8th Oct 2009 07:00
8 October 2009
Ted Baker PLC
Interim Results for the 28 weeks ended 15 August 2009
Highlights
|
Better than expected Group performance in difficult trading environment |
|
|
Retail sales up 15.0% with UK performing ahead of expectations |
|
|
New retail store opened in Orlando during the first half |
|
|
New retail store openings planned for Heathrow Terminal 1, Boston and Melbourne in the second half |
|
|
Ted Baker Born range successfully launched in August and initial customer reactions have been positive |
|
28 weeks ended 15 August 2009 |
28 weeks ended 9 August 2008 |
Change |
53 weeks ended 31 January 2009 |
|
|
Group Revenue |
£76.6m |
£71.6m |
7.0% |
£152.7m |
|
Profit Before Tax |
£6.0m |
£7.4m |
(18.4)% |
£17.8m |
|
Basic EPS |
10.4p |
12.4p |
(16.1)% |
29.6p |
|
Interim Dividend |
5.25p |
5.25p |
0% |
11.4p |
Commenting, Ray Kelvin, Founder and Chief Executive, said:
"The Group's performance in the first half of the year has been better than expected given the difficult trading environment. This trend has continued into the second half and whilst we remain cautious, given the uncertain economic outlook, the initial reactions to our Autumn / Winter collections have been encouraging.
We continue to benefit from our multi-channel distribution strategy and this, coupled with the strength of the Ted Baker brand and the support of our strong balance sheet, means we remain well placed to invest in the long term development of our business."
|
Enquiries: |
|
|
Ted Baker PLC |
Tel: 020 7796 4133 on 8 October 2009 only |
|
Ray Kelvin, Chief Executive |
Tel: 020 7255 4800 thereafter |
|
Lindsay Page, Finance Director |
|
|
Hudson Sandler |
Tel: 020 7796 4133 |
|
Michael Sandler |
|
|
Kate Hough |
CHAIRMAN'S STATEMENT
The Group's performance in the first half of the year has been better than expected in an uncertain trading environment.
We continue to benefit from our multi-channel distribution strategy through which we operate our retail, wholesale and licence businesses. Sales in our retail division were ahead of expectations, with sales up 15.0% to £61.3m on average selling space up 16.1%. We continue to experience difficult trading conditions in our overseas markets, offset by our better performance in the UK.
As previously anticipated, wholesale sales were down 16.3% for the first half of the year, due in part to the difficult trading conditions being experienced by some of our wholesale customers, but mainly due to the transfer of some wholesale accounts to retail concessions and the closure of certain accounts no longer appropriate for our brand. We expect this trend to continue in the second half.
The growth of our retail business, allied with the reduction in wholesale sales, is expected to lead to a shift in the phasing of profit from the first half to the second half of the year.
FINANCIAL RESULTS
Group revenue increased by 7.0% to £76.6m (2008: £71.6m) for the 28 weeks ended 15 August 2009 ("the period") and the composite gross margin was slightly above last year at 59.5% (2008: 58.7%) due to the change in the mix between retail and wholesale sales. Retail now represents 80.0% of total turnover (2008: 74.5%) and we anticipate this figure being slightly higher by the year end due to the seasonally higher level of retail sales in the second half of the year.
Operating expenses increased by 10.1% to £41.6m (2008: £37.8m). Distribution costs, which mainly comprise the cost of retail stores, outlets and concessions, increased by 15.9% to £32.0m (2008: £27.7m), primarily reflecting the increase in retail space against the same period last year. Despite the incremental activity of our business, administrative expenses reduced by 5.5% to £9.6m (2008: £10.2m), reflecting actions taken towards the end of last year to control costs.
Operating profit was £6.4m (2008: £7.3m) resulting in profit before tax of £6.0m (2008: £7.4m). Basic earnings per share was 10.4p (2008: 12.4p).
Net cash generated from operating activities was £4.1m (2008: -£0.1m). The increase on the prior year was principally due to an increased focus on working capital. Capital expenditure of £2.5m (2008: £7.5m) reflects a lower number of store openings. This expenditure also included some refurbishment of existing locations.
DIVIDENDS
The Board has decided to maintain the interim dividend at 5.25p. This will be payable on 27 November 2009 to shareholders on the register at the close of business on 23 October 2009.
PEOPLE
Our performance in the first half of the year would not have been possible without the dedication and commitment of our team. On behalf of the Board, I would like to thank the team at Ted Baker for its continuing efforts and hard work. The team's enthusiasm and passion for the brand is a key factor in our continued success.
On 14 July we announced that David Hewitt, Non Executive Director, had retired from the Board. On behalf of the Board, I would like to thank David for his extraordinary contribution to Ted Baker over the last twelve years. David has been with the Company since its flotation in July 1997 and his retail and business experience has greatly benefited Ted Baker during its period of growth. We all wish him a long and healthy retirement.
