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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Footasylum Plc | LSE:FOOT | London | Ordinary Share | GB00BYPHD607 | ORD GBP0.001 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 81.50 | 80.00 | 83.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMFOOT
RNS Number : 1158E
Footasylum PLC
16 October 2018
16 October 2018
This announcement contains inside information
Footasylum plc
Results for the 26 weeks ended 25 August 2018
Revenue growth across all channels and major product categories, despite challenging trading conditions
Profitability impacted by lower gross margin and by the extensive investments being made to position the Company for future growth
Footasylum plc ("Footasylum" or the "Company"), the UK-based fashion retailer focusing on branded footwear and apparel, today announces its unaudited results for the 26 week period ended 25 August 2018 (comparative figures are shown for the 26 week period ended 26 August 2017).
Hot Features
Premium
HY19 HY18
-------------------------------------------- ------- -----
Revenue (GBPm) 98.6 83.2
-------------------------------------------- ------- -----
Adjusted EBITDA (GBPm)1 (1.5) 4.4
-------------------------------------------- ------- -----
Adjusted EBITDA margin (1.5)% 5.3%
-------------------------------------------- ------- -----
Adjusted (loss) / profit before tax (GBPm)2 (4.0) 2.3
-------------------------------------------- ------- -----
Non-GAAP adjusted diluted EPS (p)3 (3.98)p 1.70p
-------------------------------------------- ------- -----
Net cash (GBPm) (cash less bank overdrafts) 4.5 (0.7)
-------------------------------------------- ------- -----
Financial highlights
-- Currently trading in line with the FY19 expectations that were rebased with the trading update of 3 September 2018
-- Revenue up 19% to GBP98.6m, (HY18: GBP83.2m) with growth across all channels and major product categories
o Store revenue up 12% to GBP66.3m (HY18: GBP59.0m) albeit impacted by challenging trading conditions and delays in store openings and upsizes
o Online sales up 29% to GBP30.2m (HY18: GBP23.5m) now accounting for 31% of total revenue (HY18: 28%)
o Wholesale up 200% to GBP2.1m (HY18: GBP0.7m)
-- Adjusted EBITDA of (GBP1.5m) (HY18: GBP4.4m) reflects a lower gross margin and increased investment for future growth
-- Adjusted loss before tax of (GBP4.0m) (HY18: profit GBP2.3m) -- Net cash balances at period end of GBP4.5m (FY18: (GBP0.7m))
Operational highlights
-- Opened one new store, bringing the total store estate to 66, with plans well advanced to open a further five stores and upsize a total of five stores across the financial year, with four upsizes planned before peak trading
-- Significantly improved the online experience with further investment in the footasylum.com website and the relaunch of our app
-- Launched a new consumer rewards programme, UNLCKD, to improve the consumer experience and provide greater consumer insight
Barry Bown, Executive Chairman of Footasylum, commented:
"This has been a difficult trading period for Footasylum as we have contended with tough conditions on the high street and some delays in our programme of new store openings and upsizes ahead of the peak trading period.
While we are pleased to be reporting good top line growth, and a particularly strong year-on-year revenue performance in both online and wholesale, our profitability has been impacted both by a lower overall gross margin from higher clearance activity in stores, as well as the extensive investments that are being made to position the Company for future growth.
We are encouraged by the early results and trends that we are seeing from our investments in key areas such as digital and marketing, and see substantial opportunity for further progress across these and other parts of our operations. In the longer-term, we remain confident that the Company's differentiated, product-led, multi-channel proposition, combined with strong partnerships with core suppliers, will underpin our future progress."
Analyst meeting and availability of Half Year Report
A meeting for analysts will be held today at the London Stock Exchange commencing at 10.00am. Please contact Powerscourt on the details below for further information or to confirm attendance. A copy of the presentation will be available on the Company's Investor website: http://investors.footasylum.com/. Copies of this Half Year Report are available from the Company's website http://investors.footasylum.com/ and from the Company Secretary at Sandbrook House, Sandbrook Park, Rochdale, Lancashire, OL11 1RY
Enquiries:
Footasylum plc Tel: +44 (0) 1706 714 265
Barry Bown, Executive Chairman
Danielle Davies, Chief Financial Officer
GCA Altium Limited (Financial and Nominated Advisor) Tel: + 44 (0) 20 7484 4040
Phil Adams
Sam Fuller
Tim Richardson
Liberum Capital Limited (Broker) Tel: +44 (0) 20 3100 2222
John Fishley
Andrew Godber
Powerscourt (Financial Public Relations) Tel: + 44 (0) 20 7250 1446
Rob Greening
Lisa Kavanagh
Isabelle Saber
Consumer website: https://www.footasylum.com/
Investor website: http://investors.footasylum.com/
Notes
(1) Adjusted EBITDA is stated as earnings before interest, tax, depreciation, amortisation, exceptional items and the share-based payment charge.
(2) Adjusted profit before tax is stated as adjusted EBITDA after interest, depreciation and amortisation.
(3) Non-GAAP adjusted diluted earnings per share ("EPS") is stated as profit after tax ("PAT") before exceptional items and the share-based payment charge per the diluted issued ordinary shares as at 25 August 2018. Share options are not included in the calculation at HY19 as they would be anti-dilutive.
Disclaimer
This announcement contains inside information for the purposes of article 7 of EU Regulation 596/2014. The person responsible for making this announcement on behalf of Footasylum is Nancy Kelsall, Company Secretary.
Certain statements in this financial report are forward-looking. Where the financial report includes forward-looking statements, these are made by the Directors in good faith based on the information available to them at the time of their approval of this report. Such statements are based on current expectations and are subject to a number of risks and uncertainties, including both economic and business risk factors that could cause actual events or results to differ materially from any expected future events or results referred to in these forward-looking statements. Unless otherwise required by applicable law, regulation or accounting standards, the Company undertakes no obligations to update any forward-looking statements whether as a result of new information, future events or otherwise.
