RNS No 9610r
TED BAKER PLC
9th October 1997
Ted Baker, the leading designer fashion brand announces its maiden interim
results for the 28 weeks to 9 August 1997, following its listing on the London
Stock Exchange in July 1997
Highlights
* Turnover up 49.7% to #8.58m - retail sales up 29.2%
- wholesale sales up 94.5%
* Operating profit before exceptional flotation costs increased by 29.3% to
#2.04m
* Profit before tax and exceptional flotation costs #2.15m, an increase of
33.2%
* Adjusted earnings per share up 36.1% to 3.58p per share
Ray Kelvin, Chief Executive comments:
"The Ted Baker brand continues to demonstrate its strength. Menswear remains
buoyant and the Ted Baker Woman collection is significantly increasing its
contribution, both through retail and wholesale. We are delighted with the
reception of our Autumn collections and we look forward to a successful
outcome for the full year."
Enquiries:
Ray Kelvin, Chief Executive
Lindsay Page, Finance Director
Ted Baker PLC
on 0171 796 4133 on 9 October, 1997 and on 0171 387 0122 thereafter.
Piers Hooper, Director
Hudson Sandler Limited
on 0171 796 4133.
Ted Baker PLC - Interim Results For The 28 Weeks To 9 August 1997
Financial Performance
I am delighted to announce maiden interim results following
our successful listing on the London Stock Exchange in July
of this year.
The Group has achieved an increase in turnover of 49.7% to
#8.58m. Operating profit before exceptional flotation costs
increased by 29.3% from #1.58m to #2.04m. Profit before
taxation and exceptional flotation costs was up 33.2% to
#2.15m (1996: #1.62m). Adjusted earnings per share were
3.58p, compared to 2.63p for the same period last year.
Retail sales improved by 29.2% to #5.09m, benefiting partly
from the expansion of trading space in some of our stores
and also from an 18.7% increase in like-for-like sales.
Wholesale sales rose by an impressive 94.5% from #1.79m to
#3.49m. Wholesale sales represented 40% of total sales, up
from 31%, thus resulting in a small reduction in overall
margins.
Ted Baker has achieved tremendous growth in sales,
profitability and brand awareness in the last five years
through the efforts of all members of the Ted Baker team.
We set out at the beginning of the year to put in place a
strategy to maintain that impressive growth record and to
ensure the long term strength of the brand whilst giving the
members of the Ted Baker team the opportunity to share in
the success of the business. The flotation on the London
Stock Exchange will help us to achieve these objectives.
Operational Review
Retail
Our retail outlets achieved growth of 29.2% to #5.09m. Like-
for-like sales were up 18.7%. The retail gross margin
improved from 63.7% to 65.7%. Our strategy continues to be
to promote the brand primarily through the quality of our
product, in-store promotions and innovative window displays.
This is supported by the quirky, fun, yet professional
approach of our retail team. We believe that this approach
continues to differentiate us from our competitors and has
an impact on overall retail sales.
It is not our current intention to open new stores and this
will help to ensure that Ted Baker retail outlets maintain
their exclusivity and destination status. Instead we are
expanding existing stores where appropriate and in some
cases devoting areas specifically to the increasingly
important Ted Baker Woman collection. In the first half we
expanded our Liverpool store by some 1,450 square feet. The
capital requirements for the expansion of our retail
business continue to be relatively low and in the period
under review, development and fit out costs were #240,000
with a total of #400,000 anticipated for the full year.
Wholesale
UK wholesale business increased significantly with sales
improving by 61.7% to #2.67m. We continue to maintain the
exclusivity of the brand and our ability to sell the
majority of products at full price through carefully
controlling our "trustees", the retailers entrusted with
stocking the brand. In the first half we added an
additional 58 trustees compared to the same period last
year. The average level of sales to each trustee outlet
also increased by some 42% and the gross margin increased
from 38.5% to 39.7%.
