5th Oct 2006 07:01
Ted Baker PLC05 October 2006 5 October 2006 Ted Baker PLC Interim Results for the 28 weeks ended 12 August 2006 Highlights • Group revenue up 6.9% to £61.1m (2005: £57.2m) • Retail sales up 10.4% to £39.4m (2005: £35.7m) • Wholesale sales up 1.1% to £21.7m (2005: £21.5m) • Licence income in line at £1.8m (2005: £1.8m) • Profit before tax increased by 11.3% to £7.0m (2005: £6.3m) • Basic earnings per share up 14.0% at 11.4p (2005: 10.0p) • Interim dividend up 10.3% to 4.3p per share (2005: 3.9p per share) • Continued expansion in the US, with the successful launch in May of our second largest US store in Southern California's luxury shopping destination, South Coast Plaza. • Asian expansion progressing with the opening of the first store in Hong Kong on 4 October 2006. • Five further openings scheduled in Dubai (2), Singapore, Bangkok and Jakarta during the second half of the year. Commenting, Ray Kelvin, Founder and Chief Executive, said: "I am pleased to announce positive results for the last 28 weeks. At Ted Bakerwe continue to focus on our key strengths of design, product quality, attentionto detail and great service. We are encouraged by the positive reactions fromour customers to the autumn/winter 2006 collections. We continue with our planned expansion of the brand into the US, the Far Eastand Asia and I am pleased to announce the opening of the first store in HongKong yesterday. The second half of the year has started well and we are confident of a positiveoutcome for the year." Enquiries: Ted Baker PLC Tel: 020 7796 4133 on 5 October 2006 onlyRay Kelvin, Chief Executive Tel: 020 7255 4800 thereafterLindsay Page, Finance Director Hudson Sandler Tel: 020 7796 4133Sandrine GallienKate Hough Notes to Editors 'No Ordinary Designer Label...' Ted Baker has grown steadily from a single shirtspecialist store in Glasgow to an international brand that distributes throughretail showcases, leading department stores and key independents in Europe, USA,Canada and Australasia. In October 2005, a territorial licence agreement wassigned with Li & Fung Group of companies, for retail and wholesale distributionin Hong Kong, Macau, China, Taiwan and South Korea. In December 2005 a secondterritorial licence agreement was signed with RSH Limited, for retaildistribution of the Ted Baker brand in Singapore, Malayasia, Thailand,Indonesia, UAE, Saudi Arabia, Bahrain, Qatar, Oman, Kuwait and Lebanon. Using three distinct channels of distribution, retail, wholesale and licensing,allows Ted to pursue a policy of careful brand management and growth byextending the breadth of the collections, controlling distribution channels anddeveloping the Ted Baker presence within key markets. Ted's collections include three men's ranges: Global, which consists of limitededition opulent pieces; Endurance, a fusion of traditional tailoring with 21stcentury technology and high performance fabrics; and Mainline which is acombined collection of laid-back denim pieces, casual shirts and contemporarysuiting. Ted's Womenswear collection includes tailoring, silk jerseys,directional knitwear, sophisticated dresses, and appliqued denim pieces. Boththe men's and women's collections are complemented by their individual accessorycollections. The Childrenswear and Babywear ranges are aptly named Teddy Boy,Teddy Girl, Teddy Baby and are treated as 'small cuts dressed by Ted.'Fragrances, Footwear, Eyewear, Watches and Intimates are designed by Ted anddistributed through licensees. Renowned for the brand's quirky sense of humour and attention to detail, TedBaker has always had a very clear unswerving focus on quality. Ted createscollections that appeal to a broad range of style conscious men and womenlooking for that certain something a little out of the ordinary. For further information please visit www.tedbaker.co.uk CHAIRMAN'S STATEMENT I am pleased to report a positive first half performance for the Ted Bakerbrand, in all of our territories. Both revenue and profits are up on last year,reflecting the continuing appeal of our innovative collections. During theperiod we continued to build our presence in the United States with thesuccessful opening of our new store in Southern California. The first licensedstore has opened in Hong Kong on 4 October 2006 with further openings in Dubai,Singapore, Bangkok and Jakarta to follow in the second half. FINANCIAL RESULTS Group revenue increased by 6.9% to £61.1m (2005: £57.2m) in the 28 weeks ended12 August 2006 with a particularly strong performance in the retail business. The composite gross margin was 56.5% compared to 57.0% for the first half of2005 reflecting a slightly increased wholesale margin and a lower achievedretail gross margin. Distribution costs, which include the costs of retail stores, concessions andoutlets increased by 4.6% to £20.6m (2005: £19.7m) which was below the increasein average retail selling space of 8.6%. Administration expenses reduced by 0.5%to £8.7m (2005: £8.8m) reflecting continued tight cost management. Operating profit was up 12.6% at £7.0m (2005: £6.2m). Profit before taxincreased by 11.3% for the period to £7.0m (2005: £6.3m). Basic earnings pershare increased by 14.0% to 11.4p (2005: 10.0p) DIVIDENDS The Board has declared an increased interim dividend of 4.3p per share (2005:3.9p) payable on the 24 November 2006 to shareholders on the register at theclose of business on 3 November 2006. RETAIL Retail sales were up 10.4% to £39.4m (2005: £35.7m). The retail gross margin was64.3% compared to 65.9% for the same period last year, which was due to a higherproportion of our sales being generated in the United States, the opening of afurther outlet store and a strong end of season sale. Underlying margins wereunchanged. Average retail square footage increased by 8.6% to 143,076 sq.ft. (2005: 131,769sq.ft.) as we expanded our retail space both in the UK and overseas. Sales persquare foot increased by 1.8% to £276 (2005: £271). Ted Baker has continued its retail expansion in the United States with theopening of our second largest US store in Southern California's premier luxuryshopping destination, South Coast Plaza in May and we are pleased with itsperformance to date. The 3,895 sq ft store houses Ted's full range of men's andwomen's collections, including Global, Endurance, Men's Mainline and Womenswear.Our other stores in the United States continue to trade well. WHOLESALE The wholesale division has performed well given the difficult market conditionsthat we reported at the time of the preliminary statement. Sales were ahead 1.1%to £21.7m (2005: £21.5m) although this reflects in part earlier phasing ofautumn/winter deliveries. Without this earlier phasing, we estimate that firsthalf sales would have been approximately 6.0% down on the previous year. Grossmargins were slightly above last year at 42.3% (2005: 42.1%). LICENCE INCOME Our licence income was in line with last year at £1.8m (2005: £1.8m). We arepleased with the growth in our skincare and fragrances licence as well as ourshoe and watch licences. Our other licences continue to perform well inaccordance with our expectations. Licence income continues to be significantly weighted towards the second half ofthe financial year and we anticipate that the outcome for the full year will beahead of last year. COLLECTIONS Ted Baker Menswear have enjoyed good growth in the period with sales up 5.6% to£34.0m (2005: £32.2m). Menswear represented 55.7% of sales (2005: 56.3%). Womenswear sales increased by 11.7% to £24.3m (2005: £21.8m) and represented39.8% of our total sales (2005: 38.1%). Sales of other collections, comprising Childrenswear and Footwear were £2.8m(2005: £3.2m) and these collections represented 4.5% of our total sales (2005:5.6%). We recently launched our new MKIII Endurance suit, which combines highperformance fabrics, traditional tailoring and hidden detailing, and the initialresponse has been encouraging. CURRENT TRADING AND PROSPECTS In the seven weeks to 30 September 2006 we are pleased to report that retailsales were 14.7% ahead of the same period last year. Wholesale sales were 6.8%below the same period last year reflecting some earlier phasing of deliveriesinto the first half compared to last year. We expect wholesale sales for thefull year to be below last year due to the difficult market conditions facingsome of our trustees. Ted Baker is focused on delivering the high quality brand that our customersexpect and we have been particularly pleased with the positive reaction to our2006 autumn/winter collections. We continue to focus on the planned expansion of our distribution both in the UKand overseas as we develop Ted Baker into a global brand. In the UK, four concessions have been opened since the half year and a furtherthree concessions and a store in Bath are due to open before the year end. I am delighted to announce that our retail licensee opened the first store inHong Kong yesterday and the early reaction from customers has been promising.Five further openings in the Far East and Middle East are planned this year. As always, the Christmas period remains key to our overall performance and theBoard remains confident of a successful outcome for the full year. Robert Breare5 October 2006 Group Income StatementFor the 28 weeks ended 12 August 2006 28 weeks ended 28 weeks ended 52 weeks ended 12 August 13 August 28 January Note 2006 2005 2006 £'000 £'000 £'000 Revenue 61,126 57,182 117,832Cost of sales (26,598) (24,603) (48,979) ___________ _________ _________ Gross profit 34,528 32,579 68,853 Distribution costs (20,619) (19,704) (39,007)Administrative expenses (8,714) (8,757) (15,339)Other operating income 1,790 2,088 3,827 ___________ _________ _________ Operating profit 6,985 6,206 18,334Finance income 2 73 99 129Finance expenses 2 (95) (48) (109) ___________ _________ _________ Profit before tax 6,963 6,257 18,354Income tax expense (2,158) (2,002) (5,435) ___________ _________ _________ Profit for the period 4,805 4,255 12,919 ___________ _________ _________ Attributable to:Equity shareholders of the parent company 4,831 4,263 12,931Minority interests (26) (8) (12) ___________ _________ _________ Profit for the period 4,805 4,255 12,919 ___________ _________ _________ Earnings per share Basic 3 11.4p 10.0p 30.6pDiluted 3 11.3p 9.7p 29.7p Group Statement of Changes in EquityFor the 28 weeks ended 12 August 2006 Available Share Share for sale Hedging Translation Retained Minority Total capital premium reserve reserve reserve earnings Interests equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 28 January 2006 2,149 6,983 176 (7) 12 32,911 (52) 42,172 Share option credit - - - - - (8) - (8)Movement of current/deferred - - - - - (181) - (181)tax on share optionsChange in fair value - - (176) - - - - (176)Change in hedge reserve - - - (230) - - - (230)Exchange rate movement - - - - (303) - - (303)Profit for the period - - - - - 4,831 (26) 4,805Shares issued 11 1,045 - - - - - 1,056Movement in respect of own shares - - - - - (3,977) - (3,977)Movement in respect of - - - - - 5,155 - 5,155treasury sharesDisposal of own shares - - - - - 935 - 935Dividends paid - - - - - (3,501) - (3,501) _______________________________________________________________________________________Balance at 12 August 2006 2,160 8,028 - (237) (291) 36,165 (78) 45,747 _______________________________________________________________________________________ Available Share Share for sale Hedging Translation Retained Minority Total capital premium reserve reserve reserve interests earnings equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 29 January 2005 2,149 6,983 - - - 27,738 (40) 36,830 Share option charge - - - - - 337 - 337Deferred tax on share options - - - - - 222 - 222Change in fair value - - 362 - - - - 362Change in hedge reserve - - - 51 - - - 51Exchange rate movement - - - - 26 - - 26Profit for the period - - - - - 4,263 (8) 4,255Shares issued - - - - - (218) - (218)Shares vested - - - - - 41 - 41Dividends paid - - - - - (3,138) - (3,138) _______________________________________________________________________________________ Balance at 13 August 2005 2,149 6,983 362 51 26 29,245 (48) 38,768 _______________________________________________________________________________________ Group Balance SheetAt 12 August 2006 Note 12 August 2006 13 August 2005 28 January 2006 £'000 £'000 £'000Non-current assets Intangible assets 493 501 501Property, plant and equipment 18,771 18,021 18,667Deferred tax assets - 889 1,543Available-for-sale financial assets - 362 176 _______________________________________________________________________________________ 19,264 19,773 20,887 Current assets Inventories 26,986 24,887 23,475Trade and other receivables 14,944 12,925 11,764Derivative financial assets 7 118 155Cash and cash equivalents 5 6,801 4,954 11,381 _______________________________________________________________________________________ 48,738 42,884 46,775 Current liabilities Trade and other payables (18,362) (18,023) (17,507)Borrowings 5 (282) (1,308) (563)Current tax payable (3,067) (3,722) (6,544)Derivative financial liabilities (266) (86) (126) _______________________________________________________________________________________ (21,977) (23,139) (24,740) Non-current liabilitiesBorrowings 5 - (750) (750) Deferred tax liabilities (278) - - _______________________________________________________________________________________ (278) (750) (750) _______________________________________________________________________________________ Total liabilities (22,255) (23,889) (25,490) _______________________________________________________________________________________ Net assets 45,747 38,768 42,172 _______________________________________________________________________________________Equity Share capital 2,160 2,149 2,149Share premium account 8,028 6,983 6,983Other reserves (237) 413 169 _______________________________________________________________________________________ Retained earnings 35,874 29,271 32,923 Total equity attributable to equity 45,825 38,816 42,224shareholders of the parent companyMinority interests (78) (48) (52) _______________________________________________________________________________________ Total equity 45,747 38,768 42,172 _______________________________________________________________________________________ Group Cash Flow StatementFor the 28 weeks ended 12 August 2006 Note 28 weeks ended 28 weeks ended 52 weeks ended 12 August 13 August 28 January 2006 2005 2006 £'000 £'000 £'000Cash generated