About Footasylum
Footasylum is a UK-based fashion retailer focusing on the branded footwear and apparel markets. The Company retails "on-trend" product ranges which are predominantly aimed at 16 to 24-year-old fashion-conscious consumers and are sourced from an extensive stable of third-party and own brands. These include well-known sports and casual footwear and apparel brands, as well as up-and-coming brands and own label products.
Examples of third-party brands include: adidas; Nike; The North Face; Gym King; Converse; New Balance; EA7; Vans; Nicce London; Under Armour; Tommy Hilfiger; and Calvin Klein. Examples of Footasylum's own brands include: Kings Will Dream and Alessandro Zavetti.
The Company operates a multi-channel model which combines a 66-strong store estate - in a variety of high street, mall and retail park locations in cities and towns throughout Great Britain - with a fast-growing online platform and a recently launched wholesale arm for distributing its own brand ranges via a network of partners.
Footasylum was founded in 2005 and the Company's ordinary shares were admitted to trading on AIM in November 2017.
EXECUTIVE CHAIRMAN'S STATEMENT
While it has undoubtedly been a challenging trading period for the Company, I am pleased that we continued to deliver good top line growth. We continue to evolve with changing market conditions and our multi-channel proposition affords us the ability to refocus our investment across channels to ensure we remain well positioned to capture the growth opportunities that we see ahead of us.
Our strategic priorities
The key pillars of our growth strategy continue to be: the development of our online and digital marketing platforms; a disciplined UK store roll out and upsizing in key locations; and the expansion of our wholesale operation alongside the growth of our own brand products. Our strategy, combined with our differentiated offering and hyper-local approach, is aimed at leveraging the trends and opportunities that we see in the marketplace.
Online
There is substantial further growth potential in the online channel and we are investing significantly in technology and talent to enable us to reach consumers more effectively, improve their online experience with Footasylum, and make it easier for them to buy more from us. We continue to target 50% of our revenue to come from online and wholesale channels in the medium-term.
Stores
Physical stores form the foundation of our brand and provide a solid base for our multichannel approach. They drive growth by accessing more key brands, a wider range of product and more exclusives. Our store rollout and upsizing strategy builds on these foundations by increasing floor space in key locations, allowing us to present our product range more effectively, improve selling capacity and become an even more attractive proposition for our key suppliers.
Wholesale
Our wholesale operation enhances the market positioning of our own brands and gives them a longer life cycle. Where appropriate, it allows us to take advantage of a broader market allowing us to maximise their potential as well as building their credibility in the market. We see volume potential in this area and believe it represents another route to access international markets.
INVESTMENTS for growth
In order to maximise the growth opportunities ahead of us, we have continued to invest in necessary technology, people and infrastructure both online and in stores.
Digital
We have made great improvements in our online offering by placing our app and rewards scheme at the centre of consumer transactions. We have fundamentally redesigned the website, introduced live chat, improved imagery, checkout and the basket to improve conversion. We are seeing early indicators of success with online conversion rates improving meaningfully.
Mobile conversion has been particularly strong and revenue generated from mobile devices increased from 60% to 66% in the period. To continue to address this growth opportunity, we have relaunched our new Footasylum app alongside our rewards scheme, "UNLCKD". In addition to offering tiered benefits to our consumers, this cross-channel rewards scheme, in combination with the app, also gives us a deeper understanding of our consumers.
Other actions to grow the online consumer base and their order frequency have included extending the cut-off time for next day delivery and trialling same day delivery in some areas. Early feedback is positive; click and collect now accounts for 12% of all online orders (HY18: 11%) and our trust pilot score has improved considerably to 7.7.
Marketing
Our marketing function has been restructured in order to create focused teams dedicated to brand, marketing and creativity, which will enable us to plan and execute the creative campaigns needed to engage and entertain our consumers.
Our marketing approach is designed to access the rapidly growing online consumer base whilst also driving footfall into stores. We have improved our social media engagement through continued collaboration with key influencers while steadily building our content and presence on key platforms. In addition, we are improving our data analytics and consumer segmentation to better understand our tribes, targeting online shoppers with a high propensity to purchase in-store and rolling out location specific digital campaigns to drive in-store sales.
Our 10,000 sq ft studio in Manchester has strengthened our in-house design, photography and videography capabilities to support our activities, both digitally and through our stores. The studio allows us to increase the output and quality of product photography and videography whilst dramatically increasing distribution efficiency; all of which means we are reacting faster to evolving trends and maximising relevance to our consumers.
Marketing campaigns with big brands have stepped up significantly in the first half with successful campaigns executed for Nike and adidas, amongst others.
Stores
Investment in our store estate is important for the success of our business. In the last six months, we have refocussed our investment priorities to scale back the number of new store openings in favour of refitting and upsizing strategically important locations. We employ a robust and consistent investment framework that not only delivers a return on capital, but - even more importantly at this stage in our development - also enables us to engage with key suppliers more effectively. In this financial year alone, we plan to upsize a total of five stores, including the strategically important, flagship stores in London's Stratford and White City shopping centres. By the end of FY20, after including the two upsizes planned for that year, we will have completed a total 14 out of the 20 stores we initially identified as potential upgrades. We have been encouraged by the early success of our upsized stores and the resulting progress with suppliers, and firmly believe that the investments we are making in this area are an effective use of capital.
brands
Our continued ability to build relationships with global brands is imperative for our growth. One of my personal immediate priorities on joining the business was to utilise my experience and network of contacts to help boost the team's capabilities to further develop our already strong third-party relationships.
