RNS No 3652a
TED BAKER PLC
15th October 1998
TED BAKER PLC
Interim Results for the 28 Weeks to 15 August 1998
Highlights
* Turnover up 41% to #12.1 million:
- retail up 26.5% to #6.44 million
- wholesale up 61.8% to #5.66 million
* Profit before taxation increased by 17.7% to #2.53 million
* Earnings per share increased by 17.3% to 4.2p
* Maiden interim dividend of 1.8p per share
* Current trading on target: retail sales for the 8 weeks to 10 October
1998 up 16% compared to the same period last year; wholesale sales up
some 74% over the same period
Commenting, Ray Kelvin, Chief Executive, said, "I am particularly pleased with
these strong results which show good progress in all areas and underline the
continuing growth of Ted Baker Woman. We are well positioned ahead of the
important Christmas trading period."
Enquiries: Ray Kelvin, Chief Executive
Lindsay Page, Finance Director
Telephone: 0171 387 0122
Piers Hooper/Tim Robertson
Hudson Sandler Limited
Telephone: 0171 796 4133
Interim Results for the 28 week to 15 August 1998
Chairman's Statement
I am pleased to report that Ted Baker has continued to make excellent progress
in the first half of the current financial year.
Results
In the 28 weeks to 15 August 1998, turnover increased by 41% to #12.1 million
(1996/97: #8.58 million). Operating profit increased by 17.2% to #2.39
million (compared with #2.04 million, adjusted for last year's exceptional
flotation costs, for the same period last year). Profit before tax, on the
same basis, was up by 17.7%, to #2.53 million (1996/97: #2.15 million).
Earnings per share increased by 17.3% from 3.58p, adjusted for exceptional
flotation costs, to 4.20p. The Board has declared a maiden interim dividend
of 1.8p per share, payable on 26 November 1998 to shareholders on the register
at the close of business on 30 October 1998.
Review
Retail
Retail sales continued to expand with an increase of 26.5% to #6.44 million
reflecting a contribution from the development of the first floor in our
Manchester store, opened in November 1997, and concessions in Selfridges and
Bentalls opened in August 1997. Like for like sales fell by 4.2% and gross
margins fell 1.5% from 65.7% to 64.2% as a result of increased sales discounts
compared with previous years.
Our strategy for the growth of our retail business remains unchanged: to
increase the quality and floor space of our existing stand-alone outlets while
adding, very selectively, new concessions within department stores. During
the first half, average retail square footage increased by 56% to 15,000
sq.ft. compared with the same period last year. Since the start of the year
we have opened three new Ted Baker Woman concessions within Selfridges and
Bentalls in London. Following the opening of new concessions and the
development of additional space in our own stores, sales per square foot fell
19% from #531 to #430. As the new space matures we expect sales densities to
increase.
In June, we opened our first store in New York, in partnership with a strong
and experienced local operator. The store will also help develop the profile
of the brand in the US and support the expansion of our US wholesale business.
Wholesale
Demand for Ted Baker products was reflected in a significant increase in
wholesale sales for the period of 62% to #5.66 million.
In the UK, sales grew by 73% from #2.67m to #4.75m. The number of trustees,
or wholesale outlets, grew by 44% from 216 to 311 excluding Edward Baker
trustees and average sales per trustee increased by 20%. We recorded our first
wholesale sales of the Edward Baker suit collection to a limited number of
trustees and the initial reaction has been very encouraging.
Outside the UK sales increased by 10.6% in the period, to #910,000. Our focus
for the wholesale business remains on expansion in the UK while developing
overseas earnings in the US and Europe. Wholesale distributors have been
appointed recently in Canada and Sweden, with first sales expected before the
end of 1998, and in France, where sales should commence in Spring 1999. The
initial reaction in all three countries is very promising.
Brands
Careful management of the brand portfolio continues to be a critical factor in
Ted's success. The core Ted Baker menswear brand performed well with sales up
almost 16%. Ted Baker Woman posted an increase in sales of 143% as the
product range was widened and additional stockists were appointed. Teddy Boy
was up 94% and the newly launched, more formal, Edward Baker brand has got off
to a flying start.
The sales mix continues to evolve - menswear now accounts for 70.8% of
turnover, compared to 82.8% at the same time last year. The success of Ted
Baker Woman has resulted in womenswear sales rising to 26.9% of turnover
(1997: 15.6%).
