TIDMTED
RNS Number : 6597P
Ted Baker PLC
06 October 2011
Ted Baker PLC
("Ted Baker", the "Group")
Interim Results for the 28 weeks ended 13 August 2011
Strong Group performance reflecting continued investment
in the Ted Baker brand
Highlights
28 weeks ended 13 28 weeks ended 14
August 2011 August 2010 Change
Group Revenue GBP102.8m GBP88.1m 16.6%
Profit Before Tax GBP8.5m GBP7.5m 12.7%
Basic EPS 14.8p 12.9p 14.7%
Interim Dividend 7.15p 6.3p 13.5%
-- Strong Group performance across all areas of our business
-- Retail sales up 13.0% on a 6.7% increase in average retail
square footage
o UK and European retail sales up 7.8% to GBP69.2m
o US retail sales up 74.0% to $16.7m
-- Retail stores opened in Manchester (2), Paris and Hong
Kong
-- Wholesale sales up 32.8% to GBP21.6m
-- Licence income up 5.5% to GBP3.1m
Commenting, Ray Kelvin CBE, Founder and Chief Executive,
said:
"Ted Baker has delivered a strong performance during the first
half of 2011 reflecting the continued investment in our brand and
the strength and passion of our team.
Our Autumn/Winter collections have been positively received and
we look forward to opening our first stores in Tokyo and in Beijing
early next year. We are also excited to announce that we have
signed a lease for a store on the internationally renowned Fifth
Avenue, New York to be opened in the middle of next year.
As in previous years, results for the full year will be
dependent on trading in the important second half and, at this
stage, we remain understandably cautious given the uncertain
economic environment, although believe that we are well placed to
deal with the challenges ahead."
Enquiries:
Ted Baker PLC Tel: 020 7796 4133 on 6 October 2011 only
Ray Kelvin CBE, Chief Executive Tel: 020 7255 4800 thereafter
Lindsay Page, Finance Director
Hudson Sandler Tel: 020 7796 4133
Alex Brennan
Kate Hough
Michael Sandler
www.tedbaker.com
www.tedbakerplc.com
Media images available for download at:
http://www.tedbakerplc.com/ted/en/mediacentre/imagelibrary
Chairman's Statement
I am pleased to announce a 16.6% increase in Group revenue to
GBP102.8m and a 12.7% improvement in profit before tax to GBP8.5m.
This result reflects our continued investment in the Ted Baker
brand, both in the UK and internationally, the strength of our
collections and the growing international reach of our
multi-channel distribution strategy.
The retail division performed well across all markets, despite a
subdued start to retail trading at the beginning of the financial
year, with sales up 13.0% on a 6.7% increase in average retail
square footage.
Wholesale sales were up 32.8% reflecting a good performance from
our UK wholesale business, which includes our wholesale export
business, and continuing growth in our US wholesale business. Part
of this increase was also due to the phasing of sales between the
first and second half of the year.
Licence income from our product and territorial licences
continued to grow in line with our expectations increasing by 5.5%
to GBP3.1m.
Financial Results
Group revenue increased by 16.6% to GBP102.8m (2010: GBP88.1m)
for the 28 weeks ended 13 August 2011 ("the period"). Although
input margins have been largely maintained the composite gross
margin decreased to 59.5% (2010: 61.2%), reflecting a change in mix
between retail and wholesale sales and a higher level of
promotional activity in our retail markets.
Operating expenses increased by 13.9% in the period to GBP56.2m
(2010: GBP49.3m). Distribution costs, which mainly comprise the
cost of retail stores, outlets and concessions, increased by 10.9%
to GBP41.2m (2010: GBP37.1m), reflecting the increase in average
retail square footage and an increase in turnover related property
costs.
Administrative expenses increased by 23.3% to GBP15.0m (2010:
GBP12.2m) reflecting the growth in the US team to support our US
retail and wholesale businesses and growth in other central
functions to support our expansion into international markets.
Profit before tax increased by 12.7% to GBP8.5m (2010: GBP7.5m)
resulting in basic earnings per share of 14.8p (2010: 12.9p). The
effective tax rate of 27.4% (2010 full year effective rate: 28.7%)
was in line with our expectations for the full financial year and
reflects the reduction in the rate of corporation tax in the UK
from 28% to 26% which came into effect on 1 April 2011.
The net decrease in cash and cash equivalents of GBP16.5m (2010:
GBP4.9m) reflected higher working capital and an increase in
capital expenditure.
Total working capital, which comprises inventories, trade and
other receivables and trade and other payables, increased by
GBP14.7m to GBP46.3m (2010: GBP31.6m). Inventories increased due to
underlying growth of our business and earlier timing of stock
receipts towards the end of the period. The timing of stock
payments also resulted in a decrease in trade and other payables.
The increase in trade and other receivables reflected growth in the
number of retail concessions and growth in our wholesale
business.
Capital expenditure of GBP8.2m (2010: GBP4.8m) reflected the
opening of stores in Manchester, Paris and Hong Kong and
concessions through leading department stores in the US, Spain and
Portugal, as well as investment in some new stores due to open in
the second half of the year. Further investment was also made in
the infrastructure of the business and the refurbishment of some
existing stores.
Dividends
The Board has declared an interim dividend of 7.15p (2010:
6.3p), representing an increase of 13.5%, which will be payable on
25 November 2011 to shareholders on the register at the close of
business on 21 October 2011.