Building brand relationships takes time, but through a combination of store openings and upsizes, targeted marketing campaigns and streamlined systems, we believe that we are differentiating ourselves and positioning the Company for success.
Our actions in this area continue to bear fruit. Multiple new brands are launching, we have gained access to additional categories from key third party suppliers and are pleased that we are now gaining access to exclusive product. At the same time, we are broadening the range of brands and product offered in our stores.
The development of our own brands also remains a priority, as they underline the quality and choice we offer our consumers and ensure that we can drive trends quickly when we identify gaps in the ranges of our third-party brands.
Capital structure and dividend policy
The Board is satisfied that the current capital and funding structure of the Company is robust, allowing it to invest in the systems and stores that will fuel future growth. The Board continues to apply strong cash controls and we remain (and expect to remain) in compliance with the covenants of our bank facilities.
In the short-term, we will retain the Company's earnings for re-investment to continue funding growth. Therefore, we are not proposing an interim dividend for HY19. Ultimately it is the Board's intention to pursue a progressive dividend policy which will be balanced against the need to retain sufficient earnings to expand and develop the Company.
Our COLLEAGUES
We have continued to strengthen several of our teams, attracting and retaining top talent and reinforcing our existing capabilities in areas including retail, buying and human resources. In particular, we've brought on a vastly experienced Head of Retail to lead on tactical strategy, delivery, consumer experience and trading in stores.
We are a business that is committed to delivering on our strategic objectives and focused on delivering sustainable long-term growth, and our colleagues across the business remain more committed than ever to this objective. I would like to take this opportunity to thank our senior management team and all our colleagues for their continuing hard work and continued dedication in what has been, at times, a challenging six months.
Current trading and outlook
The Company is trading in line with the FY19 expectations that were rebased at the time of the trading update of 3 September 2018.
While the UK high street is undoubtedly a challenging trading environment, the Board stands behind its growth strategy and is confident that targeted new store openings and upsizes, combined with focused investment in the online channel will materially improve Footasylum's existing strong brand relationships and enhance the consumer experience. However, in order to preserve the balance sheet given the lower expectations for profitability in the near term, from FY20 the Company will scale back its targeted store expansion programme to two new stores and two upsizes per annum, until the capacity for greater investment returns. As a result, associated costs in FY20 will be lower than previously expected.
Consequently, expected capital expenditure of GBP16m in FY19 is expected to represent its peak level with the associated depreciation flowing through in later years. The Company's forecast for its FY19 cash position is unchanged and remains in line with market expectations.
The Board is encouraged by the progress made to date in strengthening its partnerships with core suppliers and improvements in its technology and consumer systems. In the longer-term, the Board remains confident that the Company's differentiated, product-led, multi-channel proposition, combined with strong partnerships with core suppliers, will underpin its continued progress.
Barry Bown
EXECUTIVE CHAIRMAN
FINANCIAL REVIEW
Absolute
HY19 HY18 Change
-------------------------------------------- ------ ----- ---------
Revenue (GBPm) 98.6 83.2 +15.4
-------------------------------------------- ------ ----- ---------
Gross profit (GBPm) 42.3 37.3 +5.0
-------------------------------------------- ------ ----- ---------
Gross margin 42.9% 44.8% (190) bps
-------------------------------------------- ------ ----- ---------
Adjusted EBITDA (GBPm)1 (1.5) 4.4 (5.9)
-------------------------------------------- ------ ----- ---------
Adjusted EBITDA margin (1.5)% 5.3% (680) bps
-------------------------------------------- ------ ----- ---------
Adjusted (loss) / profit before tax (GBPm)2 (4.0) 2.3 (6.3)
-------------------------------------------- ------ ----- ---------
(Loss) / Profit before tax (GBPm) (2.5) 1.7 (4.2)
-------------------------------------------- ------ ----- ---------
Non-GAAP adjusted diluted EPS (p)3 (3.98) 1.70 (5.68)
-------------------------------------------- ------ ----- ---------
Net cash (GBPm) (cash less bank overdraft) 4.5 (0.7) +5.2
-------------------------------------------- ------ ----- ---------
1. Adjusted EBITDA is stated as earnings before interest, tax, depreciation, amortisation, exceptional items and the share-based payment charge.
2. Adjusted profit before tax is stated as adjusted EBITDA after interest, depreciation and amortisation.
3. Non-GAAP adjusted diluted earnings per share ("EPS") is stated as profit after tax ("PAT") before exceptional items and the share-based payment charge per the diluted issued ordinary shares as at 25 August 2018. Share options are not included in the calculation at HY19 as they would be anti-dilutive.
Revenue for the period increased 19 per cent, reflecting sales growth in major product categories, across all channels, from further store roll out, increasing volumes of online traffic and the growth of the Company's wholesale business. The gross margin was 42.9 per cent, down 190 basis points (HY18: 44.8 per cent) due to a combination of channel mix and clearance activity in stores and online contributing to a reduction in both footwear and apparel margin.
Footasylum continued to invest in its infrastructure and talent to support further growth. This, combined with the lower sales and gross margin, resulted in an adjusted EBITDA loss of GBP1.5m (HY18: profit of GBP4.4m).
Revenue
Overall revenue increased 19 per cent in HY19 to GBP98.6 million (HY18: GBP83.2 million). Revenue is reported net of sales taxes and returns, which remained low as a proportion of revenue reflecting Footasylum's product offering.
Revenue by channel
GBPm HY19 HY18 Change
---------- ----- ----- ------
Store 66.3 59.0 12%
---------- ----- ----- ------
Online 30.2 23.5 29%
---------- ----- ----- ------
Wholesale 2.1 0.7 200%
---------- ----- ----- ------
98.6 83.2 19%
---------- ----- ----- ------
Footasylum operates a multi-channel model across a 66-strong store estate in the UK, online and via a wholesale business which distributes Footasylum own brand products to select partners. In HY19 the store estate accounted for 67 per cent of total revenue (HY18: 71 per cent), online for 31 per cent of total revenue (HY18: 28 per cent) and wholesale for 2 per cent of total revenue (HY18: 1 per cent).
