RNS Number:7586D
Ted Baker PLC
06 October 2004
6 October 2004
Ted Baker plc
Interim Results for the 28 weeks ended 14 August 2004
Highlights
* Group turnover up 16.9% to #49.0m (2003: #41.9m)
* Retail sales up 13.0% to #30.7m (2003: #27.1m)
* Wholesale sales up 24.1% to #18.3m (2003: #14.8m)
* Licence income up 63.6% at #1.8 m (2003: #1.1m)
* Profit before tax increased by 25.9% to #5.8m (2003: #4.6m)
* Basic earnings per share up 24.7% at 9.6p (2003: 7.7p)
* Interim dividend up 9.4% to 3.5p per share (2003: 3.2p per share)
* Successful launch of the Endurance store in Covent Garden, London, the '
Best in Show' store in Westbourne Grove, London and a further US store in
San Francisco.
Commenting, Ray Kelvin, Chief Executive, said:
"Strong sales and profit growth were achieved in the first half of the year as
the Ted Baker brand continues its successful expansion in the UK and
internationally. Our cutting edge Endurance store in Covent Garden, London and
our 'Best in Show' store in Westbourne Grove, London were launched in the period
and both are performing well. We are delighted to announce the forthcoming
opening of a new London store in Regent Street in November. The second half of
the year has started well and we are confident of a positive outcome for the
year."
Enquiries:
Ted Baker plc Tel: 020 7796 4133 on 6 October 2004 only
Ray Kelvin, Chief Executive Tel: 020 7255 4800 thereafter
Lindsay Page, Finance Director
GCG Hudson Sandler Tel:020 7796 4133
Noemie de Andia
Sandrine Boussard
Visit Ted's new e-commerce site at www.tedbaker.co.uk
CHAIRMAN'S STATEMENT
I am pleased to report another strong set of results for the first half of the
year as we continue to expand the Ted Baker brand in the UK and abroad. Over the
period, the innovative quality of the Ted Baker brand was once again
demonstrated by the successful openings of our Endurance store in Covent Garden,
London and our 'Best in Show' store in Westbourne Grove, London which are both
performing well. These stores are showcases for the brand and support the
further expansion of our wholesale and licensing businesses.
STRATEGY
We continue to make good progress in pursuing our strategy of developing Ted
Baker as a global brand through the expansion of our collections and the careful
management of our three distribution channels, retail, wholesale and licensing.
Our policy of careful brand management and growth by developing our presence in
key overseas markets, especially the United States, continues to create long
term value for our shareholders.
FINANCIAL RESULTS
Group turnover increased by 16.9% to #49.0m (2003: #41.9m) in the 28 weeks ended
14 August 2004, driven by growth in both the retail and wholesale businesses.
Wholesale sales benefited by some #1.0m from the earlier phasing of deliveries
compared to expectations.
The retail gross margin was slightly ahead of last year, thanks to increased
buying efficiencies, while the wholesale gross margin was slightly lower due to
a change in the mix of underlying collections. These factors combined with a
change in sales mix between retail and wholesale resulted in a slight decrease
in the composite gross margin to 56.8% (2003: 57.4%).
Operating costs increased by 16.0% compared to last year as a result of
increased retail selling space and continued investment in our infrastructure
for the long term development of the brand.
Operating profit increased by 23.2% to #5.9m (2003: #4.8m). Profit before tax
for the period improved by 25.9% to #5.8m (2003: #4.6m). The effective tax rate
at 30% was below last year due to one off deductions relating to the exercise of
share options. Basic earnings per share increased by 24.7% to 9.6p (2003: 7.7p).
DIVIDENDS
The Board has declared an increased interim dividend of 3.5p per share (2003:
3.2p) payable on 26 November 2004 to shareholders on the register at the close
of business on 5 November 2004.
RETAIL
Retail sales were up 13.0% to #30.7m (2003: #27.1m). Retail gross margins
remain strong and were slightly ahead of last year at 66.1% (2003: 65.7%).
Average retail square footage increased by 12.5% to 105,786 sq.ft. (2003: 93,991
sq.ft.) as we expand our retail space to reflect the growth of our collections.
