We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ted Baker Plc | LSE:TED | London | Ordinary Share | GB0001048619 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 109.80 | 109.80 | 110.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMTED
RNS Number : 2624A
Ted Baker PLC
23 March 2017
23 March 2017
Ted Baker Plc
("Ted Baker", the "Group")
Annual Results for the 52 weeks ended 28 January 2017
Highlights:
Hot Features
Premium
2017 2016 Change
Group Revenue GBP531.0m GBP456.2m 16.4%
Profit Before Tax and
Exceptional Items GBP65.8m GBP58.7m 12.1%
Profit Before Tax GBP61.3m GBP58.7m 4.4%
Adjusted EPS 114.0p 100.6p 13.3%
Basic EPS 105.7p 100.6p 5.1%
Total Dividend 53.6p 47.8p 12.1%
-- Group revenue up 16.4% (10.8% in constant currency) to GBP531.0m
-- Retail sales up 15.0% (9.2% in constant currency) to GBP400.7m
o UK and Europe retail sales up 10.7% (8.4% in constant currency) to GBP279.5m
o US and Canada retail sales up 28.3% (13.0% in constant currency) to GBP103.4m
o E-commerce sales up 35.1% (32.3% in constant currency) to GBP72.3m
-- Wholesale sales up 20.9% (15.9% in constant currency) to GBP130.3m -- Licence income up 26.8% to GBP18.2m -- Proposed final dividend of 38.8p bringing total dividend to 53.6p, an increase of 12.1%
Ray Kelvin CBE, Founder and Chief Executive, said:
"I am pleased to report another good year of progress in Ted Baker's expansion as a global lifestyle brand. We have continued to trade well and develop despite a backdrop of on-going external challenges across our global markets. This success reflects the strength and appeal of the brand as well as the outstanding quality of our collections.
Our Spring/Summer collections have been well received and we have a clear strategy for continued growth across both established and newer markets. This is underpinned by controlled distribution across channels as well as the design, quality and attention to detail that are at the core of everything we do.
The success of the Ted Baker brand is testament to the skill and talent of our commitTED teams across the globe. I would like to take this opportunity to thank them for their hard work during the year. The Group's business model as well as the strength of the brand, our team and collections support confidence in Ted Baker's further development and growth."
This document contains inside information. Enquiries: Ted Baker Plc Tel: 020 7796 4133 on 23 March 2017 only Ray Kelvin CBE, Founder & Chief Executive Tel: 020 7255 4800 thereafter Lindsay Page, Chief Operating Officer & Group Finance Director Charles Anderson, Company Secretary & Finance Director Hudson Sandler Tel: 020 7796 4133 Alex Brennan Fern Duncan
www.tedbaker.com
www.tedbakerplc.com
Media images available for download at:
http://www.tedbakerplc.com/ted/en/mediacentre/imagelibrary
Notes to editors:
Ted Baker Plc - "No Ordinary Designer Label"
Ted Baker is a global lifestyle brand that operates through three main distribution channels: retail, which includes e-commerce; wholesale; and licensing, which includes territorial and product licences.
We distribute through our own and licensed retail outlets, leading department stores and selected independent stores in the UK and Europe, North America, the Middle East, Asia and Australasia.
The brand continues to go from strength to strength driven along in part by its unconventional approach to product and design. Never forgetting its roots as a shirt specialist but always with an eye on the future Ted is continuously innovating through its collections, store environments and now with digital and social media initiatives that foster a truly omnichannel view for its growing and highly engaged global audience.
Ted Baker has 490 stores and concessions worldwide, comprising of 192 in the UK, 98 in Europe, 111 in the US and Canada, 80 in the Middle East, Africa and Asia and 9 in Australasia.
The brand offers a wide range of collections including: Menswear; Womenswear; Global; Phormal; Endurance; Accessories; Bedding; Childrenswear; Crockery; Eyewear; Footwear; Fragrance and Skinwear; Gifting and Stationery; Jewellery; Lingerie and Sleepwear; Luggage; Neckwear; Rugs; Suiting; Technical Accessories; Tiles; and Watches.
Strategic Report
Chairman's Statement
I am pleased to report that Group revenue increased by 16.4% (10.8% in constant currency)(1) to GBP531.0m (2016: GBP456.2m) and profit before tax and exceptional items(2) increased by 12.1% to GBP65.8m (2016: GBP58.7m)(2) for the 52 weeks ended 28 January 2017 (the "period"). This good performance reflects the strength of the Ted Baker brand and business model and was achieved despite a backdrop of on-going external factors which have impacted trading across all of our markets. In particular, we have seen increased levels of promotional activity and a fall in international tourism in North America, and the trading environment continued to be challenging in Asia.
The retail channel performed well, with retail sales including e-commerce up 15.0% (9.2% in constant currency)(1) to GBP400.7m (2016: GBP348.4m) on an increase in average square footage of 8.5%. Our e-commerce business is an integral and increasingly important component within our retail proposition and has performed very well, delivering strong sales growth of 35.1% (32.3% in constant currency)(1) to GBP72.3m (2016: GBP53.5m). We continued our geographic expansion with openings across the UK and Europe, North America and Asia and we continue to invest and build brand awareness in our newer markets for the long-term development of the brand.
The wholesale channel delivered a strong performance, with sales up 20.9% (15.9% in constant currency)(1) to GBP130.3m (2016: GBP107.7m). This reflects a good performance from our UK wholesale business, which includes the supply of goods to our licensed stores and our export business, as well as a strong performance from our North American wholesale business.
Our territorial and product licences delivered strong performances, as licence income increased by 26.8% to GBP18.2m (2016: GBP14.4m). During the period, our licence partners opened stores and concessions in Azerbaijan, Dubai, Egypt, Indonesia, Mexico and Taiwan. We also opened our first stores in Bahrain and Vietnam and are pleased with their performances so far.
During the period, we successfully launched the next phase of the Microsoft Dynamics AX system across our North American business. We will continue the roll-out of the next phases of the project to our other territories over the coming months, which will allow us to enhance efficiency, streamline our operations and support the evolution of the business.
In October 2016, we took our first delivery of inventory into our new European distribution centre in the UK and have successfully transitioned one of our legacy warehouses into this facility with the remaining two to complete in the coming months. The European distribution centre will handle all operations for our retail, wholesale and e-commerce businesses across the UK and Europe, supporting our long-term growth strategy.
Having completed the purchase of the iconic Ugly Brown Building in the prior period, the Group continues to consider its expansion and development opportunities. The Group has extended the term of its option to purchase 50% of neighbouring Block A to 31 May 2017.
Financial Results
Group revenue for the period increased by 16.4% (10.8% in constant currency)(1) to GBP531.0m (2016: GBP456.2m). The Group gross margin increased to 61.0% (2016: 59.9%) as a result of improved full price sell-through in our retail channel and an improved mix of wholesale sales to trustee customers, as well as some foreign exchange benefits.
Profit before tax and exceptional items(2) increased by 12.1% to GBP65.8m (2016: GBP58.7m) and profit before tax increased by 4.4% to GBP61.3m (2016: GBP58.7m). Adjusted basic earnings per share, which excludes exceptional items, increased by 13.3% to 114.0p (2016: 100.6p) and basic earnings per share increased by 5.1% to 105.7p (2016: 100.6p).
Exceptional items in the period of GBP4.5m (2016: GBPnil) include a provision for lease commitments relating to the Group's legacy warehouses of GBP2.9m along with GBP0.7m of other closure costs and GBP0.9m in respect of closure costs for a concept store in London. There were no exceptional items in the previous period.
The Group's net borrowing position at the end of the period was GBP95.2m (2016: GBP84.6m). This reflects the secured term loan of GBP58.5m (2016: GBP60.0m) used to purchase The Ugly Brown Building and other net debt of GBP36.7m (2016: GBP24.6m). The increase in other net debt reflects the on-going capital expenditure during the period and increased working capital in line with the Group's growth.
Dividends
The Board is recommending a final dividend of 38.8p per share (2016: 34.6p), making a total for the period of 53.6p per share (2016: 47.8p per share), an increase of 12.1% on the prior period. Subject to approval by shareholders at the Annual General Meeting to be held on 13 June 2017, the final dividend will be paid on 23 June 2017 to shareholders on the register on 19 May 2017.
People
I would like to take this opportunity to thank all of my colleagues across the world for their continued hard work and commitment. The performance in the period is testament to our talented teams, whose commitment and passion are key to our success as we continue to grow the business and develop Ted Baker as a global lifestyle brand.
Current Trading and Outlook
Retail
In the UK and Europe, we plan to open a new store in each of Oxford and Paris, an outlet in Gloucester and our first Dutch outlet in Roermond, along with further concessions in the UK, France, Germany and the Netherlands. We will continue to invest in our e-commerce sites to enhance customer experience.
In North America, we will continue to develop our presence with plans to open stores in Los Angeles and Houston, and relocate our Miami Aventura store. We also plan to open new concessions in Canada with a premium department store.
In Asia, we remain focused on building brand awareness, where we are still in the relatively early stages of investment. In line with our development strategy in this territory, we have relocated a store in Tokyo and plan to open a further store in Shanghai and new concessions in Japan and South Korea.
Wholesale
We anticipate further growth across our wholesale businesses, which should result in high single-digit sales growth (in constant currency)(1) in the coming period.
Licence Income
Our product and territorial licences continue to perform well, with further store openings planned in Australia, Dubai, Kuwait, Lebanon, Mexico, Qatar, Saudi Arabia and Turkey along with our first store in India.
Group
Trading across our markets continues to be impacted by on-going external factors. We have a clear strategy for the continued expansion of Ted Baker as a global lifestyle brand across both established and newer markets. This is underpinned by our controlled distribution across channels as well as the design, quality and attention to detail that are at the core of everything we do.
To deliver our expansion plans, capital expenditure in the new financial period is planned to be at GBP35.0m (2017: GBP43.8m). This relates to continued investment in the new European distribution centre, further store openings and refurbishments, and the on-going investment in new IT systems across the business.
Ted Baker's business model, as well as the strength of the brand and collections, support our confidence in the Group's continued development and further growth.
We intend to make our trading statement covering trading from the start of the financial period in mid-June 2017.
David Bernstein CBE
Non-Executive Chairman
23 March 2017
Notes:
(1) Constant currency variances are calculated by applying the previous financial period foreign exchange rates to current period results in overseas subsidiaries to remove the impact of exchange rate fluctuations.
(2) Exceptional items are excluded from profit before tax and exceptional items due to these items being one-off and material in nature.
The Directors believe these measures provide a consistent and comparable view of the underlying performance of the Group's on-going business.