Leveraging the Brand
Our strategy is to become a leading global designer brand, based
on three main elements:
-- considered expansion of our collections. We review our
collections continually to ensure we react to trends and meet our
customers' expectations. In addition, we look for opportunities to
extend the breadth of collections and enhance our offer;
-- controlled distribution through three main channels: retail;
wholesale; and licensing. We consider each new opportunity to
ensure it is right for the brand and will deliver margin led
growth; and
-- carefully managed development of existing and new
international markets. We continue to manage growth in existing
territories while considering new territories for expansion.
Underlying our strategy is an emphasis on design, product
quality and attention to detail, which is delivered by the passion,
commitment and dedication of our teams, licence partners and
wholesale customers ("trustees").
Global Group Performance
Retail
We operate stores and concessions across the UK, Europe, the US
and Hong Kong and an online business based in the UK, primarily
serving the UK and Europe, with a separate site dedicated to the
Americas.
Retail sales were up 13.0% to GBP81.2m (2010: GBP71.9m) with
average retail square footage increasing by 6.7% to 234,564 sq.ft
(2010: 219,936 sq.ft). Sales per square foot rose by 5.4% to GBP332
(2010: GBP315).
Sales through our e-commerce business increased by 29.9%
compared to the same period last year. During the period we
launched a "Click and Collect" service in the UK and are pleased
with the response from our customers at this early stage.
The retail gross margin was 64.0% (2010: 65.4%) reflecting a
higher level of promotional activity in our markets and an improved
performance in our outlets which led to a change in mix between
full price and outlet sales.
Retail operating costs were 11.0% up on space ahead 6.7%
resulting in a slight reduction in retail operating contribution of
14.0% (2010: 14.5%). The increase in costs above the growth in
space was the result of an increase in turnover related property
costs.
Wholesale
We currently operate a wholesale business in the UK serving 15
countries across Europe and a wholesale business in the US.
Group wholesale sales were 32.8% above the same period last year
at GBP21.6m (2010: GBP16.2m) with gross margins of 42.5% (2010:
42.9%). The increase in sales predominantly reflects a good
performance from our UK business and continuing growth in both our
wholesale export business and our US wholesale business. Part of
the increase was also due to the phasing of sales between the first
and second half of the year.
Licence Income
We operate both territorial and product licences. Our
territorial licences cover the Middle East, Asia and Australasia,
through which we operate licensed retail stores and, in some
territories, wholesale operations. Our product licences cover
lingerie & sleepwear, perfume & fragrance, watches,
footwear, eyewear, neckwear, jewellery and childrenswear.
Licence income for the period increased in line with
expectations to GBP3.1m (2010: GBP3.0m).
Our territorial and product licences continue to perform in line
with expectations, with good performances in the period from our
licensed stores in the Middle East and Asia, our licensed products
exclusive to Debenhams and our licensed footwear partner, Pentland
Group.
Collections
Ted Baker Womenswear delivered a strong performance with sales
up 22.6% to GBP53.1m (2010: GBP43.3m). Womenswear represented 51.7%
of total sales (2010: 49.1%), a portion of which represented more
Womenswear space added in the first half of the year.
Ted Baker Menswear also performed well with sales increasing
10.9% to GBP49.7m (2010: GBP44.8m). Menswear represented 48.3% of
total sales (2010: 50.9%).
Geographic Performance
United Kingdom & Europe
Sales in the period in our UK and Europe retail division were up
7.8% to GBP69.2m (2010: GBP64.2m). This good performance was
delivered despite the subdued start to retail trading at the
beginning of the financial year. During the period we opened two
stores in Manchester, a second store in Paris and concessions
through leading department stores in Spain and Portugal and are
pleased with their performances at this early stage.
During the period we disposed of our Langley Court and
Westbourne Grove, London stores as part of an ongoing review of our
store portfolio.
Average square footage rose by 1.7% over the period to 188,865
sq.ft (2010: 185,780 sq.ft). At 13 August 2011, total retail square
footage was 193,264 sq.ft (2010: 186,605 sq.ft), representing an
increase of 3.6%. Retail sales per square foot increased 5.4% from
GBP331 to GBP349.
At 13 August 2011, we operated 34 stores (2010: 33), 164
concessions (2010: 154) and 10 outlet stores (2010: 10).
Sales from our UK wholesale business increased by 26.2% to
GBP18.8m (2010: GBP14.9m) due to a good performance from our UK
wholesale business and continued growth in our wholesale export
business. Part of this increase also reflected the phasing of sales
between the first and second half of the financial year.
US
Sales from our US retail division increased by 74.0% to $16.7m
(2010: $9.6m), which in sterling was equivalent to sales up 63.5%
to GBP10.3m (2010: GBP6.3m). During the period we opened
concessions through a leading department store and are very pleased
with their performance. As at 13 August 2011, we operated 7
concessions across the United States (2010: nil), 13 stores (2010:
11) and 2 outlet stores (2010: 2).
Average square footage rose 28.2% over the period to 41,034
sq.ft (2010: 32,006 sq.ft). At 13 August 2011, total retail square
footage was up 20.1% on last year at 42,605 sq.ft (2010: 35,477
sq.ft). Retail sales per square foot rose 33.8% from $299 to
$400.
Sales from our US wholesale business increased by 114.3% to
$4.5m (2010: $2.1m) reflecting the continued growth of the business
under our own management.
Middle East, Asia and Australasia
We continue to develop the Ted Baker brand across the Middle
East, Asia and Australasia working closely with our partners in
those territories to ensure the visual merchandising of the stores
and the training of the teams reflects the Ted Baker culture. As at
13 August 2011, we operated a total of 26 stores (2010: 20 stores)
across those territories.