GLOBAL GROUP PERFORMANCE
RETAIL
Improved trading in the UK offset a weaker performance in overseas markets, where conditions continue to be difficult. Retail sales were up 15.0% to £61.3m (2008: £53.3m) and the retail gross margin was 63.9% (2008: 64.6%). While we saw an improvement in the UK gross margin to 66.8% (2008: 66.2%), this was offset by a lower margin in our overseas markets due to increased promotional activity in highly competitive markets.
Average retail square footage rose by 16.1% to 203,325 sq.ft (2008:175,090 sq.ft). Sales per square foot decreased by 1.0% to £296 (2008: £299).
WHOLESALE
As anticipated, wholesale sales were 16.3% below last year at £15.3m (2008: £18.3m) with wholesale gross margins of 41.6% (2008: 41.5%). We estimate that around a third of this decline is due to the transfer of some wholesale accounts to retail concessions and a further third is due to the closure of certain accounts no longer appropriate for our brand. The balance represents the difficult trading conditions being experienced by some of our wholesale customers.
LICENCE INCOME
Ted Baker operates two types of licences: territorial licences covering the Middle East, Asia, Australia and New Zealand; and product licences covering perfume & fragrance, watches, footwear, eyewear and childrenswear.
Licence income for the period was £2.5m (2008: £2.9m), which was 4.8% ahead of last year if we exclude the impact of our North American licence partner, Hartmarx Corporation filing for bankruptcy protection in January 2009. We have seen good performances from our licensed childrenswear collection, exclusive to Debenhams, as well as from our footwear and eyewear product licences.
Hartmarx Corporation filed for protection under Chapter 11 of the US bankruptcy code in January 2009 and has subsequently terminated its licence agreement with us. We have since signed new licence agreements directly with companies who previously held product sub-licences with Hartmarx and with a Canadian distributor previously contracted by Hartmarx. This situation has enabled us to actively manage the further expansion of our business in this territory and we will continue to explore potential opportunities.
COLLECTIONS
Ted Baker Womenswear delivered a strong performance for the period with sales up 17.9% to £36.9m (2008: £31.3m). Womenswear represented 48.2% of total sales (2008: 43.8%). A significant proportion of the increase in turnover is due to the transfer of wholesale accounts to concessions with a resulting increase in performance.
Ted Baker Menswear delivered a good result with sales of £39.7m down 1.5% on the prior year (2008: £40.3m). Menswear represented 51.8% of total sales (2008: 56.2%).
UNITED KINGDOM & EUROPE
Sales for the period in our UK and European retail division were up 16.6% to £56.1m (2008: £48.1m). While the UK has performed ahead of our expectations, our European stores have faced challenging conditions.
Average square footage rose by 18.5% over the period to 175,007 sq.ft (2008: 147,733 sq.ft). At 15 August 2009, total retail square footage was 174,046 sq.ft (2008: 154,233 sq.ft), representing an increase of 12.8%. Retail sales per square foot decreased 1.6% from £319 to £314.
At 15 August 2009, we operated 32 stores (2008: 29), 122 concessions (2008: 92) and 10 outlet stores (2008: 10).
US
The US market remains challenging and sales for the period in our US retail division were down 23.8% to $8.0m (2008: $10.5m), which in sterling was equivalent to sales down 1.9% to £5.2m (2008: £5.3m). During the first half we opened one outlet store in Orlando and consequently now have 8 stores and 2 outlet stores across the United States.
Average square footage rose by 3.5% over the period to 28,318 sq.ft (2008: 27,357 sq.ft). At 15 August 2009 total retail square footage was up 6.8% on last year at 29,953 sq.ft (2008: 28,058 sq.ft). Retail sales per square foot fell 5.2% from £194 to £184.
MIDDLE EAST, ASIA AND AUSTRALASIA
Ted Baker now operates 18 stores and concessions in the Middle East and Asia through our territorial licence partners RSH Limited and Li and Fung Group of Companies. The stores continue to perform in line with our expectations and we were pleased to open a further store in Taiwan during the period.
Through our licence partner we continue to develop the Ted Baker brand in Australia and our store in Melbourne, which we operate through a joint venture, has performed well during the period.
CURRENT TRADING AND OUTLOOK
Our Autumn / Winter collections have been well received and we were pleased to announce the launch in August of Born by Ted Baker, our highly designed men's casualwear collection. The initial reaction from our customers has been positive.
Retail
We continue to deliver a better than expected performance in the UK, while conditions in our overseas markets remain challenging.
Our new store in Heathrow Terminal 1 opened in September and is performing well at this very early stage. Our Boston store is expected to open in October and we will take advantage of further opportunities for new stores in the US, should they be appropriate. We are also opening our second store in Melbourne, Australia at the end of October though our joint venture in the territory.
Wholesale
Trading in our wholesale business continues to be down against last year and we expect this trend to continue in the second half of the year.