Overall sales per square foot have increased to #290 (2003: #289). Sales per
square foot in the UK were slightly down at #312 (2003: #317) due to larger
stores such as Floral Street, London and the Shambles, Manchester generating
lower sales per square foot and sites which opened in the second half of last
year not yet reaching maturity. Overseas sales per square foot were up by 26.5%
at #143 (2003: #113) as our overseas retail business continues to develop.
The first half of the year was marked by some exciting retail developments
including the launch of our innovative Endurance store in Covent Garden, London.
This store represents the first opportunity for customers to see the full
breadth of the entire Endurance collection of crease resistant suits, easy care
shirts, ties, accessories and sportswear. The store features a unique
registration system which allows the customer to interact with the display pods
and other special features. We are pleased with the performance to date and its
ability to showcase the entire collection for our wholesale business.
In August we opened our 'Best in Show' store in Westbourne Grove, London to
carry the most exclusive pieces of the Ted Baker collections in a prestigious
retail environment. During the period we also opened stores in Guildford and
Stansted Airport and we are encouraged by early trading in all three locations.
Our retail presence overseas was further expanded with the opening of our fourth
store in the United States, in Union Square, San Francisco. The store which is
2,500 sq.ft. opened in June and has enjoyed excellent trading to date. Our
stores in New York and San Jose continued to perform well while our Miami store
continues to disappoint due to the immaturity of the shopping centre in which it
is located. The United States remains our primary focus for further retail
expansion. In Europe, our Paris store continues to perform in line with
expectations.
WHOLESALE
The wholesale division continued to grow strongly in the first half and
represented 37.4% of group sales in the period (2003: 35.2%). Wholesale sales
increased by 24.1% to #18.3m (2003: #14.8m) reflecting growth across the
collections, particularly the Accessories, Swimwear, Endurance and Childrenswear
ranges. The phasing of wholesale deliveries was once again brought forward
compared to the same period last year and we estimate that the earlier phasing
of Autumn / Winter stock contributed an additional #1.0m of sales in the first
half compared to our expectations.
Gross margins were 41.1% (2003: 42.1%). This slight decrease reflects changes
in the wholesale sales mix, with increased sales of newer ranges which, while
volumes are still low, achieve lower margins than our established collections.
LICENCE INCOME
Our licence income increased by 63.6% to #1.8m (2003: #1.1m) driven by growth
across all product and territorial licences. Collaboration with licence
partners to develop new product areas or new territories remains at the heart of
our brand management strategy. We work closely with our licence partners to
develop and market our products and increase the global reach of our brand.
Our product licensees have performed very well and we are particularly pleased
with the performance of our new opthalmics and sunglasses licensee. In the US
our territorial licensee continues to expand and develop the US wholesale
business with leading department stores and top independent retailers. This
period also saw the first contribution from our Antipodean licensee, who are
making good progress.
COLLECTIONS
Quality, innovation and humour remain at the heart of the Ted Baker ethos and
are reflected in the design of our collections.
Sales of Ted Baker Menswear in the period enjoyed a strong performance
increasing by 24.3% reflecting the continuing expansion of our menswear
collections and the success of the Endurance range. Womenswear increased by
9.5% and represented 38.5% of our total sales (2003: 41.1%). Sales of other
collections, comprising Childrenswear, Homeware and Footwear, were #3.8m (2003:
#3.5m). Other collections now represent 7.7% of sales (2003: 8.4%).
The Endurance collection continues to be very successful and has been expanded
further to include new styles of suits including the 'Limo' suit, a
revolutionary stretch suit and 'Slim Jim' which is a more contemporary fit. We
are also excited about the imminent launch of the 'Fish out of the Water' suit,
the first ever washable Endurance designer suit.
BOARD CHANGE
Lord Stone of Blackheath has notified the Board of his intention to resign his
position as Non-executive Director of the Company, with immediate effect,
following an increase in his charitable, political and other business
commitments. The Board would like to thank Andrew for his considerable
contribution to the development of the Company and wishes him well for the
future.
CURRENT TRADING AND PROSPECTS
Trading has continued to be strong since the end of the first half. In the seven
weeks to 2 October 2004, retail sales were 20.2% ahead of the same period last
year and we are pleased with the initial reaction to our autumn/winter
collections. Wholesale sales were also 11.3% ahead of the same period last year.
As in previous years, we anticipate higher retail and wholesale margins in the
second half of the year which should result in retail margins being broadly in
line with last year while wholesale margins are expected to be slightly lower
due to the change in sales mix. As a result we anticipate a slightly lower
composite gross margin for the full year compared to last year.
