20th Sep 2018 10:33
LONDON (Alliance News) - Lifestyle and fashion brand French Connection PLC said Thursday its interim loss plunged lower amid one-off provisions and revenue struggled amid store closures, yet it still expects a profit for the full year.
For the six months to the end of July, pretax loss deepened to GBP15.1 million from GBP5.9 million the year prior. This was after revenue fell to GBP58.1 million from GBP59.5 million the year before.
Profit performance was hurt by GBP9.6 million in one-off charges. This was after it made a GBP2.8 million provision for bad debts and also a GBP6.8 million charge for exiting onerous leases as well as store disposals.
On an underlying basis - excluding exceptional costs - losses narrowed to GBP5.5 million from GBP5.9 million the year prior.
Revenue performance was held back by store closures and a "tough" retail trading environment in the UK impacting its retail business, reducing revenue by 11% to GBP27.3 million. In contrast, its wholesale unit saw revenue rise 6.2% to GBP30.8 million.
"I am pleased that the changes we have made around the business over the last couple of years continue to move us forward," French Connection Chairman & Chief Executive Officer Stephen Marks said.
"There is no doubt that progress has not been helped by the trading conditions in which we operate in the UK, although we can take great confidence from the performance of the wholesale business and the stability of the licence income," Marks added.
French Connection ended the period with GBP12.8 million in cash, up from GBP6.7 million the year prior. This was after it sold its 75% stake in lifestyle brand Toast (Mail Order) Ltd for GBP13.9 million in April.
In line with the year prior, French Connection did not pay an interim dividend.
"The order books we have provide a clear outlook for the second half of the year in wholesale although retail continues to be challenging," Marks continued. "We remain on target to return the business to profitability this year and we will be doing everything we can to ensure that happens."
Shares in French Connection were 8.2% lower at 46.00 pence on Thursday.
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