Licence Income
Our product and territorial licences continue to perform in line with our expectations and we will continue to consider other opportunities in North America.
Outlook
At this stage, we continue to exceed our expectations. However, the economic environment remains uncertain and our outlook for the current financial year remains cautious. 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 trading period since the start of the second half of the financial year, in mid November.
Condensed Group Income Statement
For the 28 weeks ended 15 August 2009
|
|
Note
|
Unaudited 28 weeks
ended
15 August
2009
|
|
Unaudited 28 weeks
ended
9 August
2008
|
|
Audited
53 weeks ended
31 January
2009
|
|
|
|
£‘000
|
|
£‘000
|
|
£‘000
|
|
|
|
|
|
|
|
|
|
Revenue
|
2
|
76,621
|
|
71,616
|
|
152,661
|
|
Cost of sales
|
|
(31,057)
|
|
(29,571)
|
|
(63,295)
|
|
Gross profit
|
2
|
45,564
|
|
42,045
|
|
89,366
|
|
|
|
|
|
|
|
|
|
Distribution costs
|
|
(32,044)
|
|
(27,657)
|
|
(56,744)
|
|
Administrative expenses
|
|
|
|
|
|
|
|
- Other administrative expenses
|
|
(9,597)
|
|
(10,157)
|
|
(19,204)
|
|
- Impairment losses
|
3
|
-
|
|
-
|
|
(1,786)
|
|
Other operating income
|
|
2,429
|
|
3,021
|
|
5,529
|
|
Operating profit
|
2
|
6,352
|
|
7,252
|
|
17,161
|
|
|
|
|
|
|
|
|
|
Finance income
|
2, 4
|
3
|
|
196
|
|
837
|
|
Finance expenses
|
2, 4
|
(347)
|
|
(106)
|
|
(307)
|
|
Share of profit of jointly controlled entity, net of tax
|
|
23
|
|
52
|
|
75
|
|
Profit before tax
|
2
|
6,031
|
|
7,394
|
|
17,766
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
7
|
(1,749)
|
|
(2,147)
|
|
(5,198)
|
|
Profit for the period
|
|
4,282
|
|
5,247
|
|
12,568
|
|
|
|
|
|
|
|
|
|
Profit attributable to:
|
|
|
|
|
|
|
|
- Equity shareholders of the parent company
|
|
4,315
|
|
5,271
|
|
12,593
|
|
- Minority interests
|
|
(33)
|
|
(24)
|
|
(25)
|
|
Profit for the period
|
|
4,282
|
|
5,247
|
|
12,568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
|
5
|
|
|
|
|
|
|
Basic
|
|
10.4p
|
|
12.4p
|
|
29.6p
|
|
Diluted
|
|
10.4p
|
|
12.4p
|
|
29.6p
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Group Statement of Comprehensive Income
For the 28 weeks ended 15 August 2009
|
|
Unaudited 28 weeks
ended
15 August
2009
|
|
Unaudited 28 weeks
ended
9 August
2008
|
|
Audited
53 weeks ended
31 January
2009
|
|
|
£‘000
|
|
£‘000
|
|
£‘000
|
|
|
|
|
|
|
|
|
Profit for the period
|
4,282
|
|
5,247
|
|
12,568
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
Net effective portion of changes in fair value of cash flow hedges
|
(1,319)
|
|
380
|
|
3,771
|
|
Net change in fair value of cash flow hedges transferred to profit or loss
|
(835)
|
|
(185)
|
|
(2,309)
|
|
Exchange rate movement
|
(1,237)
|
|
204
|
|
1,702
|
|
Other comprehensive income for the period, net of tax
|
(3,391)
|
|
399
|
|
3,164
|
|
|
|
|
|
|
|
|
Total comprehensive income for the period
|
891
|
|
5,646
|
|
15,732
|
|
|
|
|
|
|
|
|
Total comprehensive income attributable to:
|
|
|
|
|
|
|
- Equity shareholders of the parent company
|
924
|
|
5,670
|
|
15,757
|
|
- Minority interests
|
(33)
|
|
(24)
|
|
(25)
|
|
Total comprehensive income for the period
|
891
|
|
5,646
|
|
15,732
|
Condensed Group Statement of Changes in Equity - Unaudited
For the 28 weeks ended 15 August 2009
|
Share capital |
Share premium |
Cash flow hedging reserve |
Translation reserve |
Retained earnings |
Total equity attributable to equity shareholders of the parent company |
Minority interests |
Total equity |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Balance at 31 January 2009 |
2,160 |
9,137 |
1,713 |
1,182 |
48,010 |
62,202 |
(36) |
62,166 |
|
Comprehensive income for the period |
||||||||
|
Profit for the period |
- |
- |
- |
- |
4,315 |
4,315 |
(33) |
4,282 |
|
Other comprehensive income |
- |
- |
(2,154) |
(1,237) |
- |
(3,391) |
- |
(3,391) |
|
Total comprehensive income for the period |
- |
- |
(2,154) |
(1,237) |
4,315 |
924 |
(33) |
891 |