Menswear, including both apparel and footwear, represented 68 per cent of total revenue in HY19. This has decreased as a proportion of total revenue from 70 per cent in HY18, reflecting growth in women's ranges which, along with children's ranges, were launched in selected stores as well as online.
Stores
Store revenue increased 12% on last year, and although a good performance, growth was impacted by challenging summer trading combined with delays in delivering both planned upsizes and new stores. Footasylum opened one new store (HY18: three) in the period and is planning to deliver four upsizes ahead of the peak Christmas trading period. Across this financial year, we plan to deliver a total of six new stores and five upsizes.
Of the 66 stores open at 25 August 2018, 64 were operated under the core Footasylum fascia, while a further two stores operate under offshoot fascia, branded Drome and SEVEN. These offshoot stores accounted for c.1 per cent of total revenue in both HY19 and HY18 but play a strategic role in strengthening supplier relationships and providing access to third party products.
Online
Online revenue continues to grow strongly, up 29 per cent in HY19 to GBP30.2 million (HY18: GBP23.5 million), accounting for 31 per cent of total revenue, up from 28 per cent in HY18. The Company sells across five platforms including one for each of its three fascias, Footasylum, Drome and SEVEN, as well as its own brand website for Kings Will Dream, which launched in FY18.
More than 80 per cent of the traffic to these websites in HY19 came from mobile and tablet devices, in line with the prior period. The Company continues to develop its mobile offering, with apps launched in the year for Footasylum, Kings Will Dream and SEVEN. Several of our technological enhancements, including the website redesign and consumer rewards programme, were launched late in the period but are showing promising early outcomes.
Wholesale
In March 2017 Footasylum launched its wholesale operation, selling its own brands - initially Kings Will Dream - through a network of partners from small stores to major European operators. Revenue from wholesale was GBP2.1 million in HY19 (HY18: GBP0.7 million), around 2 per cent of total revenue (HY18: 1 per cent).
As a result of its online and wholesale operations, the Company generated 3 per cent of its revenue internationally in HY19 (HY18: 2 per cent).
Revenue by product category
GBPm HY19 HY18 Change
------------ ---- ---- ------
Footwear 53.8 45.9 17%
------------ ---- ---- ------
Apparel 41.2 33.5 23%
------------ ---- ---- ------
Accessories 3.6 3.8 (5)%
------------ ---- ---- ------
98.6 83.2 19%
------------ ---- ---- ------
Footwear experienced the largest absolute increase of GBP7.9m, or 17 per cent, to GBP53.8 million while apparel grew the fastest at 23 per cent, to GBP41.2 million. Accessories, which remain a small proportion of overall revenue, were down 5 per cent to GBP3.6 million. In HY19, Footasylum sold around 18,000 SKUs (HY18: 15,000 SKUs) across all channels, with the top 20 SKUs accounting for just 8 per cent of HY19 revenue (HY18: 7 per cent), highlighting a limited reliance on any one product.
Gross margin
Footasylum's routes to market have differing margin profiles, reflecting the underlying product mix across footwear, apparel and accessories. The overall gross margin will vary due to the impact of this mix, as well as the proportion of revenue coming from the Company's own brand labels in any given period. As previously announced, gross margin in the Period was adversely impacted by a combination of mix and a higher amount of clearance activity in stores and online.
In the last six months we highlighted two stock issues - footwear and some bedroom brands apparel - as the key drivers of our lowered gross margin expectations for FY19 and beyond. In the period we worked through the footwear stock and we are pleased to see footwear margins beginning to improve. However, the impact of the loss of exclusivity on some bedroom brands' apparel has driven increased clearance activity.
Investing for growth
Footasylum is investing ahead of the curve in its infrastructure to support future business expansion. The Company is now operating a second distribution facility in Rochdale in addition to its existing distribution centre. It has also upgraded its technology systems to support its growing digital presence and has a larger Head Office team and central functions. During the period Footasylum had on average 1,432 full time equivalent employees across the Company (HY18: 1,162). Admin expenses include rent and rates on the Company's store portfolio, distribution costs, marketing costs as well as head office costs. Excluding exceptional items, depreciation, amortisation and the share-based payment charge, admin expenses have increased to 44.5 per cent of revenue (HY18: 39.5 per cent of revenue).
Adjusted EBITDA decreased to (GBP1.5) million (HY18: GBP4.4 million) reflecting the lower gross margin and higher costs from investment in the Company's operations.
Depreciation and amortisation was GBP2.3 million for the period (HY18: GBP2.0 million), reflecting the increased capital expenditure in new and upsized stores, investments in IT and in the distribution facility.
Exceptional items
Exceptional items in the period totalled GBP2.3 million income (HY18: GBP(0.6) million cost) relating to the early exit and surrender of one of our store premises.
Earnings per share
After exceptional items, profit / (loss) after tax was GBP(2.7) million (HY18: GBP1.3 million). Following a capital reorganisation and an issue of new ordinary shares at the time of the IPO in November 2017, the Company had 104,474,390 ordinary shares of GBP0.001 each in issue (pre-IPO: 6,000 ordinary shares of GBP1 each) as at 25 August 2018. The non-GAAP adjusted diluted EPS of (3.98)p (HY18: 1.70p) is stated as profit after tax before exceptional items and the share-based payment charge per the diluted issued ordinary shares as at 25 August 2018 for both HY19 and HY18. Share options are not included in the calculation at HY19 as they would be anti-dilutive.
