4th Oct 2007 07:01
Ted Baker PLC04 October 2007 4 October 2007 Ted Baker PLC Interim Results for the 28 weeks ended 11 August 2007 Highlights • Further growth driven by the strength of the Ted Baker brand and multi-channel distribution strategy • Profit before tax unchanged but slightly ahead of our expectations due to shift in profit phasing from first half to second half • Strong performance across the retail division - sales up 15.1% to £45.4m • Wholesale sales down 4.1% to £20.8m as previously anticipated • Strong growth in licence income, up 27.8% to £2.3m • Initial response to our Autumn/Winter collections has been very positive. Retail sales for the first seven weeks were 12.5% ahead of the same period last year 28 weeks ended 11 28 weeks ended 12 Growth 52 weeks ended 27 January 07 August 07 August 06 Group Revenue £66.2m £61.1m 8.3% £125.6mProfit Before Tax £7.0m £7.0m 0.7% £20.0mBasic EPS 11.5p 11.4p 0.9% 33.9pInterim Dividend 5.0p 4.3p 16.3% 14.6p Commenting, Ray Kelvin, Founder and Chief Executive, said: "I am delighted to report another excellent performance for the Group as TedBaker's attention to detail and high product quality continues to drive thegrowth of the brand. The initial response to our Autumn/Winter collections has been very positive andwe remain dedicated to the careful international expansion of the brand, throughour multi-channel distribution strategy. The Board is confident in the outcome for 2007 and looks forward to the futurewith confidence." Enquiries: Ted Baker PLC Tel: 020 7796 4133 on 4 October 2007 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 Renowned for his quirky sense of humour and close attention to detail, Ted Bakerhas grown steadily since his beginnings as a shirt specialist in Glasgow back in1988. In fact, today Ted Baker is a global lifestyle brand that distributesthrough its own retail outlets, leading department stores and key independentsthroughout Europe, USA, Middle East and Asia. Or as the man himself prefers toput it, 'No Ordinary Designer Label.' Using three distinct channels of distribution - retail, wholesale and licensing- Ted's pursued a policy of considered brand management by: extending thebreadth of his collections; controlling distribution channels; and developinghis presence within key markets. An approach that's seen his offering and reachexpand considerably without the essence of the brand being diluted. His menswear collections blend the finest traditions of English tailoring withcontemporary styling. What's more from the limited edition Global range toEndurance - a fusion of traditional tailoring with 21st century technology andhigh performance fabrics - and his mainline collection, featuring denim, casualshirts, contemporary suiting, underwear and accessories, he offers something forevery occasion. Elegant and feminine, Ted's womenswear collections are equally as impressive.Spanning dresses, tailoring, jersey, denim, directional knitwear andaccessories, they offer a complete Ted to toe look. The youngest members ofsociety haven't been forgotten either. Ted's childrenswear features an array ofeveryday and occasion wear for discerning girls and boys from newborn to sixteenyear olds. Expanding his offering even further, fragrances, footwear, eyewear, watches andlingerie are developed and distributed through licencees - under Ted's watchfuleye of course. A diffusion childrenswear collection and mobile phone range areamongst his latest brand licensing projects. Visit Ted's new e-commerce site at www.tedbaker.com CHAIRMAN'S STATEMENT I am pleased to report another good trading period for the Group. Growth hasonce again been driven by the strength of our brand and by our multi-channeldistribution strategy. As announced in our interim management statement, above average growth in ourretail and licence divisions, together with challenges for our wholesaledivision have resulted in a change in profit phasing from the first half to thesecond half of the financial year. Our retail and licence divisions have performed strongly with retail salesincreasing by 15.1% and licence income increasing by 27.8%. As expected, ourwholesale business was below last year, down 4.1%. Whilst market conditions haveaffected some of our wholesale customers, many areas of our wholesale businesshave performed well. As a result, profit before tax for the Group was in linewith last year and has slightly exceeded our expectations. FINANCIAL RESULTS Group revenue