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MUL Mulberry Group Plc

97.50
-5.00 (-4.88%)
Last Updated: 10:45:22
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Mulberry Group Plc LSE:MUL London Ordinary Share GB0006094303 ORD 5P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -5.00 -4.88% 97.50 90.00 105.00 105.00 97.50 102.50 9,755 10:45:22
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Apparel & Accessories, Nec 159.13M 13.24M 0.2204 4.42 58.58M

Mulberry Group PLC Preliminary Results (0052I)

14/06/2017 7:00am

UK Regulatory


Mulberry (LSE:MUL)
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TIDMMUL

RNS Number : 0052I

Mulberry Group PLC

14 June 2017

Mulberry Group plc

Preliminary results for the year ended 31 March 2017

Continued growth, international development and product investment

Mulberry Group plc ("the Group" or "Mulberry"), the British luxury brand, announces results for the year ended 31 March 2017.

FINANCIAL HIGHLIGHTS

   --      Total revenue up 8% to GBP168.1 million (2016: GBP155.9 million) 
   --      Profit before tax up 21% to GBP7.5 million (2016: GBP6.2 million) 
   --      Cash of GBP21.1 million at the end of the period (2016: GBP14.0 million) 
   --      Inventory reduced to GBP42.8 million (2016: GBP44.4 million) 

OPERATING HIGHLIGHTS

-- Retail sales (including Digital) up 8% to GBP128.3 million (2016: GBP118.7 million) with like-for-like up 5%

-- Revenue from Digital channels increased by 19% to represent 15% of Group revenue (2016: 14%) with localised mulberry.com sites introduced in China and Korea

-- Establishment of Mulberry (Asia) Limited ("Mulberry Asia"), a majority-owned entity, to develop the brand in China, Hong Kong and Taiwan

-- New products introduced under the creative direction of Johnny Coca, including the new Zipped Bayswater, continue to gain momentum

CURRENT TRADING

   --      New Retail stores opened in Shanghai during April 2017 and in Hong Kong during May 2017 
   --      Retail like-for-like sales (including Digital) up 1% for the 10 weeks to 3 June 2017 

THIERRY ANDRETTA, CHIEF EXECUTIVE OFFICER, COMMENTED:

"During the year we have made good progress. Our sales and profits are growing, enhancing our strong cash position.

We have advanced our international growth strategy with a new partnership in Asia and the continued expansion of our omni-channel offer in key markets.

We have generated strong creative momentum with new products that are well received by our existing and new customers.

Looking ahead, we will continue to invest in advancing our international development and increasing Mulberry's relevance to our customers' rapidly evolving lifestyle."

FOR FURTHER DETAILS PLEASE CONTACT:

Bell Pottinger

Daniel de Belder / Elizabeth Snow 07977 927142 / 020 3772 2582

Mulberry Investor Relations

Allegra Perry 020 7605 6795

GCA Altium

Sam Fuller / Tim Richardson 020 7484 4040

Barclays

Nicola Tennent / Thomas Dugarin 020 3134 9801

BUSINESS REVIEW

Sales

Total revenue grew by 8% to GBP168.1 million (2016: GBP155.9 million). Key elements of this growth have been: 1) Product launches, 2) Retail, Digital and Omni-channel enhancement, and 3) Selective Wholesale.

1) Product launches

During the year, a significant number of new products were launched under the creative direction of Johnny Coca. The Zipped Bayswater bag has become an immediate bestseller since its launch during October 2016 and the family will be further extended in coming seasons. The bag was highlighted during the marketing campaign, "Modern Heritage", which ran during April and May 2017.

2) Retail, Digital and Omni-channel enhancement

Global Digital sales were up 19% to GBP25.5 million for the period (2016: GBP21.4 million), accounting for 15% of Group revenue (2016: 14%). Retail sales (including Digital) were up 8% to GBP128.3 million for the period (2016: GBP118.7 million) with like-for-like sales up 5%.

A number of services were added to the Group's omni-channel offer during the period and local mulberry.com sites were introduced in China and Korea. In the USA, a local distribution centre has been established in order to facilitate local fulfilment.