Cash and financial position
26 week 26 week
period ended period ended
GBPm 25 Aug 2018 26 Aug 2017
--------------------------------------------------------- ------------- -------------
Adjusted EBITDA (1.5) 4.4
--------------------------------------------------------- ------------- -------------
Working capital (2.0) (4.0)
--------------------------------------------------------- ------------- -------------
Corporation tax (0.9) (0.9)
--------------------------------------------------------- ------------- -------------
Free cash flow (4.4) (0.5)
--------------------------------------------------------- ------------- -------------
Property, plant and equipment and intangible assets (4.8) (2.6)
--------------------------------------------------------- ------------- -------------
Cash (used in) / generated from financing activities (0.2) 0.2
--------------------------------------------------------- ------------- -------------
Net exceptional income / (cost) 2.3 (0.6)
--------------------------------------------------------- ------------- -------------
Other 0.2 0.0
--------------------------------------------------------- ------------- ------------- Net cash flow (6.9) (3.5) --------------------------------------------------------- ------------- ------------- Cash and cash equivalents at beginning of period 11.4 2.8 --------------------------------------------------------- ------------- ------------- Cash and cash equivalents / (overdraft) at end of period 4.5 (0.7) --------------------------------------------------------- ------------- -------------
Footasylum had net cash of GBP4.5 million at 25 August 2018 (26 August 2017: GBP(0.7) million) with a reduction in free cash flow to GBP(4.4) million (HY18: GBP(0.5) million). The change in free cash flow was due to lower EBITDA and a seasonal working capital out flow.
Capex
At 25 Aug At 26 Aug
GBPm 2018 2017
-------------------------- --------- ---------
Capex on stores 1.5 2.5
-------------------------- --------- ---------
Warehouse 0.8 0.2
-------------------------- --------- ---------
Technology 1.2 0.5
-------------------------- --------- ---------
Other 0.8 0.3
-------------------------- --------- ---------
Total capital expenditure 4.3 3.5
-------------------------- --------- ---------
During HY19 capital expenditure was GBP4.3 million (HY18: GBP3.5 million). Of this amount, GBP1.5 million (HY18: GBP2.5 million) was spent on enhancing the store estate, including opening 1 new store and preliminary work on the new stores and upsizes which are planned ahead of the peak trading period.
In July 2017 Footasylum negotiated a new multi-currency revolving credit facility with HSBC of GBP30 million. The facility was made available to fund capital expenditure and future working capital requirements. The interest payable on the loan is LIBOR plus 1.9 per cent. At 25 August 2018 the facility was undrawn and the company was, and remains compliant with the associated covenants.
Dividend policy
As disclosed at the time of the IPO the Directors intend, in the short-term, to retain the Company's earnings for re-investment to fund growth. It is the Directors' ultimate intention to pursue a progressive dividend policy subject to the need to retain earnings to expand the growth and development of the Group.
FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT
for the 26 weeks ended 25 August 2018
Unaudited Audited Audited
---------------------------------------- ----- ---------- ---------- -------------
26 Week 26 Week 52 Week
Period Period Period
Ended Ended Ended
25 August 26 August 24 February
2018 2017 2018
Notes GBP'000 GBP'000 GBP'000
---------------------------------------- ----- ---------- ---------- -------------
Revenue 2 98,552 83,173 194,769
Cost of sales (56,263) (45,922) (107,160)
---------------------------------------- ----- ---------- ---------- -------------
Gross profit 42,289 37,251 87,609
Administrative expenses 3 (44,650) (35,473) (85,399)
Operating (loss) / profit (2,361) 1,778 2,210
---------------------------------------- ----- ---------- ---------- -------------
Underlying EBITDA* 3 (1,547) 4,359 12,457
---------------------------------------- ----- ---------- ---------- -------------
Depreciation and amortisation 3 (2,269) (2,000) (3,803)
---------------------------------------- ----- ---------- ---------- -------------
Share-based payments charge 3 (837) - (421)
---------------------------------------- ----- ---------- ---------- -------------
Operating (loss) / profit before
exceptional items (4,653) 2,359 8,233
---------------------------------------- ----- ---------- ---------- -------------
Exceptional items 3 2,292 (581) (6,023)
---------------------------------------- ----- ---------- ---------- -------------
Operating (loss) / profit (2,361) 1,778 2,210
---------------------------------------- ----- ---------- ---------- -------------
Finance expense (175) (36) (269)
---------------------------------------- ----- ---------- ---------- -------------
(Loss) / profit before income tax (2,536) 1,742 1,941
---------------------------------------- ----- ---------- ---------- -------------
Taxation (169) (463) (1,780)
---------------------------------------- ----- ---------- ---------- -------------
(Loss) / profit and total comprehensive
income for the financial period
attributable to shareholders (2,705) 1,279 161
---------------------------------------- ----- ---------- ---------- -------------
* Underlying EBITDA is stated as earnings before interest, tax, depreciation, amortisation, exceptional items and share-based payments charge
All activities relate to continuing operations.