increased by 8.3% to £66.2m (2006: £61.1m) for the 28 weeks ended11 August 2007 and the composite gross margin was broadly in line with last yearat 56.6%. Operating expenses rose by 11.6% to £32.7m (2006: £29.3m). Distribution costs,which include the cost of retail stores, outlets and concessions increased by14.3% to £23.6m (2006: £20.6m). As a proportion of retail turnover, distributioncosts remained in line with the previous year. Administrative expenses increasedby 5.2% to £9.2m (2006: £8.7m). Operating profit was up 1.8% at £7.1m (2006: £7.0m). Profit before tax for theperiod was unchanged at £7.0m (2006: £7.0m). Basic earnings per share increasedby 0.9% to 11.5p (2006: 11.4p). We recorded a net cash decrease in the period of £16.4m (2006: £3.0m). Financingactivities were £8.8m higher than last year reflecting an increased dividend andthe purchase of own shares (£4.9m), whilst the comparative figure includedproceeds from the sale of own shares. An additional £1.9m of capitalexpenditure due to new store openings and refurbishment and increased workingcapital of £4.3m compared to last year was offset by lower income taxes paid.The increase in working capital reflected growth in the level of the businessand the timing of payments and receipts which will unwind by the year-end. DIVIDENDS The Board has declared an increased interim dividend of 5.0p per share (2006:4.3p) payable on the 30 November 2007 to shareholders on the register at theclose of business on 2 November 2007. This reflects our more progressivedividend policy as announced in our preliminary statement. GLOBAL GROUP PERFORMANCE We continue to focus on the careful global expansion of the Ted Baker brandthrough our multi-channel distribution strategy. Quality, design and attention to detail are the key strengths of the brand andwe remain focused on these areas. These strengths underpin Ted Baker's cultureand are evident across our products, stores and working environments and wecontinue to maintain close control of our brand as we expand. RETAIL The retail division delivered a particularly strong performance with sales up15.1% to £45.4m (2006: £39.4m). The retail gross margin was 64.9% compared to64.3% for the same period last year. Average retail square footage increased by 6.4% to 152,249 sq.ft. (2006: 143,076sq.ft.) as we expanded our retail space both in the UK and overseas. Sales persquare foot increased by 8.0% to £298 (2006: £276) reflecting a positivereaction to our Spring/Summer collections as well as the increasing maturity ofour newer space and overseas stores. WHOLESALE Wholesale sales were 4.1% below last year at £20.8m (2006: £21.7m). This wasaffected by the challenging conditions faced by some of our trustees in certainproduct categories, the transfer of some wholesale trustee accounts to retailconcessions and the action we have taken in respect of certain wholesalecustomers who were no longer appropriate for our brand. The reduction in wholesale sales was mitigated by the growth in productssupplied to our licence partners, albeit, at lower margins. Although gross margins were lower at 38.4% (2006: 42.3%), reflecting theincreased sales to our retail licence partners in the Middle East and Asia,underlying gross margins on sales to trustees were broadly in line with theprevious year. We continue to monitor the profile of our wholesale customers to ensure that itremains appropriate to our brand. LICENCE INCOME Ted Baker operates two types of licences: territorial licences covering NorthAmerica, the Middle East, Asia, Australia and New Zealand; and product licencescovering, eyewear, perfume & fragrance, watches, lingerie and footwear. Licence income for the period was up 27.8% to £2.3m (2006: £1.8m) and we areparticularly pleased with the performances of our sunglasses and ophthalmiclicencee and our perfume and fragrance licencee, both of whom delivered stronggrowth. Licence income in the period includes a contribution from the retail licenceagreements signed in 2006 with RSH Limited and Li and Fung Group of Companies. COLLECTIONS Ted Baker Menswear enjoyed good growth for the period with sales up 7.0% to£36.4m (2006: £34.0m). Menswear represented 55.0% of sales (2006: 55.7%). Ted Baker Womenswear delivered a strong performance with sales up 10.7% to£26.9m (2006: £24.3m) and represented 40.6% of our total sales (2006: 39.8%). Sales of other collections comprising Childrenswear and Footwear wereencouraging at £2.9m (2006: £2.8m). These collections represented 4.4% of ourtotal sales (2006: 4.5%). UNITED KINGDOM & EUROPE Our UK & Europe retail division performed strongly in the period with sales up15.8% to £40.6m (2006: £35.1m). Average square footage rose by 6.0% over the period to 127,793 sq.ft. (2006:120,548 sq.ft.). At 11 August 2007, total retail square footage was 128,069sq.ft. (2006: 119,956 sq.ft.), representing an increase of 6.8%. Retail salesper square foot increased 9.3% from £291 to £318. In April we were delighted to announce the launch of a standalone womenswearstore in Langley Court, Covent Garden. We have been pleased with the performanceof the store and will continue to assess opportunities to open furtherstandalone womenswear stores, as and when appropriate. During the period we alsoopened a store in Gatwick North and two concessions in leading departmentstores. At 11 August 2007, we operated 22 stores (2006: 20), 77 concessions (2006: 69)and 8 outlet stores (2006: 8). US Our US retail division has again performed strongly in the period. Salesincreased by 20.9% to $9.6m against $7.9m last year, which in Sterling wasequivalent to sales up 10.1% to £4.8m (2006: £4.4m) reflecting the weakness ofthe dollar in this period. We now have seven stores across the United States andcontinue to develop the business and consider further opportunities forexpansion. Average square footage rose by 8.6% over the period to 24,456 sq.ft. (2006:22,528 sq.ft.). At 11 August 2007, total retail square footage was in line withlast year at 24,456 sq.ft. MIDDLE EAST & ASIA We continue to develop our brand across the Middle East and Asia through ourterritorial licence agreements with RSH Limited and Li and Fung Group ofCompanies. During the period we opened four stores, in Dubai, Malaysia, Taiwan andSingapore, bringing the total number of stores opened in the Middle East andAsia to 10 since October 2006. The stores are designed by our in-house design teams and we work closely withour partners to manage the visual merchandising of the stores and the trainingof the teams to ensure the stores reflect the Ted Baker ethos and culture. CURRENT TRADING AND OUTLOOK We are pleased to report that we have received a very positive reaction from ourcustomers to our new Autumn/Winter collections. Retail In the seven weeks to 29 September 2007 retail sales were 12.5% ahead of thesame period last year. Average retail square footage increased by 6.0% over thesame period. Since the period-end, we have opened a store in Dublin and performance to datehas been excellent. We also opened our first store in Melbourne, Australiathrough a joint venture with our licence partner in the territory and theinitial reaction has been encouraging. We plan to open stores in the second half of the financial year in Brighton (UK)and Aventura Mall, Florida (US). Wholesale In the seven weeks to 29 September 2007, wholesale sales were 5.3% below thesame period last year. We anticipate an improvement in the second half andexpect wholesale sales for the full year to be slightly below last year. Licence Income Our retail licencees in the Middle East and Asia have also opened three newstores in Taiwan, Hong Kong and Malaysia and further licenced stores are plannedin the second half of the financial year. We have launched a licenced childrenswear collection exclusive to Debenhamscalled Baker by Ted Baker in 69 Debenhams stores in the UK and Ireland and weare extremely pleased with progress to date. This launch complements our wellestablished premium mainline childrenswear collection already available atselected Ted Baker stores. I am delighted to announce that we are collaborating with The Carphone WarehouseGroup ("CWG") to launch two Ted Baker branded mobile phones next month. Thefirst phone is designed in conjunction with Samsung Electronics, the second withHigh Tech Computer Corporation. This is a natural extension of the Ted Bakerbrand as mobile phones are increasingly becoming fashion accessories, to whichwe can add our unique creative flair. The phones will be available exclusivelythrough CWG's store network in the UK and Europe and through CWG's websites. While as always, the Group results for the full year will be dependent ontrading in the second half of the financial year, the Board remains confident inthe outcome for 2007 and looks forward to the future with confidence. Group Income StatementFor the 28 weeks ended 11 August 2007 Unaudited 28 Unaudited 28 Audited weeks