Stores operated through our licence partners in the Middle East
continue to perform well. Consequently these partners continue to
seek further opportunities in this region. As at 13 August 2011, we
operated 7 stores (2010: 5 stores) across the Middle East.
In February we opened a second store in Hong Kong under our own
management and are pleased by performance in the region.
In July we opened a concession within a leading department store
in the Marina Bay Sands mall in Singapore with our licence partner
in that territory, RSH Limited. As at 13 August 2011, we operated a
total of 15 stores across Asia (2010: 13).
In August we opened our first store in Auckland, New Zealand
through a joint venture with our licence partner in that territory,
Flair Industries Pty Ltd, and we are pleased with its progress at
this early stage. As at 13 August 2011, we operated 4 stores in
Australasia (2010: 2 stores).
Current Trading and Outlook
Retail
The strong performance seen in the first half of 2011 has
continued into the second half of the year, although the last few
weeks have been affected by unseasonably warm weather.
Since the end of the period, we have moved our store in the
Bicester Outlet Village to a larger unit and trading has been very
positive at this early stage. In November we will move our store in
the Bluewater shopping centre to a larger unit.
In Eire, we opened a further concession in Dublin in September
and are encouraged by early trading.
In the US, we will be opening a further store in San Diego and a
further outlet near Boston. Since the end of the period, we have
opened a further concession through a leading department store,
with three more concessions planned before the end of the financial
year. We have also signed a lease for a store on Fifth Avenue, New
York which we expect to open in June 2012.
In Asia, we have taken possession of a store in Tokyo, Japan and
plan to open towards the end of this financial year. We will also
be opening a store in Beijing, China at the start of the next
financial year.
Wholesale
Trading in our UK wholesale business has been in line with
expectations but we anticipate that the phasing of sales will
unwind in the second half of the year. In the US, our wholesale
business continues to perform well. We anticipate Group wholesale
sales for the full year being some 12.0% ahead of last year.
Licence Income
Our product and territorial licences continue to perform in line
with expectations.
Outlook
Whilst we have made a good start to the financial year, our
results for the full year will be dependent on trading in the
second half of the financial year and, at this stage, we remain
cautious given the uncertain macroeconomic environment. Our costs
and commitments remain under control and, with our strong balance
sheet, we will continue to invest in the long term development of
the Ted Baker brand.
We intend to make our next interim management statement,
covering the period since the start of the second half of the
financial year, in mid November.
Condensed Group Income Statement
For the 28 weeks ended 13 August 2011
Audited
Unaudited 28 Unaudited 28 52 weeks ended
weeks ended 13 weeks ended 14 29 January
Note August 2011 August 2010 2011
GBP'000 GBP'000 GBP'000
Revenue 2 102,776 88,128 187,700
Cost of sales (41,638) (34,165) (71,923)
---------------- ---------------- ----------------
Gross profit 2 61,138 53,963 115,777
Distribution
costs (41,170) (37,131) (73,690)
Administrative
expenses (14,981) (12,151) (24,259)
Licence income 3,133 2,971 6,227
Other operating
income /
(expense) 316 (130) 77
Operating profit 2 8,436 7,522 24,132
Finance income 3 41 37 42
Finance expenses 3 (55) (107) (120)
Share of profit
of jointly
controlled
entity, net of
tax 50 65 174
Profit before
tax 2 8,472 7,517 24,228
Income tax
expense 6 (2,322) (2,202) (6,948)
---------------- ---------------- ----------------
Profit for the
period 6,150 5,315 17,280
---------------- ---------------- ----------------
Attributable to:
- Equity
shareholders of
the parent
company 6,150 5,355 17,280
-
Non-controlling
interest - (40) -
---------------- ---------------- ----------------
Profit for the
period 6,150 5,315 17,280
---------------- ---------------- ----------------
Earnings per
share 4
Basic 14.8p 12.9p 41.5p
Diluted 14.1p 12.8p 41.4p
Condensed Group Statement of Comprehensive Income
For the 28 weeks ended 13 August 2011
Unaudited 28 weeks Audited
Unaudited 28 ended 52 weeks ended
weeks ended 13 14 August 29 January
August 2011 2010 2011
GBP'000 GBP'000 GBP'000
Profit for the
period 6,150 5,315 17,280
------------------ ------------------- ----------------
Other
comprehensive
income
Net effective
portion of
changes in fair
value of cash
flow hedges (84) 228 143
Net change in fair
value of cash
flow hedges
transferred to
profit or loss 171 (292) (279)
Exchange rate
movement (115) 276 112
------------------ ------------------- ----------------
Other
comprehensive
(loss) / income
for the period,
net of tax (28) 212 (24)
Total
comprehensive
income for the
period 6,122 5,527 17,256
------------------ ------------------- ----------------
Total
comprehensive
income
attributable to:
- Owners of the
parent 6,122 5,567 17,256
- Non-controlling
interest - (40) -
------------------ ------------------- ----------------
Total
comprehensive
income for the
period 6,122 5,527 17,256
------------------ ------------------- ----------------
Condensed Group Statement of Changes in Equity - Unaudited
For the 28 weeks ended 13 August 2011
Total equity
attributable
Cash to equity
Share flow shareholders
Share premium hedging Translation Retained of the Non-controlling Total
capital account reserve reserve earnings parent interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 29
January 2011 2,160 9,137 (148) 236 64,639 76,024 - 76,024
Comprehensive
income for the
period
Profit for the
period - - - - 6,150 6,150 - 6,150
Effective
portion of
changes in
fair value of
cash flow
hedges - - (84) - - (84) - (84)