Unaudited Audited Audited
-------------------------------------------------------------------- ----- ---------- ---------- -------------
26 Week 26 Week 52 Week
Period Period Period
Ended Ended Ended
25 August 26 August 24 February
Notes 2018 2017 2018
-------------------------------------------------------------------- ----- ---------- ---------- -------------
Basic and diluted earnings per share attributable to equity
shareholders of the Company:
-------------------------------------------------------------------- ----- ---------- ---------- -------------
Basic 5 -2.59p 1.64p 0.19p
-------------------------------------------------------------------- ----- ---------- ---------- -------------
Diluted 5 -2.59p 1.64p 0.18p
-------------------------------------------------------------------- ----- ---------- ---------- -------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the 26 weeks ended 25 August 2018
Unaudited Audited Audited
----------------------------------- ---------- ---------- -------------
At At At
25 August 26 August 24 February
2018 2017 2018
GBP'000 GBP'000 GBP'000
----------------------------------- ---------- ---------- -------------
Non-current assets
Intangible assets 791 21 477
Property and equipment 21,441 15,652 19,905
------------------------------------ ---------- ---------- -------------
22,232 15,673 20,382
----------------------------------- ---------- ---------- -------------
Current assets
Inventory 43,479 30,620 35,720
Trade and other receivables 13,318 7,890 7,493
Deferred tax asset 104 110 104
------------------------------------ ---------- ---------- -------------
Cash and cash equivalents 4,511 4,008 11,416
------------------------------------ ---------- ---------- -------------
61,412 42,628 54,733
----------------------------------- ---------- ---------- -------------
Total assets 83,644 58,301 75,115
------------------------------------ ---------- ---------- -------------
Current liabilities
Trade and other payables (38,513) (25,993) (27,977)
Bank overdraft - (4,728) -
Preference shares - (18,700) -
----------------------------------- ---------- ---------- -------------
(38,513) (49,421) (27,977)
----------------------------------- ---------- ---------- -------------
Net current assets / (liabilities) 22,899 (6,793) 26,756
------------------------------------ ---------- ---------- -------------
Non-current liabilities
Accruals and deferred income (4,745) (2,989) (4,693)
Net obligation under finance lease
and hire purchase (147) (183) (235)
Director loans - (3,850) -
(4,892) (7,022) (4,928)
----------------------------------- ---------- ---------- -------------
Total liabilities (43,405) (56,443) (32,905)
------------------------------------ ---------- ---------- -------------
Net assets 40,239 1,858 42,210
------------------------------------ ---------- ---------- -------------
Equity
Share capital 104 6 104
Share premium account 3,510 249 3,510
Retained earnings 36,625 1,603 38,596
------------------------------------ ---------- ---------- -------------
Total equity 40,239 1,858 42,210
------------------------------------ ---------- ---------- -------------
FINANCIAL STATEMENTS
CONSOLIDATED CASH FLOW STATEMENT
for the 26 weeks ended 25 August 2018
Unaudited Audited Audited
---------------------------------------- ----- ---------- ---------- -------------
At At At
25 August 26 August 24 February
2018 2017 2018
Notes GBP'000 GBP'000 GBP'000
---------------------------------------- ----- ---------- ---------- -------------
Cash generated from operating
activities
----- ---------- ---------- -------------
(Loss) / profit for the period: 3 (2,705) 1,279 161
----- ---------- ---------- -------------
Adjustments for:
----- ---------- ---------- -------------
Depreciation of property, plant
and equipment 3 2,269 2,000 3,803
----- ---------- ---------- -------------
Loss / (Gain) on disposal of tangible
assets 3 212 (1) (7)
----- ---------- ---------- -------------
Net finance charge 175 36 269
----- ---------- ---------- -------------
Share-based payments charge 3 837 - 421
----- ---------- ---------- -------------
Taxation charge 169 463 1,780
----- ---------- ---------- -------------
Increase in stock (7,759) (7,098) (12,199)
----- ---------- ---------- -------------
Increase in debtors (5,825) (4,281) (3,878)
----- ---------- ---------- -------------
Increase in creditors 11,549 7,347 10,727
----- ---------- ---------- -------------
Corporation tax paid (879) (884) (1,787)
---------------------------------------- ----- ---------- ---------- -------------
Net cash used in operating activities (1,957) (1,139) (710)
---------------------------------------- ----- ---------- ---------- -------------
Investing activities
----- ---------- ---------- -------------
Purchases of property, plant and
equipment (4,298) (2,581) (8,005)
Purchase of intangible assets (453) - (530)
Sale of property, plant and equipment - 9 18
---------------------------------------- ----- ---------- ---------- -------------
Net cash used in investing activities (4,751) (2,572) (8,517)
---------------------------------------- ----- ---------- ---------- -------------
Financing activities
----- ---------- ---------- -------------
Repayment of finance lease liabilities (66) 188 (75)
----- ---------- ---------- -------------
Interest paid (131) (36) (214)
----- ---------- ---------- -------------
Proceeds from the issue of ordinary
share capital - - 43,418
----- ---------- ---------- -------------
Share issue costs - - (2,318)
----- ---------- ---------- -------------
Debt issue costs - - (330)
----- ---------- ---------- -------------
Repayment of preference shares - - (18,700)
----- ---------- ---------- -------------
Repayment of Director loan account
capital - - (3,850)
----- ---------- ---------- -------------
Repayment of Director loan account
interest - - (127)
---------------------------------------- ----- ---------- ---------- -------------
Net cash (used in) / generated
from financing activities (197) 152 17,804
---------------------------------------- ----- ---------- ---------- -------------
Net (decrease) / increase in cash
and cash equivalents (6,905) (3,559) 8,577
---------------------------------------- ----- ---------- ---------- -------------
Cash and cash equivalents at beginning
of period 11,416 2,839 2,839
---------------------------------------- ----- ---------- ---------- -------------
Cash and cash equivalents / (overdraft)
at end of period 4,511 (720) 11,416
---------------------------------------- ----- ---------- ---------- -------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Reconciliation of 26 week period to 26 August 2017
Retained
Share Share earnings / Total
capital premium (losses) equity
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- ----------- --------
Balance at 25 February 2017 6 249 324 579
-------- -------- ----------- --------
Comprehensive Income:
-------- -------- ----------- --------
Profit for the period - - 1,279 1,279
---------------------------- -------- -------- ----------- --------
Balance at 26 August 2017 6 249 1,603 1,858
---------------------------- -------- -------- ----------- --------
Reconciliation of 26 week period to 25 August 2018
Retained
Share Share earnings / Total
capital premium (losses) equity
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------ -------- -------- ----------- --------