There were 67 directly operated stores at the end of the period (2016: 67 stores). The network was refined with two key priorities:

   --      UK enhancement: relocation of the Covent Garden and Bicester stores; and 

-- International development: acquisition of the store in Sydney, Australia and through the Mulberry Asia agreement, signed at the end of the financial year, the Group has acquired post year end one store in Hong Kong and in addition will acquire two stores in China, and one concession in Taiwan during the financial year ending March 2018; in North America, two stores were closed, New York (Madison Avenue) and Washington, the digital offer was enhanced and sales commenced to the Nordstrom department store chain.

3) Selective Wholesale

Wholesale revenue, comprising sales to partner stores and selective multi-brand wholesale accounts, increased 7% to GBP39.8 million (2016: GBP37.2 million). The franchise store network at the period end had a total of 52 stores in Asia, Europe and the Middle East (2016: 55 stores). As highlighted above, the four stores acquired by Mulberry Asia will join the Group's own Retail store portfolio during the financial year to March 2018.

The Wholesale sales trend reflects a positive reaction to the new collections. Selective new wholesale accounts were opened in Europe, North America and Asia.

 
                          52 weeks to 31-Mar      52 weeks to 31-Mar      Total change (this      Like-for-like** 
                          2016 (GBP million)      2017 (GBP million)      year vs last year)      change (this year vs 
                                                                                                  last year) 
-----------------------  ----------------------  ----------------------  ----------------------  --------------------- 
 UK Retail Sales*         97.4                    106.8                   +10%                    +5% 
 International Retail 
  Sales*                  21.3                    21.5                    +1%                     +7% 
 Group Retail Sales       118.7                   128.3                   +8%                     +5% 
 Wholesale Sales          37.2                    39.8                    +7%                     n/a 
 Group Total Sales        155.9                   168.1                   +8%                     n/a 
-----------------------  ----------------------  ----------------------  ----------------------  --------------------- 
 
   *   Regional splits include Digital sales 

** LFL is defined as the year-on-year change in sales from stores which have been trading for 12 months after the anniversary of the store opening

Digital sales increased by 19% during the year to 31 March 2017

Financial

Gross margin for the year to 31 March 2017 was 61.6% (2016: 62.0%). After incurring significant production start-up costs due to a large number of new designs introduced during the first six months, production efficiencies returned to normal levels during the second six months of the year. Gross margin reflects a one-off cost of GBP0.6 million relating to the stock repurchase associated with the North Asia acquisition.

Operating expenses (net) for the year increased to GBP96.5 million (2016: GBP90.5 million) primarily due to higher Retail store costs of GBP3.7 million and increased marketing, advertising and promotion costs of GBP1.6 million.

Profit before tax was GBP7.5 million (2016: GBP6.2 million) after accounting for non-recurring costs relating to activities in North Asia (c. GBP0.8 million), adverse currency movements (c. GBP0.5 million) and non-cash store impairments (c. GBP1.1 million).

The tax charge for the year was GBP2.5 million (2016: GBP3.5 million) giving an effective tax rate of 33.8% (2016: 56.8%) following the implementation of a revised transfer pricing policy during the year. The Group expects the effective tax rate to remain at this level in future.

Capital expenditure for the period was GBP5.3 million, including GBP3.2 million related to stores, GBP0.9 million in IT systems and GBP0.6 million in factories.

Inventories decreased to GBP42.8 million at 31 March 2017 from GBP44.4 million at 31 March 2016 reflecting an on-going initiative to reduce inventory levels in the business.

The Group generated cash of GBP7.1 million during the year with cash balances of GBP21.1 million as at 31 March 2017 (2016: GBP14.0 million) and has no debt.

The Board of Mulberry seeks to balance paying dividends to shareholders with investing in the business. The Board remains confident of the medium term outlook and is recommending the payment of a dividend of 5.0p per ordinary share (2016: 5.0p) which will be paid on 23 November 2017 to shareholders on the register at 27 October 2017.