from operations Profit for the period 4,805 4,255 12,919Adjusted for:Income tax expense 2,158 2,002 5,435Depreciation 2,185 2,041 3,820Loss on disposal of property, plant & equipment 44 2 23Share option (credits) / charge (8) 337 612Net finance (losses) / gains (63) 2 35Change in hedge reserve (230) 51 (7)Increase in inventories (3,745) (2,076) (595)Increase in trade and other receivables (2,370) (4,489) (3,534)Increase in trade and other payables 167 428 2,030 ___________ _________ _________ Cash generated from operations 2,943 2,553 20,738 Interest paid (12) (38) (125)Income taxes paid (3,112) (2,674) (5,480) ___________ _________ _________ Net cash flow from operating activities (181) (159) 15,133 Cash flow from investing activities Purchases of property, plant & equipment (2,588) (2,675) (5,059)Proceeds from sale of property, plant & equipment - 35 13Interest received 58 43 63 ___________ _________ _________ Net cash flow from investing activities (2,530) (2,597) (4,983) Cash flow from financing activities Proceeds from issue of ordinary shares 1,056 - -Purchase of own shares (752) (447) (4,617)Sale of own shares 5,907 - -Shares vested (3,042) 229 271Dividends paid 4 (3,501) (3,138) (4,775) ___________ _________ _________ Net cash flow from financing activities (332) (3,356) (9,121) ___________ _________ _________Net (decrease) / increase in cash and cash equivalents (3,043) (6,112) 1,029 Cash and cash equivalents at 28 January 2006 10,068 8,853 8,853Non cash movements - 42 -Exchange rate movement (506) 113 186 ___________ _________ _________ Cash and cash equivalents at 12 August 2006 5 6,519 2,896 10,068 ___________ _________ _________ Notes to the Interim Financial StatementsFor the 28 weeks ended 12 August 2006 1. Basis of preparation These financial statements have been prepared on the basis of the recognitionand measurement requirements of IFRS applied in the financial statements at 28January 2006 and those standards that have been endorsed and will be applied at27 January 2007. The results for each half-year are unaudited. The comparative figures for the 52weeks ended 28 January 2006 have been abridged from the Group's financialstatements for that year, which have been delivered to the Registrar ofCompanies. The auditors have reported on those financial statements; theirreport was unqualified and did not contain statements under section 237 (2) or(3) of the Companies Act 1985. 2. Finance income and expenses 28 weeks ended 28 weeks ended 52 weeks ended 12 August 2006 13 August 2005 28 January 2006 £'000 £'000 £'000Finance income- Interest receivable 73 46 74- Exchange rate movement - 53 55 ___________ _________ _________ 73 99 129 ___________ _________ _________Finance expenses- Interest payable (10) (48) (109)- Exchange rate movement (85) - - ___________ _________ _________ (95) (48) (109) ___________ _________ _________ 3. Earnings per share 28 weeks ended 28 weeks ended 52 weeks ended 12 August 2006 13 August 2005 28 January 2006 No. No. No.Number of shares:Weighted number of ordinary shares outstanding 42,451,893 42,504,123 42,236,880Effect of dilutive options 223,064 1,159,850 1,216,443 ___________ _________ _________ Weighted number of ordinary shares outstanding - diluted 42,674,957 43,663,973 43,453,323 ___________ _________ _________ Earnings: £'000 £'000 £'000Profit for the period, basic and diluted 4,831 4,263 12,931 Basic earnings per share 11.4p 10.0p 30.6pDiluted earnings per share 11.3p 9.7p 29.7p 4. Dividends per share 28 weeks ended 28 weeks ended 52 weeks ended 28 12 August 2006 13 August 2005 January 2006 £'000 £'000 £'000 Final dividend paid for the prior year of 8.2p per ordinary share (2005: 7.3p) 3,501 3,138 3,138Interim dividend paid 2006: £Nil (2005: 3.9p) - - 1,637 ___________ _________ _________ 3,501 3,138 4,775 ___________ _________ _________ The Board has declared an interim dividend of 4.3p per share (2005: 3.9p)payable on the 24 November 2006 to shareholders on the register at the close ofbusiness on 3 November 2006. 5. Reconciliation of cash and cash equivalents per balance sheet to cash flow statement 28 weeks ended 28 weeks ended 52 weeks ended 12 August 2006 13 August 2005 28 January 2006 £'000 £'000 £'000 Cash and cash equivalents per balance sheet 6,801 4,954 11,381Current borrowings (282) (1,308) (563)Non-current borrowings - (750) (750) ___________ _________ _________ Cash and cash equivalents per cash flow statement 6,519 2,896 10,068 ___________ _________ _________ 6. Interim report This interim report will be sent by post to all registered shareholders. Copieswill be available to the public from the Company Secretary at the registeredoffice: Ted Baker PLC, The Ugly Brown Building, 6a St Pancras Way, London NW10TB. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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