|
Transactions with equity shareholders of the parent company |
||||||||
|
Share option charge |
- |
- |
- |
- |
22 |
22 |
- |
22 |
|
Movement of current/deferred tax on share options |
- |
- |
- |
- |
(1) |
(1) |
- |
(1) |
|
Disposal of treasury shares |
- |
- |
- |
- |
43 |
43 |
- |
43 |
|
Dividends paid |
- |
- |
- |
- |
(4,743) |
(4,743) |
- |
(4,743) |
|
Total transactions with equity shareholders of the parent company, recognised directly in equity |
- |
- |
- |
- |
(4,679) |
(4,679) |
- |
(4,679) |
|
Balance at 15 August 2009 |
2,160 |
9,137 |
(441) |
(55) |
47,646 |
58,447 |
(69) |
58,378 |
Condensed Group Statement of Changes in Equity - Unaudited
For the 28 weeks ended 9 August 2008
|
Share capital |
Share premium |
Cash flow hedging reserve |
Translation reserve |
Retained earnings |
Total equity attributable to equity shareholders of the parent company |
Minority interests |
Total equity |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Balance at 26 January 2008 |
2,160 |
9,137 |
251 |
(520) |
44,695 |
55,723 |
(11) |
55,712 |
|
Comprehensive income for the period |
||||||||
|
Profit for the period |
- |
- |
- |
- |
5,271 |
5,271 |
(24) |
5,247 |
|
Other comprehensive income |
- |
- |
195 |
204 |
- |
399 |
- |
399 |
|
Total comprehensive income for the period |
- |
- |
195 |
204 |
5,271 |
5,670 |
(24) |
5,646 |
|
Transactions with equity shareholders of the parent company |
||||||||
|
Share option charge |
- |
- |
- |
- |
8 |
8 |
- |
8 |
|
Movement of current/deferred tax on share options |
- |
- |
- |
- |
(43) |
(43) |
- |
(43) |
|
Own shares acquired |
- |
- |
- |
- |
(2,014) |
(2,014) |
- |
(2,014) |
|
Disposal of treasury shares |
- |
- |
- |
- |
53 |
53 |
- |
53 |
|
Dividends paid |
- |
- |
- |
- |
(4,799) |
(4,799) |
- |
(4,799) |
|
Total transactions with equity shareholders of the parent company, recognised directly in equity |
- |
- |
- |
- |
(6,795) |
(6,795) |
- |
(6,795) |
|
Balance at 9 August 2008 |
2,160 |
9,137 |
446 |
(316) |
43,171 |
54,598 |
(35) |
54,563 |
Condensed Group Statement of Changes in Equity - Audited
For the 53 weeks ended 31 January 2009
|
Share capital |
Share premium |
Cash flow hedging reserve |
Translation reserve |
Retained earnings |
Total equity attributable to equity shareholders of the parent company |
Minority interests |
Total equity |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
Balance at 26 January 2008 |
2,160 |
9,137 |
251 |
(520) |
44,695 |
55,723 |
(11) |
55,712 |
|
Comprehensive income for the period |
||||||||
|
Profit for the period |
- |
- |
- |
- |
12,593 |
12,593 |
(25) |
12,568 |
|
Other comprehensive income |
- |
- |
1,462 |
1,702 |
- |
3,164 |
- |
3,164 |
|
Total comprehensive income for the period |
- |
- |
1,462 |
1,702 |
12,593 |
15,757 |
(25) |
15,732 |
|
Transactions with equity shareholders of the parent company |
||||||||
|
Share option charge |
- |
- |
- |
- |
(301) |
(301) |
- |
(301) |
|
Movement of current/deferred tax on share options |
- |
- |
- |
- |
(44) |
(44) |
- |
(44) |
|
Own shares acquired |
- |
- |
- |
- |
(2,014) |
(2,014) |
- |
(2,014) |
|
Disposal of treasury shares |
- |
- |
- |
- |
64 |
64 |
- |
64 |
|
Dividends paid |
- |
- |
- |
- |
(6,983) |
(6,983) |
- |
(6,983) |
|
Total transactions with equity shareholders of the parent company, recognised directly in equity |
- |
- |
- |
- |
(9,278) |
(9,278) |
- |
(9,278) |
|
Balance at 31 January 2009 |
2,160 |
9,137 |
1,713 |
1,182 |
48,010 |
62,202 |
(36) |
62,166 |
Condensed Group Balance Sheet
At 15 August 2009
|
|
Note |
Unaudited 15 August 2009 |
Unaudited 9 August 2008 |
Audited 31 January 2009 |
||
|
£'000 |
£'000 |
£'000 |
||||
|
Non-current assets |
||||||
|
Intangible assets |
630 |
573 |
673 |
|||
|
Property, plant and equipment |
26,919 |
27,723 |
28,701 |
|||
|
Investments in equity accounted investee |
121 |
62 |
85 |
|||
|
Deferred tax assets |
777 |
401 |
904 |
|||
|
Prepayments |
866 |
843 |
961 |
