TIDMTED
RNS Number : 5126A
Ted Baker PLC
21 March 2013
Ted Baker PLC
("Ted Baker", the "Group")
Annual Results for the 52 weeks ended 26 January 2013
Highlights
2013 2012 Change
Group Revenue GBP254.5m GBP215.6m 18.0%
Profit Before Tax and Exceptional
Costs GBP31.5m GBP27.1m 16.5%
Profit Before Tax GBP28.9m GBP24.3m 19.2%
Adjusted EPS 56.4p 48.9p 15.3%
Basic EPS 51.5p 42.2p 22.0%
Total Dividend 26.6p 23.4p 13.7%
-- Group revenue up 18.0% to GBP254.5m
-- Retail sales up 19.4% to GBP208.0m
o UK and Europe retail sales up 11.1% to GBP165.1m
o US and Canada retail sales up 68.3% to GBP36.7m
-- Our first retail stores opened in Japan, China and Canada
-- New retail stores opened in London, New York and Hong Kong
-- Our first concessions opened in South Korea, Germany and the Netherlands
-- Wholesale sales up 12.2% to GBP46.5m
-- Licence income up 11.5% to GBP7.5m
-- Proposed final dividend of 18.7p bringing total dividend to 26.6p, an increase of 13.7%
-- Second store in China opened in Shanghai since the year end.
Commenting, Ray Kelvin CBE, Founder and Chief Executive,
said:
"I am pleased to report another strong performance in what has
been a very exciting year for the Ted Baker brand. We have
continued to develop our presence internationally with our first
stores in Japan, China and Canada and our first concessions in
South Korea, Germany and the Netherlands opened during the
year.
Since the year end we have opened our second store in China in
Shanghai, where we will also open our third store in the middle of
the year. Further store and concessions openings are planned across
all of our markets.
This strong performance has been achieved despite a challenging
and competitive trading environment and is testament to the
strength of the brand, our collections and our people. I would like
to take this opportunity to thank the entire team for their hard
work and Tedication during the year as we continue to build the Ted
Baker brand on the world stage."
Enquiries:
Ted Baker PLC Tel: 020 7796 4133 on 21 March 2013 only
Ray Kelvin CBE, Chief Executive Tel: 020 7255 4800 thereafter
Lindsay Page, Finance Director
Hudson Sandler Tel: 020 7796 4133
Alex Brennan
Michael Sandler
Julia Cooke
www.tedbaker.com
www.tedbakerplc.com
Media images available for download at:
http://www.tedbakerplc.com/ted/en/mediacentre/imagelibrary
Notes to editors:
Ted Baker PLC - "No Ordinary Designer Label"
Ted Baker is a leading global lifestyle brand distributing
across five continents through its three main distribution
channels: retail (including e-commerce); wholesale; and
licensing.
Ted Baker has 316 stores and concessions worldwide, comprising
of 180 in the UK, 48 in Europe, 53 in North America, 31 in the
Middle East and Asia and 4 in Australasia.
Ted Baker offers a wide range of collections including:
Menswear; Womenswear; Global; Phormal; Endurance; Born by Ted
Baker; Accessories; Lingerie and Sleepwear; Childrenswear;
Fragrance and Skinwear; Footwear; Neckwear; Eyewear; and Watches,
all of which are underpinned by an unwavering emphasis on design,
product quality and attention to detail.
Chairman's Statement
The Group has delivered a strong result across all areas of our
business. This performance resulted in an 18.0% increase in Group
revenue to GBP254.5m (2012: GBP215.6m) and a 16.5% increase to
GBP31.5m (2012: GBP27.1m) in profit before tax and exceptional
costs.
The retail division performed strongly in a competitive trading
environment and delivered an increase in revenue of 19.4% to
GBP208.0m (2012: GBP174.2m), on an increase in average square
footage of 14.0%. Gross margins increased to 66.2% (2012:
65.2%).
Wholesale sales for the Group increased by 12.2% to GBP46.5m
(2012: GBP41.4m). This reflected continued growth in our US
wholesale business and a good performance from our UK wholesale
business, which also includes the results of our UK export
business.
Licence income from our territorial and product licences
increased by 11.5% to GBP7.5m (2012: GBP6.7m).
This has been a significant year for the Group as we have
further established the brand in existing markets and invested in
newer markets for the longer term.
Results
Group revenue for the 52 weeks ended 26 January 2013 rose by
18.0% to GBP254.5m (2012: GBP215.6m). The composite gross margin
increased to 62.4% (2012: 61.3%), reflecting less promotional
activity compared to the same period last year.
Profit before tax and exceptional costs increased by 16.5% to
GBP31.5m (2012: GBP27.1m) and profit before tax increased by 19.2%
to GBP28.9m (2012: GBP24.3m).
Exceptional costs incurred during the year of GBP2.6m (2012:
GBP2.8m) included GBP1.6m of rental costs incurred in the first
half of the year in our stores on Fifth Avenue, New York and in
Tokyo, Japan for the periods before they commenced trading. The
balance of GBP1.0m includes an impairment charge of GBP0.8m in
respect of some retail assets, notably a retail development in the
UK that has failed to deliver on its potential. The remaining
GBP0.2m primarily relates to set up costs incurred for our
expansion into China.
Adjusted basic earnings per share, which exclude exceptional
costs increased by 15.3% to 56.4p (2012: 48.9p) and basic earnings
per share increased by 22.0% to 51.5p (2012: 42.2p).
The Group's net borrowing position at the end of the year was
GBP10.0m (2012: net cash of GBP1.8m). As anticipated, the reduction
in cash was due to the significant investment in capital
expenditure during the year and increased inventory to support both
the growth and expansion of the Group in the coming year.
Dividends
The Board is recommending a final dividend of 18.7p per share
(2012:16.25p), making a total for the year of 26.6p per share
(2012: 23.4p per share), an increase of 13.7% on the prior year.
Subject to approval by shareholders at the 2013 AGM, the final
dividend will be paid on 14 June 2013 to shareholders on the
register on 10 May 2013.
People
I would like to take this opportunity to thank all of my
colleagues around the world. This performance and the continued
development of the brand in new and existing markets is testament
to the passion, enthusiasm and commitment of the Ted Baker
team.
It was announced on 9 January 2013 that Robert Breare, who had
been Non-Executive Chairman since 2002, was stepping down from the
Board. I would like to thank Robert for his extraordinary
contribution to Ted Baker over the last 11 years. His retail and
business experience has greatly benefited the Group during this
period of growth and we wish him all the best with his future
endeavours.
Following Robert stepping down, I have taken over his duties as
Non-Executive Chairman and I will also chair the Board's Nomination
Committee. I am incredibly proud to have been associated with Ted
Baker since joining the Board in 2003 and I look forward to
continuing to work with the Ted Baker team to deliver the exciting
opportunities ahead. Ron Stewart, an Independent Non-Executive
Director since 2009, has become Senior Independent Non-Executive
Director and Anne Sheinfield, an Independent Non-Executive Director
since 2010, has become Chairman of the Remuneration Committee.
