquarters, relocating our distribution centre and building our team,
which will meet our space requirements for the foreseeable future.
FINANCIAL HIGHLIGHTS
In the 28 weeks to 12 August 2000, turnover increased by 23.8% to #19.9
million (1999: #16 million) demonstrating the continued strength of the brand.
As stated in our results for the year ended 31 January 2000 in April, the
current year will see the seasonal bias towards the second half increased.
This has arisen as a result of a combination of factors: the planned step-up
in our cost base resulting from our investment in infrastructure and people
which has impacted on the first half; and the opening of four retail outlets
during the period under review and the phasing of wholesale deliveries, which
together will give rise to an enhanced performance in the second half. In
particular, the move to our new headquarters at The Ugly Brown Building in
London NW1 has proved a great success, providing an outstanding environment
for the presentation of our brand to customers and suppliers and an excellent
working environment for our team.
As expected, operating profit was #2.2 million compared to #2.8 million for
the equivalent period last year. The composite gross margin was 57.9% compared
to 59.4% for the equivalent period last year, reflecting an increased
contribution from the wholesale division, a change in the wholesale product
mix and, as a consequence, a reduced wholesale margin. Profit before tax, on
the same basis, was #2.1 million (1999: #2.9 million).
Earnings per share were 3.7p compared to 4.9p. The Board has declared an
increased interim dividend of 2.4p per share (1999: 2.1p) payable on 27
November 2000 to shareholders on the register at the close of business on 27
October 2000.
RETAIL
Retail sales were 19.6% ahead during the period. Retail gross margins were
largely unchanged at 67.2% (1999: 67.4%). During the first half of the year, a
standalone woman's store was opened on the King's Road, Chelsea, increasing
our woman-only presence, and further stores opened in Richmond and Birmingham.
All have yet to achieve maturity but are trading in line with expectations.
Our store in New York produced another exceptional performance, with sales
increasing by 30%. Average retail square footage per store increased by 34%
from 30,500 sq ft to 41,000 sq ft, and this increase is reflected in an
increase of 39% in distribution costs. Sales per square foot were #310
compared to #350, reflecting the addition of new immature space.
WHOLESALE
UK wholesale revenues rose by 38.1% to #6.2 million (1999: #4.5 million). Our
wholesale sales reflect the success of the Endurance range of suits, the
continued development of Ted Baker Woman, and the first sales of our girlswear
collection, Teddy Girl. The number of trustees, or wholesale outlets, in the
UK increased by 31% to 596, excluding trustees for the newly launched footwear
range. Wholesale gross margins fell to 41.5% (1999: 43.6%), reflecting a
change in product mix during the period.
Overseas wholesale sales were #961,000 (1999: #923,000) reflecting the winding
down of our US wholesale business following the licence agreement signed in
February, balanced by good progress in other markets. The second half will be
the first period under the direct control of our licensee.
LICENCE INCOME
Licence income increased from #104,000 to #269,000, reflecting an initial
contribution from the US licensing agreement signed in February 2000 and a
further successful year for Ted Baker fragrances.
COLLECTIONS
Our collections have been expanded further and continue to be well received.
Womenswear enjoyed an excellent performance as sales increased by 43.5%.
Womenswear now represents 39.1% of our total sales compared with 34% in the
corresponding period last year. Sales of Ted Baker menswear in the period
increased by 8.1%. Sales of our childrenswear ranges, Teddy Boy and Teddy
Girl, increased by 64.4% and now represent 3.7% of sales. Additionally, we saw
the first contribution from our shoe collection. The Ted Baker Endurance Suit
for men was a significant highlight and a woman's Endurance Suit was launched
in the period under review. The Endurance collection has been extended for
the second half and will include a range of 'life enhancing' products.
INFRASTRUCTURE
In the period under review we moved to our new headquarters at The Ugly Brown
Building in London, which has been designed and developed in accordance with
the spirit of our brand. The new headquarters total 41,000 sq ft compared to
some 8,000 sq ft at our previous location. The increased space not only
allows us to present our collections in an appropriate setting but will
provide us with sufficient room for growth in the foreseeable future. We have
also relocated our distribution centre from a 16,000 sq ft site to a modern
41,000 sq ft facility.