Business Model and Strategy
Business model
Ted Baker has grown steadily from its origins as a single shirt specialist store in Glasgow to the global lifestyle brand it is today. In order to protect the ethos and persona for which we have gained an enviable reputation, we always ask ourselves the question: "Would Ted do it that way?"
Product
Ted Baker is a quintessentially British brand with a quirky yet commercial fashion offering that prides itself in always being able to satisfy the needs of our customer. Our approach is focused on unwavering attention to detail and firm commitment to quality.
We offer a wide range of collections including: Menswear; Womenswear; Global; Phormal; Endurance; Accessories; Bedding; Childrenswear; Crockery; Eyewear; Footwear; Fragrance and Skinwear; Gifting and Stationery; Jewellery; Lingerie and Sleepwear; Luggage; Neckwear; Rugs; Suiting; Technical Accessories; Tiles; and Watches.
The menswear collection is a reflection of popular contemporary culture, with a sense of style and humour mixed in. It also includes our Phormalwear range, offering a number of distinctive suiting collections that combine heritage British tailoring with a modern outlook. The womenswear collection is a fresh and feminine mix of European elegance with London flair, and is a celebration of beauty, individuality and exquisite attention to detail.
Distribution channels
The brand operates through three main distribution channels: retail, which includes e-commerce; wholesale; and licensing, which includes territorial and product licences. We want our customer to enjoy a seamless experience regardless of how they choose to shop and interact with the brand.
The retail channel comprises stores, concessions and e-commerce, which is now an integral part of our retail experience. We operate stores and concessions across the UK, Europe, North America and Asia, and localised e-commerce sites for the UK, Europe, US, Canada and Australia. We also have e-commerce businesses with some of our concession partners.
Stores and concessions are designed to showcase the brand's unique style of retail theatre and to ensure our customers enjoy a welcoming and pleasurable shopping experience. Each store boasts a fully bespoke design that's full of innovative and distinctive touches.
E-commerce enables us to offer our customers access to an extended product range and provides us with a means to talk directly with our customers and engage them with the brand in non-traditional ways. We focus on ensuring that we provide a user-friendly online brand and shopping experience across multiple devices.
The wholesale business in the UK serves countries across the world, primarily in the UK and Europe, as well as supplying products to stores operated by our territorial licence partners. In addition, we operate a wholesale business in North America serving the US and Canada. Our wholesale partners ("Trustees") are custodians of our collections and uphold our brand integrity by ensuring that their retail environment and brand adjacencies are in keeping with the profile and positioning of the brand. We have built up strong relationships with some of the best independent retailers and department stores around the world.
We operate both territorial and product licences. Our licence partners are all experts in their field and share our passion for unwavering attention to detail and firm commitment to quality.
Territorial licences cover specific countries or regions in Asia, Australasia, Europe, the Middle East and North America, where our partners operate licensed retail stores and, in some territories, wholesale operations.
Product licences cover: Bedding; Childrenswear; Crockery; Eyewear; Footwear; Fragrance and Skinwear; Gifting and Stationery; Jewellery; Lingerie and Sleepwear; Luggage; Neckwear; Rugs; Suiting; Technical Accessories; Tiles; and Watches.
Geographic reach
Ted Baker is a truly global lifestyle brand with 490 stores and concessions worldwide, comprising of 192 in the UK, 98 in Europe, 111 in the US and Canada, 80 in the Middle East, Africa, and Asia and 9 in Australasia.
The Group opened its first shop in the UK in Glasgow in 1988 and has since established itself in all the major fashion centres in the UK. We have also built a growing presence in Europe with stores and concessions in Belgium, France, Germany, Ireland, the Netherlands, Portugal, and Spain. Our e-commerce and wholesale businesses complement our locations in Europe.
In 1998, the Group opened its first store in North America in New York. Since then, the Group has established a presence across the USA from the East to West coasts and into Canada through both own stores and concessions. In addition, the Group has a standalone e-commerce site in North America that is localised to each of Canada and the US, and a rapidly growing wholesale business.
As part of our strategy to invest for the longer-term development of the brand, we have launched the brand in Asia with stores and concessions in China, Hong Kong, Japan and Korea. We also understand the growing desire of our customers to buy our products online and trade on renowned local websites in this region.
Through our territorial licences we also trade in many other countries across Africa, Australasia and the Middle East.
Strategy
Our strategy is to enhance our position as a leading global lifestyle brand by the continuous development of three main elements of our business model:
-- considered extension of the Ted Baker collections to achieve our brand growth potential. We review our collections continually to ensure we anticipate and react to trends and meet our customers' expectations. In addition, we look for opportunities to extend the breadth of collections and enhance our offer;
-- controlled distribution through three main channels: retail; wholesale; and licensing. We consider each new opportunity to ensure it is right for the brand and will deliver margin led growth; and
-- further international growth through carefully managed development of overseas markets. We continue to manage growth in existing territories while considering new territories for expansion.
Underlying our strategy is an emphasis on design, product quality and attention to detail, delivered by the passion, commitment and skill of our teams, licence partners and wholesale customers.
Key Performance Indicators
We review the on-going performance of the business using key performance indicators.
The Key Performance Indicators ("KPI's") that the Directors judge to be most effective in assessing progress against the Group's objectives and strategy have been detailed below and are considered throughout the Strategic Report.
Key Performance 52 weeks 52 weeks Variance Constant
Indicator ended 28 ended 30 currency
January January variance(1)
2017 2016
----------- ------------------------- ---------- ---------- --------- -------------
Group Revenue GBP531.0m GBP456.2m 16.4% 10.8%
----------- ------------------------- ---------- ---------- --------- -------------
Gross margin 61.0% 59.9%
------------------------------------- ---------- ---------- --------- -------------
Profit before
tax (excluding
exceptional items)
as a % of revenue 12.4% 12.9%
------------------------------------- ---------- ---------- --------- -------------
Operating contribution
(excluding exceptional
items) %(2) 12.6% 13.0%
------------------------------------- ---------- ---------- --------- -------------
Operating contribution
(including exceptional
items) %(2) 11.8% 13.0%
------------------------------------- ---------- ---------- --------- -------------
Retail Revenue GBP400.7m GBP348.4m 15.0% 9.2%
----------- ------------------------- ---------- ---------- --------- -------------
E-Commerce GBP72.3m GBP53.5m 35.1% 32.3%
------------------------------------- ---------- ---------- --------- -------------
Gross margin 66.1% 64.8%
------------------------------------- ---------- ---------- --------- -------------
Average square
footage(3) 387,373 357,096 8.5%
------------------------------------- ---------- ---------- --------- -------------
Closing square
footage(3) 395,088 377,830 4.6%
------------------------------------- ---------- ---------- --------- -------------
Sales per square
foot excluding
e-commerce GBP848 GBP826 2.7% (3.2%)
------------------------------------- ---------- ---------- --------- -------------
Wholesale Revenue GBP130.3m GBP107.7m 20.9% 15.9%
----------- ------------------------- ---------- ---------- --------- -------------
Gross margin 45.1% 43.8%
------------------------------------- ---------- ---------- --------- -------------
Licence
income Revenue GBP18.2m GBP14.4m 26.8%
----------- ------------------------- ---------- ---------- --------- -------------
Operating cashflow
Group per share(4) 118.4p 93.3p 26.9%
----------- ------------------------- ---------- ---------- --------- -------------
Working capital(5) GBP136.8m GBP113.5m 20.5%
------------------------------------- ---------- ---------- --------- -------------
(1) Constant currency variances are calculated by applying the previous financial period foreign exchange rates to current period results in overseas subsidiaries to remove the impact of exchange rate fluctuations
(2) Operating contribution is defined as operating profit as a percentage of revenue
(3) Excludes licensed partner stores
(4) Operating cashflow per share is defined as net cash generated from operating activities divided by the weighted number of ordinary shares (diluted)
(5) Working capital comprises inventories, trade and other receivables and trade and other payables
Business Review
Distribution channels
The brand operates through three main distribution channels: retail, which includes e-commerce; wholesale; and licensing, which includes territorial and product licences. As part of our strategy we look to further develop each of these routes to market, whilst ensuring the controlled distribution of our product.
Retail
Our retail channel comprises stores, concessions and e-commerce, which is now an integral part of our retail experience. We operate stores and concessions across the UK, Europe, North America and Asia, and localised e-commerce sites for the UK, Europe, US, Canada and Australia. We also have e-commerce businesses with some of our concession partners.
The retail division performed well, with sales up 15.0% (9.2% in constant currency)(1) to GBP400.7m (2016: GBP348.4m) despite a challenging trading environment across our global markets. The growth was driven by continued investments in new and existing stores and a strong e-commerce performance, where sales grew by 35.1% (32.3% in constant currency)(1) to GBP72.3m (2016: GBP53.5m) and represented 18.0% (2016: 15.4%) of our total retail sales.
We continue to develop our retail proposition with further investment in each of our e-commerce sites, aiming to provide a more relevant customer experience through improved design, performance and personalised content. During the period, we launched our first language specific e-commerce sites for France and Germany and have been pleased with their performance.
Average retail square footage rose by 8.5% over the period to 387,373 sq ft (2016: 357,096 sq ft). Total retail square footage at 28 January 2017 was 395,088 sq ft (2016: 377,830 sq ft), an increase of 4.6% on the prior period. Retail sales excluding e-commerce per square foot rose 2.7% (-3.2% in constant currency)(1) to GBP848 (2016: GBP826).
The retail gross margin increased to 66.1% (2016: 64.8%), primarily reflecting an improved full price sell-through in our retail channel, as well as some foreign exchange benefits.
Retail operating costs increased 24.3% (17.0% in constant currency)(1) to GBP203.3m (2016: GBP163.5m) and as a percentage of retail sales, increased to 50.7% (2016: 46.9%). An element of the increase in retail operating costs is due to dual running costs arising from the new European distribution centre, and some store pre-opening costs in our North American market.
Wholesale
Our wholesale business in the UK serves countries across the world, primarily in the UK and Europe, as well as supplying products to stores operated by our territorial licence partners. In addition, we operate a wholesale business in North America serving the US and Canada.
Group wholesale sales increased by 20.9% (15.9% in constant currency)(1) to GBP130.3m (2016: GBP107.7m), reflecting a good performance from our UK wholesale business, with sales increasing by 10.4% to GBP86.1m (2016: GBP78.0m), and a strong performance from our North American wholesale business, with sales increasing by 48.8% (30.7% in constant currency)(1) to GBP44.2m (2016: GBP29.7m).
The wholesale gross margin increased to 45.1% (2016: 43.8%), which was principally the result of a greater proportion of wholesale sales to our trustee partners which carry a higher margin, as well as some foreign exchange benefits.