It is with great sadness that I have to report that David
Hewitt, a colleague and fellow director passed away at the end of
last year. David was a Non-Executive Director of the Company from
its flotation in July 1997 until retirement in July 2009. He was
passionate about the product and worked closely with the team
across the business, providing valuable advice that greatly
benefitted the Company over his twelve year tenure. He will be
sadly missed by his colleagues.
Current Trading and Outlook
The Ted Baker brand continues to perform strongly and we are
pleased by the initial positive reaction to our Spring/Summer
collections. We continue to build brand awareness in our newer
markets, where we are investing for the longer term, and further
retail openings are planned across all of our markets.
Retail
The new financial year has started well at this early stage,
particularly in the UK, where we will be opening two stores within
Gatwick Airport; an accessory only store in the Gatwick North
terminal in June and a store in the Gatwick South terminal towards
the end of the year. We will be launching a new e-commerce platform
in the second half of the year to support our anticipated growth,
including the opportunity for local language sites as we expand
internationally. This will also include more localised and
personalised content based upon browsing and shopping behaviours
including currency and delivery options specific to each
country.
In Europe, we will be opening our first outlet store in Belgium
in July. We are also looking to open further concessions in
Germany, Spain, France and the Netherlands.
In the US, we plan to open a further eight concessions during
the year. We also plan to open our first outlet store in Toronto,
Canada later in the year.
In Asia, we have very recently opened a second store in
Shanghai, China and a further concession through a leading
department store in Tokyo, Japan. We will be opening another store
in Shanghai in the middle of the year, as well as our first outlet
store in Shanghai in April.
Wholesale
Trading in our wholesale business has started well and in line
with our expectations. We anticipate further growth in our US
wholesale business and export business in the coming year, with
sales from our UK wholesale business slightly above last year.
Overall, this should result in single digit growth in our wholesale
business in the coming year.
Licence Income
Our product and territorial licences continue to perform well
and are in line with expectations.
Our licence partners plan to open stores in Beirut, Adelaide,
Abu Dhabi, Kuwait and Lebanon during the coming year.
Group
We have continued to deliver a good performance in an uncertain
trading environment and, through maintaining our focus on the long
term development of the brand, we believe that we are well placed
to deal with the challenges and opportunities ahead. We continue to
ensure that our costs and commitments are controlled and in line
with trends anticipated for the coming year.
We will continue to develop our retail, wholesale and licensing
distribution strategy across new and existing markets.
We intend to make our next interim management statement,
covering trading since the start of the financial year in mid June
2013.
David Bernstein
Non-Executive Chairman
21 March 2013
Business Review
OUR BUSINESS
Ted Baker is a leading designer brand that operates through
three main distribution channels: retail; wholesale; and licensing.
We offer a wide range of collections including: Menswear;
Womenswear; Global; Phormal; Endurance; Born by Ted Baker;
Accessories; Lingerie and Sleepwear; Childrenswear; Fragrance and
Skinwear; Footwear; Neckwear; Eyewear; and Watches.
The brand has grown steadily from its origins as a single shirt
specialist store in Glasgow to the global business it is today. We
distribute through our own and licensed retail outlets, leading
department stores and selected independent stores in Europe, North
America, the Middle East, Asia and Australasia.
Our strategy is to become a leading global designer brand, based
on three main elements:
-- considered expansion of the Ted Baker 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 overseas 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, North
America and Asia, an e-commerce business based in the UK, primarily
serving the UK and Europe, with a separate site dedicated to the
Americas and an e-commerce business with some of our concession
partners.
The retail division delivered a strong performance with sales up
19.4% to GBP208.0m (2012: GBP174.2m). Average retail square footage
rose by 14.0% over the year to 274,531 sq ft (2012: 240,815 sq ft).
Total retail square footage at 26 January 2013 was 294,329 sq ft
(2012: 253,635 sq ft), an increase of 16.0% on the prior year.
Retail sales per square foot rose 2.6% from GBP685 to GBP703.
Sales through our e-commerce business increased by 63.7% to
GBP14.9m (2012: GBP9.1m). In April, we launched a mobile optimised
transactional site and the response from our customers has been
very positive. Our e-commerce business continues to benefit from
the enhancements to our UK based transactional site.
The retail gross margin increased to 66.2% (2012: 65.2%),
reflecting a lower level of promotional activity in our markets
compared to the same period last year.
Retail operating costs increased in line with our expectations
to GBP100.1m (2012: GBP81.2m) and as a percentage of retail sales
rose to 48.1% (2012: 46.6%), primarily driven by our expansion into
new international markets. This resulted in a slight decrease in
retail operating contribution to 18.1% (2012: 18.5%).
Wholesale
We currently operate a wholesale business in the UK serving
countries across Europe and a wholesale business in the US.
Group wholesale sales increased by 12.2% to GBP46.5m (2012:
GBP41.4m) and the gross margin was in line with last year at 45.2%
(2012: 45.1%). The increase in sales predominantly reflects a good
performance from our UK wholesale business and continuing growth in
both our wholesale export business and our US wholesale
business.
Licence income
We operate both territorial and product licences. Our
territorial licences cover the Middle East, Asia and Australasia,
through which we operate licenced retail stores and, in some
territories, wholesale operations. Our product licences cover
lingerie & sleepwear, fragrance, watches, footwear, eyewear,
neckwear, skinwear and childrenswear.
Licence income was up 11.5% to GBP7.5m (2012: GBP6.7m). We have
seen particularly good performances from our footwear collection
with our licenced partner, Pentland Group and from our
childrenswear collection and lingerie and sleepwear collections
with Debenhams. Our licensed stores in the Middle East and Asia
performed well during the period.
Collections
Ted Baker Womenswear delivered a strong performance with sales
up 27.7% to GBP137.1m (2012: GBP107.4m). Womenswear benefited from
a greater proportion of the space added during the period and as a
result represented 53.9% of total sales (2012: 49.8%).
Ted Baker Menswear performed well with sales increasing by 8.4%
to GBP117.4m (2012: GBP108.3m). Menswear represented 46.1% of total
sales in the period (2012: 50.2 %).
GEOGRAPHIC PERFORMANCE
United Kingdom and Europe
Sales in our UK and Europe retail division were up 11.1% to
GBP165.1m (2012: GBP148.6m). This good performance was delivered in
a competitive trading environment.
Average retail square footage rose by 5.7% over the period to
204,331 sq ft (2012: 193,389 sq ft). At 26 January 2013 total
retail square footage was 210,768 sq ft (2012: 201,223 sq ft)
representing an increase of 4.7%. Retail sales per square foot
increased by 2.1% from GBP723 to GBP738.
During the year, we opened stores on the Brompton Road, London
and in Heathrow Terminal Three, both of which performed well. We
also opened concessions with leading department stores in Germany,
the Netherlands, Ireland and Spain and are pleased with their
performances.
At 26 January 2013, we operated 35 stores (2012: 33), 183
concessions (2012: 169) and 10 outlet stores (2012: 10).