Our focus continues to be on the expansion of the UK
business while developing overseas earnings through
wholesale in the US and in Europe. While the margins from
both of these areas are lower than those from UK wholesale,
they represent a significant opportunity for growth. US
wholesale sales advanced from #145,000 to #716,000. Two new
franchised retail outlets were opened in Zurich and
Amsterdam in March and April 1997 respectively.
Brands
Our core menswear brand performed very well during the first
half year. Shirts continue to dominate the sales mix but
represent a reducing element as the product range widens.
While menswear will continue to generate the bulk of sales,
we are delighted with the progress of the Ted Baker Woman
and Teddy Boy collections. Ted Baker Woman, a range
specifically aimed at the casual designer womenswear market,
recorded a fourfold increase in sales and accounted for
15.6% of our total sales for the period, compared with 5.9%
last year. We believe that womenswear provides great
opportunity for growth in the UK as the womenswear market
remains significantly larger than the UK menswear market.
During the first half, in addition to improved retail sales,
the number of stockists taking the Ted Baker Woman brand
increased from 28 to 44.
Teddy Boy, "Son of Ted", is a collection designed especially
for the 3-14 year old boyswear market. The range has done
well in its first Spring/Summer season and represented 1.7%
of total revenues in the first half of the year.
Current trading and prospects
Since the period end the progress made in the first half has
continued. Retail sales for the eight weeks to 4 October
1997 are some 25% ahead of the same period last year and
like for like sales for the same period are some 12% ahead.
In early August, we completed the transition from wholesale
supplier to concession operator in Selfridges and in four
outlets of Bentalls. Our Glasgow store was closed during
August while an additional 970 square feet of retail space
was added. The store reopened as planned on 8 September.
In addition, we opened the first floor of our Manchester
site, representing an additional 1,100 square feet of retail
space, as planned on 2 October.
Our collections for the Autumn/Winter season, which reflect
our emphasis on high design content, distinctive colours and
innovative fabrics, are very strong and have been well
received by our wholesale customers.
We have launched the first collection for our new Edward
Baker brand, which offers more formal, yet still fashion led
clothing, comprising a collection of shirts, trousers, ties
and related accessories. The collection is currently being
sold in our own stores, in Selfridges and in selected
trustees' outlets.
The anticipated benefits of our expanded retail space,
additional wholesale trustees in the UK and the increasing
contribution from the Ted Baker Woman collection give us
good reason to remain positive about the outcome for the
more important second half of the current year.
Brian North,
Chairman
9 October 1997
CONSOLIDATED PROFIT AND LOSS ACCOUNT
PROFORMA
Unaudited Unaudited Audited Unaudited
28 weeks ended 28 wks ended 52 wks ended period ended
9 Aug 97 10 Aug 96 25 Jan 97 9 Aug 97
#'000 #'000 #'000 #'000
Turnover 8,584 5,731 14,038 1,938
Cost of sales (3,850) (2,532) (6,161) (798)
Gross profit 4,734 3,199 7,877 1,140
Distribution costs (1,683) (1,047) (2,283) (525)
Administrative
expenses (1,744) (588) (4,612) (1,013)
Other operating income 62 14 37 3
------ ------ ------ ------
Operating profit 1,369 1,578 1,019 (395)
====== ====== ====== ======
Profit/(loss) before exceptional
directors' emoluments and
flotation costs 2,041 1,578 4,157 277
Exceptional
directors' emoluments - - (3,138) -
Flotation costs (672) - - (672)
Net interest receivable 113 39 98 26
------ ------- ------- -------
Profit/(loss) on ordinary
activities before
taxation 1,482 1,617 1,117 (369)
Tax on profit on
ordinary activities (700) (550) (991) (123)
------ ------- ------- --------
Profit/(loss) on ordinary activities
after taxation 782 1,067 126 (492)
Dividends