weeks 52 weeks ended ended ended 11 August 12 August 27 January Note 2007 2006 2007 £'000 £'000 £'000 Revenue 2 66,210 61,126 125,648Cost of sales (28,741) (26,598) (51,986) Gross profit 2 37,469 34,528 73,662 Distribution costs (23,565) (20,619) (41,404)Administrative expenses (9,169) (8,714) (16,645)Other operating income 2,375 1,790 4,436 Operating profit 2 7,110 6,985 20,049Finance income 2, 3 66 73 192Finance expenses 2, 3 (161) (95) (191) Profit before tax 2 7,015 6,963 20,050Income tax expense 6 (2,174) (2,158) (5,634) Profit for the period 4,841 4,805 14,416 Attributable to:Equity shareholders of the parent company 4,838 4,831 14,421Minority interests 3 (26) (5) Profit for the period 4,841 4,805 14,416 Earnings per share 4Basic 11.5p 11.4p 33.9pDiluted 11.4p 11.3p 33.6p Dividends 5 Paid in period 4,322 3,501 5,335Paid in period (pence per share) 10.3 8.2 12.5Proposed 2,108 1,834 4,394Proposed (pence per share) 5.0 4.3 10.3 Group Statement of Changes in Equity - UnauditedFor the 28 weeks ended 11 August 2007 Total Equity attributable to equity Available shareholders Share Share for sale Hedging Translation Retained of the parent Minority Total capital premium reserve reserve reserve earnings company Interests equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 27 January 2007 2,160 8,028 - (90) (493) 41,733 51,338 (57) 51,281 Share option charge - - - - - 138 138 - 138Movement of current/ deferred tax on shareoptions - - - - - 2 2 - 2 Purchase of own shares for cancellation (netof sale of own shares) - - - - - (4,082) (4,082) - (4,082)Amounts from hedge reserve recycled tothe income statement - - - 398 - - 398 - 398Effective portion of changes in fair valueof cash flow hedges - - - (1,138) - - (1,138) - (1,138)Exchange rate movement - - - - (146) - (146) - (146)Profit for the period - - - - - 4,838 4,838 3 4,841Movement in respect of own shares - - - - - (776) (776) - (776)Dividends paid - - - - - (4,322) (4,322) - (4,322)Balance at 11 August 2007 2,160 8,028 - (830) (639) 37,531 46,250 (54) 46,196 Total Equity attributable to equity Available shareholders Share Share for sale Hedging Translation Retained of the parent Minority Total capital premium reserve reserve reserve earnings company Interests equity £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 28 January 2006 2,149 6,983 176 (7) 12 32,911 42,224 (52) 42,172 Share option credit - - - - - (8) (8) - (8)Movement of current/deferredtax on share options - - - - - (181) (181) - (181)Change in fair value - - (176) - - - (176) - (176)Amounts from hedge reserverecycled to theincome statement - - - 104 - - 104 - 104Effective portion ofchanges in fairvalue of cashflow hedges - - - (334) - - (334) - (334)Exchange rate movement - - - - (303) - (303) - (303)Profit for the period - - - - - 4,831 4,831 (26) 4,805Shares issued 11 1,045 - - - - 1,056 - 1,056Movement in respect of ownshares - - - - - (3,977) (3,977) - (3,977)Purchase of own shares forcancellation(net of sale ofown shares) - - - - - 5,155 5,155 - 5,155Disposal of own shares - - - - - 935 935 - 935Dividends paid - - - - - (3,501) (3,501) - (3,501)Balance at 12 August 2006 2,160 8,028 - (237) (291) 36,165 45,825 (78) 45,747 Group Balance SheetAt 11 August 2007 Note Unaudited Unaudited Audited 11 August 2007 12 August 2006 27 January 2007 £'000 £'000 £'000Non-current assets Intangible assets 496 493 482Property, plant and equipment 21,056 18,771 19,209Deferred tax assets 481 - 525 22,033 19,264 20,216Current assets Inventories 29,660 26,986 27,825Trade and other receivables 17,899 14,944 11,843Derivative financial assets - 7 216Cash and cash equivalents 8 5,780 6,801 13,513 53,339 48,738 53,397Current liabilities Trade and other payables (15,020) (18,362) (16,714)Bank overdraft 8 (8,889) (282) -Current tax payable (3,543) (3,067) (5,268)Derivative financial liabilities (890) (266) (307) (28,342) (21,977) (22,289) Non-current liabilitiesDeferred tax liabilities (834) (278) (43) (834) (278) (43)Total liabilities (29,176) (22,255) (22,332) Net assets 46,196 45,747 51,281 Equity Share capital 2,160 2,160 2,160Share premium account 8,028 8,028 8,028Other reserves (1,469) (528) (583)Retained earnings 37,531 36,165 41,733Total equity attributable to equity 46,250 45,825 51,338shareholders of the parent companyMinority interests (54) (78) (57)Total equity 46,196 45,747 51,281 Group Cash Flow StatementFor the 28 weeks ended 11 August 2007 Note Unaudited Unaudited Audited 28 weeks ended 