Our e-commerce business performed exceptionally well during the
period with sales increasing by 62.5% to GBP14.3m (2012:
GBP8.8m)
Sales from our UK wholesale division increased by 10.1% to
GBP39.1m (2012: GBP35.5m) reflecting a good performance from our UK
wholesale business and continued growth in our wholesale export
business.
US and Canada
Sales from our US and Canadian retail division increased by
68.3% to GBP36.7m (2012: GBP21.8m).
In support of our strategy to build our multi-channel business
and raise brand awareness, during the year we opened a flagship
store on Fifth Avenue, New York, a further twenty two concessions
throughout a leading department store and an outlet store in
Woodbury Common, New York. We continue to make good progress and
are confident that our prominent store on Fifth Avenue is helping
to raise brand awareness of the Ted Baker brand in the US and
internationally. We also opened our first store in Toronto, Canada
in November and its performance has been good.
Average square footage rose by 38.9% to 59,384 sq ft (2012:
42,761 sq ft) and retail sales per square foot increased 20.9% from
GBP502 to GBP607. This reflects both higher sales densities in the
concessions opened during the year and an improvement in consumer
confidence in this market. As at 26 January 2013, we had 16 stores
(2012: 14), 33 concessions (2012: 11) and 4 outlet stores (2012:
3).
Sales from our US wholesale business increased by 25.3% to
GBP7.5m (2012: GBP6.0m) reflecting the continued growth of our
business.
Middle East, Asia and Australasia
We continue to develop the Ted Baker brand across the Middle
East and Australasia. In Asia, with the help of our licence
partners, we are in the early stages of investing in new markets
for the longer term development of the brand. As at 26 January
2013, we, together with our licence partners, operated a total of
35 stores (2012: 26 stores) across these territories.
Our licensed stores across the Middle East performed
particularly well during the period and as a result our partners
are seeking further opportunities to expand in the region. One of
our licence partners opened another store in Kuwait during the
year. As at 26 January 2013, our licence partners operated 8 stores
across the Middle East (2012: 7 stores).
Our expansion into new international markets continued with an
opening in Tokyo, Japan in February 2012 and four concessions
through leading department stores in South Korea in March and
November 2012. We also opened our first store in Beijing, China in
September. These openings reflect our strategy to invest for the
longer term development of the brand and we have been encouraged by
the initial reaction to the brand and our collections in these new
markets.
In June, our licence partner opened stores in the Plaza Senayan
Mall in Jakarta, Indonesia, the Suria Mall in Kuala Lumpar,
Malayasia and the ION Mall in Singapore. In July, we opened a third
store in Hong Kong under our own management and the brand continues
to be well received in the region. During the period two existing
stores were closed and, as a result, as at 26 January 2013, we,
together with our licence partners, operated a total of 23 stores
across the Middle East and Asia (2012: 15)
The joint venture with our Australasian licence partner, Flair
Industries Pty Ltd, continues to perform in line with our
expectations. As at 26 January 2013, we operated 4 stores in
Australasia (2012: 4 stores).
Financial Review
Revenue and Gross Margin
Group revenue increased by 18% to GBP254.5m (2012: GBP215.6m),
driven by a 19.4% increase in retail sales to GBP208.0m (2012:
GBP174.2m) and a 12.2% increase in wholesale sales to GBP46.5m
(2012: GBP41.4m).
The composite gross margin for the Group was 62.4% (2012:
61.3%). This increase reflects a lower level of promotional
activity in our markets compared to the same period last year.
Operating Expenses Pre-Exceptional Costs
Distribution costs increased in line with our expectations to
GBP101.4m (2012: GBP82.4m) and as a percentage of sales increased
to 39.8% (2012: 38.2%), which was primarily driven by our expansion
into new international markets and included pre-opening costs of
GBP0.4m (excluding exceptional costs discussed below) in respect of
stores before they commenced trading.
Administration expenses increased by 11.3% to GBP33.0m (2012:
GBP29.6m). Excluding the employee performance related bonus of nil
(2012: GBP3.1m), administration expenses rose by 24.5% reflecting
growth in the US team to support the growth in our retail and
wholesale businesses, growth in other central functions and the
continued development of our distribution and information
technology infrastructures to support our expansion into
international markets.
Exceptional costs
The exceptional costs, which include both distribution costs and
administration expenses, incurred during the year of GBP2.6m (2012:
GBP2.8m) included GBP1.6m of rental costs incurred in the first
half of the year in our stores on Fifth Avenue, New York and in
Tokyo, Japan for the periods before they commenced trading. The
balance of GBP1.0m includes an impairment charge of GBP0.8m in
respect of some retail assets, notably a retail development in the
UK that has failed to deliver on its potential. The remaining
GBP0.2m primarily relates to set up costs incurred for our
expansion into China.
The prior year figure was in respect of rent for stores that
would not commence trading until 2012, set up costs in relation to
our expansion into China and a provision for bad and doubtful debts
in respect of our exposure in Greece.
Profit Before Tax
Profit before tax and exceptional costs increased by 16.5% to
GBP31.5m (2012: GBP27.1m) and profit before tax increased by 19.2%
to GBP28.9m (2012: GBP24.3m).
Finance Income and Expenses
Net interest payable during the year was GBP612,000 (2012:
GBP201,000). This increase reflects higher Group borrowing compared
to the prior year due to significant capital expenditure and
increased working capital to support the Group around the
world.
The foreign exchange loss during the year of GBP178,000 (2012:
gain of GBP38,000) was due to the retranslation of monetary assets
and liabilities denominated in foreign currencies.
Taxation
The Group tax charge for the year was GBP7.3m (2012: GBP6.7m),
an effective tax rate of 25.3% (2012: 27.6%). This reduction from
the prior year reflects the fall in the UK corporation tax rate
from 1 April 2012. This effective tax rate is higher than the UK
rate of 24.32% largely due to the non-recognition of losses in
overseas territories where the businesses are still in their
development phase. The Autumn Statement on 5 December 2012
confirmed that the main Corporation Tax rate from 1 April 2013 will
fall to 23% with a further reduction to 21% from 1 April 2014. In
the Budget Statement on 20 March 2013, a further cut in corporation
tax rate to 20% was announced which will take effect from 1 April
2015. We would expect to see a future reduction in our effective
tax rate in line with these changes although the rate will be
impacted where future overseas profits arise in jurisdictions with
higher tax rates than the UK.
Cash Flow
The net decrease in cash and cash equivalents was the same as
for last year at GBP11.9m (2012: GBP11.9m). An increase in net cash
generated from operating activities of GBP6.2m was offset by an
increase in financing and investing activities.
Total working capital as per the Group balance sheet, which
comprises inventories, trade and other receivables and trade and
other payables, increased by GBP13.8m to GBP61.0m (2012: GBP47.2m),
principally as a result of an increase in year end inventory levels
reflecting the underlying growth of our business and the earlier
phasing of deliveries into the business to ensure smooth transition
to the Spring/Summer season across all our markets.
Capital expenditure of GBP19.8m as per the Group cash flow
(2012: GBP15.0m) reflected the opening and refurbishment of stores,
concessions and outlets and the continued investment in the
infrastructure of the business. Included within this figure is
GBP1.6m (2012: GBP3.7m) of expenditure which relates to stores that
are due to open in 2013.