(including non-equity) - - (120) -
------ ------- ------- -------
Retained profit/(loss)
for the period 782 1,067 6 (492)
====== ====== ====== ======
Earnings/(loss)
per share Note 2 1.93p 2.63p 0.31p (1.2p)
Adjusted
earnings
per share Note 2 3.58p 2.63p 6.97p 0.004p
CONSOLIDATED BALANCE SHEETS
Unaudited Unaudited Audited
9 Aug 97 10 Aug 96 25 Jan 97
#'000 #'000 #'000
Fixed assets
Tangible assets 1,347 846 957
---------- ----------- ---------
Current assets
Stock 3,816 1,854 2,200
Debtors 970 925 565
Cash 1,526 1,213 3,982
---------- ----------- ---------
Total current assets 6,312 3,992 6,747
Creditors: amounts falling
within 1 year (5,058) (2,531) (6,579)
---------- ----------- ---------
Net current assets 1,254 1,461 168
---------- ----------- ---------
Total assets less current
liabilities 2,601 2,307 1,125
Provisions for liabilities
and charges (80) (105) (80)
---------- ----------- ---------
Total assets 2,521 2,202 1,045
====== ====== ======
Capital and reserves
Called up share capital 2,063 466 456
Other reserve 950 - -
Capital redemption reserve - 234 244
Profit and loss account (492) 1,502 345
---------- ---------- ----------
2,521 2,202 1,045
====== ====== ======
CONSOLIDATED CASHFLOW STATEMENTS
PROFORMA
Unaudited
28 wks ended 52 wks ended period ended
9 Aug 97 10 Aug 96 25 Jan 97 9 Aug 97
Note #'000 #'000 #'000 #'000
Net cash (outflow)/inflow
from operating
activities 3(a) (2,639) (13) 3,402 (2,086)
Returns on investments and
servicing of finance
Interest received 113 40 97 26
------- ------- -------- --------
Net cash inflow from
returns on investments and
servicing of finance 113 40 97 26
Taxation (417)
Capital
expenditure 3(d) (505) (222) (413) (191)
Equity dividend
paid (120) - - -
Management of
liquid
resources 3(e) 2,875 375 (2,425) 1,625
------- -------- -------- --------
Cash inflow/
(outflow) before
financing (276) 180 244 (626)
Financing
Issue of ordinary
share capital 1,000 - - 1,000
Issue costs (27) - - (27)
Re-purchase of own shares - - (95) -
Redemption of deferred
shares (42) - - (42)
Costs of acquisition (236) - - (236)
------- -------- -------- --------
Increase in cash 419 180 149 69
====== ====== ====== ======
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 No Ordinary Designer Label Limited
for the year ended 25 January 1997.
The consolidated interim financial statements are presented
on proforma and actual bases:
i. Actual basis
The actual group profit and loss account and cash flow
statement consolidate the financial statements of Ted Baker
PLC and all its subsidiary undertakings for the period ended
9 August 1997. Ted Baker PLC was incorporated on 23 June
1997 and acquired No Ordinary Designer Label Limited
(formerly Ted Baker Limited) on 24 June 1997. The
acquisition method of accounting has been adopted, whereby
the results of subsidiary undertakings acquired or disposed
of in the period are included in the profit and loss account
from the date of acquisition or up to the date of disposal.
ii. Proforma basis
In order to demonstrate the underlying operating performance
of the group, the interim financial statements also include
proforma group profit and loss accounts and cash flow
statements. The proforma profit and loss accounts
consolidate the accounts of Ted Baker PLC and all its
subsidiary undertakings as though the group had been in
existence throughout the reported periods, by applying
merger accounting principles to the company's acquisition of
No Ordinary Designer Label Limited. The proforma cash flow
statements aggregate the cash flows for the reported periods
of No Ordinary Designer Label Limited and subsidiary
undertakings and Ted Baker PLC.
Consequently, although Ted Baker PLC was not incorporated
until 23 June 1997 and the acquisition of No Ordinary
Designer Label Limited was not completed until 24 June 1997,
the proforma financial information is presented as if the
businesses had always been part of the same group.
The financial information in this report does not constitute
statutory accounts and does not comprise the group's
financial statements for the year ended 25 January 1997.