NORTH ASIA

As previously communicated, the Group has created a new entity, Mulberry (Asia) Limited ("Mulberry Asia") with Challice Limited ("Challice") to operate its business in China, Hong Kong and Taiwan. As a result the existing Distribution Agreement with Club 21 for the Asia-Pacific region has been modified to remove Hong Kong, China and Taiwan from Club 21's distribution territory. Challice, which owns c. 56% of the Group's share capital, is under the same ultimate shareholder control as Mulberry's existing distributor in the region, Club 21. The Group owns 60% of the share capital of Mulberry Asia, with Challice holding the remaining 40%. Mulberry Asia commenced trading in Hong Kong during April 2017. A subsidiary in China and a branch office in Taiwan are being formed and are expected to be operational during 2017, once the relevant business licences for those territories have been received. The total share capital of Mulberry Asia is GBP3.2 million (HK$32 million), of which the Group has invested GBP1.9 million (HK$19.2 million).

CURRENT TRADING AND OUTLOOK

Sales

Like-for-like Retail sales (including Digital) were up 1% for the 10 weeks to 3 June 2017. In the UK, like-for-like sales were up 2% and continue to benefit from an increase in tourist spending in London, although domestic demand has been softer. International like-for-like sales show a weakening in non-strategic locations with management continuing to focus on the optimisation of the store network.

 
                   Retail like-for-like sales*                        Retail total sales** 
 This year vs.     26 weeks to      52 weeks to      10 weeks to      26 weeks to      52 weeks to      10 weeks to 
 last year (%)     30-Sep           31-Mar 2017      3-June           30-Sep           31-Mar 2017      3-June 
                   2016                              2017             2016                              2017 
----------------  ---------------  ---------------  ---------------  ---------------  ---------------  --------------- 
 UK Retail***      +7%              +5%              +2%              +12%             +10%             -3% 
 International 
  Retail***        +10%             +7%              -3%              +2%              +1%              0% 
 Group Retail 
  total            +7%              +5%              +1%              +10%             +8%              -3% 
----------------  ---------------  ---------------  ---------------  ---------------  ---------------  --------------- 
 

* LFL is defined as the year-on-year change in sales from stores which have been trading for 12 months after the anniversary of the store opening

** The decline in total sales reflects the shift in timing of the half-yearly UK friends and family event which occurred during April 2016 but took place during March in 2017

*** Regional splits include Digital sales

Digital sales increased by 19% in the year to 31 March 2017 and increased by 23% in the 10 weeks to 3 June 2017

Wholesale

North Asia (Hong Kong, China, Taiwan) will transition from a wholesale account to a Retail subsidiary during the current financial year will reduce the Group's total Wholesale revenue and increase Retail revenue.

International

The Group will continue to invest in advancing its international development during the current financial year.

Mulberry Asia's Hong Kong activities have been operational since 3 April 2017, with activities in China and Taiwan expected to commence during 2017. Since the end of March 2017, the store in Hong Kong has been relocated to an improved location, a pop-up shop has been opened in a prominent Hong Kong shopping mall and a new store has been opened in Shanghai. The Group also plans to relocate the existing store in Beijing to a better location during Summer 2017.

In Europe and North America, the Group continues to focus on improving productivity in existing stores, with limited new store openings and strategic refinement of the store network, as opportunities arise, coupled with further omni-channel enhancements.

Omni-channel

The Group has introduced further enhancements to the Digital and omni-channel offering and will continue to invest in this area going forward.

In Asia, the mulberry.com sites in China and Korea are expected to be fully translated during Summer 2017.

Capital expenditure

A new design concept for the Group's stores is being developed. This will lead to increased capital expenditure as it is rolled out. This is expected to commence during 2018.

Capital expenditure for the full year ending 31 March 2018 is expected to be in the region of GBP7.5 million (2017: GBP5.3 million), of which the majority will be on stores.

STRATEGY

The Board's long term objective is to grow Mulberry as a global luxury brand, offering unique and desirable product at the best value for price, and thereby create shareholder value. The Group considers that revenue growth is the key performance indicator with which this goal can be measured.

Product

Leather goods remain the core commercial focus of the Group. Following the acceleration of new product launches during the financial year ended 31 March 2017, there will continue to be a focus on novelty in coming seasons. This will include the extension of existing bag families into new sizes, as well as the introduction of new bag designs to cover all functions and lifestyles.

Over the longer term, the objective is to reinforce Mulberry as a lifestyle brand by strengthening complementary categories to its core leather goods ranges. The key focus categories are footwear, ready-to-wear, soft accessories and jewellery. As part of the initiative to further develop these relatively new categories, the Group will continue to invest in targeted product development and marketing.