These developments, together with a continuing investment in our team, have
given rise to a step up in the cost base of the business during the period,
but will provide significant support for the long-term development of the
brand.
CURRENT TRADING AND PROSPECTS
Our autumn/winter collections are selling strongly and have been well
received. In the eight weeks to 7 October retail sales were 34.4% ahead and UK
wholesale sales were 76.4% up. Since the end of the period under review
another two standalone womenswear stores, at Hampstead and Manchester
Triangle, have opened.
Last week we opened a store at Canary Wharf in London devoted to our new Ted's
The Business range of 'smart casual' wear, which has been developed to meet
the needs of the 'dress down' market. The initial reaction has been extremely
favourable. We have also developed a website for the Ted's The Business
collection, including a version specifically designed for hand-held pocket
computers at www.tedsthebusiness.co.uk.
We have recently launched a homeware collection, initially featuring towels
and bedlinen and including the 'Bed in a Box', which has been very well
received and will make its first contribution in the first half of next year.
We have also signed a licence agreement for the development of a range of
sunglasses, which will be launched in spring 2001.
We have performed according to our expectations in the first half and,
although the Christmas trading period will have a significant influence on the
year as a whole, we remain confident of a successful outcome for the year.
Brian North
11 October 2000
Consolidated Profit and Loss Account
for the 28 weeks ended 12 August 2000
unaudited unaudited audited
28 weeks 28 weeks year
ended ended ended
12 August 14 August 29 January
2000 1999 2000
#'000 #'000 #'000
Turnover 19,851 16,029 36,737
Cost of sales (8,354) (6,507) (14,970)
---------- ---------- ---------
Gross profit 11,497 9,522 21,767
Distribution costs (6,029) (4,327) (9,922)
Administrative expenses (3,504) (2,525) (4,359)
Other operating income 234 172 377
---------- ---------- ---------
Operating profit 2,198 2,842 7,863
Net interest (payable)/
receivable (55) 65 8
---------- ---------- ---------
Profit on ordinary activities
before taxation 2,143 2,907 7,871
Tax on profit on ordinary
activities (625) (880) (2,156)
---------- ---------- ----------
Profit on ordinary activities
after taxation 1,518 2,027 5,715
Minority interests (1) (5) (17)
Dividends (997) (867) (2,600)
---------- ---------- ----------
Retained profit for the
period 520 1,155 3,098
========= ========= =========
Earnings per share note 2 3.7p 4.9p 14.1p
Diluted earnings per sharenote 2 3.6p 4.9p 13.5p
Consolidated Balance Sheet
as at 12 August 2000
unaudited unaudited audited
12 August 14 August 29 January
2000 1999 2000
#'000 #'000 #'000
Fixed assets
Tangible assets 11,184 4,953 8,605
Investments - own shares 313 770 485
-------- ------- --------
11,497 5,723 9,090
-------- ------- --------
Current assets
Stock 9,862 8,650 8,466
Debtors 3,688 2,269 3,243
Cash at bank and in hand 267 373 167
-------- -------- --------
13,817 11,292 11,876
Creditors : amounts falling
due within 1 year (14,838) (8,812) (10,815)
-------- -------- --------
Net current (liabilities)/assets (1,021) 2,480 1,061
-------- -------- --------
Total assets less current
liabilities 10,476 8,203 10,151
Creditors : amounts falling
due after more than 1 year - (200) (200)
Provisions for liabilities
and charges (28) (42) (35)
-------- -------- --------
Total assets 10,448 7,961 9,916
-------- -------- --------
Capital and reserves
Called up share capital 2,063 2,063 2,063
Other reserve 910 910 910
Profit and loss account * 7,427 4,955 6,898
-------- -------- --------
Equity shareholders' funds 10,400 7,928 9,871
Minority interests 48 33 45
-------- -------- --------
10,448 7,961 9,916
===== ===== =====
* includes exchange movements of #9,000
(28 weeks to 14 August 1999 #NIL; year ended 29 January 2000 #NIL)
Consolidated Cash Flow Statement
for the 28 weeks ended 12 August 2000
unaudited unaudited audited
28 weeks 28 weeks year
ended ended ended
12 August 14 August 29 January
2000 1999 2000
#'000 #'000 #'000
Net cash inflow/(outflow)
from operating activities note 3a 2,324 (34) 7,041
Returns on investments and
servicing of finance
Interest received 28 65 70
Interest paid (83) - (62)
Taxation (605) 53 (2,138)
Capital expenditure note 3d (3,330) (2,731) (6,897)
Equity dividends paid (1,719) (1,486) (2,353)
---------- ---------- ----------
Cash outflow before management
of liquid resources
and financing (3,385) (4,133) (4,339)
Management of liquid resources - 3,000 3,000
---------- ---------- ----------
Decrease in cash (3,385) (1,133) (1,339)
========== ========= =========
Notes to the Interim Financial Statements
1. Basis of preparation
The consolidated interim financial statements have been prepared under the
historical cost convention and in accordance with applicable accounting
standards. The accounting policies are consistent with those set out in the
financial statements of Ted Baker PLC for the 52 weeks ended 29 January 2000.