28 weeks ended 52 weeks ended 11 August 12 August 27 January 2007 2006 2007 £'000 £'000 £'000 Profit for the period 4,841 4,805 14,416Adjusted for:Income tax expense 2,174 2,158 5,634Depreciation 2,492 2,185 3,981Loss on disposal of property, plant & equipment 83 44 63Share option charge / (credit) 138 (8) 332Net finance gains / (losses) 72 (63) (125)Change in hedge reserve (740) (230) (83)Increase in inventories (1,934) (3,745) (4,714)(Increase) / decrease in trade and other receivables (5,603) (2,370) 903(Decrease) / increase in trade and other payables (2,689) 167 (554)Cash generated from operations (1,166) 2,943 19,853 Interest paid (74) (12) (64)Income taxes paid (1,556) (3,112) (5,873)Net cash generated from operating activities (2,796) (181) 13,916 Cash flow from investing activities Purchases of property, plant & equipment (4,480) (2,588) (4,970)Proceeds from sale of property, plant & equipment - - 26Interest received 85 58 164Net cash from investing activities (4,395) (2,530) (4,780) Cash flow from financing activities Proceeds from issue of ordinary shares - 1,056 1,056Purchase of own shares 10 (4,936) (752) (3,438)Sale of own shares 854 5,907 5,907Shares vested (776) (3,042) (3,042) Loan repayment - - (750)Dividends paid 5 (4,322) (3,501) (5,335)Net cash from financing activities (9,180) (332) (5,602) Net (decrease) / increase in cash and cash (16,371) (3,043) 3,534equivalents Cash and cash equivalents at 27 January 2007 13,513 10,068 10,068Loan repayment - - 750Exchange rate movement (251) (506) (839)Cash and cash equivalents at 11 August 2007 8 (3,109) 6,519 13,513 Notes to the Interim Financial StatementsFor the 28 weeks ended 11 August 2007 1. Basis of preparation a. Reporting entity Ted Baker PLC is a company domiciled in the United Kingdom. The condensedhalf-yearly financial statements of the Group as at and for the 28 weeks ended11 August 2007 comprise the Group and its subsidiaries (together referred to asthe "Group"). The group financial statements as at and for the 52 weeks ended 27 January 2007are available upon request from the Company's registered office at Ted BakerPLC, The Ugly Brown Building, 6a St Pancras Way, London NW1 0TB or atwww.tedbaker.com. b. Statement of compliance These condensed group half-yearly financial statements have been prepared inaccordance with "IAS 34 Interim Financial Reporting" as adopted by the EU andthe requirements of the Disclosures and Transparency Rules. They do not includeall of the information required for full annual financial statements and shouldbe read in conjunction with the group financial statements as at and for the 52weeks ended 27 January 2007. These condensed group half-yearly financialstatements were approved by the Board of Directors on 4 October 2007. The comparative figures for the 52 weeks ended 27 January 2007 are not theCompany's statutory accounts for that financial year. Those accounts have beenreported on by the Company's auditors and delivered to the registrar ofcompanies. The report of the auditors was (i) unqualified; (ii) did not includea reference to any matters to which the auditors drew attention by way ofemphasis without qualifying their report; and (iii) did not contain a statementunder section 237(2) or (3) of the Companies Act 1985. The results for each half year have not been audited but have been reviewed bythe auditors in accordance with the Auditing Practices Board guidance on Reviewof Interim Financial Information. c. Significant accounting policies The accounting policies applied by the Group in these condensed grouphalf-yearly financial statements are the same as those applied by the Group inits group financial statements for the 52 weeks ended 27 January 2007 exceptthat "IFRS 7 Financial Instruments: Disclosures" has been adopted in the currentyear. 