Marketing and Brand

Mulberry continues to invest in building the brand globally via a dynamic marketing and communication strategy, aiming to engage with new and loyal customers, whilst enhancing the understanding of the brand in new and emerging markets. The Group aims to engage with customers across all touch points via an integrated marketing approach coupling traditional events and press formats with extensive use of digital, mobile and social media. Digital continues to take the highest share of all media investment.

To reinforce its customer-centric business strategy and enhance the customer experience, the Group recently announced it is evolving the format of its seasonal collection launches. The Group will hold private previews of its Spring Summer 2018 collection to UK editors in London and international press and buyers in Paris. The collection will be unveiled during London Fashion Week during February 2018 to offer an instantly shoppable, real-time global consumer experience. The shift will enable the Group to continue to drive engagement and increase relevance with its customers.

The Group continues to develop its Somerset-based customer service operations, including further investment in aftercare and call centre operations.

Retail, Digital and Omni-channel

The Group will continue to strengthen its position in the UK and expand internationally through its omni-channel strategy, with well situated stores complemented by a strong digital presence. The penetration of omni-channel is expected to grow in the UK, Europe and North America, through continued enhancements of the offering. The Group also plans to introduce omni-channel services to newly controlled territories, including Australia, China and Hong Kong.

In the short to medium term, the Group plans to continue to strategically refine and enhance the store network, while focusing upon improving the range of omni-channel services to match rapidly evolving customer buying behaviour.

Operations

The Group continues to invest in its operational capability to maintain a high quality, scalable platform.

The Group's two factories in Somerset manufacture approximately 50% of its bags, reinforcing the authenticity of the Mulberry brand and, at a practical level, contributing to the attainment of high product quality standards. Looking forward, the Group is committed to its "Made in England" strategy and intends to maintain its UK production of handbags at approximately 50%.

As part of the strategic goal of best-in-class service to our customers, the Group will continue to invest in IT and Digital infrastructure and orientate organisational structures around the customer.

GROUP INCOME STATEMENT

YEARED 31 MARCH 2017

 
 
 
                                                 2017        2016 
                                     Note     GBP'000     GBP'000 
--------------------------------  -------  ----------  ---------- 
 
 Revenue                                      168,121     155,867 
--------------------------------  -------  ----------  ---------- 
 Cost of sales                               (64,535)    (59,300) 
--------------------------------  -------  ----------  ---------- 
 
 Gross profit                                 103,586      96,567 
--------------------------------  -------  ----------  ---------- 
 
 Operating expenses                          (96,961)    (91,961) 
--------------------------------  -------  ----------  ---------- 
 
 Other operating income                           482       1,504 
--------------------------------  -------  ----------  ---------- 
 
 Operating profit                               7,107       6,110 
--------------------------------  -------  ----------  ---------- 
 
 Share of results of associates                   148         169 
--------------------------------  -------  ----------  ---------- 
 Finance income                                   295           4 
--------------------------------  -------  ----------  ---------- 
 Finance expense                                 (17)        (66) 
--------------------------------  -------  ----------  ---------- 
 
 Profit before tax                              7,533       6,217 
--------------------------------  -------  ----------  ---------- 
 
 Tax                                          (2,543)     (3,532) 
--------------------------------  -------  ----------  ---------- 
 
 Profit for the year                            4,990       2,685 
--------------------------------  -------  ----------  ---------- 
 
 Attributable to: 
--------------------------------  -------  ----------  ---------- 
 Equity holders of the parent                   5,338       2,685 
--------------------------------  -------  ----------  ---------- 
 Non-controlling interests                      (348)           - 
--------------------------------  -------  ----------  ---------- 
 
 Profit for the year                            4,990       2,685 
--------------------------------  -------  ----------  ---------- 
 
 Basic earnings per share          4             8.4p        4.5p 
--------------------------------  -------  ----------  ---------- 
 Diluted earnings per share        4             8.4p        4.5p 
--------------------------------  -------  ----------  ---------- 
 

All activities arise from continuing operations.