Shareholder Return
Basic earnings per share increased by 22.0% to 51.5p (2012:
42.2p). Adjusted earnings per share, which exclude exceptional
costs of GBP2.6m (2012: GBP2.8m), increased by 15.3% to 56.4p
(2012: 48.9p).
The proposed final dividend of 18.7p per share will make a total
for the year of 26.6p per share (2012: 23.4p per share), an
increase of 13.7% on the previous year.
Free cash flow per share, which is calculated using the net cash
generated from operating activities, was 41.0p (2012: 26.7p) and
reflected an increase in cash generated from operating
activities.
Currency Management
The most significant exposure to foreign exchange fluctuation
relates to purchases made in foreign currencies, principally the US
Dollar and the Euro.
A proportion of the Group's purchases are hedged in accordance
with the Group's risk management policy, typically 12 months in
advance. The balance of purchases is hedged naturally as the
business operates internationally and income is generated in the
local currencies.
At the balance sheet date, the Group had hedged its projected
commitments in respect of the year ending January 2014.
Borrowing Facilities
The Group has a three year committed borrowing facility of
GBP40.0m (2012: GBP40.0m), which is due to expire on 1 March 2015.
The facility is a multi-currency revolving credit facility with The
Royal Bank of Scotland and Barclays. The facility is used as
necessary to fund capital expenditure to support the Group's growth
strategy.
The facilities contain appropriate financial covenants and are
tested on a quarterly basis. The Group monitors actual and
prospective compliance with these on a regular basis.
Principal Risks and Uncertainties
The Board recognises there are a number of risks and
uncertainties that face the Group. The Board, with the help of the
chief executive, the finance director and subsidiary directors (the
"Executive Committee"), has established a structured approach to
identify, access and manage these risks and this is regularly
monitored and updated by the Risk Committee. Although not
exhaustive, the following list highlights some of the principal
risks which are not shown in order of importance:
Issue Potential impact Mitigation
------------------ ---------------------------- --------------------------------- ---------------------------------
Strategic Risks External events External events may occur which All factors affecting these
may affect the global, economic stakeholders are monitored
and financial environment closely on an ongoing basis
in which we operate. These ensuring
events can affect our suppliers, that we are prepared for and can
customers and partners, risking react to changes in the external
an increase in our cost base and environment, allowing us
adversely affecting our revenue to reduce our exposure as early
as possible. The spread of our
business and supply chain also
helps to mitigate these risks
------------------ ---------------------------- --------------------------------- ---------------------------------
Brand and reputational risk The strength of our brand and We carefully consider each new
its reputation are important to opportunity and each wholesale
the business. There is a risk customer and partner with whom
that our brand may be undermined we do business. These are
or damaged by our actions or monitored on an ongoing basis to
those of our partners ensure they remain appropriate
to the brand
------------------ ---------------------------- --------------------------------- ---------------------------------
Fashion and Design As with all fashion brands there The Group maintains a high level
is a risk that our offer will of market awareness and an
not satisfy the needs of our understanding of consumer trends
customers, resulting in lower and fashion to ensure that we
sales and reduced market share remain able to respond to
changes in consumer preference
------------------ ---------------------------- --------------------------------- ---------------------------------
Operational Risks Supply chain If garments do not reach us on Our supply chain is diversified
time and to specification, there across a number of suppliers in
is a risk of a loss of revenue different regions, reducing
and customer confidence reliance on a small number of
key suppliers. Suppliers are
treated as key business partners
and we work closely with them to
mitigate these risks
------------------ ---------------------------- --------------------------------- ---------------------------------
Cost inflation We may face increases in our Operating costs are monitored
operating costs due to growth in regularly to ensure that any
raw material, labour, property cost pressures are quickly
and other costs, placing identified
pressure on our pricing and appropriate action is taken
strategy, margins and
profitability
------------------ ---------------------------- --------------------------------- ---------------------------------
Infrastructure There is a risk of operational The business continuity plan is
problems, including disruption constantly reviewed and updated
to the infrastructure that by the Risk Committee. In
supports addition, business disruption is
our business, which may lead to covered by our insurance
a loss of revenue, data and policies
inventory
---------------------------- --------------------------------- ---------------------------------
Social Responsibility We are committed to operating in Four members of the Executive
a responsible and sustainable Committee have been tasked with
manner as regards our supply overseeing specific areas of
chain, environment and our social responsibility
community. If we fail to operate agenda. The Group has an
in a manner that supports our employee whose sole
philosophy, responsibility is to
this could damage the trust and monitor this agenda and ensure
confidence of our stakeholders our practices fall in line with
it
------------------ ---------------------------- --------------------------------- ---------------------------------
Issue Potential impact Mitigation
---------------------------- ---------------------------- ---------------------------- ----------------------------
Operational Risks - IT security Advances in technology have Commitment of additional
(continued) resulted in more data being specialist resources and
transmitted electronically, the continual upgrading of
posing security equipment
an increased security risk. and software mitigate these
There is also the risks
possibility of
unintentional loss of
controlled
data by authorised users
---------------------------- ---------------------------- ---------------------------- ----------------------------
People The Group's performance is Retention of key talent is
linked to the performance important and we take
of our people and, in active steps to provide
particular, to stability and security
the leadership of key to the key team. We carry
individuals. The loss of a out an annual benchmarking
key individual whether at review to ensure that we
management level provide competitive
or within a specialist remuneration and total
skill set could have a reward packages. We also
detrimental effect on our utilise long-term incentive
operations and, in schemes to retain
some cases, the creative key talent. Employee
vision for the brand engagement through our
culture and environment
strengthen the commitment
of team members and has a
positive impact on our
attrition rate
---------------------------- ---------------------------- ---------------------------- ----------------------------
Regulatory and legal The Group operates within The Group closely monitors
framework many markets globally and changes in the legal and
must comply with various regulatory framework within
regulatory requirements. the markets
Failure to do so could lead in which it operates. We
to financial penalties work closely with
and/or reputational damage specialists in each market