Licence income
We operate both territorial and product licences. Our licence partners are all experts in their field and share our passion for unwavering attention to detail and firm commitment to quality.
Our territorial licences cover specific countries or regions in Asia, Australasia, Europe, the Middle East and North America, where our partners operate licensed retail stores and, in some territories, wholesale operations.
Our product licences cover: Bedding; Childrenswear; Crockery; Eyewear; Footwear; Fragrance and Skinwear; Gifting and Stationery; Jewellery; Lingerie and Sleepwear; Luggage; Neckwear; Rugs; Suiting; Technical Accessories; Tiles; and Watches.
Both territorial and product licences delivered good performances, with licence income up 26.8% to GBP18.2m (2016: GBP14.4m). There were notable performances from our product licencees in Childrenswear, Eyewear, Footwear, Homeware, Skinwear and Suiting.
In July 2016, we opened our first store in Vietnam with our new licence partner Maison, and we are encouraged by the performance to date. In November 2016, we opened our first store in Bahrain, and are pleased by the performance so far.
Collections
Ted Baker Womenswear delivered a good performance with sales up 19.7% to GBP304.3m (2016: GBP254.1m). Womenswear represented 57.3% of total sales (2016: 55.7%).
Ted Baker Menswear performed well with sales up 12.2% to GBP226.7m (2016: GBP202.1m). Menswear represented 42.7% of total sales in the period (2016: 44.3%).
Geographic Performance
United Kingdom and Europe
52 weeks 52 weeks Variance Constant
ended ended currency
28 January 30 January variance(1)
2017 2016
---------------------------- ------------ ------------ --------- -------------
Total retail revenue* GBP279.5m GBP252.5m 10.7% 8.4%
---------------------------- ------------ ------------ --------- -------------
E-commerce revenue GBP61.1m GBP46.8m 30.6% 29.8%
---------------------------- ------------ ------------ --------- -------------
Average square footage* 246,826 236,685 4.3%
---------------------------- ------------ ------------ --------- -------------
Closing square footage* 250,624 244,007 2.7%
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot including e-commerce
sales GBP1,132 GBP1,067 6.1% 3.9%
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot excluding e-commerce
sales GBP885 GBP869 1.8% (0.8%)
---------------------------- ------------ ------------ --------- -------------
Wholesale revenue GBP86.1m GBP78.0m 10.4%
---------------------------- ------------ ------------ --------- -------------
Own stores 36 38
---------------------------- ------------ ------------ --------- -------------
Concessions 237 224
---------------------------- ------------ ------------ --------- -------------
Outlets 14 13
---------------------------- ------------ ------------ --------- -------------
Partner stores 3 3
---------------------------- ------------ ------------ --------- ------------- Total 290 278 ---------------------------- ------------ ------------ --------- -------------
* Excludes licensed partner stores
Retail sales in UK and Europe increased by 10.7% to GBP279.5m (2016: GBP252.5m) (8.4% in constant currency)(1) despite tough trading conditions and the impact of terrorism in northern Europe.
Our e-commerce business performed very well during the period with sales increasing by 30.6% to GBP61.1m (2016: GBP46.8m). E-commerce sales are an integral part of the retail proposition in the UK and European markets. We launched our first language specific sites for France and Germany and are pleased with their performance.
As a percentage of UK and Europe retail sales, e-commerce sales represented 21.9% (2016: 18.5%).
During the period, we opened an outlet in Madrid, Spain and further concessions with premium department stores in the UK, France, Germany and Spain. We closed two stores, one in the UK and one in France. We are pleased with the performance of the new openings and remain positive about further growth opportunities for our brand in these markets.
Sales from our UK wholesale division increased by 10.4% to GBP86.1m (2016: GBP78.0m) reflecting a good performance from sales to Trustees, which include our wholesale export business and the supply of product to our retail licence partners.
North America
52 weeks 52 weeks Variance Constant
ended ended currency
28 January 30 January variance(1)
2017 2016
---------------------------- ------------ ------------ --------- -------------
Total retail revenue* GBP103.4m GBP80.6m 28.3% 13.0%
---------------------------- ------------ ------------ --------- -------------
E-commerce revenue GBP9.8m GBP6.6m 48.5% 31.2%
---------------------------- ------------ ------------ --------- -------------
Average square footage
* 112,110 94,496 18.6%
---------------------------- ------------ ------------ --------- -------------
Closing square footage
* 116,590 106,471 9.5%
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot including e-commerce
sales GBP922 GBP853 8.1% (4.7%)
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot excluding e-commerce
sales GBP835 GBP784 6.5% (6.1%)
---------------------------- ------------ ------------ --------- -------------
Wholesale revenue GBP44.2m GBP29.7m 48.8% 30.7%
---------------------------- ------------ ------------ --------- -------------
Own stores 31 25
---------------------------- ------------ ------------ --------- -------------
Concessions 55 55
---------------------------- ------------ ------------ --------- -------------
Outlets 11 10
---------------------------- ------------ ------------ --------- -------------
Partner Stores 14 7
---------------------------- ------------ ------------ --------- -------------
Total 111 97
---------------------------- ------------ ------------ --------- -------------
* Excludes licensed partner stores
We are very pleased with our progress across both the retail and wholesale channels in North America, despite well documented challenges facing the North American retail market, which has seen increased levels of promotional activity and a fall in international tourism. This has resulted in a challenging environment not only for our stores but also for our key trading partners. However, we remain confident that the Ted Baker brand is becoming more established and continuing to gain recognition in this territory.
Sales from our retail division in North America increased by 28.3% to GBP103.4m (2016: GBP80.6m) (13.0% in constant currency)(1) . During the period, we continued our expansion with new stores in Atlanta, Miami, New York, Seattle and relocated our Dallas store, and we opened new stores in Calgary, Ottawa and an outlet in Vancouver. We also opened seven concessions in Mexico with our licence partner. We closed one store in New York.
Our e-commerce businesses delivered strong performances with sales increasing 48.5% to GBP9.8m (31.2% in constant currency)(1) . As a percentage of North America retail sales, e-commerce sales represent 9.5% (2016: 8.2%).
Sales from our North American wholesale business increased by 48.8% to GBP44.2m (2016: GBP29.7m) (30.7% in constant currency)(1) reflecting the brand's increased appeal and recognition in this territory.
Middle East, Asia, Africa and Australasia
52 weeks 52 weeks Variance Constant
ended ended currency
28 January 30 January variance(1)
2017 2016
---------------------------- ------------ ------------ --------- -------------
Total retail revenue GBP17.8m GBP15.4m 15.6% 2.6%
---------------------------- ------------ ------------ --------- -------------
E-commerce revenue GBP1.4m -
---------------------------- ------------ ------------ --------- -------------
Average square footage
* 28,438 25,915 9.7%
---------------------------- ------------ ------------ --------- -------------
Closing square footage
* 27,874 27,352 1.9%
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot including e-commerce
sales GBP625 GBP593 5.4% (6.5%)
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot excluding e-commerce
sales GBP576 GBP593 (2.9%) (14.0%)
---------------------------- ------------ ------------ --------- -------------
Own stores 8 8
---------------------------- ------------ ------------ --------- -------------
Concessions 15 8
---------------------------- ------------ ------------ --------- -------------
Outlets 3 3
---------------------------- ------------ ------------ --------- -------------
Partner stores 63 54
---------------------------- ------------ ------------ --------- -------------
Total 89 73
---------------------------- ------------ ------------ --------- -------------
* Excludes licensed partner stores
We continue to develop the Ted Baker brand across the Middle East, Asia and Australasia through our retail and licensing channels.
We remain positive about the long-term opportunities in Asia. However, as has been widely reported, the trading environment continues to be challenging. Retail sales in Asia increased 15.6% to GBP17.8m (2016: GBP15.4m) (2.6% in constant currency)(1) . In Hong Kong, we relocated one store; in China, we opened a store in Beijing and four further concessions; and in Japan, we opened three concessions and closed one store in Tokyo, which has been relocated since the period end. During the period, we launched online concession businesses in China and Japan, and we are pleased with the early reaction to these sites.
During the period, our Middle Eastern licence partners performed particularly well and opened stores in each of Azerbaijan, Dubai and Egypt and our first store in Bahrain. Our South East Asian licence partner opened a store in Indonesia, and a new licence partner store opened in Vietnam. We opened two stores in Taiwan and closed one. As at 28 January 2017, our licence partners operated 54 stores and concessions across the Middle East, South East Asia, and Africa (2016: 45).
The joint venture with our Australasian licence partner, Flair Industries Pty Ltd, continued to perform well. As at 28 January 2017, we operated 9 stores in Australasia (2016: 9 stores).
Notes:
(1) Constant currency variances are calculated by applying the previous financial period foreign exchange rates to
current period results in overseas subsidiaries to remove the impact of exchange rate fluctuations.
The Directors believe this measure provides a consistent and comparable view of the underlying performance of the Group's on-going business.
Financial Review
Revenue and Gross Margin
Group revenue increased by 16.4% (10.8% in constant currency)(1) to GBP531.0m (2016: GBP456.2m), driven by a 15.0% (9.2% in constant currency)(1) increase in retail sales to GBP400.7m (2016: GBP348.4m) and a 20.9% (15.9% in constant currency)(1) increase in wholesale sales to GBP130.3m (2016: GBP107.7m).
The gross margin for the Group increased to 61.0% (2016: 59.9%) as a result of improved full price sell-through in our retail channel and an improved mix of wholesale sales to trustee customers, as well as some foreign exchange benefits.
Operating Expenses Pre-Exceptional items(2)
Distribution costs increased by 22.7% (15.5% in constant currency)(1) to GBP208.2m (2016: GBP169.8m) and as a percentage of sales increased to 39.2% (2016: 37.2%). An element of the increase in distribution costs is due to dual running costs arising from the new European distribution centre, and some store pre-opening costs in our North American market.
Administration expenses excluding exceptional costs(2) increased by 14.2% (10.6% in constant currency)(1) to GBP65.6m (2016: GBP57.4m). Excluding the employee performance related bonus of GBPnil (2016: GBP2.7m), administration expenses rose by 19.8% due to growth of our central functions, both in the UK and overseas, and the continued deployment of our information technology infrastructures to support our growth.
Dual running costs incurred in respect of our new European distribution centre and the systems roll-out were GBP4.0m in the period.
Profit Before Tax
Profit before tax and exceptional items(2) increased by 12.1% to GBP65.8m (2016: GBP58.7m) and profit before tax increased by 4.4% to GBP61.3m (2016: GBP58.7m).