Long-Term Incentive Plan
Following a recommendation by the Remuneration Committee, the Board is
proposing to introduce a long-term incentive plan in order to link a
significant portion of executive directors' remuneration directly to the long-
term performance of the company.
A letter providing further details of the proposed plan and convening an
extraordinary general meeting of the company at which shareholder approval of
the plan will be sought, will be posted to shareholders at the same time as
the interim report.
Information Technology
Our new management information systems were implemented, on schedule and
within budget, during July and August 1998. These systems are Year 2000
compliant and provide important tools with which to manage the development of
our business and to respond quickly to our fast moving markets. We do not
anticipate any material additional costs to achieve full year 2000 compliance.
Current Trading and Prospects
The Autumn/Winter collections have been well received by both retail and
wholesale customers. Retail and wholesale sales for the eight weeks to 10
October 1998 are respectively 16% and 74% ahead of the same period last year.
In September 1998 we opened a concession in the new Selfridges store in
Trafford Park, Manchester and reopened our Soho store which had been closed
for three weeks for refurbishment of the ground floor and for the fitting out
of the first floor. This additional space is now dedicated to Ted Baker
Woman.
The second half should benefit further from the strong momentum now
established by Ted Baker Woman and our first stand alone Ted Baker Woman store
is scheduled to open in Nottingham in November 1998.
In September 1998 we launched, under licence, Ted Baker Skinwear, a range of
men's grooming products, and our new underwear collection is due to be
launched in November 1998. These new products are not expected to make a
significant contribution in the current financial year.
A successful Christmas trading period will continue to have a significant
influence on the outcome for the year as a whole but the quality of our
products, the strength of our brand and the experience of our team, mean that
we are well placed for the second half. We remain confident of a successful
outcome for the year as a whole.
Brian North
15 October 1998
-------------------
Consolidated Profit and Loss Account
proforma
unaudited unaudited audited unaudited audited
28 wks ended 28 wks ended 53 wks ended period period
ended ended
15 Aug 1998 9 Aug 1997 31 Jan 1998 9 Aug 31 Jan
1997 1998
#'000 #'000 #'000 #'000 #'000
Turnover 12,106 8,584 20,682 1,938 14,036
Cost of sales (5,656) (3,850) (8,993) (798) (5,883)
Gross profit 6,450 4,734 11,689 1,140 8,153
Distribution costs (2,573) (1,683) (4,005) (525) (2,847)
Administrative
expenses (1,610) (1,744) (2,879) (1,013) (2,153)
Other operating income 124 62 54 3 -
Operating
profit/(loss) 2,391 1,369 4,859 (395) 3,153
Profit before
exceptional
flotation costs 2,391 2,041 5,544 277 3,838
Flotation costs - (672) (685) (672) (685)
Net interest
receivable 139 113 205 26 118
Profit/(loss)
on ordinary activities
before taxation 2,530 1,482 5,064 (369) 3,271
Tax on profit on ordinary
activities (796) (700) (1,850) (123) (1,291)
Profit/(loss)
on ordinary activities
after taxation 1,734 782 3,214 (492) 1,980
Dividends (743) - (1,238)
Retained
profit/(loss)
for the period 991 (492) 742
Earnings /(loss)
per share note 2 4.2p 1.93p 7.86p (1.2p) 4.8p
Adjusted
earnings per
share note 2 4.2p 3.58p 9.53p 0.004p 6.47p
Consolidated Balance Sheet
unaudited unaudited audited
15 Aug 1998 9 Aug 1997 31 Jan 1998
#'000 #'000 #'000
Fixed assets
Tangible assets 2,393 1,347 1,645
Investments - own shares 194 - 194
2,587 1,347 1,839
Current assets
Stock 5,404 3,816 3,284
Debtors 2,441 970 1,242
Cash 2,500 1,526 4,679
Total current assets 10,345 6,312 9,205
Creditors : amounts falling
due within 1 year (7,968) (5,058) (7,064)
Net current assets 2,377 1,254 2,141
Total assets less current
liabilities 4,964 2,601 3,980
Creditors : amounts falling
due after 1 year (200) - (200)
Provisions for liabilities
and charges (58) (80) (65)
Total assets 4,706 2,521 3,715
Capital and reserves
Called up share capital 2,063 2,063 2,063
Other reserve 910 950 910
Profit and loss account 1,733 (492) 742
4,706 2,521 3,715
Consolidated Cash Flow Statement
proforma
unaudited unaudited audited unaudited audited
28 wks ended 28 wks ended 53 wks ended period ended period ended
15 Aug 1998 9 Aug 1997 31 Jan 1998 9 Aug 1997 31 Jan 1998
#'000 #'000 #'000 #'000 #'000
Net cash inflow/
(outflow) from
operating
activities note 3a 204 (2,639) 1,309 (2,086) 1,891
Returns on
investments and
servicing of finance
Net interest
received 139 113 205 26 118
Taxation (310) - (453) - (453)
Capital
expenditure note 3d (974) (505) (1,180) (191) (853)
Equity dividend paid (1,238) (120) (120) - -
Acquisitions - - (237) - 2,803
Cash (outflow)
/inflow before
management of
liquid resources
and financing (2,179) (3,151) (476) (2,251) 3,506
Management of liquid
resources 2,332 2,875 (50) 1,625 (3,950)
Financing
Issue of ordinary
share capital - 1,000 1,000 1,000 1,000
Issue costs - (27) (27) (27) (27)
Redemption of deferred
shares - (42) - (42) -
Costs of acquisition - (236) - (236) -
New secured loan - - 200 - 200
Increase in cash 153 419 647 69 729
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 53 weeks ended 31 January 1998.