Net change in
fair value of
cash flow
hedges
transferred
to profit or
loss - - 171 - - 171 - 171
Exchange rate
movement - - - (115) - (115) - (115)
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Total
comprehensive
income for
the period - - 87 (115) 6,150 6,122 - 6,122
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Transactions
with owners
recorded
directly in
equity
Share options
/ awards
charge - - - - 238 238 - 238
Movement on
current /
deferred tax
on share
options /
awards - - - - 633 633 - 633
Disposal of
own /
treasury
shares - - - - 69 69 - 69
Dividends paid - - - - (5,953) (5,953) - (5,953)
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Total
transactions
with owners - - - - (5,013) (5,013) - (5,013)
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Balance at 13
August 2011 2,160 9,137 (61) 121 65,776 77,133 - 77,133
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Condensed Group Statement of Changes in Equity - Unaudited
For the 28 weeks ended 14 August 2010
Total equity
attributable
Cash to equity
Share flow shareholders
Share premium hedging Translation Retained of the Non-controlling Total
capital account reserve reserve earnings parent interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30
January 2010 2,160 9,137 (12) 124 54,906 66,315 (85) 66,230
Comprehensive
income for the
period
Profit for the
period - - - - 5,355 5,355 (40) 5,315
Effective
portion of
changes in
fair value of
cash flow
hedges - - 228 - - 228 - 228
Net change in
fair value of
cash flow
hedges
transferred
to profit or
loss - - (292) - - (292) - (292)
Exchange rate
movement - - - 276 - 276 - 276
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Total
comprehensive
income for
the period - - (64) 276 5,355 5,567 (40) 5,527
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Transactions
with owners
recorded
directly in
equity
Share options
/ awards
charge - - - - 228 228 - 228
Movement on
current /
deferred tax
on share
options /
awards - - - - 7 7 - 7
Disposal of
own /
treasury
shares - - - - 19 19 - 19
Dividends paid - - - - (4,953) (4,953) - (4,953)
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Total
transactions
with owners - - - - (4,699) (4,699) - (4,699)
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Balance at 14
August 2010 2,160 9,137 (76) 400 55,562 67,183 (125) 67,058
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Condensed Group Statement of Changes in Equity - Audited
For the 52 weeks ended 29 January 2011
Total equity
attributable
Cash to equity
Share flow shareholders
Share premium hedging Translation Retained of the Non-controlling Total
capital account reserve reserve earnings parent interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30
January 2010 2,160 9,137 (12) 124 54,906 66,315 (85) 66,230
Comprehensive
income for the
period
Profit for the
period - - - - 17,280 17,280 - 17,280
Deferred tax
associated with
movement in
hedging
reserve - - 55 - - 55 - 55
Effective
portion of
changes in fair
value of cash
flow hedges - - 88 - - 88 - 88
Net change in
fair value of
cash flow
hedges
transferred to
profit or loss - - (279) - - (279) - (279)
Exchange rate
movement - - - 112 - 112 - 112
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Total
comprehensive
income for the
period - - (136) 112 17,280 17,256 - 17,256
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Transactions
with owners
recorded
directly in
equity
Share options /
awards charge - - - - 426 426 - 426
Movement on
current /
deferred tax on
share options /
awards - - - - 298 298 - 298
Purchase of
non-controlling
interest - - - - (715) (715) 85 (630)
Disposal of own
/ treasury
shares - - - - 19 19 - 19
Dividends paid - - - - (7,575) (7,575) - (7,575)
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Total
transactions
with owners - - - - (7,547) (7,547) 85 (7,462)
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Balance at 29
January 2011 2,160 9,137 (148) 236 64,639 76,024 - 76,024
-------- -------- -------- ------------ --------- ------------- ---------------- --------
Condensed Group Balance Sheet
At 13 August 2011
Unaudited Unaudited Audited 29
Note 13 August 2011 14 August 2010 January 2011
GBP'000 GBP'000 GBP'000
Non-current
assets
Intangible
assets 1,013 601 997
Property, plant
and equipment 32,342 26,707 28,368
Investments in
equity
accounted
investee 395 237 345
Deferred tax
assets 2,416 1,648 2,470
Prepayments 757 767 777
---------------- ---------------- ----------------
36,923 29,960 32,957
---------------- ---------------- ----------------
Current assets
Inventories 46,314 40,117 42,492
Trade and other
receivables 26,648 20,987 27,384
Amount due from
equity
accounted
investee 498 307 286
Derivative
financial
assets 303 343 102
Cash and cash
equivalents 8 5,165 8,905 13,536
---------------- ---------------- ----------------
78,928 70,659 83,800
---------------- ---------------- ----------------
Current
liabilities
Trade and other
payables (26,658) (29,525) (34,970)
Bank overdraft 8 (8,254) - -
Income tax
payable (2,314) (2,183) (3,761)
Derivative
financial
liabilities (628) (549) (455)
---------------- ---------------- ----------------
(37,854) (32,257) (39,186)
---------------- ---------------- ----------------
Non-current
liabilities
Deferred tax
liabilities (864) (1,304) (1,547)
---------------- ---------------- ----------------
(864) (1,304) (1,547)
---------------- ---------------- ----------------
Net assets 77,133 67,058 76,024
---------------- ---------------- ----------------
Equity
Share capital 2,160 2,160 2,160
Share premium
account 9,137 9,137 9,137
Other reserves (61) (76) (148)
Translation
reserve 121 400 236
Retained
earnings 65,776 55,562 64,639
---------------- ---------------- ----------------
Total equity
attributable to
equity
shareholders of
the parent
company 77,133 67,183 76,024
---------------- ---------------- ----------------
Non-controlling
interest - (125) -
---------------- ---------------- ----------------
Total equity 77,133 67,058 76,024