|||
|
29,313 |
29,602 |
31,324 |
||||
|
Current assets |
||||||
|
Inventories |
35,451 |
32,969 |
37,315 |
|||
|
Trade and other receivables |
18,180 |
20,899 |
20,466 |
|||
|
Amount due from equity accounted investee |
117 |
42 |
139 |
|||
|
Derivative financial assets |
114 |
689 |
2,444 |
|||
|
Cash and cash equivalents |
9 |
2,229 |
6,413 |
4,660 |
||
|
56,091 |
61,012 |
65,024 |
||||
|
Current liabilities |
||||||
|
Trade and other payables |
(22,276) |
(24,196) |
(29,806) |
|||
|
Bank overdraft |
9 |
(1,500) |
(7,312) |
- |
||
|
Income tax payable |
(1,743) |
(3,447) |
(3,801) |
|||
|
Derivative financial liabilities |
(555) |
(9) |
- |
|||
|
(26,074) |
(34,964) |
(33,607) |
||||
|
Non-current liabilities |
||||||
|
Deferred tax liabilities |
(952) |
(1,087) |
(575) |
|||
|
(952) |
(1,087) |
(575) |
||||
|
Net assets |
58,378 |
54,563 |
62,166 |
|||
|
Equity |
||||||
|
Share capital |
2,160 |
2,160 |
2,160 |
|||
|
Share premium account |
9,137 |
9,137 |
9,137 |
|||
|
Other reserves |
(441) |
446 |
1,713 |
|||
|
Translation reserve |
(55) |
205 |
1,182 |
|||
|
Retained earnings |
10 |
47,646 |
42,650 |
48,010 |
||
|
Total equity attributable to equity shareholders of the parent company |
58,447 |
54,598 |
62,202 |
|||
|
Minority interests |
(69) |
(35) |
(36) |
|||
|
Total equity |
58,378 |
54,563 |
62,166 |
|||
Condensed Group Cash Flow Statement
For the 28 weeks ended 15 August 2009
|
|
Note
|
Unaudited
28 weeks ended
15 August
2009
|
|
Unaudited
28 weeks ended
9 August
2008
|
|
Audited
53 weeks ended
31 January
2009
|
|
|
|
£’000
|
|
£’000
|
|
£’000
|
|
Cash generated from operations
|
|
|
|
|
|
|
|
Profit for the period
|
|
4,282
|
|
5,247
|
|
12,568
|
|
Adjusted for:
|
|
|
|
|
|
|
|
Income tax expense
|
|
1,749
|
|
2,147
|
|
5,198
|
|
Depreciation
|
|
3,473
|
|
3,047
|
|
5,990
|
|
Impairment losses
|
|
-
|
|
-
|
|
1,786
|
|
Loss on disposal of property, plant & equipment
|
|
71
|
|
1
|
|
106
|
|
Share option charge
|
|
22
|
|
8
|
|
(301)
|
|
Net finance gains
|
|
88
|
|
1
|
|
161
|
|
Net change in cash flow hedges
|
|
(1,779)
|
|
195
|
|
1,087
|
|
Share of profit in joint venture
|
|
(23)
|
|
(52)
|
|
(75)
|
|
Decrease in non current prepayments
|
|
34
|
|
52
|
|
80
|
|
Decrease / (increase) / in inventories
|
|
864
|
|
(3,472)
|
|
(5,923)
|
|
Decrease / (increase) in trade and other receivables
|
|
5,852
|
|
(7,204)
|
|
(11,159)
|
|
(Decrease) / increase in trade and other payables
|
|
(6,755)
|
|
1,929
|
|
6,967
|
|
Interest paid
|
|
(94)
|
|
(73)
|
|
(330)
|
|
Income taxes paid
|
|
(3,731)
|
|
(1,954)
|
|
(5,052)
|
|
Net cash generated from operating activities
|
|
4,053
|
|
(128)
|
|
11,103
|
|
|
|
|
|
|
|
|
|
Cash flow from investing activities
|
|
|
|
|
|
|
|
Purchases of property, plant & equipment
|
|
(2,536)
|
|
(7,503)
|
|
(11,828)
|
|
Proceeds from sale of property, plant & equipment
|
|
-
|
|
-
|
|
14
|
|
Interest received
|
|
3
|
|
59
|
|
149
|
|
Net cash from investing activities
|
|
(2,533)
|
|
(7,444)
|
|
(11,665)
|
|
|
|
|
|
|
|
|
|
Cash flow from financing activities
|
|
|
|
|
|
|
|
Own shares acquired
|
10
|
-
|
|
(2,014)
|
|
(2,014)
|
|
Proceeds from option holders for exercise of options
|
|
43
|
|
53
|
|
64
|
|
Dividends paid
|
6
|
(4,743)
|
|
(4,799)
|
|
(6,983)
|
|
Net cash from financing activities
|
|
(4,700)
|
|
(6,760)
|
|
(8,933)
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
(3,180)
|
|
(14,332)
|
|
(9,495)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at 31 January 2009 /
26 January 2008
|
|
4,660
|
|
13,105
|
|
13,105
|
|
Exchange rate movement
|
|
(751)
|
|
328
|
|
1,050
|
|
Cash and cash equivalents at 15 August 2009 /
9 August 2008 / 31 January 2009
|
9
|
729
|
|
(899)
|
|
4,660
|
Notes to the Condensed Interim Financial Statements
For the 28 weeks ended 15 August 2009
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 15 August 2009 comprise the Company and its subsidiaries (together referred to as "the Group").