to ensure compliance
with local laws and
regulations
---------------------------- ---------------------------- ---------------------------- ----------------------------
Financial Risks Currency, interest, credit In the course of its The Group's policies for
and counterparty credit operations, the Group is dealing with these risks
risks, including financial exposed to these financial are discussed in detail in
covenants under risks which if they Group's financial
the credit facilities were to arise may have statements
material financial impacts
on the Group
---------------------------- ---------------------------- ---------------------------- ----------------------------
Group Income Statement
For the 52 weeks ended 26 January 2013
52 weeks ended 52 weeks ended
26 January 28 January
2013 2012
Note GBP'000 GBP'000
Revenue 2 254,466 215,625
Cost of sales (95,740) (83,419)
-------------- --------------
Gross profit 158,726 132,206
Distribution costs (101,357) (82,358)
Administrative expenses (32,984) (29,640)
Exceptional costs (2,614) (2,814)
Licence income 7,509 6,733
Other operating income 234 142
Operating profit 29,514 24,269
Finance income 4 34 45
Finance expenses 4 (824) (208)
Share of profit of jointly controlled
entity, net of tax 198 149
Profit before tax 3,5 28,922 24,255
Income tax expense 5 (7,325) (6,698)
-------------- --------------
Profit for the period 21,597 17,557
============== ==============
Earnings per share 7
Basic 51.5 42.2p
Diluted 49.9 40.6p
Group Statement of Comprehensive Income
For the 52 weeks ended 26 January 2013
52 weeks ended 52 weeks ended
26 January 28 January
2013 2012
GBP'000 GBP'000
Profit for the period 21,597 17,557
--------------- ---------------
Other comprehensive income
Net effective portion of changes in fair value of cash flow hedges (320) (190)
Net change in fair value of cash flow hedges transferred to profit or loss 723 26
Exchange rate movement 152 (92)
--------------- ---------------
Other comprehensive income for the period 555 (256)
Total comprehensive income for the period 22,152 17,301
=============== ===============
Group Statement of Changes in Equity
For the 52 weeks ended 26 January 2013
Total
equity
attributable
to equity
Cash flow shareholders
Share Share hedging Translation Retained of the Non-controlling Total
capital premium reserve Reserve earnings parent interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 28 January
2012 2,160 9,137 (312) 144 74,056 85,185 - 85,185
Comprehensive income
for the period
Profit for the period - - - - 21,597 21,597 - 21,597
Deferred tax
associated
with movement in
hedging
reserve - - (131) - - (131) - (131)
Effective portion of
changes in fair
value
of cash flow hedges - - (189) - - (189) - (189)
Net change in fair
value
of cash flow hedges
transferred
to profit or loss - - 723 - - 723 - 723
Exchange rate
movement - - - 152 - 152 - 152
-------- -------- --------- ----------- --------- ------------- --------------- --------
Total comprehensive
income
for the period - - 403 152 21,597 22,152 - 22,152
======== ======== ========= =========== ========= ============= =============== ========
Transactions with
owners
recorded directly in
equity
Share options /
awards
charge - - - - 240 240 - 240
Movement on current /
deferred tax on
share
options / awards - - - - 1,225 1,225 - 1,225
Disposal of own /
treasury
shares - - - - 222 222 - 222
Dividends paid - - - - (10,131) (10,131) - (10,131)
-------- -------- --------- ----------- --------- ------------- --------------- --------
Total transactions
with
owners - - - - (8,444) (8,444) - (8,444)
======== ======== ========= =========== ========= ============= =============== ========
Balance at 26 January
2013 2,160 9,137 91 296 87,209 98,893 - 98,893
======== ======== ========= =========== ========= ============= =============== ========
Group Statement of Changes in Equity
For the 52 weeks ended 28 January 2012
Total
equity
attributable
to equity
Cash flow shareholders
Share Share hedging Translation Retained of the Non-controlling Total
capital premium 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 - - - - 17,557 17,557 - 17,557
Deferred tax
associated
with movement in
hedging
reserve - - 50 - - 50 - 50
Effective portion of
changes in fair value
of cash flow hedges - - (240) - - (240) - (240)
Net change in fair
value
of cash flow hedges
transferred
to profit or loss - - 26 - - 26 - 26
Exchange rate movement - - - (92) - (92) - (92)
-------- -------- --------- ----------- --------- ------------- --------------- -------
Total comprehensive
income
for the period - - (164) (92) 17,557 17,301 - 17,301
======== ======== ========= =========== ========= ============= =============== =======
Transactions with
owners
recorded directly in
equity
Share options / awards
charge - - - - 446 446 - 446
Movement on current /
deferred tax on share
options / awards - - - - 275 275 - 275
Disposal of own /
treasury
shares - - - - 69 69 - 69
Dividends paid - - - - (8,930) (8,930) - (8,930)
-------- -------- --------- ----------- --------- ------------- --------------- -------
Total transactions
with
owners - - - - (8,140) (8,140) - (8,140)
======== ======== ========= =========== ========= ============= =============== =======
Balance at 28 January
2012 2,160 9,137 (312) 144 74,056 85,185 - 85,185
======== ======== ========= =========== ========= ============= =============== =======
Company Statement of Changes in Equity
For the 52 weeks ended 26 January 2013
Retained
Share capital Share premium Other reserves earnings Total Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 28 January 2012 2,160 9,137 15,339 21,285 47,921
Profit for the period - - - 14,183 14,183
Transactions with owners
recorded directly in equity
Share options / awards
charge - - - 37 37
Share options / awards
granted to subsidiary employees - - 203 - 203
Disposal of own shares - - - 222 222
Dividends paid - - - (10,131) (10,131)
------------- ------------- -------------- --------- ------------
Total transactions with
owners - - 203 (9,872) (9,669)
============= ============= ============== ========= ============
Balance at 26 January 2013 2,160 9,137 15,542 25,596 52,435
============= ============= ============== ========= ============
For the 52 weeks ended 28 January 2012
Retained
Share capital Share premium Other reserves earnings Total Equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 29 January 2011 2,160 9,137 14,962 15,954 42,213
Profit for the period - - - 14,123 14,123
Transactions with owners
recorded directly in equity
Share options / awards
charge - - - 69 69
Share options / awards
granted to subsidiary employees - - 377 - 377
Disposal of own shares - - - 69 69
Dividends paid - - - (8,930) (8,930)
------------- ------------- -------------- --------- ------------
Total transactions with
owners - - 377 (8,792) (8,415)
============= ============= ============== ========= ============
Balance at 28 January 2012 2,160 9,137 15,339 21,285 47,921
============= ============= ============== ========= ============
Group and Company Balance Sheet
At 26 January 2013
Group Company Group Company
26 January 26 January 28 January 28 January
Note 2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Non-current assets
Intangible assets 983 - 968 -
Property, plant and equipment 8 45,412 - 35,680 -
Investments in subsidiary - 17,631 - 17,428
Investment in equity accounted
investee 693 - 494 -
Deferred tax assets 4,523 - 3,418 -
Prepayments 674 - 695 -
----------- ----------- ----------- -----------
52,285 17,631 41,255 17,428
----------- ----------- ----------- -----------
Current assets
Inventories 67,673 - 51,872 -
Trade and other receivables 34,124 34,376 30,587 30,053
Amount due from equity accounted
investee 225 - 407 -
Derivative financial assets 544 - 411 -
Cash and cash equivalents 9,823 440 8,560 444
----------- ----------- ----------- -----------
112,389 34,816 91,837 30,497