---------------- ---------------- ----------------
Condensed Group Cash Flow Statement
For the 28 weeks ended 13 August 2011
Unaudited Unaudited Audited
28 weeks ended 28 weeks ended 52 weeks ended
13 August 14 August 29 January
Note 2011 2010 2011
GBP'000 GBP'000 GBP'000
Cash generated
from operations
Profit for the
period 6,150 5,315 17,280
Adjusted for:
Income tax
expense 2,322 2,202 6,948
Depreciation 3,884 3,384 6,470
(Profit) / loss
on disposal of
property, plant
& equipment (211) 178 225
Share options /
awards charge 238 228 426
Net finance
gains 51 7 30
Net change in
derivative
financial
assets and
liabilities 59 118 138
Share of profit
in joint
venture (50) (65) (174)
Decrease in non
current
prepayments 35 33 61
Increase in
inventories (3,939) (6,580) (9,026)
Decrease /
(increase) in
trade and other
receivables 808 (1,238) (7,511)
(Decrease) /
increase in
trade and other
payables (8,328) 4,668 10,140
Interest paid (31) (42) (83)
Income taxes
paid (3,793) (3,425) (6,859)
---------------- ---------------- ----------------
Net cash
generated from
operating
activities (2,805) 4,783 18,065
---------------- ---------------- ----------------
Cash flow from
investing
activities
Purchases of
property, plant
& equipment (8,227) (4,790) (10,036)
Purchase of
non-controlling
entity - - (630)
Proceeds from
sale of
property, plant
& equipment 451 18 32
Interest
received 4 33 38
---------------- ---------------- ----------------
Net cash from
investing
activities (7,772) (4,739) (10,596)
---------------- ---------------- ----------------
Cash flow from
financing
activities
Proceeds from
option holders
for exercise of
options 9 69 19 19
Dividends paid 5 (5,953) (4,953) (7,575)
---------------- ---------------- ----------------
Net cash from
financing
activities (5,884) (4,934) (7,556)
---------------- ---------------- ----------------
Net decrease in
cash and cash
equivalents (16,461) (4,890) (87)
Cash and cash
equivalents at
29 January 2011
/ 30 January
2010 13,536 13,698 13,698
Exchange rate
movement (164) 97 (75)
---------------- ---------------- ----------------
Cash and cash
equivalents at
13 August 2011
/ 14 August
2010 / 29
January 2011 8 (3,089) 8,905 13,536
---------------- ---------------- ----------------
Notes to the Condensed Interim Financial Statements
For the 28 weeks ended 13 August 2011
1. Basis of preparation
a. Reporting entity
Ted Baker PLC is a company domiciled in the United Kingdom. The
condensed interim financial statements ("interim financial
statements") of Ted Baker PLC as at and for the 28 weeks ended 13
August 2011 comprise the Company and its subsidiaries (together
referred to as the "Group").
The Group financial statements as at and for the 52 weeks ended
29 January 2011 are available upon request from the Company's
registered office at Ted Baker PLC, The Ugly Brown Building, 6a St.
Pancras Way, London NW1 0TB or at www.tedbakerplc.com.
b. Statement of compliance
These interim financial statements have been prepared in
accordance with "IAS 34 Interim Financial Reporting" as adopted by
the EU and the requirements of the Disclosures and Transparency
Rules. They do not include all of the information required for full
annual financial statements and should be read in conjunction with
the Group financial statements as at and for the 52 weeks ended 29
January 2011. These interim financial statements were approved by
the Board of Directors on 6 October 2011.
The comparative figures for the 52 weeks ended 29 January 2011
are not the Company's statutory accounts for that financial year.
Those accounts have been reported on by the Company's auditors and
delivered to the registrar of companies. The report of the auditors
was (i) unqualified; (ii) did not include a reference to any
matters to which the auditors drew attention by way of emphasis
without qualifying their report; and (iii) did not contain a
statement under section 498(2) or (3) of the Companies Act 2006.
These sections address whether proper accounting records have been
kept, whether the Company's accounts are in agreement with these
records and whether the auditors have obtained all the information
and explanations necessary for the purposes of the audit.
The financial information in this document is unaudited, but has
been reviewed by the auditors in accordance with the Auditing
Practices Board guidance on Review of Interim Financial
Information.
c. Going concern
The Group financial statements for the 52 weeks ended 29 January
2011, approved by the Board on 24 March 2011, included information
on the business environment in which the Group operates, including
the factors that are likely to impact the future prospects of the
Group, together with the principal risks and uncertainties that the
Group faces. In addition, the notes to the consolidated financial
statements set out the Group's objectives, policies and processes
for managing its financial and capital risk and its exposures to
credit, market and liquidity risk. Many of the risks and
uncertainties reported are such that their potential to impact the
Group's operations are inherent and remain valid as regards to
their potential impact during the second half of 2011. The impact
of the economic environment in which the Group's businesses operate
is considered in the Chairman's Statement.
The Directors have prepared trading and cash flow forecasts for
a period of one year from the date of approval of these interim
financial statements. The Directors have a reasonable expectation
that the Group has adequate cash headroom and expects to meet all
banking covenant requirements. Accordingly, they continue to adopt
a going concern basis in preparing the financial statements of the
Group.
d. Significant accounting policies
Except as noted below, these interim financial statements have
been prepared using the same accounting policies as used in the
preparation of the Group's financial statements for the 52 weeks
ended 29 January 2011 and as discussed therein.