Exceptional Items
Exceptional items in the period of GBP4.5m (2016: GBPnil) include a provision for lease commitments relating to the Group's legacy warehouses of GBP2.9m along with GBP0.7m of other closure costs and GBP0.9m in respect of closure costs for a concept store in London. There were no exceptional items in the previous period.
Finance Income and Expenses
Net interest payable during the period was GBP2.9m (2016: GBP1.4m). The increase was largely due to interest payable on the term loan that financed the purchase of the freehold of The Ugly Brown Building.
The net foreign exchange gain during the period of GBP1.1m (2016: GBPnil) was due to the translation of monetary assets and liabilities denominated in foreign currencies following the devaluation of sterling that followed the UK's EU referendum result.
Taxation
The Group tax charge for the period was GBP14.7m (2016: GBP14.4m), an effective tax rate of 24.0% (2016: 24.6%). This effective tax rate is higher than the UK tax rate for the period of 20% largely due to higher overseas tax rates and to the non-recognition of losses in overseas territories where the businesses are still in their development phase. The UK corporation tax rate will reduce to 19% from 1 April 2017 and 17% from 1 April 2020.
Our closing UK deferred tax assets and liabilities have been measured at 19% based on the corporation tax rate at which they are anticipated to unwind and overseas deferred tax assets and liabilities have been measured at the applicable overseas tax rates.
Our future effective tax rate is expected to be higher than the UK tax rate as a result of a growing proportion of overseas profits arising in jurisdictions with higher tax rates than the UK.
Cash Flow
The net decrease in cash and cash equivalents of GBP13.5m (2016: GBP5.9m) primarily reflected an increase in working capital and further capital expenditure to support our long-term development.
Total working capital, which comprises inventories, trade and other receivables and trade and other payables, increased by GBP23.3m to GBP136.8m (2016: GBP113.5m). This was mainly driven by an increase in inventories of GBP33.2m to GBP158.5m (2016: GBP125.3m) reflecting the growth of our business, stock on hand for our wholesale customers and licence partners, and earlier phasing of stock deliveries at the end of the financial period due to the timing of Chinese New Year, which fell at the end of the period. In addition to this, inventory has increased due to the impact of foreign exchange rates on the translation of inventory in overseas subsidiaries.
Income taxes paid decreased by GBP2.5m to GBP10.6m (2016: GBP13.1m). This was largely due to accelerated tax deductions on US store openings and refurbishments.
Group capital expenditure of GBP43.8m (2016: GBP89.5m including GBP58.0m relating to the purchase of The Ugly Brown Building) relates to the opening and refurbishment of stores, concessions and outlets, the fit-out of our new European distribution centre and the on-going investment in business-wide IT systems to support our continued growth.
The Group's net borrowing position at the end of the period was GBP95.2m (2016: GBP84.6m).
Shareholder Return
Basic earnings per share increased by 5.1% to 105.7p (2016: 100.6p). Adjusted earnings per share, which exclude exceptional items(2) , increased by 13.3% to 114.0p (2016: 100.6p).
The proposed final dividend of 38.8p per share will make a total for the period of 53.6p per share (2016: 47.8p per share), an increase of 12.1% on the previous period.
Operating cash flow per share was 118.4p (2016: 93.3p) and reflected an increase in cash generated from operating activities.
Borrowing Facilities
During the period, the Group agreed an extension of its multi-currency revolving credit facility with The Royal Bank of Scotland and Barclays. A new agreement was signed on 31 May 2016 which increased the Group's committed borrowing facility from GBP85m to GBP110m expiring in March 2018. The increase is a function of the growth in our business and is necessary to fund capital expenditure to support the Group's long-term strategy.
In the prior period, the Group entered into a five year GBP60m secured term loan, in addition to the existing multi-currency revolving credit facility with The Royal Bank of Scotland and Barclays. The term loan is amortised over fifteen years and the proceeds were used to finance the purchase of The Ugly Brown Building.
The facility and term loan contain appropriate financial covenants that are tested on a quarterly basis. The Group monitors actual and prospective compliance with these on a regular basis.
Treasury Risk Management
The most significant exposure to foreign exchange fluctuation relates to purchases made in foreign currencies, principally the US Dollar and the Euro.
A proportion of the Group's purchases are hedged in accordance with the Group's risk management policy, which allows for foreign currency to be hedged for up to 24 months in advance. The balance of purchases is hedged naturally as the business operates internationally and income is generated in the local currencies.
In June 2016, ahead of the UK referendum on Brexit, the Group extended its hedging arrangements for US Dollars to April 2018. At the balance sheet date, the Group has hedged its projected commitments in respect of the period ending 27 January 2018 as well as a proportion of its requirements for the following period.
The Group is exposed to movements in UK interest rates as both the revolving credit facility and term loan accrue interest based on LIBOR plus a fixed margin.
During the period, the Group entered into interest rate swap agreements, fixing GBP30.0m of the floating rate net debt.
Notes:
(1) Constant currency variances are calculated by applying the previous financial period foreign exchange rates to current period results in overseas subsidiaries to remove the impact of exchange rate fluctuations.
(2) Exceptional items are excluded from profit before tax and exceptional items due to these items being one-off and material in nature.
(3) Exceptional items are excluded from adjusted earnings per share due to these items being one-off and material in nature.
The Directors believe these measures provide a consistent and comparable view of the underlying performance of the Group's on-going business.
Principal Risks and Uncertainties
The Board is ultimately responsible for the Group's system of risk management and internal control and for reviewing their effectiveness. The Board confirms that there is an on-going process for identifying, evaluating and managing the significant risks faced by the Group, which has been in place for the period and up to the date of approval of these financial statements, and that this process is regularly reviewed by the Board. However, such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.
In order to help manage these risks and uncertainties, the Board has delegated responsibility for monitoring the effectiveness of the Group's systems of internal control and risk management to the Audit Committee.
In addition, the Group has established a Risk Committee that includes the Finance Director and various members of the Executive Committee and heads of department. The Risk Committee reviews the risk management and control process in each key business area on an on-going basis, and provides a platform for management to drive improvement across the business. The Risk Committee considers:
-- the authority, resources and co-ordination of those involved in the identification, assessment and management of significant risks faced by the Group;
-- the response to the significant risks which have been identified by management and others;
-- the maintenance of a controlled environment directed towards the proper management of risk; and
-- the annual reporting procedures.
Having considered the key risks inherent in the business and the system of control necessary to manage such risks, the Finance Director presents the Risk Committee's findings to the Board on a regular basis. In addition, the Chief Executive reports to the Board on changes in the business and the external environment which affect significant risks.
On behalf of the Board, the Audit Committee has reviewed the effectiveness of the system of risk management and internal control during the period. In particular, it has reviewed and updated the process for identifying and evaluating the significant risks affecting the business and the policies and procedures by which these risks are managed. Management is responsible for the identification and evaluation of significant risks applicable to their areas of the business together with the design and operation of suitable internal controls. These risks are assessed on a continual basis and may be associated with a variety of internal or external sources including control breakdowns, disruption in information systems, competition, natural catastrophe and regulatory requirements, and also by reference to the Group's five year strategic and financial plan. During the period the Board has placed significant focus on risk management. As such, during the period the Audit Committee engaged PricewaterhouseCoopers LLP ("PwC") to undertake a detailed review of the Group's risk framework and internal audit function via in-depth interviews with senior management and key stakeholders across the Group.
The Group has an independent internal audit function whose findings are regularly reviewed by the Board and the Executive Committee. The Audit Committee monitors and reviews the effectiveness of the internal audit activities.
The Chief Operating Officer provides the Board with monthly financial information which includes key performance indicators.
The Board has carried out a robust assessment of the principal risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity. Although not exhaustive, the following list highlights some of the principal risks identified by the Group (which are not shown in order of importance). Additional risks and uncertainties not presently known, or currently considered to be less material, may also have an adverse effect on the Group:
Issue Potential impact Mitigation
-------------- -------------------- -------------------------- ---------------------------
Strategic Brand The strength We carefully
Risks and Reputational and reputation consider each
Risk of the Ted Baker new partner
brand is important with whom we
to the business. do business.
There is a risk Such partners
that our brand are subject
may be undermined to due diligence
or damaged by and are monitored
our actions or on an on-going
those of our basis to ensure
partners or supply they remain
chain. appropriate
to the brand.
Our dedicated
social media
team closely
monitors social
media channels
and addresses
any reputational
issues in accordance
with our protocol.
--------------------
Development Failure in growing We perform extensive
of Overseas the international due diligence
Markets business through on all potential
franchise operations, partners and
licencees and territories
e-commerce. Risk and to assess
that the Group our appropriate
fails to prioritise routes to market.
the right territories We operate in
or investment a range of international
or fails to support markets, which
these markets helps to mitigate
with systems over-reliance
and supply chain and exposure
capability. to any one territory.
-------------------- -------------------------- ---------------------------
Fashion As with all fashion We maintain
and Design brands there a high level
is a risk that of market awareness
our offer will and an understanding
not satisfy the of consumer
needs of our trends and fashion
customers or to ensure that
we fail to correctly we remain able
identify trends to respond to
in an increasingly changes in consumer
competitive market, preference.
resulting in We use customer
lower sales and data to develop
reduced market targeted marketing
share. and promotional
activity.
We continue
to focus on
product design,
quality and
attention to
detail.
-------------------- -------------------------- ---------------------------
External External events These risk factors
Events may occur which are monitored
may affect the closely on an
global, economic on-going basis
and financial ensuring that
environment in we are prepared
which we operate. for and can
These events react to changes
can affect our in the external
suppliers, customers environment,
and partners, allowing us
increasing our to reduce our
cost base and exposure as
adversely affecting early as possible.
our revenue.
The geographic
spread of our
business and
supply chain
also helps to
mitigate these
risks.
Brexit The UK's decision
to leave the The Group and
European Union its external
has increased advisers continue
the level of to carefully
economic and monitor the
consumer uncertainty. potential impact
of Brexit. Our
presence in
a range of international
markets helps
mitigate the
impact of this
risk.
-------------- -------------------- -------------------------- ---------------------------
Operational Supply If garments do
Risks Chain not reach us
on time and to
specification,
there is a risk
of a loss of
revenue and customer
confidence. Over
reliance on key
suppliers could
also have an
impact on our
business.
-------------- -------------------- --------------------------
Our supply chain
is diversified
across a number
of suppliers
in different
regions, reducing
reliance on
a small number
of key suppliers.
Suppliers are
treated as key
business partners
and we work
closely with
them to mitigate
these risks.
The Group continues
to improve and
evolve its supply
chain.