----------- ----------- ----------- -----------
Current liabilities
Trade and other payables (40,793) (12) (35,281) (4)
Bank overdraft (19,862) - (6,790) -
Income tax payable (4,360) - (3,353) -
Derivative financial liabilities (269) - (1,063) -
----------- ----------- ----------- -----------
(65,284) (12) (46,487) (4)
----------- ----------- ----------- -----------
Non-current liabilities
Deferred tax liabilities (497) - (1,420) -
----------- ----------- ----------- -----------
(497) - (1,420) -
----------- ----------- ----------- -----------
Net assets 98,893 52,435 85,185 47,921
----------- ----------- ----------- -----------
Equity
Share capital 2,160 2,160 2,160 2,160
Share premium 9,137 9,137 9,137 9,137
Other reserves 91 15,542 (312) 15,339
Translation reserve 296 - 144 -
Retained earnings 87,209 25,596 74,056 21,285
----------- ----------- ----------- -----------
Total equity attributable
to equity shareholders of
the parent company 98,893 52,435 85,185 47,921
Non-controlling interest - - - -
----------- ----------- ----------- -----------
Total equity 98,893 52,435 85,185 47,921
----------- ----------- ----------- -----------
These financial statements were approved by the Board of
Directors on 21 March 2013 and were signed on its behalf by:
L D Page
Director
Group and Company Cash Flow Statement
For the 52 weeks ended 26 January 2013
Group Company Group Company
52 weeks 52 weeks 52 weeks 52 weeks
ended ended ended ended
26 January 26 January 28 January 28 January
2013 2013 2012 2012
GBP'000 GBP'000 GBP'000 GBP'000
Cash generated from operations
Profit for the period 21,597 14,183 17,557 14,123
Adjusted for:
Income tax expense 7,325 - 6,698 -
Depreciation 9,040 - 7,656 -
Net impairment / (credit) 765 - (352) -
Loss on disposal of property, plant
& equipment 102 - 30 -
Share options / awards charge 240 37 446 69
Net finance losses / (gains) 789 (5) 201 (4)
Net change in derivative financial
assets and liabilities (1,461) - 85 -
Share of profit in joint venture (198) - (149) -
Decrease in non-current prepayments 29 - 62 -
Increase in inventory (15,762) - (9,302) -
Increase in trade and other receivables (2,570) (4,324) (3,720) (5,341)
Increase / (decrease) in trade
and other payables 5,586 8 242 (10)
Interest paid (633) - (192) -
Income taxes paid (7,122) - (7,738) -
------------ ------------ ------------ ------------
Net cash generated from operating
activities 17,727 9,899 11,524 8,837
------------ ------------ ------------ ------------
Cash flow from investing activities
Purchases of property, plant &
equipment (19,774) - (14,993) -
Purchase of non-controlling entity - - - -
Proceeds from sale of property,
plant & equipment 9 - 451 -
Interest received 8 6 8 4
------------ ------------ ------------ ------------
Net cash from investing activities (19,757) 6 (14,534) 4
------------ ------------ ------------ ------------
Cash flow financing activities
Proceeds from option holders for
exercise of options 222 222 69 69
Dividends paid (10,131) (10,131) (8,930) (8,930)
------------ ------------ ------------ ------------
Net cash from financing activities (9,909) (9,909) (8,861) (8,861)
------------ ------------ ------------ ------------
Net decrease in cash and cash equivalents (11,939) (4) (11,871) (20)
Cash and cash equivalents at 28
January 2012 / 29 January 2011 1,770 444 13,536 464
Exchange rate movement 130 - 105 -
------------ ------------ ------------ ------------
Net cash and cash equivalents at
26 January 2013 / 28 January 2012 (10,039) 440 1,770 444
------------ ------------ ------------ ------------
Cash and cash equivalents at 26
January 2013 / 28 January 2012 9,823 440 8,560 444
Bank overdraft at 26 January 2013
/ 28 January 2012 (19,862) - (6,790) -
------------ ------------ ------------ ------------
Net cash and cash equivalents at
26 January 2013 / 28 January 2012 (10,039) 440 1,770 444
------------ ------------ ------------ ------------
Notes to the Financial Statements
For the 52 weeks ended 26 January 2013
1. Basis of preparation
EU law (IAS Regulation EC 1606/2002) requires that the Group
financial statements, for the 52 weeks ended 26 January 2013, are
prepared in accordance with International Financial Reporting
Standards (IFRSs) adopted for use in the EU ("adopted IFRSs").
This financial information has been prepared on the basis of the
recognition and measurement requirements of adopted IFRSs as at 26
January 2013.
The financial information set out above does not constitute the
Group's statutory accounts for the 52 weeks ended 26 January 2013
or 52 weeks ended 28 January 2012. The annual financial information
presented in this annual results announcement for the 52 weeks
ended 26 January 2013 is based on, and is consistent with, that in
the Group's audited financial statements for the 52 weeks ended 26
January 2013, and those financial statements will be delivered
during the second week of May 2013. The auditor's report on those
financial statements is unqualified and does not contain any
statement under Section 498 (2) or (3) of the Companies Act
2006.
Statutory accounts for 28 January 2012 have been delivered to
the registrar of companies. The auditors' have reported on those
accounts; their reports were i) unqualified and, ii) did not
contain statements under Section 498 (2) or (3) of the Companies
Act 2006.
Going concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Business Review on pages 6 to 8. The financial
position of the Group, its cash flows, liquidity position and
borrowing facilities are described in the Chairman's Statement on
pages 3 and 4. In addition the Group's financial statements include
the Group's objectives, policies and processes for managing its
capital; its financial risk management objectives; details of its
financial instruments and hedging activities; and its exposures to
credit risk and liquidity risk.
The Group's forecasts and projections, taking into account
reasonably possible changes in trading performance, show that the
Group has sufficient financial resources. As a consequence the
Directors have a reasonable expectation that the Company and the
Group are well placed to manage their business risks and to
continue in operational existence for the foreseeable future,
despite the current uncertain global economic outlook. Accordingly,
the Directors continue to adopt the going concern basis in
preparing the consolidated financial statements
Non-GAAP performance measures
The directors believe that the profit before exceptional items
and adjusted earnings per share measures provide additional useful
information for shareholders on the underlying performance of the
business. These measures are consistent with how underlying
business performance is measured internally.
The exceptional profit before tax measure is not a recognised
profit measure under IFRS and may not be directly comparable with
adjusted profit measures used by other companies.
Exceptional items in the current year include:
-- Significant pre-opening costs (including rental and others) for new store openings
-- An impairment charge in respect to some retail assets,
notably a retail development in the UK that has failed to deliver
on its potential
-- Costs incurred in relation to expansion into new markets
Significant accounting policies
Except as described below, the accounting policies applied by
the Group in this annual results announcement are the same as those
applied by the Group in its consolidated financial statements for
the 52 weeks ended 28 January 2013.
There were no revisions to adopted IFRS that became applicable
in the period which had a significant impact on the Group's
financial statements
The Group does not consider that any other standards, amendments
or interpretations issued by the IASB, but not yet applicable, will
have a significant impact on the financial statements in future
years.
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.