Reconciliation to adjusted profit before tax:

 
 
 
                                                                                2017        2016 
                                                                             GBP'000     GBP'000 
--------------------------------------------------------------------      ----------  ---------- 
 
 Profit before tax                                                             7,533       6,217 
--------------------------------------------------------------------      ----------  ---------- 
 
 Impairment charge related to retail property , plant and equipment            1,087       1,615 
--------------------------------------------------------------------      ----------  ---------- 
 Profit on disposal of retail stores                                               -     (1,078) 
--------------------------------------------------------------------      ----------  ---------- 
 
 Adjusted Profit before tax - non-GAAP measure                                 8,620       6,754 
--------------------------------------------------------------------      ----------  ---------- 
 
 Adjusted basic earnings per share                                     4       10.2p        5.4p 
--------------------------------------------------------------------      ----------  ---------- 
 Adjusted diluted earnings per share                                   4       10.2p        5.4p 
--------------------------------------------------------------------      ----------  ---------- 
 

GROUP STATEMENT OF COMPREHENSIVE INCOME

YEARED 31 MARCH 2017

 
 
 
                                                                                              2017        2016 
                                                                                           GBP'000     GBP'000 
--------------------------------------------------------------------------------------  ----------  ---------- 
 
 Profit for the year                                                                         4,990       2,685 
--------------------------------------------------------------------------------------  ----------  ---------- 
 Items that may be reclassified subsequently to profit or loss 
--------------------------------------------------------------------------------------  ----------  ---------- 
 
 Exchange differences on translation of foreign operations                                   1,803       1,330 
--------------------------------------------------------------------------------------  ----------  ---------- 
 Losses on a hedge of a net investment taken to equity                                         (5)           - 
--------------------------------------------------------------------------------------  ----------  ---------- 
 Income tax relating to items that may be reclassified subsequently to profit or loss        (361)       (276) 
--------------------------------------------------------------------------------------  ----------  ---------- 
 
 Total comprehensive income for the year                                                     6,427       3,739 
--------------------------------------------------------------------------------------  ----------  ---------- 
 
 Attributable to: 
--------------------------------------------------------------------------------------  ----------  ---------- 
 Equity holders of the parent                                                                6,775       3,739 
--------------------------------------------------------------------------------------  ----------  ---------- 
 Non-controlling interests                                                                   (348)           - 
--------------------------------------------------------------------------------------  ----------  ---------- 
 
 Total comprehensive income for the year                                                     6,427       3,739 
--------------------------------------------------------------------------------------  ----------  ---------- 
 

GROUP BALANCE SHEET

AT 31 MARCH 2017

 
 
                                                      2017        2016 
                                                   GBP'000     GBP'000 
----------------------------------------------  ----------  ---------- 
 
 Non-current assets 
----------------------------------------------  ----------  ---------- 
 Intangible assets                                  10,833      11,088 
----------------------------------------------  ----------  ---------- 
 Property, plant and equipment                      24,136      28,143 
----------------------------------------------  ----------  ---------- 
 Interests in associates                               198         206 
----------------------------------------------  ----------  ---------- 
 Deferred tax asset                                  1,500       1,467 
----------------------------------------------  ----------  ---------- 
                                                    36,667      40,904 
----------------------------------------------  ----------  ---------- 
 
 Current assets 
----------------------------------------------  ----------  ---------- 
 Inventories                                        42,822      44,378 
----------------------------------------------  ----------  ---------- 
 Trade and other receivables                        14,669      10,767 
----------------------------------------------  ----------  ---------- 
 Cash and cash equivalents                          21,093      14,014 
----------------------------------------------  ----------  ---------- 
                                                    78,584      69,159 
----------------------------------------------  ----------  ---------- 
 
 Total assets                                      115,251     110,063 
----------------------------------------------  ----------  ---------- 
 
 Current liabilities 
----------------------------------------------  ----------  ---------- 
 Trade and other payables                         (28,350)    (27,805) 
----------------------------------------------  ----------  ---------- 
 Current tax liabilities                           (1,257)     (2,342) 
----------------------------------------------  ----------  ---------- 
 Total liabilities                                (29,607)    (30,147) 
----------------------------------------------  ----------  ---------- 
 
 Net assets                                         85,644      79,916 
----------------------------------------------  ----------  ---------- 
 