-------------------- -------------------------- ---------------------------
Infrastructure There is a risk
of operational The business
problems, including continuity plan
disruption to is constantly
the infrastructure reviewed and
that supports updated by the
our business, Risk Committee.
which may lead In addition,
to a loss of business disruption
revenue, data is covered by
and inventory. our insurance
policies.
--------------------
Social We are committed A sub-committee
Responsibility to operating of the Executive
in a responsible Committee has
and sustainable been tasked
manner as regards with overseeing
our supply chain, specific areas
environment and of our social
community. If responsibility
we fail to operate agenda. Ted's
in a manner that Conscience Team
supports our is responsible
philosophy, this for monitoring
could damage this agenda
the trust and and ensure our
confidence of practices fall
our stakeholders. in line with
it.
-------------------- -------------------------- ---------------------------
Cyber The business The Group has
Security is reliant on invested in
sensitive data additional specialist
being transmitted IT resources.
electronically,
and is subject The continual
to threats from upgrading of
hacking or viruses security equipment
or other unauthorised and software
data breaches. also mitigates
these risks.
There is the
possibility of Tightly controlled
unintentional security controls
loss of controlled and data recovery
data by authorised and business
users. continuity plans
have been implemented
with the support
of specialist
third parties.
-------------------- -------------------------- ---------------------------
IT Infrastructure The Group's IT The Group's
and Implementation infrastructure IT Steering
of ERP is key to the Committee meets
operation of on a two weekly
its business. basis to review
the implementation
We are in the and all other
process of implementing major IT projects.
Microsoft Dynamics This Committee
AX across the comprises members
business. With of the Executive
any project of Committee and
this scale, there is advised by
is a risk of external professional
a poorly managed advisers. The
implementation IT Steering
or take-up of Committee has
new systems, established
which could lead a Design Authority
to business disruptions. charged with
overseeing the
This, and the scheduling of
implementation the implementation
of other new of any new system.
business systems,
has potential
to impact interdependent
systems.
-------------------- --------------------------
Robust change
management and
professional
project managers
recruited to
oversee the
project team
which includes
key business
stakeholders.
-------------------- -------------------------- ---------------------------
People Our performance Identification
is linked to and retention
the performance of key talent
of our people is important
and, in particular, and we take
to the leadership active steps
of key individuals. to provide stability
The loss of a and security
key individual to the key team.
whether at management We carry out
level or within an annual benchmarking
a specialist review to ensure
skill set could that we provide
have a detrimental competitive
affect on our remuneration
operations and, and total reward
in some cases, packages. We
the creative also utilise
vision for the long-term incentive
brand. schemes to retain
key talent.
Employee engagement
through our
culture and
environment
strengthen the
commitment of
team members
and has a positive
impact on our
attrition rate.
-------------------- --------------------------
Succession plans
are in place
and have been
reviewed during
the period.
-------------------- -------------------------- ---------------------------
Regulatory We operate in The Group closely
and Legal a range of international monitors changes
Framework markets and must in the legal
comply with various and regulatory
regulatory requirements. framework within
Failure to do the markets
so could lead in which it
to financial operates. We
penalties and/or work closely
reputational with specialist
damage. advisers in
each market
to ensure compliance
with local laws
and regulations.
-------------------- -------------------------- ---------------------------
Infringement Unauthorised
of the use of the Group's The Group, with
Group's designs, trademarks its external
Intellectual and other intellectual advisers, rigorously
Property property rights manages and
could damage defends its
the Ted Baker intellectual
brand and the property.
Group's reputation.
The Group deals
with counterfeit
goods in accordance
with its robust
enforcement
strategy.
------------ -------------------- -------------------------- ---------------------------
Financial Currency,
Risks Interest, In the course The Group's policies
Credit of its operations, for dealing with
and Counterparty we are exposed these risks are
Credit to these financial discussed in
Risks, risks which, detail in Note
including if they were 23 to the financial
Financial to arise, may statements.
Covenants have material
under financial impacts
the Group's on the Group.
credit
facilities
------------ ---------------------- -------------------------- -----------------------------
Foreign The Group is The Group's Foreign
Exchange exposed to fluctuations Exchange strategy
in the exchange is closely managed
rates of key by the Finance
currencies. Director and
the Group's external
advisers. The
Group has adopted
a hedging policy
to mitigate short-term
foreign exchange
risk.
------------ ---------------------- -------------------------- -----------------------------
Viability statement
In accordance with provision C.2.2 of the UK Corporate Governance Code dated September 2014 (the "Code") the Directors have assessed the viability of the Group over a five year period, taking into account the Group's current position and the potential impact of the principal risks documented above.
The Group operates a five year plan, which is updated and reviewed annually by the Board. Within the five year plan, detailed scenario planning and stress testing has been carried out over a five year period. The Directors therefore consider the five year period to 30 January 2022 to be the appropriate period to assess the viability and prospects of the Group with a high level of certainty.
The Directors' assessment has been further enhanced by analysing the current and future risks, controls and assurances available, resulting in a clear picture of the risk profile across the whole business. The principal risks, including specific operational risks, that could affect the future viability of the Group over the next five years are identified in the Principal Risks and Uncertainties section.
In making this assessment the Directors have considered the resilience of the Group to the occurrence of these risks in severe but plausible scenarios, taking into account the effectiveness of any mitigating actions. In addition, the Board has considered the impact on the Group's cash flows, headroom, covenants and other key financial ratios having stress tested the potential impact of these scenarios, both individually and in combination.
Sensitivity analysis was also used to stress test the Group's strategic plan and to confirm that sufficient headroom would remain available under the Group's credit facilities. The Board considers that under each scenario tested the mitigating actions would be effective and sufficient to ensure the continued viability of the Group. For the reasons stated above, based on the robust assessment undertaken, the Directors confirm they have a reasonable expectation that the Group will be able to continue in operation, and meet its liabilities as they fall due, over the period of assessment.
Going Concern
The Directors have reviewed the Group's budgets and long-term projections. After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for 12 months from the approval of these accounts. For this reason, they continue to adopt the going concern basis in preparing the financial statements.
The Strategic Report was approved by the Board of Directors on 23 March 2017 and signed on its behalf by:
Charles Anderson
Finance Director and Company Secretary
23 March 2017
Registered Office: The Ugly Brown Building, 6a St. Pancras Way, London NW1 0TB
Company No: 03393836
Group Income Statement
For the 52 weeks ended
28 January 2017
Note 52 weeks 52 weeks
ended ended
28 January 30 January
2017 2016
GBP'000 GBP'000
Revenue 2 530,986 456,169
Cost of sales (207,257) (183,147)
----------- -----------
Gross profit 323,729 273,022
Distribution costs (208,221) (169,762)
Administrative expenses (70,103) (57,435)
Administrative expenses
before exceptional costs (65,590) (57,435)
Exceptional costs 3 (4,513) -
------------------------------------ ----- ----------- -----------
Licence income 18,237 14,384
Other operating expense (1,145) (840)
----------- -----------
Operating profit 62,497 59,369
Finance income 4 1,597 531
Finance expense 4 (3,373) (1,931)
Share of profit of jointly
controlled entity, net
of tax 550 695
----------- -----------
Profit before tax 3 61,271 58,664
Profit before tax and exceptional
costs 65,784 58,664
Exceptional costs (4,513) -
Income tax expense 5 (14,703) (14,429)
Profit for the period 46,568 44,235
=========== ===========
Earnings per share
Basic 7 105.7p 100.6p
Diluted 7 104.5p 99.3p
Group Statement of Comprehensive
Income
For the 52 weeks ended 28 January
2017
52 weeks 52 weeks
ended ended
28 January 30 January
2017 2016
GBP'000 GBP'000
Profit for the period 46,568 44,235
------------ ------------
Other comprehensive income
Items that may be reclassified to
the Income Statement
Net effective portion of changes
in fair value of cash flow hedges 10,521 951
Net change in fair value of cash
flow hedges transferred to profit
or loss (5,435) (669)
Exchange differences on translation
of foreign operations net of tax 5,580 2,599
------------ ------------
Other comprehensive income for the
period 10,666 2,881
Total comprehensive income for the
period 57,234 47,116
============ ============
Group Statement of Changes in Equity
For the 52 weeks ended
28 January 2017
Share Share Cash Translation Retained Total
capital premium flow reserve earnings equity
hedging attributable
reserve to equity
shareholders
of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30
January 2016 2,199 9,617 1,650 2,311 156,822 172,599
Comprehensive
income for the
period
Profit for the
period - - - - 46,568 46,568
Exchange differences
on translation
of foreign operations - - - 7,038 - 7,038
Current tax
on foreign currency
translation - - - (1,458) - (1,458)
Effective portion
of changes in
fair value of
cash flow hedges - - 11,714 - - 11,714
Net change in
fair value of
cash flow hedges
transferred
to profit or
loss - - (5,435) - - (5,435)
Deferred tax
associated with
movement in
hedging reserve - - (1,193) - - (1,193)
Total comprehensive
income for the
period - - 5,086 5,580 46,568 57,234
========= ========= ========= ============ ========== ==============
Transactions
with owners
recorded directly
in equity
Increase in
issued share
capital 9 318 - - - 327
Share-based
payments charges - - - - 1,839 1,839
Movement on
current and
deferred tax
on share-based
payments - - - - 281 281
Dividends paid - - - - (21,736) (21,736)
--------- --------- --------- ------------ ---------- --------------
Total transactions
with owners 9 318 - - (19,616) (19,289)
========= ========= ========= ============ ========== ==============
Balance at 28
January 2017 2,208 9,935 6,736 7,891 183,774 210,544
========= ========= ========= ============ ========== ==============
Group Statement of Changes in Equity
For the 52 weeks ended
30 January 2016
Share Share Cash Translation Retained Total
capital premium flow reserve earnings equity
hedging attributable
reserve to equity
shareholders
of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
31 January
2015 2,196 9,331 1,368 (288) 127,967 140,574
Comprehensive
income for
the period
Profit for
the period - - - - 44,235 44,235
Exchange differences
on translation
of foreign
operations - - - 3,242 - 3,242
Current tax
on foreign
currency translation - - - (643) - (643)
Effective portion
of changes
in fair value
of cash flow
hedges - - 996 - - 996
Net change
in fair value
of cash flow
hedges transferred