Revised and amended standards and interpretations
The following adopted accounting standards and interpretations,
issued by the International Accounting Standards Board (IASB) or
International Financial Reporting, Interpretations Committee
(IFRIC), have been adopted for the first time by the Group in the
current financial year with no significant impact on its
consolidated results or financial position:
-- Amendment to IAS 32, Financial Instruments: Presentation:
Classification of Rights Issues;
-- IFRIC 19, Extinguishing Financial Liabilities with Equity
Instruments;
-- IAS24, Related Party Disclosures; and
-- Amendment to IFRIC 14, IAS 19, The Limit on a Defined Benefit
Asset, Minimum Funding Requirements and their Interaction.
2. Segment information
The Group has three reportable segments; retail, wholesale and
licence income.
For each of the three segments, the Group's chief operating
decision maker (the "Board") reviews internal management reports on
a four weekly basis.
The accounting policies of the reportable segments are the same
as described in note (s) on page 52 of the Group financial
statements as at and for the 52 weeks ended 29 January 2011.
Information regarding the results of each reportable segment is
included below. Performance for the retail segment is measured
based on operating contribution, whereas performance of the
wholesale segment is measured based on gross profit and performance
of the licence segment is measured based on royalty income, as
included in the internal management reports that are reviewed by
the Board.
Segment results are used to measure performance as management
believes that such information is the most relevant in evaluating
the performance of certain segments relative to other entities that
operate within these industries. Inter-segment pricing is
determined on an arm's length basis.
Segment revenue and segment result
Unaudited - 28 weeks ended
13 August 2011 Retail Wholesale Licence income Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 81,199 21,577 - 102,776
Cost of sales (29,230) (12,408) - (41,638)
--------- ---------- --------------- ---------
Gross profit 51,969 9,169 - 61,138
Operating costs (40,602) - - (40,602)
--------- ---------- --------------- ---------
Operating contribution 11,367 9,169 - 20,536
Licence income - - 3,133 3,133
--------- ---------- --------------- ---------
Segment result 11,367 9,169 3,133 23,669
Reconciliation of segment
result to profit before
tax
Segment result 11,367 9,169 3,133 23,669
Other operating costs (15,549)
Other operating income 316
---------
Operating profit 8,436
Net finance expense (14)
Share of profit of jointly
controlled entity, net of
tax 50
---------
Profit before tax 8,472
---------
Capital expenditure 6,398 119 - 6,517
Unallocated capital
expenditure 1,715
---------
Total capital expenditure 8,232
---------
Depreciation 2,684 76 - 2,760
Unallocated depreciation 1,124
---------
Total depreciation 3,884
---------
Segment assets 83,061 24,833 - 107,894
Other assets 7,957
---------
Total assets 115,851
---------
Segment liabilities (27,583) (7,329) - (34,912)
Other liabilities (3,806)
---------
Total liabilities (38,718)
---------
Net assets 77,133
---------
Wholesale sales are shown after the elimination of inter-company
sales of GBP9,816,000 (14 August 2010: GBP6,601,000, 29 January
2011: GBP14,596,000).
Unaudited - 28 weeks ended
14 August 2010 Retail Wholesale Licence income Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 71,886 16,242 - 88,128
Cost of sales (24,885) (9,280) - (34,165)
--------- ---------- --------------- ---------
Gross profit 47,001 6,962 - 53,963
Operating costs (36,585) - - (36,585)
--------- ---------- --------------- ---------
Operating contribution 10,416 6,962 - 17,378
Licence income - - 2,971 2,971
--------- ---------- --------------- ---------
Segment result 10,416 6,962 2,971 20,349
Reconciliation of segment
result to profit before
tax
Segment result 10,416 6,962 2,971 20,349
Other operating costs (12,697)
Other operating expense (130)
---------
Operating profit 7,522
Net finance expense (70)
Share of profit of jointly
controlled entity, net of
tax 65
---------
Profit before tax 7,517
---------
Capital expenditure 3,103 219 - 3,322
Unallocated capital
expenditure 1,355
---------
Total capital expenditure 4,677
---------
Depreciation 2,639 63 - 2,702
Unallocated depreciation 682
---------
Total depreciation 3,384
---------
Segment assets 76,735 18,592 - 95,327
Other assets 5,292
---------
Total assets 100,619
---------
Segment liabilities (24,531) (5,543) - (30,074)
Other liabilities (3,487)
---------
Total liabilities (33,561)
---------
Net assets 67,058
---------
Audited - 52 weeks ended
29 January 2011 Retail Wholesale Licence income Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 152,724 34,976 - 187,700
Cost of sales (52,615) (19,308) - (71,923)
--------- ---------- --------------- ---------
Gross profit 100,109 15,668 - 115,777
Operating costs (72,649) - - (72,649)
--------- ---------- --------------- ---------
Operating contribution 27,460 15,668 - 43,128
Licence income - - 6,227 6,227
--------- ---------- --------------- ---------
Segment result 27,460 15,668 6,227 49,355
Reconciliation of segment
result to profit before
tax
Segment result 27,460 15,668 6,227 49,355
Other operating costs (25,300)
Other operating income 77
---------
Operating profit 24,132
Net finance expense (78)
Share of profit of jointly
controlled entity, net of
tax 174
---------
Profit before tax 24,228
---------
Capital expenditure 6,336 360 - 6,696
Unallocated capital
expenditure 2,812
---------
Total capital expenditure 9,508
---------
Depreciation 4,980 132 - 5,112
Unallocated depreciation 1,358
---------
Total Depreciation 6,470
---------
Segment assets 86,784 22,946 - 109,730
Other assets 7,027
---------
Total assets 116,757
---------
Segment liabilities (28,824) (6,601) - (35,425)
Other liabilities (5,308)
---------
Total liabilities (40,733)
---------
Net assets 76,024
---------
3. Finance income and expenses
Unaudited Unaudited Audited
28 weeks ended 28 weeks ended 14 52 weeks ended 29
13 August 2011 August 2010 January 2011
GBP'000 GBP'000 GBP'000
Finance income
- Interest
receivable 4 30 35
- Foreign exchange
gains 37 7 7
----------------- ------------------ ------------------
41 37 42
----------------- ------------------ ------------------
Finance expenses
- Interest payable (55) (37) (65)
- Foreign exchange
losses - (70) (55)
----------------- ------------------ ------------------
(55) (107) (120)
----------------- ------------------ ------------------
4. Earnings per share
Unaudited Unaudited Audited
28 weeks ended 13 28 weeks ended 14 52 weeks ended 29
August 2011 August 2010 January 2011
No. No. No.
