3rd Oct 2019 08:43
(Alliance News) - Ted Baker PLC on Thursday slashed its interim dividend and reported a swing to loss amid weaker trading conditions in the retail market.
The one-time FTSE 250 stock tumbled by 35% to 598.50 pence each in London on Thursday morning.
In the six months to August 10, revenue slipped 0.7% year-on-year to GBP303.8 million from GBP306.0 million and Ted Baker slumped to a pretax loss of GBP23.0 million from a GBP24.5 million profit, on higher costs and exceptional items.
Exceptional costs soared year-on-year to GBP17.4 million from just GBP557,000, not helped by GBP2.0 million in external investigation and legal costs related to its recent "hugging" scandal and the GBP11.8 million loss it incurred on the sale of its Asian business.
Also weighing on earnings were administrative expenses, which rose by 15% to GBP47.8 million from GBP41.6 million last year, and distribution costs, which increased 4.7% to GBP126.8 million from GBP121.1 million.
Total retail sales fell 2.5% year-on-year to GBP214.5 million from GBP220.1 million, with in-stores sales down 2.9% year-on-year and online sales slipping 1.3%.
Ted Baker explained: "The performance reflects the very difficult trading conditions throughout the period, unseasonable weather experienced across North America in the early part of the period and the highly promotional retail environment across our global markets. This has been exacerbated by the well-publicised challenges that continue to face some of the group's UK trading partners as well as some challenges with our Spring/Summer collections."
In the UK & Europe alone, total retail sales slipped 3.9% to GBP141.3 million from GBP147.1 million a year ago and tumbled by 15% in the rest of the world to GBP9.5 million from GBP11.2 million. In North America, however, there was sales growth of 3.1% to GBP63.7 million from GBP61.8 million.
Turning to its dividend, the retailer chopped its first half payout by 56% to 7.8 pence per share from 17.9p.
Chief Executive Lindsay Page said: "We are continuing to pro-actively manage the significant challenges impacting our sector including weak consumer spending, macro-economic uncertainty, and the accelerating channel shift towards e-commerce. However, we are not immune to these pressures which have impacted our financial performance during the first half of the year."
The first half performance was below expectations, Ted Baker conceded, and second half trading has also "started slowly". Full-year results will be below last year if this trend continues, the company noted.
The poor interim period is a further blow to the company which has endured boardroom turbulence in recent months. Its founder, Ray Kelvin, resigned as chief executive earlier this year after allegations of misconduct were made against him.
Kelvin took a voluntary leave of absence from his role as chief executive of Ted Baker in December last year, after he was accused by the company's staff of forced "hugging" and inappropriate touching and comments.
By Eric Cunha; [email protected]
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