to profit or
loss - - (669) - - (669)
Deferred tax
associated
with movement
in hedging
reserve - - (45) - - (45)
Total comprehensive
income for
the period - - 282 2,599 44,235 47,116
========= ========= ========= ============ ========== ==============
Transactions
with owners
recorded directly
in equity
Increase in
issued share
capital 3 286 - - - 289
Share-based
payments charges - - - - 2,019 2,019
Movement on
current and
deferred tax
on share-based
payments - - - - 1,144 1,144
Dividends paid - - - - (18,543) (18,543)
--------- --------- --------- ------------ ---------- --------------
Total transactions
with owners 3 286 - - (15,380) (15,091)
========= ========= ========= ============ ========== ==============
Balance at
30 January
2016 2,199 9,617 1,650 2,311 156,822 172,599
========= ========= ========= ============ ========== ==============
Company Statement of Changes in Equity
For the 52 weeks ended 28 January 2017
Share Share Other reserves Retained Total
capital premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30 January
2016 2,199 9,617 19,060 38,697 69,573
Profit for the
period - - - 27,246 27,246
Transactions with
owners recorded
directly in equity
Increase in issued
share capital 9 318 - - 327
Share-based payments
charges - - - 219 219
Share-based payments
charges for awards
granted to subsidiary
employees - - 1,620 - 1,620
Dividends paid - - - (21,736) (21,736)
-------- -------- -------------- --------- --------
Total transactions
with owners 9 318 1,620 (21,517) (19,570)
======== ======== ============== ========= ========
Balance at 28 January
2017 2,208 9,935 20,680 44,426 77,249
======== ======== ============== ========= ========
Company Statement of Changes in Equity
For the 52 weeks ended 30 January 2016
Share Share Other reserves Retained Total
capital premium earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 31 January
2015 2,196 9,331 17,287 32,978 61,792
Profit for the
period - - - 24,016 24,016
Transactions with
owners recorded
directly in equity
Increase in issued
share capital 3 286 - - 289
Share-based payments
charges - - - 246 246
Share-based payments
charges for awards
granted to subsidiary
employees - - 1,773 - 1,773
Dividends paid - - - (18,543) (18,543)
-------- -------- -------------- --------- --------
Total transactions
with owners 3 286 1,773 (18,297) (16,235)
======== ======== ============== ========= ========
Balance at 30 January
2016 2,199 9,617 19,060 38,697 69,573
======== ======== ============== ========= ========
Group and Company Balance Sheet
At 28 January 2017
Note Group Group Company Company
28-Jan-17 30-Jan-16 28-Jan-17 30-Jan-16
GBP'000 GBP'000 GBP'000 GBP'000
Intangible assets 8 24,445 17,247 - -
Property, plant and
equipment 9 144,354 123,397 - -
Investments in subsidiary - - 23,102 21,482
Investment in equity
accounted investee 1,897 1,641 - -
Deferred tax assets 4,446 6,313 - -
Prepayments 401 414 - -
---------- ---------- ---------- ----------
Non-current assets 175,543 149,012 23,102 21,482
Inventories 158,500 125,323 - -
Trade and other receivables 59,251 49,303 51,932 47,486
Amount due from equity
accounted investee 653 563 - -
Derivative financial
assets 8,974 2,850 - -
Cash and cash equivalents 21,401 13,295 2,238 615
---------- ---------- ---------- ----------
Current assets 248,779 191,334 54,170 48,101
Trade and other payables (80,995) (61,088) (23) (10)
Bank overdraft (58,074) (37,869) - -
Term loan (6,000) (1,500) - -
Income tax payable (10,327) (8,382) - -
Provisions for liabilities (915) - - -
and charges
Derivative financial
liabilities (616) (352) - -
---------- ---------- ---------- ----------
Current liabilities (156,927) (109,191) (23) (10)
---------- ---------- ---------- ----------
Deferred tax liability (2,349) (56) - -
Provisions for liabilities (2,002) - - -
and charges
Term loan (52,500) (58,500) - -
----------
Non-current liabilities (56,851) (58,556) - -
---------- ---------- ---------- ----------
Net assets 210,544 172,599 77,249 69,573
========== ========== ========== ==========
Equity
Share capital 2,208 2,199 2,208 2,199
Share premium 9,935 9,617 9,935 9,617
Other reserves 6,736 1,650 20,680 19,060
Translation reserve 7,891 2,311 - -
Retained earnings 183,774 156,822 44,426 38,697
----------
Total equity attributable
to equity shareholders
of the parent company 210,544 172,599 77,249 69,573
----------
Total equity 210,544 172,599 77,249 69,573
========== ========== ========== ==========
These financial statements were approved by the Board of Directors on 23 March 2017 and were signed on its behalf by:
Lindsay Page
Director
Company number: 03393836
Group and Company Cash Flow Statement
For the 52 weeks ended 28 January 2017
Group Group Company Company
52 weeks 52 weeks 52 weeks 52 weeks
ended ended ended ended
28 January 30 January 28 January 30 January
2017 2016 2017 2016
GBP'000 GBP'000 GBP'000 GBP'000
Cash generated from
operations
Profit for the period 46,568 44,235 27,246 24,016
Adjusted for:
Income tax expense 14,703 14,429 - -
Depreciation and amortisation 20,966 14,929 - -
Impairment - 188 - -
Loss on disposal of
property, plant & equipment 416 58 - -
Share-based payments 1,839 2,019 219 247
Net finance expense 1,776 1,400 - -
Net change in derivative
financial assets and
liabilities carried
at fair value through
profit or loss 677 840 - -
Share of profit in
joint venture (550) (695) - -
Decrease in non-current
prepayments 59 52 - -
Increase in inventory (27,128) (12,142) - -
Increase in trade and
other receivables (16,335) (10,805) (4,446) (5,977)
Increase in trade and
other payables 20,392 1,566 13 -
Increase in provisions
for liabilities and
charges 2,917 - - -
Interest paid (2,886) (1,376) - -
Income taxes paid (10,644) (13,127) - -
------------ ------------ ------------ ------------
Net cash generated
from operating activities 52,770 41,571 23,032 18,286
------------ ------------ ------------ ------------
Cash flow from investing
activities
Purchases of property,
plant & equipment and
intangibles (43,753) (89,535) - -
Proceeds from sale
of property, plant
& equipment 93 - - -
Investment in subsidiaries - - - -
Dividends received
from joint venture 294 344 - -
Interest received 15 - - -
------------ ------------ ------------ ------------
Net (decrease) in cash
from investing activities (43,351) (89,191) - -
------------ ------------ ------------ ------------
Cash flow financing
activities
Proceeds of term loan - 60,000 - -
Repayment of term loan (1,500) - - -
Dividends paid (21,736) (18,543) (21,736) (18,543)
Proceeds from issue
of shares 327 289 327 289
------------ ------------ ------------ ------------
Net (decrease) in cash
from financing activities (22,909) 41,746 (21,409) (18,254)
------------ ------------ ------------ ------------
Net (decrease) / increase
in cash and cash equivalents (13,490) (5,874) 1,623 32
------------ ------------ ------------ ------------
Net cash and cash equivalents
at the beginning of
the period (24,574) (18,824) 615 583
Exchange rate movement 1,391 124 - -
------------ ------------ ------------ ------------
Net cash and cash equivalents
at the end of the period (36,673) (24,574) 2,238 615
------------ ------------ ------------ ------------
Cash and cash equivalents
at the end of the period 21,401 13,295 2,238 615
Bank overdraft at the
end of the period (58,074) (37,869) - -
------------ ------------ ------------ ------------
Net cash and cash equivalents
at the end of the period (36,673) (24,574) 2,238 615
------------ ------------ ------------ ------------
Notes to the Financial Statements
1. Summary of Significant Accounting Policies
Basis of preparation
EU law (IAS Regulation EC 1606/2002) requires that the Group financial statements, for the 52 weeks ended 28
January 2017 are prepared in accordance with International Financial Reporting Standards (IFRSs) adopted for use in the EU ("adopted IFRSs").
This financial information has been prepared on the basis of the recognition and measurement requirements of adopted IFRSs as at 28 January 2017. This financial information does not constitute the Group's statutory accounts for the 52 weeks ended 28 January 2017 or 30 January 2016. The annual financial information presented in this annual results announcement for the 52 weeks ended 28 January 2017 is based on, and is consistent with, that in the Group's audited financial statements for the 52 weeks ended 28 January 2017, and those financial statements will be delivered in May 2017. The auditor's report on those financial statements is unqualified and does not contain any statement under Section 498 (2) or (3) of the Companies Act 2006.
Statutory accounts for 30 January 2016 have been delivered to the Registrar of Companies. The auditor has reported on those accounts; their reports were i) unqualified and, ii) did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.
Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out on pages 3 to 16. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Chairman's Statement on pages 3 to 5. In addition, the financial statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.
The Group meets its day-to-day working capital requirements through a committed overdraft facility expiring on 29 March 2018 which is a multi-currency revolving credit facility with The Royal Bank of Scotland and Barclays. The facility will be used to the extent necessary to fund working capital and capital expenditure to support the Group's growth strategy.
The Group's forecasts and projections, taking into account reasonably possible changes in trading performance, show that the Group has sufficient financial resources. As a consequence the Directors have a reasonable expectation that the Company and the Group are well placed to manage their business risks and to continue in operational existence for the twelve months from the date of signing the financial statements, despite the current uncertain global economic outlook. Accordingly, the Directors continue to adopt the going concern basis in preparing the consolidated financial statements.
Non-GAAP performance measures
Exceptional items are those items which, in the opinion of the Directors, should be excluded in order to provide a consistent and comparable view of the underlying performance of the Group's on-going business. Generally this will include those items that are largely one-off and material in nature. Exceptional items are identified and presented on a consistent basis each period and a reconciliation of profit before tax and exceptional items to profit before tax is included in the financial statements.
Exceptional items in the period included:
-- costs in relation to the closure of the Group's legacy warehouses in the UK. The Directors believe this cost to be one-off in nature as the Group do not close existing warehouses or move to new warehouses regularly;
-- costs in relation to the closure of a concept store in London. The Directors believe this cost to be one-off in nature as the Group does not open concept stores frequently.
There were no exceptional items in the prior period.
Exceptional items and their related tax impacts are added back/deducted from profit attributable to the owners of the Company to arrive at adjusted earnings per share.
The Directors believe that the profit before exceptional items and adjusted earnings per share measures provide useful information for shareholders on the underlying performance of the business as these exceptional items are one-off and material in nature. These measures are also consistent with how underlying business performance is measured internally.
The exceptional profit before tax measure is not a recognised profit measure under IFRS and may not be directly comparable with adjusted profit measures used by other companies.
Constant Currency variances are calculated by applying the previous financial period foreign exchange rates to current period results in overseas subsidiaries to remove the impact of exchange rate fluctuations. The Directors believe this provides a consistent and comparable view of the underlying performance of the Group's on-going business.
Significant accounting policies
No new standards, amendments or interpretations, effective for the first time for the period beginning on or after 31 January 2016 have had a material impact on the Group or Company.