The financial statements of No Ordinary Designer Label
Limited for the year ended 25 January 1997 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 year ended 25 August 1997 and for
the 28 weeks ended 10 August 1996 have been calculated on
profit on ordinary activities after taxation and 40,524,061
ordinary shares of 5p each in Ted Baker PLC, representing
the 1,764,166 ordinary shares, 3,065,000 'A' Preference
Shares and 4,010,000 'B' Preference Shares it issued in
consideration for the acquisition of the entire issued
share capital of No Ordinary Designer Label Limited
(formerly Ted Baker Limited), adjusted for the following,
immediately prior to admission:
(i) the subdivision of each #1 ordinary share into
twenty ordinary shares of 5p each; and
(ii) the conversion of the 'A' Preference Shares and
'B' Preference Shares into 5,240,740 ordinary
shares of 5p each
Earnings per share for the 28 weeks ended 9 August 1997 and
the period ended 9 August 1997 have been calculated on
profit on ordinary activities after taxation and weighted
average number of ordinary shares in issue based on the
40,524,061 ordinary shares of 5p each in Ted Baker PLC
described above and the 740,740 5p ordinary shares issued on
24 July 1997.
Adjusted earnings per share has been calculated on profit on
ordinary activities after tax but excluding exceptional
directors' emoluments and the associated tax charge and
exceptional flotation costs.
These can be reconciled as follows:
PROFORMA
Unaudited Year ended Unaudited
28 weeks ended period ended
9 Aug 97 10 Aug 96 25 Jan 97 9 Aug 97
#'000 #'000 #'000 #'000
Profit/(loss) on ordinary
activities after
taxation 782 1,067 126 (492)
Exceptional directors'
emoluments 3,138
Corporation tax
associated with
exceptional directors'
emoluments (440)
Exceptional
flotation costs 672 672
------ ------ ------- -------
1,454 1,067 2,824 180
------ ------ ------- -------
3. CONSOLIDATED CASHFLOW STATEMENTS
PROFORMA
28 weeks ended 52 weeks ended Period ended
9 Aug 97 10 Aug 96 25 Jan 97 9 Aug 97
#'000 #'000 #'000 #'000
(a) Reconciliation of operating
profit/(loss) to net cash inflow
from operating activities
Operating profit/
(loss) 1,369 1,578 1,019 (395)
Depreciation
charges 126 73 149 40
Loss on sale of
tangible fixed
assets - 1 1 -
Profit on sale of
tangible fixed
assets 6 - - -
Increase in
stock (1,616) (1,132) (1,478) (900)
Decrease/
(increase)
in debtors (401) (621) (255) (161)
(Decrease)/
increase
in creditors (2,123) 88 3,991 (670)
Increase/(decrease)
in provisions - - (25) -
------- ------- -------- -------
(2,639) (13) 3,402 (2,086)
------- ------- -------- -------
(b) Analysis of movements in cash
during the year
Balance at
beginning of
period 82 (67) (67) 432
Net cash inflow/
(outflow) 419 180 149 69
------- ------- -------- --------
Balance at end
of period 501 113 82 501
------- ------- -------- --------
(c) Analysis of the balances of cash
as shown in the balance sheet
Cash at bank
and in hand 501 113 82 501
Cash on 7 day
deposit 1,025 1,100 3,900 1,025
------- -------- ------- --------
1,526 1,213 3,982 1,526
====== ====== ====== ======
(d) Capital expenditure
Payments to acquire tangible
fixed assets (520) (225) (416) (191)
Receipts from sale of tangible
fixed assets 15 3 3 -
------- -------- -------- -------
(505) (222) (413) (191)
====== ====== ====== ======
(e) Management of liquid resources
Cash (invested in)/withdrawn from
7 day deposit 2,875 375 (2,425) 1,625
------ ------- ------- -------
4. Interim Report
This interim report will be sent to all registered
shareholders. Copies will also be available to the public
from the Company Secretary at the registered office: The
Fortress, 41 Charlton Street, London NW1 1JE.
END
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