Number of shares:
Weighted number
of ordinary
shares
outstanding 41,634,313 41,621,347 41,622,472
Effect of
dilutive
options 1,970,701 255,150 163,956
------------------ ------------------ ------------------
Weighted number
of ordinary
shares
outstanding -
diluted 43,605,014 41,876,497 41,786,428
------------------ ------------------ ------------------
Earnings: GBP'000 GBP'000 GBP'000
Profit for the
period, basic
and diluted 6,150 5,355 17,280
Basic earnings 14.8p 12.9p 41.5p
per share
Diluted earnings 14.1p 12.8p 41.4p
per share
5. Dividends per share
Unaudited Unaudited Audited
28 weeks ended 13 28 weeks ended 14 52 weeks ended 29
August 2011 August 2010 January 2011
GBP'000 GBP'000 GBP'000
Final dividend
paid for the
prior year of
14.3p per
ordinary share
(2010: 0.5p) 5,953 208 208
Second interim
dividend paid
2011: GBPNil per
ordinary share
(2010: 11.4p) - 4,745 4,745
Interim dividend
paid 2011:
GBPNil (2010:
6.3p) - - 2,622
------------------ ------------------ ------------------
5,953 4,953 7,575
------------------ ------------------ ------------------
The Board has declared an interim dividend of 7.15p per share
(2010: 6.3p) payable on 25 November 2011 to shareholders on the
register at the close of business on 21 October 2011.
6. Income tax expense
The Group's full year forecast effective tax rate in respect of
continuing operations for the 28 weeks ended 13 August 2011 was
27.4% (28 weeks ended 14 August 2010: 29.3%, 52 weeks ended 29
January 2011: 28.7%).
The UK corporation tax rate reduced from 28% to 26% on April 1,
2011 and the effective tax rate takes this reduction into account.
As a further reduction to 25% was substantially enacted in Finance
Act 2011, the closing deferred tax assets and liabilities have been
remeasured. The proposed future reductions in the rate to 23% will
be reflected when the relevant legislation is substantively
enacted. The effective tax rate is expected to fall in line with
these future rate reductions.
7. Share based payments
Share options and Long Term Incentive Plans "LTIP" awards
Equity settled awards are granted to employees in the form of
share options, share awards or the award of units that can convert
to nil-cost options.
Share options are granted at an option price equal to the
Company share price at the grant date, or at a discount of 20% in
the case of SAYE share options. No consideration is payable when
share awards or nil-cost options vest. The vesting period is
generally between three and five years and the share options expire
between three and ten years after grant. Share options and awards
will also expire if the employee leaves the Group prior to the
exercise or vesting date.
The terms and conditions of the grants made during the 28 weeks
ended 13 August 2011 are as follows:
Grant date Type of award Number of Vesting Vesting
shares conditions period
20 April 2011 Share option 35,090 None 100% after
three years
20 April 2011 Share option 7,876 None 100% after
five years
The basis of measuring fair value is consistent with that
disclosed in the consolidated financial statements for the 52 weeks
ended 29 January 2011. The range of inputs into the Black-Scholes
model was as follows:
At 13 August 2011
Share price 690p
Exercise price 552p
Risk free interest rate 1.64% - 2.46%
Expected life of options 3 - 5 years
Share price volatility 26.70% - 27.00%
Dividend yield 2.88%
Value Creation Plan
The award of units is made under the Ted Baker 2009 Value
Creation Plan ("2009 VCP"). Units have no value at grant, but
subject to the satisfaction of earnings per share, share price and
total shareholder return performance targets can convert and give
participants the right to be granted nil-cost options at the end of
the performance period.
No awards were made under the 2009 VCP in the 28 weeks ended 13
August 2011.
The charge to the income statement for 28 weeks ended 13 August
2011 for VCP awards amounted to GBP208,527 (2010: GBP208,527).
Included in the charge for the period is an amount in respect of R
S Kelvin, who is employed by the Company, amounting to GBP37,326
(2010: GBP37,326).