2. Segment information 28 weeks ended 11 August 2007 - Unaudited Retail Wholesale Total £'000 £'000 £'000 Revenue 45,421 20,789 66,210Cost of sales (15,945) (12,796) (28,741)Gross profit 29,476 7,993 37,469Operating costs (27,031) (5,703) (32,734)Operating contribution 2,445 2,290 4,735Other operating income 2,375Operating profit 7,110Net finance expenses (95)Profit before tax 7,015 Total assets 51,864 23,508 75,372Total liabilities (20,015) (9,161) (29,176) 31,849 14,347 46,196 Capital expenditure 4,188 294 4,482Depreciation 2,328 164 2,492 28 weeks ended 12 August 2006 - Unaudited Retail Wholesale Total £'000 £'000 £'000 Revenue 39,448 21,678 61,126Cost of sales (14,089) (12,509) (26,598)Gross profit 25,359 9,169 34,528Operating costs (23,566) (5,767) (29,333)Operating contribution 1,793 3,402 5,195Other operating income 1,790Operating profit 6,985Net finance expenses (22)Profit before tax 6,963 Total assets 44,484 23,518 68,002Total liabilities (14,362) (7,893) (22,255) 30,122 15,625 45,747 Capital expenditure 2,345 203 2,548Depreciation 2,011 174 2,185 52 weeks ended 27 January 2007 - Audited Retail Wholesale Total £'000 £'000 £'000 Revenue 89,187 36,461 125,648Cost of sales (31,173) (20,813) (51,986)Gross profit 58,014 15,648 73,662Operating costs (48,054) (9,995) (58,049)Operating contribution 9,960 5,653 15,613Other operating income 4,436Operating profit 20,049Net finance income 1Profit before tax 20,050 Total assets 53,095 20,518 73,613Total liabilities (15,852) (6,480) (22,332) 37,243 14,038 51,281 Capital expenditure 4,603 318 4,921Depreciation 3,724 257 3,981 3. Finance income and expenses Unaudited Unaudited Audited 28 weeks ended 28 weeks ended 52 weeks ended 11 August 2007 12 August 2006 27 January 2007 £'000 £'000 £'000Finance income- Interest receivable 66 73 192 66 73 192Finance expenses- Interest payable (138) (10) (67)- Exchange rate movement (23) (85) (124) (161) (95) (191) 4. Earnings per share Unaudited Unaudited Audited 28 weeks ended 28 weeks ended 52 weeks ended 11 August 2007 12 August 2006 27 January 2007 No. No. No.Number of shares:Weighted number of ordinary shares outstanding 42,151,897 42,451,893 42,594,516Effect of dilutive options 269,329 223,064 320,881Weighted number of ordinary shares outstanding- diluted 42,421,226 42,674,957 42,915,397 Earnings: £'000 £'000 £'000Profit for the period, basic and diluted 4,838 4,831 14,421 Basic earnings per share 11.5p 11.4p 33.9pDiluted earnings per share 11.4p 11.3p 33.6p 5. Dividends per share Unaudited Unaudited Audited 28 weeks ended 28 weeks ended 52 weeks ended 27 11 August 2007 12 August 2006 January 2007 £'000 £'000 £'000 Final dividend paid for the prior year of 10.3p 4,322 3,501 3,501per ordinary share (2006: 8.2p)Interim dividend paid 2007: £Nil (2006: £Nil) - - 1,834 4,322 3,501 5,335 The Board has declared an interim dividend of 5.0p per share (2006: 4.3p)payable on the 30 November 2007 to shareholders on the register at the close ofbusiness on 2 November 2007. 6. Income tax expense The Group's consolidated effective tax rate in respect of continuing operationsfor the 28 weeks ended 11 August 2007 was 31.0%, which is consistent with therate for the 28 weeks ended 12 August 2006 (52 weeks ended 27 January 2007:28.1%). The lower rate for the 52 weeks ended 27 January 2007 was due to a deferred taxadjustment on the recognition of tax losses in overseas subsidiaries. Theunderlying effective rate was 30.9%. The reduction in the UK rate of income tax from 30% to 28% enacted in the 2007Finance Act is due to become effective in April 2008. The impact of this is notconsidered to be significant for the effective Group rate for the 28 weeks ended11 August 2007. 7. Share based payments Equity settled awards are granted to employees in the form of share options orshare awards. Share options are granted at an option price equal to the Companyshare price at the grant date, or at a discount of up to 20% in the case of SAYEshare options. No consideration is payable when share awards vest. The vestingperiod is generally between three and five years and share options expirebetween seven and ten years after grant. Awards will also expire if the employeeleaves the Group prior to the vesting date. The terms and conditions of the grant made during the 28 weeks ended 11 August2007 are as follows: Grant date Type of award Number of shares Vesting conditions Vesting period23 March 2007 Share award 139,515 Growth in earnings per 50% after three years share over three and the balance one year accounting periods later The range of inputs into the Black-Scholes model were as follows: At 11 August 2007 Share price 611.50pExercise price 0Risk free interest rate 5.29%Expected life of awards 3-4 YearsShare price volatility 20.9% - 22.5%Dividend yield 2.96% The basis of measuring fair value is consistent with that disclosed in theconsolidated financial statements for the 52 weeks ended 27 January 2007. 8. Reconciliation of cash and cash equivalents per balance sheet to thecash flow statement Unaudited Unaudited Audited 28 weeks 28 weeks 52 weeks ended ended 11 August ended 12 August 27 January 2007 2006 2007 £'000 £'000 £'000 Cash and cash equivalents per balance sheet 5,780 6,801 13,513Bank overdraft (8,889) (282) -Cash and cash equivalents per cash flow (3,109) 6,519 13,513statement 9. 