IFRS 15, 'Revenue from Contracts with Customers' which is effective from 1 January 2018 has been considered by the Group and it was concluded this will not be significant to the Group's financial statements in the future.
At the balance sheet date there are a number of new standards and amendments to existing standards in issue but not yet effective. None of these is expected to have a significant effect on the financial statements of the Group or Company, except the following, set out below:
IFRS 9, 'Financial instruments', which is effective for periods beginning on or after 1 January 2018, replaces IAS 39 and addresses the classification, measurement and recognition of financial assets and financial liabilities. This was endorsed by the EU in November 2016 and as such the impact on the Group is currently being assessed.
IFRS 16, 'Leases' addresses the definition of a lease, recognition and measurement of leases and establishes principles for reporting useful information to users of financial statements about the leasing activities of both lessees and lessors. A key change arising from IFRS 16 is that most operating leases will be accounted for on balance sheet for lessees. The standard replaces IAS 17 'Leases', and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2019. The quantitative impact of IFRS 16 on the Group's net assets and results is being assessed. IFRS 16 is expected to have a material impact on the balance sheet as both assets and liabilities will increase and is also expected to have a material impact on key components within the income statements because operating lease rental charges will be replaced by depreciation and finance costs. IFRS 16 will not have any impact on the underlying commercial performance of the Group or the cash flow generated in the period.
The Group does not consider that any other standards, amendments or interpretations issued by the IASB, but not yet applicable, will have a significant impact on the financial statements in future years.
2. Segment information
The Group has three reportable segments; retail, wholesale and licence income. For each of the three segments, the Executive Committee reviews internal management reports on a four weekly basis.
The accounting policies of the reportable segments are described in the Group's financial statements. Information regarding the results of each reportable segment is included below. Performance for the retail segment is measured based on operating contribution, whereas performance of the wholesale segment is measured based on gross profit and performance of the licence segment is measured based on royalty income, as included in the internal management reports that are reviewed by the Board.
Segment results before exceptional items are used to measure performance as management believes that such information is the most relevant in evaluating the performance of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm's length basis.
a) Segment revenue and segment result
52 weeks ended 28 January 2017 Retail Wholesale Licence income Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 400,724 130,262 - 530,986
Cost of sales (135,704) (71,553) - (207,257)
---------- ---------- --------------- ----------
Gross profit 265,020 58,709 - 323,729
Operating costs (203,253) - - (203,253)
---------- ---------- --------------- ----------
Operating contribution 61,767 58,709 - 120,476
Licence income - - 18,237 18,237
---------- ---------- --------------- ----------
Segment result 61,767 58,709 18,237 138,713
Reconciliation of segment
result to profit before tax
Segment result 61,767 58,709 18,237 138,713
Other operating costs - - - (70,558)
Exceptional costs - - - (4,513)
Other operating expense - - - (1,145)
----------
Operating profit - - - 62,497
Net finance expense - - - (1,776)
Share of profit of jointly controlled entity, net of tax - - - 550
----------
Profit before tax - - - 61,271
==========
Capital expenditure 21,358 411 - 21,769
Unallocated capital expenditure - - - 21,985
----------
Total capital expenditure - - - 43,754
==========
Depreciation and amortisation 16,588 397 - 16,985
Unallocated depreciation and amortisation - - - 3,981
----------
Total depreciation and amortisation - - - 20,966
==========
Segment assets 225,632 83,161 - 308,793
Deferred tax assets - - - 4,446
Derivative financial assets - - - 8,974
Intangible assets - head office - - - 21,718
Property, plant and equipment - head office - - - 77,440
Other assets - - - 2,951
==========
Total assets - - - 424,322
==========
Segment liabilities (104,953) (34,116) - (139,069)
Income tax payable - - - (10,327)
Provisions for liabilities and charges - - - (2,917)
Term loan - - - (58,500)
Other liabilities - - - (2,965)
----------
Total liabilities - - - (213,778)
==========
Net assets - - - 210,544
==========
Wholesale sales are shown after the elimination of inter-company sales of GBP89,695,272 (2016: GBP65,535,811).
52 weeks ended 30 January 2016 Retail Wholesale Licence income Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 348,433 107,736 - 456,169
Cost of sales (122,557) (60,590) - (183,147)
---------- ---------- --------------- ----------
Gross profit 225,876 47,146 - 273,022
Operating costs (163,484) - - (163,484)
---------- ---------- --------------- ----------
Operating contribution 62,392 47,146 - 109,538
Licence income - - 14,384 14,384
---------- ---------- --------------- ----------
Segment result 62,392 47,146 14,384 123,922
Reconciliation of segment
result to profit before tax
Segment result 62,392 47,146 14,384 123,922
Other operating costs - - - (63,713)
Exceptional costs - - - -
Other operating expense - - - (840)
----------
Operating profit - - - 59,369
Net finance expense - - - (1,400)
Share of profit of jointly controlled entity, net of tax - - - 695
----------
Profit before tax - - - 58,664
==========
Capital expenditure 19,386 1,153 - 20,539
Unallocated capital expenditure - - - 68,994
----------
Total capital expenditure - - - 89,533
==========
Depreciation and amortisation 11,966 258 - 12,224
Unallocated depreciation and amortisation - - - 2,705
----------
Total depreciation and amortisation - - - 14,929
==========
Segment assets 186,826 60,468 - 247,294
Deferred tax assets - - - 6,313
Derivative financial assets - - - 2,850
Intangible assets - head office - - - 14,199
Property, plant and equipment - head office - - - 67,072
Other assets - - - 2,618
==========
Total assets - - - 340,346
==========
Segment liabilities (75,232) (23,726) - (98,958)
Income tax payable - - - (8,382)
Term loan - - - (60,000)
Other liabilities - - - (407)
----------
Total liabilities - - - (167,747)
==========
Net assets - - - 172,599
==========
b) Geographical information
UK US Rest of World Total
GBP'000 GBP'000 GBP'000 GBP'000
52 weeks ended 28 January 2017
Revenue 316,542 130,941 83,503 530,986
Non-current assets* 118,879 34,571 17,647 171,097
52 weeks ended 30 January 2016
Revenue 291,804 99,931 64,434 456,169
Non-current assets* 103,642 25,578 13,479 142,699
*Non-current assets exclude deferred tax assets.
c) Revenue by collection
52 weeks ended 52 weeks ended
28 January 30 January
2017 2016
------------ --------------- ---------------
GBP'000 GBP'000
Menswear 226,731 202,083
Womenswear 304,255 254,086
--------------- ---------------
530,986 456,169
=============== ===============
3. Profit before tax
Profit before tax is stated 52 weeks 52 weeks
after charging/(crediting): ended ended
28 January 30 January
2017 2016
GBP'000 GBP'000
Depreciation and amortisation 20,966 14,929
Impairment of property, plant
and equipment - 188
Exceptional costs 4,513 -
Leasehold properties & concession
rentals*
Fixed lease payments 56,558 41,171
Variable rental and commission
payments 36,125 29,724
Loss on sale of property,
plant & equipment and intangibles 416 58
Auditor remuneration:
Audit of these financial
statements 12 11
Amounts receivable by the
Company's auditor and its
associates in respect of:
Audit of financial statements
of subsidiaries of the Company 300 205
Interim financial statements
review 17 17
Audit related assurance services 21 20
Taxation compliance and other
advisory services 10 114
*Disclosed above are the costs charged in the period relating to leasehold properties and concession arrangements. These are either fixed in nature or variable based on revenue levels for a particular store or concession, where relevant, excluding e-commerce sales with concession partners.
Exceptional costs in the period of GBP4.5m (2016: GBPnil) include a provision for lease commitments relating to the Group's legacy warehouses of GBP2.9m along with GBP0.7m of other closure costs and GBP0.9m in respect of closure costs for a concept store in London.
There were no amounts recognised as exceptional costs or income during the 52 weeks ended 30 January 2016.
4. Finance income and expenses
52 weeks 52 weeks
ended ended
28 January 30 January
2017 2016
GBP'000 GBP'000
Finance income
- Interest receivable 15 -
- Foreign exchange gains 1,582 531
1,597 531
============ ------------
Finance expenses
- Interest payable (2,933) (1,430)
- Foreign exchange losses (440) (501)
------------ ------------
(3,373) (1,931)
============ ============
5. Income tax expense
a) The tax charge comprises
52 weeks 52 weeks
ended ended
28 January 30 January
2017 2016
GBP'000 GBP'000
Current tax
United Kingdom Corporation
Tax 12,343 11,609
Overseas Tax 3,625 5,060
eferred tax
United Kingdom Corporation
Tax 977 46
Overseas Tax (1,038) (854)
Prior period (over)/under
provision
Current tax (4,481) (2,854)
Deferred tax 3,277 1,422
------------ ------------
14,703 14,429
============ ============
The movements in prior period current and deferred tax provisions are largely a result of accelerated tax relief claims on fixed assets in the US (2016: movements largely due to accelerated capital allowances in the UK).
b) Deferred tax movement by type
52 weeks 52 weeks
ended ended
28 January 30 January
2017 2016
----------------------------- ------------ ------------
GBP'000 GBP'000
Property, plant & equipment (464) (107)
Share-based payments (49) 336
Overseas losses 379 412
Inventory (41) (65)
Other 236 232
------------ ------------
61 808
============ ============
c) Factors affecting the tax charge for the period
The tax assessed for the period is higher than the tax calculated at domestic rates applicable to profits in the respective countries. The differences are explained below.
52 weeks 52 weeks
ended ended
28 January 30 January
2017 2016
------------------------------------- ------------ ------------
GBP'000 GBP'000
Profit before tax 61,271 58,664
Profit multiplied by the standard
rate in the UK - 20%, (2016:
standard rate in the UK of
20.16%) 12,254 11,827
Income not taxable/expenses
not deductible for tax purposes 675 759
Overseas losses not recognised 1,494 678
Movement in current and deferred
tax on share awards and options 31 30
Prior period over provision (1,204) (1,432)
Effect of rate change on corporation
tax - 41
Difference due to overseas
tax rates 1,453 2,526
Total income tax expense 14,703 14,429
============ ============
d) Deferred and current tax recognised directly in equity
52 weeks 52 weeks
ended ended
28 January 30 January
2017 2016
--------------------------------- ------------ ------------
GBP'000 GBP'000
Current tax credit on share
awards and options (554) (190)
Deferred tax charge / (credit)
on share awards and options 273 (954)
Deferred tax charge associated
with movement in hedging
reserve 1,193 45
Current tax charge associated
with foreign exchange movements
in reserves 1,458 643
------------ ------------
2,370 (456)
============ ============
There will be a reduction in the UK corporation tax rate to 19% from 1 April 2017 and to 17% from 1 April 2020.