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 15 August 1998. 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 comparative proforma group profit
and loss accounts and cash flow statements. The comparative 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 comparative 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 53
weeks ended 31 January 1998. The financial statements for Ted Baker PLC for
the 53 weeks ended 31 January 1998 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 15 August 1998 have been calculated
on profit on ordinary activities after taxation and on the 41,264,801 5p
ordinary shares in issue during the period.
Earnings per share for the 53 weeks ended 31 January 1998 and for the 28 weeks
ended 9 August 1997 have been calculated on profit on ordinary activities
after taxation and the weighted average number of ordinary shares in issue
based on 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 740,740 5p ordinary shares issued on 24
July 1997 and 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.
Adjusted earnings per share has been calculated on profit on ordinary
activities after tax but excluding exceptional flotation costs.
These can be reconciled as follows:
proforma
unaudited unaudited audited unaudited audited
28 wks ended 28 wks ended 53 wks ended period period
ended ended
15 Aug 1998 9 Aug 1997 31 Jan 1998 9 Aug 1997 31 Jan1998
#'000 #'000 #'000 #'000 #'000
Profit/(loss)
on ordinary
activities after
taxation 1,734 782 3,214 (492) 1,980
Exceptional
flotation costs - 672 685 672 685
1,734 1,454 3,899 180 2,665
3. Notes to the Consolidated Cashflow Statement
proforma
28 wks ended 28 wks ended 53 wks ended period ended period ended
15 Aug 1998 9 Aug 1997 31 Jan 1998 9 Aug 1997 31 Jan 1998
#'000 #'000 #'000 #'000 #'000
a) Reconciliation
of operating
profit/(loss)
to net cash
inflow/(outflow)
from operating
activities
Operating profit/
(loss) 2,391 1,369 4,859 (395) 3,153
Depreciation
charges 230 126 299 40 206
Loss on sale of
tangible fixed
assets - - 24 - 24
Profit on sale of
tangible fixed
assets (4) (6) (24) - (23)
Increase in
stock (2,120) (1,616) (1,084) (900) (426)
Increase in
debtors (985) (401) (367) (161) (126)
Increase/(decrease)
in creditors 699 (2,111) (2,383) (670) (902)
Decrease in
provisions (7) - (15) - (15)
204 (2,639) 1,309 (2,086) 1,891
b) Analysis of
movements in
cash during
the year
Balance at
beginning of
the period 729 82 82 432 -
Net cash
inflow 153 419 647 69 729
Balance at end
of period 882 501 729 501 729
c) Analysis of the balance
of cash as shown in the
balance sheet
Cash at bank
and in hand 882 501 729 501 729
Term deposits 1,618 1,025 3,950 1,025 3,950
2,500 1,526 4,679 1,526 4,679
d) Capital expenditure
Payments to
acquire tangible
fixed assets (986) (520) (1,047) (191) (705)
Receipts from
sale of tangible
fixed assets 12 15 61 - 46
Purchase of
own shares - - (194) - (194)
(974) (505) (1,180) (191) (853)
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 Fortress, 41 Chalton Street, London NW1 1JE.
END
IR GBGQUUBGRGRC
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