The financial information in this report does not constitute statutory
accounts and does not comprise the group's financial statements for the 52
weeks ended 29 January 2000. The financial statements for Ted Baker PLC for
the 52 weeks ended 29 January 2000 have been delivered to the Registrar of
Companies. The auditors' report on these financial statements was unqualified
and did not include a statement under Section 237 (2) or (3) of the Companies
Act 1985.
2. Earnings per share
Earnings per share for the 28 weeks ended 12 August 2000, the 52 weeks ended
29 January 2000 and for the 28 weeks ended 14 August 1999 have been calculated
on profit on ordinary activities after taxation and on the weighted average
number of ordinary shares outstanding, being 40,359,774 ordinary shares for
the 28 weeks ended 12 August 2000, 40,848,493 shares for the 28 weeks ended 14
August 1999 and 39,903,521 shares for the 52 weeks ended 29 January 2000. Own
shares held by employee benefit trusts have been eliminated from the weighted
number of ordinary shares and dividend income arising from these holdings has
been eliminated from the profit on ordinary activities after taxation and
minority interests.
Diluted earnings per share are based on a weighted average number of shares of
41,848,933 for the 28 weeks ended 12 August 2000, 41,624,264 for the 28 weeks
ended 14 August 1999 and 41,462,156 for the 52 weeks ended 29 January 2000.
3. Notes to the Consolidated Cashflow Statement
for the 28 weeks ended 12 August 2000
28 weeks 28 weeks Year
ended ended ended
12 August 14 August 29 January
2000 1999 2000
#'000 #'000 #'000
a) Reconciliation of operating profit
to net cash inflow/(outflow) from
operating activities
Operating profit 2,198 2,842 7,863
Depreciation charges 862 415 927
Loss on sale of tangible fixed assets 56 135 137
Increase in stock (1,396) (3,387) (3,203)
Increase in debtors (445) (580) (1,553)
Increase in creditors 1,056 549 2,885
Decrease in provisions (7) (8) (15)
---------- ---------- ----------
2,324 (34) 7,041
====== ====== ======
Notes to the Consolidated Cashflow Statement
for the 28 weeks ended 12 August 2000
28 weeks 28 weeks Year
ended ended ended
12 August 14 August 29 January
2000 1999 2000
#'000 #'000 #'000
b) Analysis of movements in cash
during the year
Balance at beginning of the period (33) 1,506 4,306
Net cash outflow (3,385) (1,133) (4,339)
---------- ---------- ----------
Balance at end of period (3,418) 373 (33)
========== ========== ==========
c) Analysis of the balance of cash as shown
in the balance sheet
Cash at bank and in hand 267 373 167
Debts due after one year - - (200)
Bank overdraft (3,685) - -
---------- ---------- ----------
(3,418) 373 (33)
========== ========== ==========
d) Capital expenditure
Payments to acquire
tangible fixed assets (3,551) (2,235) (6,412)
Receipts from sale of
tangible fixed assets 49 80 91
Sale/(purchase) of own shares 176 (576) (576)
Purchase of investments (4) - -
---------- ---------- ----------
(3,330) (2,731) (6,897)
========== ========== ==========
4. Interim Report
This interim report will be sent by post to all registered shareholders.
Copies will be available to the public from the Company Secretary at the
registered office:
Ted Baker, The Ugly Brown Building, 6a St Pancras Way, London NW1 OTB.
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