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.
a) Segment revenue and segment result
52 weeks ended 26 January 2013 Retail Wholesale Licence income Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 207,953 46,513 - 254,466
Cost of sales (70,268) (25,472) - (95,740)
---------- ---------- --------------- ----------
Gross profit 137,685 21,041 - 158,726
Operating costs (100,121) - - (100,121)
---------- ---------- --------------- ----------
Operating contribution 37,564 21,041 - 58,605
Licence income - - 7,509 7,509
---------- ---------- --------------- ----------
Segment result 37,564 21,041 7,509 66,114
Reconciliation of segment
result to profit before tax
Segment result 37,564 21,041 7,509 66,114
Other operating costs (34,220)
Exceptional costs (2,614)
Other operating income 234
----------
Operating profit 29,514
Net finance expense (790)
Share of profit of jointly controlled entity, net of tax 198
----------
Profit before tax 28,922
==========
Capital expenditure 17,358 194 - 17,552
Unallocated capital expenditure 2,305
----------
Total capital expenditure 19,857
==========
Depreciation 6,814 199 - 7,013
Unallocated depreciation 2,027
----------
Total depreciation 9,040
==========
Segment assets 126,688 26,842 - 153,530
Other assets 11,144
----------
Total assets 164,674
==========
Segment liabilities (49,568) (11,087) - (60,655)
Other liabilities (5,126)
----------
Total liabilities (65,781)
==========
Net assets 98,893
==========
Wholesale sales are shown after the elimination of inter-company
sales of GBP28,714,000 (2012: GBP20,348,000).
52 weeks ended 28 January 2012 Retail Wholesale Licence income Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 174,185 41,440 - 215,625
Cost of sales (60,667) (22,752) - (83,419)
--------- ---------- --------------- ---------
Gross profit 113,518 18,688 - 132,206
Operating costs (81,207) - - (81,207)
--------- ---------- --------------- ---------
Operating contribution 32,311 18,688 - 50,999
Licence income - - 6,733 6,733
--------- ---------- --------------- ---------
Segment result 32,311 18,688 6,733 57,732
Reconciliation of segment
result to profit before tax
Segment result 32,311 18,688 6,733 57,732
Other operating costs (30,791)
Exceptional costs (2,814)
Other operating income 142
---------
Operating profit 24,269
Net finance expense (163)
Share of profit of jointly controlled entity, net of tax 149
---------
Profit before tax 24,255
=========
Capital expenditure 12,178 159 - 12,337
Unallocated capital expenditure 2,752
---------
Total capital expenditure 15,089
=========
Depreciation 5,460 157 - 5,617
Unallocated depreciation 2,039
---------
Total depreciation 7,656
=========
Segment assets 100,512 23,691 - 124,203
Other assets 8,889
---------
Total assets 133,092
=========
Segment liabilities (33,986) (8,085) - (42,071)
Other liabilities (5,836)
---------
Total liabilities (47,907)
=========
Net assets 85,185
=========
b) Geographical information
UK & Europe US & Canada Asia Total
GBP'000 GBP'000 GBP'000 GBP'000
52 weeks ended 26 January 2013
Revenue 204,146 44,134 6,186 254,466
Non-current assets* 27,877 16,498 3,387 47,762
52 weeks ended 28 January 2012
Revenue 184,094 27,787 3,744 215,625
Non-current assets* 25,474 9,210 3,153 37,837
*Non-current assets exclude deferred tax assets.
c) Revenue by collection
52 weeks ended 52 weeks ended
26 January 28 January
2013 2012
------------ --------------- ---------------
GBP'000 GBP'000
Menswear 117,355 108,252
Womenswear 137,111 107,373
--------------- ---------------
254,466 215,625
=============== ===============
3. Profit before tax
Profit before tax is stated after 52 weeks ended 52 weeks ended
charging: 26 January 28 January
2013 2012
GBP'000 GBP'000
Depreciation 9,040 7,656
Exceptional costs 2,614 2,814
Net impairment reversal of property,
plant and equipment - (352)
Operating lease rentals for leasehold
properties 22,430 18,915
Loss on sale of property, plant &
equipment 102 30
Audit of these financial statements 9 9
Audit of financial statements of subsidiaries
of the company 101 76
Interim financial statements review 20 20
Audit related assurance services 18 20
Taxation compliance services 9 -
Other tax advisory services 31 -
All other services (forensic services) 165 -
The exceptional costs incurred during the year of GBP2.6m (2012:
GBP2.8m) are in respect of GBP1.6m rent paid in advance for stores
that did not commence trading until the first half of the period.
The balance of GBP1.0m includes an impairment charge of GBP0.8m in
respect of some retail assets, notably a retail development in the
UK that has failed to deliver on its potential. The remaining
GBP0.2m relates primarily to set up costs incurred for our
expansion into China.
The exceptional costs incurred during the 52 weeks to 28 January
2012 were in respect of rent paid in advance for stores that did
not commence trading until the first half of 2012, set up costs in
relation to our expansion into China and provision for bad and
doubtful debts in respect of our exposure in Greece
4. Finance income and expenses
52 weeks 52 weeks
ended ended
26 January 28 January
2013 2012
GBP'000 GBP'000
Finance income
- Interest receivable 34 7
- Foreign exchange gains - 38
----------- -----------
34 45
=========== ===========
Finance expenses
- Interest payable (646) (208)
- Foreign exchange losses (178) -
----------- -----------
(824) (208)
=========== ===========
5. Income tax expense
a) The tax charge comprises
52 weeks ended 52 weeks ended
26 January 28 January
2013 2012
GBP'000 GBP'000
Current tax 8,550 7,155
Deferred tax (1,510) (692)
Prior year under provision 285 235
-------------- --------------
7,325 6,698
============== ==============
b) Deferred tax movement by type
52 weeks ended 52 weeks ended
26 January 28 January
2013 2012
---------------------------- -------------- --------------
GBP'000 GBP'000
Property, plant & equipment 466 (380)
Share based payments 80 (151)
Overseas losses (1,957) (192)
Inventory (51) (35)
Other (48) 66
-------------- --------------
(1,510) (692)
============== ==============
c) Factors affecting the tax charge for the period
The tax assessed for the period is higher than the tax
calculated at domestic rates applicable to profits in the
respective countries. The differences are explained below.
52 weeks ended 52 weeks ended
26 January 28 January
2013 2012
------------------------------------------ -------------- --------------
GBP'000 GBP'000
Profit before tax 28,922 24,255
Profit multiplied by the standard rate
in the UK - 24.32%, (2012: standard rate
in the UK of 26.32%) 7,034 6,384
Expenses not deductible for tax purposes 655 55
Overseas losses not recognised offset by
previously unrecognised losses 123 408
Movement in current and deferred tax on
share awards and options (62) (61)
Prior year under provision 285 235
Effect of rate change on corporation tax (169) (131)
Difference due to overseas tax rates (541) (192)
Total income tax expense 7,325 6,698
============== ==============
d) Deferred and current tax recognised directly in equity
52 weeks ended 52 weeks ended
26 January 28 January
2013 2012
----------------------------------------- -------------- --------------
GBP'000 GBP'000
Deferred tax credit on share awards and
options (1,225) (275)
Deferred tax associated with movement in
hedging reserve 131 (50)
-------------- --------------
(1,094) (325)
============== ==============
There was a reduction in the UK corporation tax rate from 26% to
24% with effect from 1 April 2012. There are further proposed
reductions such that the headline rate will decrease to 20% by 1
April 2015.