The Group financial statements as at and for the 53 weeks ended 31 January 2009 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.tedbaker.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 53 weeks ended 31 January 2009. These interim financial statements were approved by the Board of Directors on 8 October 2009.
The comparative figures for the 53 weeks ended 31 January 2009 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 237(2) or (3) of the Companies Act 1985. These sections address whether proper accounting records have been kept, whether the Company's accounts are in agreement with these records and whether the auditor has 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 53 weeks ended 31 January 2009, approved by the Board on the 25 March 2009, 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 2009. The impact of the economic environment in which the Group's businesses operates 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 53 weeks ended 31 January 2009.
Revised and amended standards and interpretations
The following revised and amended standards and interpretations, which have all been endorsed by the EU, have been adopted by the Group in these interim financial statements.
Determination of operating segments - As of 1 January 2009 the Group has adopted IFRS 8, Operating Segments. The new accounting policy in respect of segment operating disclosures has not led to a change in the number and/or definition of segments previously presented on the basis that the information disclosed is consistent to that provided to the Board.
Presentation of financial statements - the Group has applied revised IAS 1, Presentation of financial statements, which became effective as of 1 January 2009. This presentation has been applied in these interim financial statements as at and for the period ended 15 August 2009. Comparative information has been represented so that it is also in conformity with the revised standard. Since the change in accounting policy only impacts presentation aspects there is no impact on earnings per share.
Accounting for marketing expenditure - the Group has applied in its interim financial statements amended IAS 38, Intangible Assets, which clarify the accounting for the Group's marketing expenditure. This amendment has no impact on the Group's net cash flows, financial position, total comprehensive income or earnings per share.
IAS 23 (Revised), Borrowing Costs, has removed the option of immediately recognising, as an expense, borrowing costs that relate to assets that take a substantial period of time to get ready for use or sale. The revised standard requires such borrowing costs to be capitalised as part of the cost of the asset. This revised standard has had no impact on the Group's net cash flows, financial position, total comprehensive income or earnings per share.
Amendments to IAS 32, Financial Instruments: Presentation, and IAS 1, Presentation of Financial Statements, relating to puttable financial instruments and obligations arising on liquidation. These amendments have no impact on the Group's net cash flows, financial position, total comprehensive income or earnings per share.
Amendment to IFRS 2, Share-based Payment, clarifies that vesting conditions are service conditions and performance conditions only; other features of a share-based payment are not vesting conditions. It also specifies that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment. This amendment to IFRS 2 has no significant impact on the Group's net cash flows, financial position, total comprehensive income or earnings per share.
IFRIC 13, Customer Loyalty Programmes, addresses accounting by entities that grant loyalty award credits to customers who buy other goods or services, and has no impact on the Group's net cash flows, financial position, total comprehensive income or earnings per share.
2. Segment information
The Group is organised into two core reportable segments: Retail and Wholesale. These segments are determined, as per IFRS 8, Operating Segments, on the basis of those segments whose operating results are regularly reviewed by the Board, which is considered to be the chief operating decision maker.