Balance at 24 February 2018 104 3,510 38,596 42,210
-------- -------- ----------- --------
Comprehensive Income:
-------- -------- ----------- --------
Loss for the period - - (2,705) (2,705)
------------------------------------------------------ -------- -------- ----------- --------
104 3,510 35,891 39,505
------------------------------------------------------ -------- -------- ----------- --------
Transactions with owners recorded directly in equity:
-------- -------- ----------- --------
Share-based payments charge - - 734 734
------------------------------------------------------ -------- -------- ----------- --------
Balance at 25 August 2018 104 3,510 36,625 40,239
------------------------------------------------------ -------- -------- ----------- --------
Reconciliation of 52 week period to 24 February 2018
Retained
Share Share earnings / Total
capital premium (losses) equity
GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------ -------- -------- ----------- --------
Balance at 25 February 2017 6 249 324 579
------------------------------------------------------ -------- -------- ----------- --------
Comprehensive Income:
------------------------------------------------------ -------- -------- ----------- --------
Profit for the period - - 161 161
------------------------------------------------------ -------- -------- ----------- --------
6 249 485 740
------------------------------------------------------ -------- -------- ----------- --------
Transactions with owners recorded directly in equity:
------------------------------------------------------ -------- -------- ----------- --------
Bonus issue of shares (i) 72 (72) - -
------------------------------------------------------ -------- -------- ----------- --------
Issue of shares (ii) 26 43,392 - 43,418
------------------------------------------------------ -------- -------- ----------- --------
Share issue costs (iii) - (2,318) - (2,318)
------------------------------------------------------ -------- -------- ----------- --------
Capital reduction (iv) - (37,741) 37,741 -
------------------------------------------------------ -------- -------- ----------- --------
Share-based payments charge - - 370 370
------------------------------------------------------ -------- -------- ----------- --------
Balance at 24 February 2018 104 3,510 38,596 42,210
------------------------------------------------------ -------- -------- ----------- --------
i On the 2 of November 2017, the Company issued bonus shares of 12 to 1 for existing shareholders
ii On the 2 of November 2017, the Company sub divided existing Ordinary shares by 1000 iii On the 2 of November 2017, the Company issued 26,474,390 ordinary shares
iv On the 13 February 2018, the Company reduced share premium account by GBP37,740,525
1 BASIS OF PREPARATION
Footasylum plc (the "Company") is a company limited by shares and incorporated and domiciled in the UK. Footasylum plc is incorporated in the United Kingdom. The registered office is Sandbrook House, Sandbrook Park, Rochdale, Lancashire, OL11 1RY. The principal activity of the Company is the retail of sports and fashion footwear and clothing.
The Consolidated and Company Financial Statements have been prepared in accordance with IFRS and the International Financial Reporting Interpretation Committee ("IFRIC") interpretations endorsed by the EU and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The functional currency of the Company and its subsidiary undertakings (the "Group") is pounds sterling and the financial statements are presented in pounds sterling, rounded to the nearest thousand.
These financial statements are prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the EU. The accounting policies applied are consistent with those disclosed in the Feb 2018 Annual Report.
The financial statements have been prepared under the historical cost convention, as modified for financial assets and liabilities at fair value through the Consolidated Income Statement.
The preparation of financial statements in conformity with adopted IFRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The judgements, estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.
The financial information included in this preliminary statement of results does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006 (the "Act"). The financial information for the 52 week period ended 24 February 2018 has been extracted from the statutory accounts on which an unqualified audit opinion has been issued.
2 SEGMENTAL REPORTING
The Directors consider there to be one operating and reportable segment, being that of the sale of products through retail outlets, the Group's website and wholesale.
Whilst the business and Chief Operating Decision Maker ('CODM') does review analysis of revenues at a disaggregated level, as disclosed below, information in relation to assess business performance and make resource allocation decisions at a level below the whole business is not made available. In particular, operating profit is not calculated at a level below the whole business. As such, the Directors consider there to be one operating and reportable segment.
Unaudited Audited Audited
26 Week 26 Week 52 Week
Period Period Period
Ended Ended Ended
25 August 26 August 24 February
2018 2017 2018
Revenue GBP'000 GBP'000 GBP'000
Store 66,253 59,039 133,119
---------- ---------- -------------
Web 30,212 23,482 59,027
Wholesale 2,087 652 2,623
---------- ---------- ---------- -------------
98,552 83,173 194,769
---------- ---------- ---------- -------------
Geographic Information
The following table provides analysis of the Group's revenue by geographical market:
Unaudited Audited Audited
------------------ ---------- ---------- -------------
26 Week 26 Week 52 Week
Period Period Period
Ended Ended Ended
25 August 26 August 24 February
2018 2017 2018
GBP'000 GBP'000 GBP'000
------------------ ---------- ---------- -------------
United Kingdom 96,000 81,491 191,282
Rest of the World 2,552 1,682 3,487
------------------ ---------- ---------- -------------
98,552 83,173 194,769
------------------ ---------- ---------- -------------
3 (LOSS) / PROFIT BEFORE TAX
This is stated after charging:
Unaudited Audited Audited
---------------------------------------------- ---------- ---------- -------------
26 Week 26 Week 52 Week
Period Period Period
ended ended Ended
25 August 26 August 24 February
2018 2017 2018
GBP'000 GBP'000 GBP'000
---------------------------------------------- ---------- ---------- -------------
Exceptional (income) / costs (2,292) 581 6,023
---------------------------------------------- ---------- ---------- -------------
Depreciation of property, plant and equipment 2,269 2,000 3,803
---------------------------------------------- ---------- ---------- -------------
Loss / (Gain) on disposal of property, plant
and equipment 212 (1) (7)
---------------------------------------------- ---------- ---------- -------------
Exchange differences (103) 10 30
---------------------------------------------- ---------- ---------- -------------
Hire of assets - operating leases 8,187 6,628 14,572
Share-based payments charge 837 - 421
---------------------------------------------- ---------- ---------- -------------
Exceptional income in the period ended 25 August 2018 relate to the early exit and surrender of one of our stores (GBP2,292,000).