We are delighted to announce the opening of a fifth store in the United States,
in the extension to the Forum Shops at Caesar's Palace in Las Vegas, expected at
the end of October. We are also pleased to confirm that we will be opening a new
6,500sq.ft. store in Regent Street, London in November. This will be our second
central London location which will showcase all of Ted's collections.
The second half, which includes the ever-important Christmas period, has started
well and we are confident of a positive outcome for the year.
Robert Breare
6 October 2004
Consolidated Profit and Loss Account
for the 28 weeks ended 14 August 2004
unaudited unaudited audited
28 weeks 28 weeks 53 weeks
ended ended ended
14 August 9 August 31 January
2004 2003 2004
#'000 #'000 #'000
Note
Turnover 48,968 41,899 88,842
Cost of sales (21,170) (17,862) (36,088)
---------- ---------- ----------
Gross profit 27,798 24,037 52,754
Distribution costs (16,118) (14,528) (30,044)
Administration expenses (7,611) (5,921) (11,169)
Other operating income 1,862 1,226 2,719
---------- ---------- ----------
Operating profit 5,931 4,814 14,260
Net interest payable (90) (173) (351)
---------- ---------- ----------
Profit on ordinary activities 5,841 4,641 13,909
before taxation
Tax on profit on ordinary activities (1,752) (1,478) (4,333)
---------- ---------- ----------
Profit on ordinary activities 4,089 3,163 9,576
after taxation
Minority interests - equity (13) 18 3
Dividends paid and proposed (1,510) (1,338) (4,066)
---------- ---------- ----------
Retained profit for the period 2,566 1,843 5,513
========== ========== ==========
Earnings per share
Basic earnings per share 2 9.6p 7.7p 22.7p
Diluted earnings per share 2 9.5p 7.5p 22.2p
Consolidated Balance Sheet
as at 14 August 2004
unaudited unaudited audited
14 August 9 August 31 January
2004 2003 2004
(restated) (restated)
#'000 #'000 #'000
Note
Fixed assets
Tangible assets 15,623 16,166 14,410
Current assets
Stock 19,849 16,729 17,321
Debtors 11,586 9,582 7,054
Cash at bank and in hand 5,593 2,602 9,811
-------- -------- --------
37,028 28,913 34,186
Creditors : amounts falling due within one year (24,376) (20,734) (19,384)
-------- -------- --------
Net current assets 12,652 8,179 14,802
-------- -------- --------
Total assets less current liabilities 28,275 24,345 29,212
Creditors : amounts falling due after more than - (4,000) (4,000)
one year
Provisions for liabilities and charges (480) (219) (480)
-------- -------- --------
Net assets 27,795 20,126 24,732
-------- -------- --------
Capital and reserves
Called up share capital 3 2,148 2,090 2,131
Share premium 3 6,858 2,339 5,358
Reserve for own shares 3 (891) (993) (896)
Profit and loss account 3 19,728 16,769 18,200
-------- -------- --------
Equity shareholders' funds 27,843 20,205 24,793
Minority interests - equity 3 (48) (79) (61)
-------- -------- --------
Total capital and reserves 27,795 20,126 24,732
======== ======== ========
Consolidated Cash Flow Statement
for the 28 weeks ended 14 August 2004
unaudited unaudited audited
28 weeks 28 weeks 53 weeks
ended ended ended
14 August 9 August 31 January
2004 2003 2004
#'000 #'000 #'000
Note
Net cash inflow from operating activities 4a 2,931 1,826 16,488
Returns on investments and servicing of finance
Interest received 30 3 19
Interest paid (101) (154) (367)
---------- ---------- ----------
Net cash outflow from returns on investments and (71) (151) (348)
servicing of finance
Taxation
UK corporation tax paid (3,142) (1,855) (3,843)
Capital expenditure and financial investment 4d (2,912) (2,459) (1,915)
Equity dividends paid (2,746) (2,404) (3,743)
---------- ---------- ----------
Cash (outflow)/inflow before financing (5,940) (5,043) 6,639
Financing
Shares issued 477 472 1,564
Shares purchased - (693) (694)
Sale of own shares - - 7
---------- ---------- ----------
Net cash inflow/(outflow) from financing 477 (221) 877
---------- ---------- ----------
(Decrease)/increase in cash in the period (5,463) (5,264) 7,516
========== ========== ==========
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, except for the items set out below, are
consistent with those set out in the financial statements of Ted Baker plc for
the 53 weeks ended 31 January 2004.