As the deferred tax assets and liabilities should be recognised based on the corporation tax rate at which they are anticipated to unwind, the assets and liabilities on UK operations have been recognised at a rate of 19%. Those assets and liabilities arising on foreign operations have been recognised at the applicable overseas tax rates.
6. Dividends per share
52 weeks 52 weeks
ended ended
28 January 30 January
2017 2016
-------------------------------- ------------ ------------
GBP'000 GBP'000
Final dividend paid for prior
period of 34.6p per ordinary
share (2016: 29.0p) 15,215 12,739
Interim dividend paid of
14.8p per ordinary share
(2016: 13.2p) 6,521 5,804
------------ ------------
21,736 18,543
============ ============
A final dividend in respect of 2017 of 38.8p per share, amounting to a dividend payable of GBP17,137,466 is to be proposed at the Annual General Meeting on 13 June 2017.
7. Earnings per share
52 weeks 52 weeks
ended ended
28 January 30 January
2017 2016
------------------------------- ------------ ------------
Number of shares: No. No.
Weighted number of ordinary
shares outstanding 44,034,459 43,950,203
Effect of dilutive options 516,310 612,138
Weighted number of ordinary
shares outstanding - diluted 44,550,769 44,562,341
============ ============
Earnings: GBP'000 GBP'000
Profit for the period basic
and diluted 46,568 44,235
Profit for the period adjusted
* 50,178 44,235
Basic earnings per share 105.7p 100.6p
Adjusted earnings per share
* 114.0p 100.6p
Diluted earnings per share 104.5p 99.3p
Adjusted diluted earnings
per share* 112.6p 99.3p
Diluted earnings per share and adjusted diluted earnings per share have been calculated using additional ordinary shares of 5p each available under the Ted Baker Sharesave Scheme and the Ted Baker Plc Long-Term Incentive Plan 2013.
There were no share related events after the balance sheet date that may affect earnings per share.
* Adjusted profit for the period and adjusted earnings per share are shown before the net exceptional costs (net of tax) of GBP3.6m (2016: GBPnil).
8. Intangible assets
Key money Computer Computer Total
software software
under development
--------------- --------- --------- ------------------ -------
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 30 January
2016 879 8,361 10,649 19,889
Additions /
transfers - 5,134 4,205 9,339
Disposals (351) - - (351)
Exchange rate
movement 96 124 - 220
--------- --------- ------------------ -------
At 28 January
2017 624 13,619 14,854 29,097
Amortisation
At 30 January
2016 - 2,642 - 2,642
Charge for the
period - 1,925 - 1,925
Disposals - - - -
Exchange rate
movement - 85 - 85
--------- --------- ------------------ -------
At 28 January
2017 - 4,652 - 4,652
--------- --------- ------------------ -------
Net book value
--------- --------- ------------------ -------
At 30 January
2016 879 5,719 10,649 17,247
========= ========= ================== =======
At 28 January
2017 624 8,967 14,854 24,445
========= ========= ================== =======
Key money Computer Computer Total
software software
under development
--------------- --------- --------- ------------------ -------
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 31 January
2015 865 3,669 9,278 13,812
Additions /
transfers - 4,634 1,371 6,005
Exchange rate
movement 14 58 - 72
--------- --------- ------------------ -------
At 30 January
2016 879 8,361 10,649 19,889
Amortisation
At 31 January
2015 - 957 - 957
Charge for the
period - 1,652 - 1,652
Exchange rate
movement - 33 - 33
--------- --------- ------------------ -------
At 30 January
2016 - 2,642 - 2,642
--------- --------- ------------------ -------
Net book value
--------- --------- ------------------ -------
At 31 January
2015 865 2,712 9,278 12,855
========= ========= ================== =======
At 30 January
2016 879 5,719 10,649 17,247
========= ========= ================== =======
The key money brought forward relates to the right to lease stores that have a guaranteed residual value. The guaranteed value arises because the next tenants based on current market conditions are required to pay these amounts to the Group. Due to the nature of this, the assets are considered recoverable and no amortisation is charged each period as the residual value of the asset is considered to be in excess of the carrying value. The current market rate rents, for both stores included within the intangible assets, continue to be above the rent under the lease terms and hence no decline in values is foreseen.
Additions included within computer software relate to the Microsoft Dynamics AX systems and further development of our e-commerce platforms. Additions included within the computer software under development category relate to the Microsoft Dynamics AX system and are stated net of transfers to computer software. Transfers from the computer software under development category in the period amounted to GBP5,134,000 (2016: GBP4,634,000) whilst additions into this category were GBP9,339,000 (2016: GBP6,005,000).
9. Property, plant and equipment
Freehold Leasehold Fixtures, Motor Assets Total
land improvements fittings vehicles under
& buildings & office construction
equipment
--------------- ------------ ------------- ---------- --------- ------------- -------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 30 January
2016 57,973 87,384 69,813 110 3,308 218,588
Additions
/ transfers - 23,816 8,038 1 2,560 34,415
Disposals - (1,538) (986) - - (2,524)
Exchange rate
movement - 6,351 3,298 - 336 9,985
------------ ------------- ---------- --------- ------------- -------
At 28 January
2017 57,973 116,013 80,163 111 6,204 260,464
------------ -------------
Depreciation
At 30 January
2016 32 45,120 49,934 105 - 95,191
Charge for
the period 451 10,562 8,026 2 - 19,041
Disposals - (1,466) (898) - - (2,364)
Impairment - - - - - -
Exchange rate
movement - 2,438 1,804 - - 4,242
------------ ------------- ---------- --------- ------------- -------
At 28 January
2017 483 56,654 58,866 107 - 116,110
------------ ------------- ---------- --------- ------------- -------
Net book value
------------ ------------- ---------- --------- ------------- -------
At 30 January
2016 57,941 42,264 19,879 5 3,308 123,397
============ ============= ========== ========= ============= =======
At 28 January
2017 57,490 59,359 21,297 4 6,204 144,354
============ ============= ========== ========= ============= =======
Freehold Leasehold Fixtures, Motor Assets Total
land & improvements fittings vehicles under
buildings & office construction
equipment
----------------------- ---------- ------------- ---------- --------- ------------- -------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 31 January
2015 - 73,447 58,160 110 790 132,507
Additions
/ transfers 57,973 12,470 10,704 - 2,381 83,528
Disposals - (280) (105) - - (385)
Exchange rate
movement - 1,747 1,054 - 137 2,938
---------- ------------- ---------- --------- ------------- -------
At 30 January
2016 57,973 87,384 69,813 110 3,308 218,588
---------- -------------
Depreciation
At 31 January
2015 - 37,238 43,362 103 - 80,703
Charge for
the period 32 7,218 6,025 2 - 13,277
Disposals - (250) (77) - - (327)
Impairment - 187 1 - - 188
Exchange rate movement - 727 623 - - 1,350
At 30 January 2016 32 45,120 49,934 105 - 95,191
Net book value
At 31 January 2015 - 36,209 14,798 7 790 51,804
At 30 January 2016 57,941 42,264 19,879 5 3,308 123,397
Additions included within the assets under construction category are stated net of transfers to other property, plant and equipment categories. Transfers from the assets under construction category in the period amounted to GBP31,855,000 (2016: GBP23,174,000) whilst additions into this category were GBP34,415,000 (2016: GBP25,555,000).
Impairment of leasehold improvements
The Group has determined that for the purposes of impairment testing, each store and outlet is tested for impairment if there are indications of impairment at the balance sheet date.
Recoverable amounts for cash-generating units are based on value in use, which is calculated from cash flow projections using data from the Group's latest internal forecasts, the results of which are reviewed by the Board. The key assumptions for the value in use calculations are those regarding discount rates, growth rates and expected changes in margins. Management estimates discount rates using pre-tax rates that reflect the current market assessment of the time value of money and the risks specific to the cash-generating units. Changes in selling prices and direct costs are based on past experience and expectations of future changes in the market.
The pre-tax discount rate used to calculate value in use is derived from the Group's adjusted weighted average cost of capital.
The impairment losses relate to stores 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.
There was no impairment charge for the 52 weeks ended 28 January 2017.
The impairment charge for the 52 weeks ended 30 January 2016 included a charge in respect to one retail asset in the UK that had failed to deliver on its potential.
10. Related Parties
The Group considers its Executive and Non-Executive Directors as key management and their compensation therefore comprises a related-party transaction.
Total compensation in respect of key management for the year was as follows:
52 weeks ended 52 weeks ended
28 January 30 January
2017 2016
GBP'000 GBP'000
Salaries & short-term benefits 2,582 1,513
Contributions to money-purchase pension schemes 53 53
Share-based payment charges 427 480
3,062 2,046
Directors of the Company and their immediate relatives control 35.4% per cent of the voting shares of the Company.
At 28 January 2017, No Ordinary Designer Label Limited ("NODL"), the main trading company owed Ted Baker Plc GBP51,932,000 (2016: GBP47,486,000). NODL was owed GBP136,813,000 (2016: GBP55,931,000) from the other subsidiaries within the Group.
Transactions between subsidiaries were priced on an arm's length basis.
The Group has a 50% interest in the ordinary share capital of No Ordinary Retail Company Pty, a company incorporated in Australia, through its wholly owned subsidiary No Ordinary Designer Label Limited. As at 28 January 2017, the joint venture owed GBP653,000 to the main trading company (2016: GBP563,000). In the period the value of sales made to the joint venture by the Group was GBP2,696,000 (2016: GBP2,427,000).
Ray Kelvin and Lindsay Page are both directors of, and shareholders in, THAT Bournemouth Company Limited, THAT TopCo Limited and THAT Bournemouth Big Hotel Limited and as such, these entities are a related party of the Company for the purposes of Chapter 11 of the Listing Rules.
During the period the Group provided design services to THAT Bournemouth Company Limited for which licence income fees were charged of GBP192,000 (2016: GBP170,000). No amounts were outstanding as at 28 January 2017 (2016: GBPnil).
During the period the main trading company provided office space to THAT TopCo Limited for which rental charges were made of GBP34,560 and other miscellaneous charges of GBP3,446 (2016: GBPnil). No amounts were outstanding as at 28 January 2017 (2016: GBPnil).
During the period the main trading company supplied services to THAT Bournemouth Big Hotel Limited for which charges were made of GBP16,551 (2016: GBPnil). No amounts were outstanding as at 28 January 2017 (2016: GBPnil).
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR KMGZFMZDGNZZ
(END) Dow Jones Newswires
March 23, 2017 03:01 ET (07:01 GMT)
1 Year Ted Baker Chart |
1 Month Ted Baker Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