 Equity 
----------------------------------------------  ----------  ---------- 
 Share capital                                       3,000       3,000 
----------------------------------------------  ----------  ---------- 
 Share premium account                              11,961      11,961 
----------------------------------------------  ----------  ---------- 
 Own share reserve                                 (1,461)     (1,474) 
----------------------------------------------  ----------  ---------- 
 Capital redemption reserve                            154         154 
----------------------------------------------  ----------  ---------- 
 Hedging reserve                                       (5)           - 
----------------------------------------------  ----------  ---------- 
 Foreign exchange reserve                            1,063       (379) 
----------------------------------------------  ----------  ---------- 
 Retained earnings                                  69,957      66,654 
----------------------------------------------  ----------  ---------- 
 Equity attributable to holders of the parent       84,669      79,916 
----------------------------------------------  ----------  ---------- 
 Non-controlling interests                             975           - 
----------------------------------------------  ----------  ---------- 
 Total equity                                       85,644      79,916 
----------------------------------------------  ----------  ---------- 
 

GROUP STATEMENT OF CHANGES IN EQUITY

YEARED 31 MARCH 2017

 
 
                                     Share        Own       Capital                             Foreign                             Non-controlling 
                          Share    premium      share    redemption      Special    Hedging    exchange      Retained                      interest              Total 
                        capital    account    reserve       reserve     reserve*    reserve     reserve      earnings      Total            GBP,000             equity 
                        GBP'000    GBP'000    GBP'000       GBP'000      GBP'000    GBP'000     GBP'000       GBP'000    GBP'000                               GBP'000 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 
 As at 1 April 
  2015                    3,000     11,961    (1,601)           154        1,467          -     (1,433)        65,141     78,689                  -             78,689 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Profit for the 
  year                        -          -          -             -            -          -           -         2,685      2,685                  -              2,685 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Other 
  comprehensive 
  income for the 
  year                        -          -          -             -            -          -       1,054             -      1,054                  -              1,054 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Total 
  comprehensive 
  income for the 
  year                        -          -                        -            -          -       1,054         2,685      3,739                  -              3,739 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Charge for 
  employee 
  share-based 
  payments                    -          -          -             -            -          -           -           478        478                  -                478 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Exercise of 
  share options               -          -          -             -            -          -           -         (149)      (149)                  -              (149) 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Own shares                   -          -        127             -            -          -           -             -        127                  -                127 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Dividends paid               -          -          -             -            -          -           -       (2,968)    (2,968)                  -            (2,968) 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Redemption of 
  reserve                     -          -          -             -      (1,467)          -           -         1,467          -                  -                  - 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Balance at 31 
  March 2016              3,000     11,961    (1,474)           154            -          -       (379)        66,654     79,916                  -             79,916 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Profit for the 
  year                        -          -          -             -            -          -                     4,990      4,990                  -              4,996 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Other 
  comprehensive 
  income for the 
  year                        -          -          -             -            -        (5)       1,442             -      1,437                  -              1,437 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Total 
  comprehensive 
  income for the 
  year                        -          -                        -            -        (5)       1,442         4,990      6,427                  -              6,427 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Charge for 
  employee 
  share-based 
  payments                    -          -          -             -            -          -           -         1,086      1,086                  -              1,086 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Exercise of 
  share options               -          -          -             -            -          -           -         (153)      (153)                  -              (153) 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Own shares                   -          -         13             -            -          -           -             -         13                  -                 13 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Adjustment 
  arising from 
  movement in 
  non-controlling 
  interest                    -          -          -             -            -          -           -           348        348                975              1,323 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Dividends paid               -          -          -             -            -          -           -       (2,968)    (2,968)                  -            (2,968) 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 Balance at 31 
  March 2017              3,000     11,961    (1,461)           154            -        (5)       1,063        69,957     84,669                975             85,644 
-----------------  ------------  ---------  ---------  ------------  -----------  ---------  ----------  ------------  ---------  -----------------  ----------------- 
 

* The special reserve was created as part of a capital restructuring of the Group in 2004. It was released to retained earnings during 2016.