As the deferred tax assets and liabilities should be recognised
based on the corporation tax rate substantively enacted at the
balance sheet date, the assets and liabilities have been recognised
at a rate of 23%. In the Budget on 20 March 2013, the Chancellor
announced a further cut in corporation tax rate to 20% from 1 April
2015. Had this tax rate change been substantively enacted before
the balance sheet date, it would have had the effect of reducing
the net deferred tax liability on UK operations by a further
GBP65,000.
6. Dividends per share
52 weeks ended 52 weeks ended
26 January 28 January
2013 2012
------------------------------------------- -------------- --------------
GBP'000 GBP'000
Final dividend paid for prior year
of 16.25p per ordinary share (2012:
14.3p) 6,767 5,953
Interim dividend paid of 7.9p per ordinary
share (2012: 7.15p) 3,364 2,977
-------------- --------------
10,131 8,930
============== ==============
A final dividend in respect of 2013 of 18.7p per share,
amounting to a dividend payable of GBP7,964,151, is to be proposed
at the Annual General Meeting on 20 June 2013.
7. Earnings per share
52 weeks ended 52 weeks ended
26 January 28 January
2013 2012
---------------------------------------- -------------- --------------
Number of shares: No. No.
Weighted number of ordinary shares
outstanding 41,939,012 41,637,410
Effect of dilutive options 1,343,134 1,571,313
Weighted number of ordinary shares
outstanding - diluted 43,282,146 43,208,723
============== ==============
Earnings: GBP'000 GBP'000
Profit for the period basic and diluted 21,597 17,557
Profit for the period adjusted * 23,635 20,371
Basic earnings per share 51.5p 42.2p
Adjusted earnings per share * 56.4p 48.9p
Diluted earnings per share 49.9p 40.6p
Own shares held by the Ted Baker Group Employee Benefit Trust,
the Ted Baker 1998 Employee Benefit Trust and treasury shares have
been eliminated from the weighted average number of ordinary
shares. The options exercised during the year, and conditional
share awards distributed, if they vest, are covered by shares held
either in treasury or by these Trusts.
Diluted earnings per share have been calculated using additional
ordinary shares of 5p each available under the 1997 Unapproved
Share Option Scheme, the 1997 Executive Share Option Scheme, the
Ted Baker Performance Share Plan and the Ted Baker 2009 VCP.
There were no share related events after the balance sheet date
that may affect earnings per share.
* Adjusted profit for the period and adjusted earnings per share
are shown before the exceptional costs of GBP2,038,000 (2012:
GBP2,814,000).
8. Property, plant and equipment
Fixtures,
fittings Assets
Leasehold & office Motor under
Improvements equipment vehicles construction Total
----------------------- ------------- ---------- --------- ------------- -------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 28 January 2012 44,279 37,358 126 3,725 85,488
Additions 13,302 8,431 - (1,876) 19,857
Disposals (120) (395) (25) - (540)
Exchange rate movement (22) (10) - (212) (244)
------------- ---------- --------- ------------- -------
At 26 January 2013 57,439 45,384 101 1,637 104,561
Depreciation
At 28 January 2012 21,282 28,410 116 - 49,808
Charge for the year 4,098 4,941 1 - 9,040
Impairment 513 252 - - 765
Disposals (84) (327) (18) - (429)
Exchange rate movement (28) (7) - - (35)
------------- ---------- --------- ------------- -------
At 26 January 2013 25,781 33,269 99 - 59,149
------------- ---------- --------- ------------- -------
Net book value
------------- ---------- --------- ------------- -------
At 28 January 2012 22,997 8,948 10 3,725 35,680
============= ========== ========= ============= =======
At 26 January 2013 31,658 12,115 2 1,637 45,412
============= ========== ========= ============= =======
Additions included within the assets under construction category
are stated net of transfers to other property, plant and equipment
categories. Transfers from the assets under construction category
in the period amounted to GBP3,725,000 (2012: GBP1,031,000) whilst
additions into this category were GBP1,637,000 (2012:
GBP3,725,000).
The impairment charge for the 52 weeks ended 26 January 2013
includes a charge in respect to some retail assets, notably a
retail development in the UK that has failed to deliver on its
potential.
Impairment of property, plant and equipment
The Group has determined that for the purposes of impairment
testing, each store and outlet is a cash-generating unit.
Cash-generating units are tested for impairment if there are
indications of impairment at the balance sheet date.
Recoverable amounts for cash-generating units are based on value
in use, which is calculated from cash flow projections using data
from the Group's latest internal forecasts, the results of which
are reviewed by the Board. The key assumptions for the value in use
calculations are those regarding discount rates, growth rates and
expected changes in margins. Management estimates discount rates
using pre-tax rates that reflect the current market assessment of
the time value of money and the risks specific to the
cash-generating units. Changes in selling prices and direct costs
are based on past experience and expectations of future changes in
the market.
The pre-tax discount rate used to calculate value in use is
derived from the Group's weighted average cost of capital.
The impairment losses relate to stores whose recoverable amounts
(value in use) did not exceed the asset carrying values. In all
cases, impairment losses arose due to stores performing below
projected trading levels.
9. Related Parties
The Company has a related party relationship with its directors
and executive officers.
Directors of the Company and their immediate relatives control
38.8 per cent of the voting shares of the Company.
At 26 January 2013, No Ordinary Designer Label Limited ("NODL"),
the main trading company owed Ted Baker PLC GBP34,376,000 (2012:
GBP30,053,000). NODL was owed GBP57,111,000 (2012: GBP38,987,000)
from the other subsidiaries within the Group.
Transactions between subsidiaries were priced on an arms length
basis.
The Group has a 50% interest in a joint venture, with Flair
Industries Pty Ltd. As at 26 January 2013, the joint venture owed
GBP225,000 to the main trading company (2012: GBP407,000). In the
period the value of sales made to the joint venture by the Group
was GBP808,000 (2012: GBP726,000).
The Group considers the Board of executive directors as key
management.
Responsibility statement of the directors in respect of the
Annual Results
We, the directors of the Company, confirm that to the best of
our knowledge:
(a) the financial statements, prepared in accordance with
International Financial Reporting Standards as adopted by the EU,
give a true and fair view of the assets, liabilities, financial
position and profit for the Group and the undertakings included in
the consolidation taken as a whole; and
(b) pursuant to Chapter 4 of the Disclosure and Transparency
Rules, the Group's annual results contains a fair review of the
development and performance of the business and the position of the
Group, and the undertakings included in the consolidation taken as
a whole, together with a description of the principal risks and
uncertainties that they face.
On behalf of the Board
R S Kelvin L D Page
Chief Executive Finance Director
21 March 2013 21 March 2013
Cautionary statement regarding forward-looking statements
This document contains certain forward-looking statements. These
forward-looking statements include matters that are not historical
facts or are statements regarding the Company's intentions, beliefs
or current expectations concerning, among other things, the
Company's results of operations, financial condition, liquidity,
prospects, growth, strategies, and the industries in which the
Company operates. Forward-looking statements are based on the
information available to the directors at the time of preparation
of this document, and will not be updated during the year. The
directors can give no assurance that these expectations will prove
to be 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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