2.1 Segment revenue and segment result
|
Unaudited 28 weeks ended 15 August 2009 |
Unaudited 28 weeks ended 9 August 2008 |
Audited 53 weeks ended 31 January 2009 |
|||
|
£'000 |
£'000 |
£'000 |
|||
|
Retail segment |
|||||
|
Revenue |
61,335 |
53,349 |
118,237 |
||
|
Cost of sales |
(22,130) |
(18,882) |
(43,505) |
||
|
Gross profit |
39,205 |
34,467 |
74,732 |
||
|
Wholesale segment |
|||||
|
Revenue |
15,286 |
18,267 |
34,424 |
||
|
Cost of sales |
(8,927) |
(10,689) |
(19,790) |
||
|
Gross profit |
6,359 |
7,578 |
14,634 |
||
|
Segment totals |
|||||
|
Revenue |
76,621 |
71,616 |
152,661 |
||
|
Cost of sales |
(31,057) |
(29,571) |
(63,295) |
||
|
Gross profit |
45,564 |
42,045 |
89,366 |
||
2.2. Reconciliation of segment result to profit before tax
|
Unaudited 28 weeks ended 15 August 2009 |
Unaudited 28 weeks ended 9 August 2008 |
Audited 53 weeks ended 31 January 2009 |
|||
|
£'000 |
£'000 |
£'000 |
|||
|
Segment result |
45,564 |
42,045 |
89,366 |
||
|
Operating expenses |
(41,641) |
(37,814) |
(75,948) |
||
|
Impairment losses |
- |
- |
(1,786) |
||
|
Operating profit before other operating income |
3,923 |
4,231 |
11,632 |
||
|
Other operating income |
2,429 |
3,021 |
5,529 |
||
|
Operating profit |
6,352 |
7,252 |
17,161 |
||
|
Net finance expense |
(344) |
90 |
530 |
||
|
Share of profit of jointly controlled entity, net of tax |
23 |
52 |
75 |
||
|
Profit before tax |
6,031 |
7,394 |
17,766 |
||
The majority of other operating income relates to licence income for both 2009 and 2008.
2.3. Segment total assets
|
Unaudited 28 weeks ended 15 August 2009 |
Unaudited 28 weeks ended 9 August 2008 |
Audited 53 weeks ended 31 January 2009 |
|||
|
£'000 |
£'000 |
£'000 |
|||
|
Retail |
67,636 |
68,530 |
75,566 |
||
|
Wholesale |
16,753 |
21,579 |
19,654 |
||
|
Unallocated assets |
1,015 |
505 |
1,128 |
||
|
Total assets |
85,404 |
90,614 |
96,348 |
||
3. Impairment losses
The impairment losses of £1,786,000, recognised in the Group's consolidated financial statements for the 53 weeks ended 31 January 2009, relate to cash-generating units 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.
Full details can be found in the Group's consolidated financial statements as at and for the 53 weeks ended 31 January 2009.
4. Finance income and expenses
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
28 weeks ended 15 August 2009
|
|
28 weeks ended 9 August 2008
|
|
53 weeks
ended 31 January 2009
|
|
|
|
£’000
|
|
£’000
|
|
£’000
|
|
Finance income
|
|
|
|
|
|
|
|
- Interest receivable
|
|
3
|
|
106
|
|
146
|
|
- Foreign exchange gains
|
|
-
|
|
90
|
|
691
|
|
|
|
3
|
|
196
|
|
837
|
|
Finance expenses
|
|
|
|
|
|
|
|
- Interest payable
|
|
(91)
|
|
(106)
|
|
(307)
|
|
- Foreign exchange losses
|
|
(256)
|
|
-
|
|
-
|
|
|
|
(347)
|
|
(106)
|
|
(307)
|
5. Earnings per share
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
28 weeks ended 15 August 2009
|
|
28 weeks ended 9 August 2008
|
|
53 weeks ended 31 January 2009
|
|
|
|
No.
|
|
No.
|
|
No.
|
|
Number of shares:
|
|
|
|
|
|
|
|
Weighted number of ordinary shares outstanding
|
|
41,613,798
|
|
42,383,945
|
|
42,563,397
|
|
Effect of dilutive options
|
|
5,946
|
|
157,189
|
|
7,904
|
|
Weighted number of ordinary shares outstanding – diluted
|
|
41,619,744
|
|
42,541,134
|
|
42,571,301
|
|
|
|
|
|
|
|
|
|
Earnings:
|
|
£’000
|
|
£’000
|
|
£’000
|
|
Profit for the period, basic and diluted
|
|
4,315
|
|
5,271
|
|
12,593
|
|
|
|
|
|
|
|
|
|
Basic earnings per share
|
|
10.4p
|
|
12.4p
|
|
29.6p
|
|
Diluted earnings per share
|
|
10.4p
|
|
12.4p
|
|
29.6p
|
6. Dividends per share
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
28 weeks ended 15 August 2009
|
|
28 weeks ended 9 August 2008
|
|
53 weeks ended 31 January 2009
|
|
|
|
£’000
|
|
£’000
|
|
£’000
|
|
|
|
|
|
|
|
|
|
Final dividend paid for the prior year of 11.4p per ordinary share (2008: 11.4p)
|
|
4,743
|
|
4,799
|
|
4,799
|
|
Interim dividend paid 2009: £Nil (2008: £Nil)
|
|
-
|
|
-
|
|
2,184
|
|
|
|
4,743
|
|
4,799
|
|
6,983
|
|
|
|
|
|
|
|
|
The Board has declared an interim dividend of 5.25p per share (2008: 5.25p) payable on 27 November 2009 to shareholders on the register at the close of business on 23 October 2009.