The group has implemented Urgent Issues Task Force Abstract 38 'Accounting for
ESOP Trusts' (UITF 38) in the interim financial statements. The comparative
results have been restated accordingly and the impact is explained in note 3.
The financial statements for Ted Baker plc for the 53 weeks ended 31 January
2004 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
unaudited unaudited audited
28 weeks 28 weeks 53 weeks
ended ended ended
14 August 9 August 31 January
2004 2003 2004
Number of shares: No. No. No.
Weighted number of ordinary shares outstanding 42,289,521 41,148,386 41,909,936
Effect of dilutive options 225,437 1,030,300 927,015
---------- ---------- ----------
Weighted number of ordinary shares outstanding - diluted 42,514,958 42,178,686 42,836,951
Earnings: #'000 #'000 #'000
Profit for the financial year 4,076 3,181 9,579
Less: dividends on own shares (24) (21) (67)
---------- ---------- ----------
Profit - basic and diluted 4,052 3,160 9,512
Basic earnings per share 9.6p 7.7p 22.7p
Diluted earnings per share 9.5p 7.5p 22.2p
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.
3. Capital and reserves
Share Share Reserve Profit and loss Minority
capital Premium for own account interests
account shares
#'000 #'000 #'000 #'000 #'000
At 31 January 2004 2,131 5,358 - 18,200 (61)
Prior period adjustment - UITF 38 - - (896) - -
---------- ---------- ---------- ---------- ----------
At 31 January 2004 as restated 2,131 5,358 (896) 18,200 (61)
Retained profit for the period - - - 2,566 13
Shares issued 17 1,500 - (1,040) -
Shares vested - - 5 - -
Exchange rate movement - - - 2 -
---------- ---------- ---------- ---------- ----------
At 14 August 2004 2,148 6,858 (891) 19,728 (48)
========== ========== ========== ========== ==========
In accordance with UITF 38, all shares held by employee trusts are deducted in
arriving at shareholders' funds and are no longer recognised as investments.
4. Notes to the Consolidated Cashflow Statement
for the 28 weeks ended 14 August 2004
unaudited unaudited audited
28 weeks 28 weeks 53 weeks
ended ended ended
14 August 9 August 31 January
2004 2003 2004
#'000 #'000 #'000
a) Reconciliation of operating profit to net
cash inflow from operating activities
Operating profit 5,931 4,814 14,260
Depreciation charges 1,690 1,751 3,285
(Profit)/loss on sale of tangible fixed assets (10) 6 -
Decrease in own shares 110 49 140
Increase in stock (2,526) (2,782) (3,435)
(Increase)/decrease in debtors (4,524) (2,710) 264
Increase in creditors 2,260 698 1,974
---------- ---------- ----------
2,931 1,826 16,488
========== ========== ==========
b) Analysis of movements in cash
during the year
Net funds/(debt) at start of period 5,811 (1,222) (1,222)
Net cash (outflow)/inflow (5,463) (5,264) 7,516
Exchange difference 7 11 (483)
---------- ---------- ----------
Net funds/(debt)at end of period 355 (6,475) 5,811
========== ========== ==========
Notes to the Consolidated Cashflow Statement
for the 28 weeks ended 14 August 2004 (continued....)
c) Analysis of the balance of cash as shown unaudited unaudited audited
in the balance sheet 28 weeks 28 weeks 53 weeks
ended ended ended
14 August 9 August 31 January
2004 2003 2004
#'000 #'000 #'000
Cash at bank and in hand 5,593 2,602 9,811
Bank overdraft (5,238) (5,077) -
Debt due after more than one year - (4,000) (4,000)
---------- ---------- ----------
355 (6,475) 5,811
========== ========== ==========
d) Capital expenditure
Payments to acquire tangible fixed assets (2,912) (2,492) (4,131)
Receipts from sale of tangible fixed assets - 33 2,216
---------- ---------- ----------
(2,912) (2,459) (1,915)
========== ========== ==========
5. 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 plc, The Ugly Brown Building, 6a St Pancras Way, London NW1
OTB.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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