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. 10. Share capital The Company acquired 830,807 treasury shares (2006: 150,000) and disposed of149,205 treasury shares (2006: 1,160,000) in the 28 weeks ended 11 August 2007. 11. Related Parties The Company has a related party relationship with its directors and executiveofficers. Directors of the Company and their immediate relatives control 40.1 per cent ofthe voting shares of the Company. At 11 August 2007, the main trading company owed the parent company £7,815,000(12 August 2006: £9,202,000, 27 January 2007: £9,757,000). The main tradingcompany was owed £12,012,000 (12 August 2006: £9,626,000, 27 January 2007:£10,779,000) from the other subsidiaries within the Group. Transactions between subsidiaries were priced on an arms length basis. Responsibility statement of the directors in respect of the half-yearlyfinancial report We, the directors of the Company, confirm that to the best of our knowledge: (a) The condensed set of financial statements has been prepared inaccordance with IAS 34 Interim Financial Reporting as adopted by the EU; (b) The interim management report includes a fair review of the informationrequired by DTR 4.2.7R, being an indication of important events that haveoccurred during the first 28 weeks of the financial year and their impact on thecondensed set of financial statements and a description of the principal risksand uncertainties for the remaining 24 weeks of the year; and (c) The interim management report includes a fair review of the informationrequired by DTR 4.2.8R, being disclosure of related party transactions andchanges therein since the last annual report. By order of the Board R S Kelvin L D PageChief Executive Finance Director 4 October 2007 4 October 2007 Independent Review Report to Ted Baker PLC Introduction We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the 28 weeks ended 11 August2007 which comprises the Group Income Statement, the Group Statement of Changesin Equity, the Group Balance Sheet, the Group Cash Flow Statement and therelated explanatory notes. We have read the other information contained in thehalf-yearly financial report and considered whether it contains any apparentmisstatements or material inconsistencies with the information in the condensedset of financial statements. This report is made solely to the company in accordance with the terms of ourengagement to assist the company in meeting the requirements of the Disclosureand 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 thecompany those matters we are required to state to it in this report and for noother purpose. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the company for our review work, forthis report, or for the conclusions we have reached. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the DTR of the UK FSA. As disclosed in note 1, the annual financial statements of the group areprepared in accordance with IFRSs as adopted by the EU. The condensed set offinancial statements included in this half-yearly financial report has beenprepared in accordance with IAS 34 Interim Financial Reporting as adopted by theEU. Our responsibility Our responsibility is to express to the company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410 Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity issued by the AuditingPractices Board for use in the UK. A review of interim financial informationconsists of making enquiries, primarily of persons responsible for financial andaccounting matters, and applying analytical and other review procedures. Areview is substantially less in scope than an audit conducted in accordance withInternational Standards on Auditing (UK and Ireland) and consequently does notenable us to obtain assurance that we would become aware of all significantmatters that might be identified in an audit. Accordingly, we do not express anaudit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the 28 weeks ended 11 August 2007 is not prepared, in all materialrespects, in accordance with IAS 34 as adopted by the EU and the DTR of the UKFSA. KPMG Audit PlcChartered Accountants8 Salisbury SquareLondonEC4Y 8BB4 October 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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