7. Income tax expense
The Group's consolidated effective tax rate in respect of continuing operations for the 28 weeks ended 15 August 2009 was 29.0% (28 weeks ended 9 August 2008: 29.0%, 53 weeks ended 31 January 2009: 29.3%).
The factors affecting the tax charge for the Group remain broadly consistent with the prior period and we expect the Group's consolidated effective rate to remain at around 29%.
8. Share based payments
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 up to 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 grant made during the 28 weeks ended 15 August 2009 are as follows:
|
Grant date |
Type of award |
Number of shares |
Vesting conditions |
Vesting period |
|
15 May 2009 |
Share option |
29,641 |
None |
100% after three years |
|
15 May 2009 |
Share option |
109,245 |
None |
100% after five years |
The basis of measuring fair value is consistent with that disclosed in the consolidated financial statements for the 53 weeks ended 31 January 2009. The range of inputs into the Black-Scholes model were as follows:
|
At 15 August 2009 |
|
|
Share price |
303.0p |
|
Exercise price |
303.0p |
|
Risk free interest rate |
2.17% - 2.77% |
|
Expected life of options |
3 - 5 years |
|
Share price volatility |
26.1% - 27.1% |
|
Dividend yield |
4.62% |
Value Creation Plan
The award of units is made under the Ted Baker 2009 Value Creation Plan ("2009 VCP"), which was approved by shareholders at the General Meeting held on 16 June 2009. 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. Further details of the plan are outlined in the notice of meeting dated 13 May 2009.
The terms and conditions of the award of units granted under the 2009 VCP during the 28 weeks ended 15 August 2009 are as follows:
|
Grant date |
Type of award |
Number of units |
Vesting conditions |
Vesting period |
|
13 August 2009 |
Award of units |
100,000 |
Growth in earnings per share, share price and total shareholder return over a three year performance period |
50% after three years and the balance one year later |
9. Reconciliation of cash and cash equivalents per balance sheet to the cash flow statement
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
28 weeks
ended 15 August 2009
|
|
28 weeks
ended 9 August 2008
|
|
53 weeks ended 31 January 2009
|
|
|
£’000
|
|
£’000
|
|
£’000
|
|
|
|
|
|
|
|
|
Cash and cash equivalents per balance sheet
|
2,229
|
|
6,413
|
|
4,660
|
|
Bank overdraft
|
(1,500)
|
|
(7,312)
|
|
-
|
|
Cash and cash equivalents per cash flow statement
|
729
|
|
(899)
|
|
4,660
|
|
|
|
|
|
|
|
10. Treasury shares
The Company acquired nil treasury shares (2008: 500,000) and disposed of 13,823 treasury shares (2008: 133,404) in the 28 weeks ended 15 August 2009.
11. Related Parties
The Company has a related party relationship with its directors and executive officers.
Directors of the Company and their immediate relatives control 41% of the voting shares of the Company.
At 15 August 2009, the main trading company owed the parent company £9,249,000 (9 August 2008: £9,281,000, 31 January 2009: £9,149,000). The main trading company was owed £11,040,000 (9 August 2008: £14,718,000, 31 January 2009: £10,873,000) 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. As at 15 August 2009, the joint venture owed £117,000 to the main trading company (9 August 2008: £42,000, 31 January 2009: £139,000). The value of sales made to the joint venture by the Group was £115,000 in the period to 15 August 2009 (9 August 2008: £104,000, 31 January 2009: £280,000).
12. Principal risks and uncertainties
The current unprecedented 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 has taken, and will continue to take, the necessary actions to recognise and deal with these challenges.
In September 2008, having considered the trends envisaged for 2009, the Board took actions to reduce costs and commitments in line with these trends. This activity covered all aspects of our business and continues to be monitored and adjusted in light of the changing environment.
There are a number of risks and uncertainties that face the Group, which are monitored by the Risk Committee and are detailed in the Group's consolidated financial statements as at and for the 53 weeks ended 31 January 2009.
Responsibility statement of the directors in respect of the interim financial statements
We, the directors of the Company, confirm that to the best of our knowledge:
|
(a) |
The condensed set of financial statements has been prepared in accordance with IAS 34 as adopted by the EU; |
|
(b) |
The interim management report includes a fair review of the information required by DTR 4.2.7R, being an indication of important events that have occurred during the first 28 weeks of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining 24 weeks of the financial year; and |
|
(c) |
The interim management report includes a fair review of the information required by DTR 4.2.8R, being related party transactions that have taken place in the first 28 weeks of the financial year and that have materially affected the financial position or performance of the Company during that period, and any changes in the related party transactions described in the last annual report that could do so. |
By order of the Board
|
R S Kelvin |
L D Page |
|
Chief Executive |
Finance Director |
|
8 October 2009 |
8 October 2009 |
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 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 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 15 August 2009 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 15 August 2009 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
For and on behalf of KPMG Audit Plc
Chartered Accountants
8 Salisbury SquareLondonEC4Y 8BB 8 October 2009
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