GROUP CASH FLOW STATEMENT

YEARED 31 MARCH 2017

 
 
 
                                                                      2017        2016 
                                                                   GBP'000     GBP'000 
--------------------------------------------------------------  ----------  ---------- 
 
 Operating profit for the year                                       7,107       6,110 
--------------------------------------------------------------  ----------  ---------- 
 
 Adjustments for: 
--------------------------------------------------------------  ----------  ---------- 
 Depreciation and impairment of property, plant and equipment        8,763       8,442 
--------------------------------------------------------------  ----------  ---------- 
 Amortisation of intangible assets                                   1,852       1,949 
--------------------------------------------------------------  ----------  ---------- 
 Loss/(profit) on sale of property, plant and equipment                325     (1,316) 
--------------------------------------------------------------  ----------  ---------- 
 Share-based payments charge                                         1,086         478 
--------------------------------------------------------------  ----------  ---------- 
 
 Operating cash flows before movements in working capital           19,133      15,663 
--------------------------------------------------------------  ----------  ---------- 
 
 Decrease/(increase) in inventories                                  2,344     (4,485) 
--------------------------------------------------------------  ----------  ---------- 
 (Increase)/decrease in receivables                                (2,326)       2,574 
--------------------------------------------------------------  ----------  ---------- 
 Increase/(decrease) in payables                                       168     (1,041) 
--------------------------------------------------------------  ----------  ---------- 
 
 Cash generated from operations                                     19,319      12,711 
--------------------------------------------------------------  ----------  ---------- 
 
 Income taxes paid                                                 (4,021)     (4,145) 
--------------------------------------------------------------  ----------  ---------- 
 Interest paid                                                        (17)        (66) 
--------------------------------------------------------------  ----------  ---------- 
 
 Net cash inflow from operating activities                          15,281       8,500 
--------------------------------------------------------------  ----------  ---------- 
 
 Investing activities: 
--------------------------------------------------------------  ----------  ---------- 
 Interest received                                                     232           4 
--------------------------------------------------------------  ----------  ---------- 
 Dividend received from associate                                      195         167 
--------------------------------------------------------------  ----------  ---------- 
 Purchases of property, plant and equipment                        (4,409)     (5,050) 
--------------------------------------------------------------  ----------  ---------- 
 Proceeds from disposal of property, plant and equipment                40       4,460 
--------------------------------------------------------------  ----------  ---------- 
 Acquisition of intangible fixed assets                              (962)       (855) 
--------------------------------------------------------------  ----------  ---------- 
 
 Net cash used in investing activities                             (4,904)     (1,274) 
--------------------------------------------------------------  ----------  ---------- 
 
 Financing activities: 
--------------------------------------------------------------  ----------  ---------- 
 Dividends paid                                                    (2,968)     (2,968) 
--------------------------------------------------------------  ----------  ---------- 
 Settlement of share awards                                          (153)        (24) 
--------------------------------------------------------------  ----------  ---------- 
 Net cash used in financing activities                             (3,121)     (2,992) 
--------------------------------------------------------------  ----------  ---------- 
 
 Net increase in cash and cash equivalents                           7,256       4,234 
--------------------------------------------------------------  ----------  ---------- 
 
 Cash and cash equivalents at beginning of year                     14,014       9,900 
--------------------------------------------------------------  ----------  ---------- 
 Effect of foreign exchange rate changes                             (177)       (120) 
--------------------------------------------------------------  ----------  ---------- 
 
 Cash and cash equivalents at end of year                           21,093      14,014 
--------------------------------------------------------------  ----------  ---------- 
 

NOTES

1. BASIS OF PREPARATION

The financial information in this announcement, which was approved by the Board of Directors on 13 June 2017, does not constitute the Company's statutory accounts for the years ended 31 March 2017 or 2016, but is derived from those accounts.

Statutory accounts for the year ended March 2016 have been delivered to the Registrar of Companies and those for the year ended 31 March 2017 have been approved and will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors have reported on those accounts, their reports were unqualified and did not draw attention to any matters by way of emphasis without qualifying their reports and did not contain any statement under section 498 (2) or (3) of the Companies Act 2006.

Whilst the financial information included in this preliminary announcement has been completed in accordance with International Financial Reporting Standards (IFRS), this announcement itself does not contain sufficient information to comply with IFRS.

2. Accounting policies

During the current year the following new and revised Standards and Interpretations have been adopted but have not had an impact on the Group:

   --     Amendments to IAS 16: Property, Plant and Equipment and IAS 38: Intangible assets. 