8. Reconciliation of cash and cash equivalents per balance sheet
to the cash flow statement
Unaudited Unaudited Audited
28 weeks ended 13 28 weeks ended 14 52 weeks ended 29
August 2011 August 2010 January 2011
GBP'000 GBP'000 GBP'000
Cash and cash
equivalents per
balance sheet 5,165 8,905 13,536
Bank overdraft (8,254) - -
------------------ ------------------ ------------------
Cash and cash
equivalents per
cash flow
statement (3,089) 8,905 13,536
------------------ ------------------ ------------------
9. Treasury shares
The Company acquired nil treasury shares (2010: nil) and
disposed of 16,021 treasury shares for proceeds of GBP69,132 (2010:
5,308 for proceeds of GBP19,162) in the 28 weeks ended 13 August
2011.
10. Related Parties
The Company has a related party relationship with its directors
and executive officers.
Directors of the Company and their immediate relatives control
40% (2010: 41%) of the voting shares of the Company.
At 13 August 2011, the main trading company owed the parent
company GBP18,826,000 (14 August 2010: GBP19,174,000, 29 January
2011: GBP24,710,000). The main trading company was owed
GBP26,662,000 (14 August 2010: GBP15,321,000, 29 January 2011:
GBP23,313,000) from the other subsidiaries within the Group.
Transactions between subsidiaries and between the parent and
subsidiaries were priced on an arms length basis.
The Group has a 50% interest in a joint venture company in
Australia, which is the parent company of a subsidiary joint
venture in New Zealand which opened during the period. As at 13
August 2011, the joint venture owed GBP498,000 to the main trading
company (14 August 2010: GBP307,000, 29 January 2011: GBP286,000).
The value of sales made to the joint venture by the Group was
GBP412,000 in the period to 13 August 2011 (14 August 2010:
GBP223,000, 29 January 2011: GBP565,000).
11. Principal risks and uncertainties
The current uncertain trading environment has affected, and will
continue to affect, all areas of our business. We also recognise
that we will be affected by the impact this will have on our
customers, partners and suppliers.
The Board recognises there are a number of risks and
uncertainties that face the Group. The Board has established a
structured approach to identify, assess and manage these risks and
this is regularly monitored and updated by the Risk Committee. The
principal risks and uncertainties are detailed in the Group's
consolidated financial statements as at and for the 52 weeks ended
29 January 2011 and have not changed since that report.
Responsibility statement of the directors in respect of the
interim financial statements
The directors confirm that to the best of their knowledge:
-- the condensed financial statements have been prepared in
accordance with IAS 34, Interim Financial Reporting as adopted by
the EU;
-- the interim management report includes a fair review of the
information required by:
(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being
an indication of important events that have occurred during the
first 28 weeks of the financial year and their impact on the
condensed financial statements, and a description of the principal
risks and uncertainties for the remaining 24 weeks of the financial
year; and
(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being
related party transactions that have taken place in the first 28
weeks of the current financial year and that have materially
affected the financial position or performance of the entity during
that period; and any changes in the related party transactions
described in the last annual report that could do so.
The directors of Ted Baker PLC are listed on page 25 of the
financial statements as at, and for, the 52 weeks to 29 January
2011.
By order of the Board
R S Kelvin L D Page
Chief Executive Finance Director
6 October 2011 6 October 2011
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 0TB.
Cautionary statement regarding forward-looking statements
This announcement contains certain forward-looking statements.
These forward-looking statements include matters that are not
historical facts or are statements regarding the Group's
intentions, beliefs or current expectations concerning, among other
things, the Group's results of operations, financial condition,
liquidity, prospects, growth, strategies, and the industries in
which the Group operates. Forward-looking statements are based on
the information available to the Directors at the time of
preparation of this announcement, and will not be updated during
the year. The Directors can give no assurance that these
expectations will prove to have been correct. Due to inherent
uncertainties, including both economic and business risk factors
underlying such forward looking information, actual results may
differ materially from those expressed or implied by these
forward-looking statements.
Independent Review Report on the Condensed Financial Statements
to the members of Ted Baker PLC
Introduction
We have been engaged by the company to review the condensed set
of financial statements in the interim financial statements for the
28 weeks ended 13 August 2011 which comprises the Condensed Group
Income Statement, Condensed Group Statement of Comprehensive
Income, the Condensed Group Statement of Changes in Equity, the
Condensed Group Balance Sheet, the Condensed Group Cash Flow
Statement and the related explanatory notes. We have read the other
information contained in the interim financial statements and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
This report is made solely to the company in accordance with the
terms of our engagement to assist the company in meeting the
requirements of the Disclosure and Transparency Rules ("the DTR")
of the UK's Financial Services Authority ("the UK FSA"). Our review
has been undertaken so that we might state to the company those
matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company
for our review work, for this report, or for the conclusions we
have reached.
Directors' responsibilities
The interim financial statements are the responsibility of, and
have been approved by, the directors. The directors are responsible
for preparing the interim financial statements in accordance with
the DTR of the UK FSA.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with International Financial
Reporting Standards as adopted by the EU. The condensed set of
financial statements included in these interim financial statements
have been prepared in accordance with IAS 34 Interim Financial
Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the company a conclusion on
the condensed set of financial statements in the interim financial
statements based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity issued by the Auditing Practices Board for use in the
UK. A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the interim financial statements for the 28 weeks ended 13
August 2011 is not prepared, in all material respects, in
accordance with IAS 34 as adopted by the EU and the DTR of the UK
FSA.
Mike Barradell (Senior Statutory Auditor)
For and on behalf of KPMG Audit Plc, Statutory Auditor
Chartered Accountants
15 Canada Square
London
E14 5GL
6 October 2011
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR UGGMUUUPGPUA
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