Exceptional costs in the period ended 26 August 2017 relate to preparations for admission (GBP581,000).
Exceptional costs in the period ended 24 February 2018 relate to preparations for admission (GBP4,145,000) and HMRC VAT provisions (GBP1,878,000).
Total costs incurred in relation to the admission to trading on AIM were GBP6,462,000 with GBP2,317,000 charged to the share premium as being directly related to newly issued shares.
HMRC VAT provisions are made for known issues based on management's interpretation of legislation and the likely outcome of negotiations or litigation. Each provision is considered separately and the amount provided reflects the best estimate of the most likely outcome, being the single most likely in a range of possible outcomes.
Unaudited Audited Audited
26 Week 26 Week 52 Week
Period Period Period
Ended Ended Ended
25 August 26 August 24 February
2018 2017 2018
GBP'000 GBP'000 GBP'000
-------------------------------------------- ---------- ---------- -------------
EBITDA reconciliation
-------------------------------------------- ---------- ---------- -------------
Operating (loss) / profit (2,361) 1,778 2,210
-------------------------------------------- ---------- ---------- -------------
Exceptional items (2,292) 581 6,023
-------------------------------------------- ---------- ---------- -------------
Underlying operating (loss) / profit before
share-based payments charge, depreciation
and amortisation (4,653) 2,359 8,233
-------------------------------------------- ---------- ---------- -------------
Depreciation and amortisation 2,269 2,000 3,803
-------------------------------------------- ---------- ---------- -------------
EBITDA (2,384) 4,359 12,036
-------------------------------------------- ---------- ---------- -------------
Share-based payments charge 837 - 421
-------------------------------------------- ---------- ---------- -------------
Underlying EBITDA (1,547) 4,359 12,457
-------------------------------------------- ---------- ---------- -------------
Underlying EBITDA is calculated as Group underlying operating profit under IFRS plus depreciation and amortisation. It excludes exceptional items and IFRS2 related share-based payments charge.
4 STAFF NUMBERS AND COSTS
Staff costs (including directors) consist of:
Unaudited Audited Audited
26 Week 26 Week 52 Week
Period Period Period
Ended Ended Ended
25 August 26 August 24 February
2018 2017 2018
GBP'000 GBP'000 GBP'000
---------------------- ---------- ---------- -------------
Wages and salaries 16,387 11,829 28,284
Social security costs 909 700 1,447
Pension costs 112 61 127
---------------------- ---------- ---------- -------------
17,408 12,590 29,858
---------------------- ---------- ---------- -------------
The average number of employees (including directors) during the period was as follows:
Unaudited Audited Audited
26 Week 26 Week 52 Week
Period Period Period
Ended Ended Ended
25 August 26 August 24 February
2018 2017 2018
--------------- ---------- ---------- -------------
Retail 894 745 885
Administration 291 224 243
Warehouse 247 193 184
--------------- ---------- ---------- -------------
1,432 1,162 1,312
--------------- ---------- ---------- -------------
5 EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.
Diluted earnings per share is calculated by dividing the net profit for the period attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinary shares.
Unaudited Audited Audited
26 Week Period 26 Week Period 52 Week Period
Ended 25 August Ended 26 August Ended 24 February
2018 2017 2018
------------------------- ------------------------- -------------------------------
PAT before PAT before PAT before
exceptional exceptional exceptional
costs and costs and costs
share-based share-based and share-based
payments payments payments
PAT charge PAT charge PAT charge
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------- ----------- ------------ ----------- ------------ ------------ -----------------
Profit / (loss) attributable
to equity shareholders
of the parent (2,705) (4,160) 1,279 1,860 161 6,604
------------------------------- ----------- ------------ ----------- ------------ ------------ -----------------
Number of shares
------------------------------- ----------- ------------ ----------- ------------ ------------ -----------------
Weighted average number
of ordinary shares for
the purposes of basic earnings
per share 104,474,390 104,474,390 78,000,000* 78,000,000* 86,413,779 86,413,779
------------------------------- ----------- ------------ ----------- ------------ ------------ -----------------
Effect of dilutive potential
ordinary shares:
Share options 5,218,930 5,218,930 - - 2,687,286 2,687,286
------------------------------- ----------- ------------ ----------- ------------ ------------ -----------------
Weighted average number
of ordinary shares for
the purposes of diluted
earnings per share 109,693,320 109,693,320 78,000,000 78,000,000 89,101,065 89,101,065
Diluted shareholding at
25 August 2018 (Non-GAAP
measure)** 109,693,320 109,693,320 109,693,320 109,693,320 109,693,320 109,693,320
Non-GAAP diluted earnings
per share** -2.59p -3.98p 1.17p 1.70p 0.15p 6.02p
Basic earnings per share -2.59p -3.98p 1.64p 2.38p 0.19p 7.64p
Diluted earnings per share*** -2.59p -3.98p 1.64p 2.38p 0.18p 7.41p
------------------------------- ----------- ------------ ----------- ------------ ------------ -----------------
*Restated in accordance with IAS 33 to reflect the impact of the sub-division and bonus issue of shares on 2 November 2017.
** Non-GAAP measure is based on shareholdings as at 25 August 2018. Share options are not included in the calculation at HY19 as they would be anti-dilutive.
*** Share options in the diluted calculation as at 25 August 2018 have not been included as they would be anti-dilutive.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
END
IR MABPTMBTBBIP
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October 16, 2018 02:00 ET (06:00 GMT)
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