At the date of approval of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:

   --     IFRS 9: Financial Instruments; 
   --     IFRS 15: Revenue from Contracts with Customers; and 
   --     IFRS 16: Leases. 
   --     IFRS 2 (amendments) 
   --     IAS 7 (amendments) 
   --     IAS 12 (amendments) 

IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. It replaces IAS 17 Leases and IFRIC 4 Determining whether an arrangement contains a lease. The most significant changes are in relation to lessee accounting. Under the new Standard, the concept of assessing a lease contract as either operating or financing is replaced by a single lessee accounting model. Under this new model, substantially all lease contracts will result in a lessee acquiring a right-to-use asset and obtaining financing. The lessee will be required to recognise a corresponding asset and liability. The asset will be depreciated over the term of the lease and the interest on the financing liability will be charged over the same period. The Standard is effective for annual periods beginning on or after 1 January 2019, however it is not currently endorsed by the European Union. Adopting this new Standard will result in a fundamental change to the Group's balance sheet, with right-to-use assets and accompanying financing liabilities for the Group's retail stores, warehouses and offices being recognised for the first time. The income statement will also be impacted, with rent expense relating to operating leases being replaced by a depreciation charge arising from the right-to-use assets and interest charges arising from lease financing. The full impact of these changes will be quantified closer to the date of adoption.

Except for IFRS 16, the Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods. Beyond the information above, it is not practicable to provide a reasonable estimate of the effect of these Standards until a detailed review has been completed.

3. DIVIDENDS

 
 
 
                                                                                                      2017        2016 
                                                                                                   GBP'000     GBP'000 
----------------------------------------------------------------------------------------------  ----------  ---------- 
 
 Dividend for the year ended 31 March 2016 of 5p (2015: 5p) per share paid on 24 November 2016       2,968       2,968 
----------------------------------------------------------------------------------------------  ----------  ---------- 
 
 Proposed dividend for the year ended 31 March 2017 of 5p per share (2016: 5p)                       2,968       2,968 
----------------------------------------------------------------------------------------------  ----------  ---------- 
 

This proposed dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

4. EARNINGS PER SHARE ('EPS')

 
 
 
                                           2017      2016 
                                          pence     pence 
-------------------------------------  --------  -------- 
 
 Basic earnings per share                   8.4       4.5 
-------------------------------------  --------  -------- 
 Diluted earnings per share                 8.4       4.5 
-------------------------------------  --------  -------- 
 Adjusted basic earnings per share         10.2       5.4 
-------------------------------------  --------  -------- 
 Adjusted diluted earnings per share       10.2       5.4 
-------------------------------------  --------  -------- 
 

Earnings per share is calculated based on the following data:

 
 
 
 
                                                                            GBP'000     GBP'000 
-----------------------------------------------------------------------  ----------  ---------- 
 
 Profit for the year for basic and diluted earnings per share                 4,990       2,685 
-----------------------------------------------------------------------  ----------  ---------- 
 Adjustments to include exceptional items: 
-----------------------------------------------------------------------  ----------  ---------- 
  Impairment relating to retail assets                                        1,087       1,615 
-----------------------------------------------------------------------  ----------  ---------- 
  Profit on disposal of retail stores                                             -     (1,078) 
-----------------------------------------------------------------------  ----------  ---------- 
 
 Adjusted profit for the year for basic and diluted earnings per share        6,077       3,222 
-----------------------------------------------------------------------  ----------  ---------- 
 
 
 
 
 
                                                                                Million     Million 
---------------------------------------------------------------------------  ----------  ---------- 
 
 Weighted average number of ordinary shares for the purpose of basic EPS           59.4        59.3 
---------------------------------------------------------------------------  ----------  ---------- 
 Effect of dilutive potential ordinary shares : share options                       0.1         0.5 
---------------------------------------------------------------------------  ----------  ---------- 
 
 Weighted average number of ordinary shares for the purpose of diluted EPS         59.5        59.8 
---------------------------------------------------------------------------  ----------  ---------- 
 

The weighted average number of ordinary shares in issue during the year excludes those held by the Mulberry Group Plc Employee Share Trust

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR ZMGMVMFRGNZZ

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June 14, 2017 02:00 ET (06:00 GMT)

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