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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Oasis Stores | LSE:OAS | London | Ordinary Share | GB0006550577 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS No 4560u
OASIS STORES PLC
29th September 1997
Contact: Michael Bennett, Chairman
Oasis Stores Plc Tel: 0171 452 1000
Charles Watson/Tom Baldock
Financial Dynamics Tel: 0171 831 3113
Oasis Stores Plc
Interim Results
Oasis Stores Plc, the leading fashion retailer, today announces results for
the 26 weeks ended 26th July 1997. Highlights of the announcement include:
* Total sales including new shops and concessions up 20% to #39.6m
(1996: #33.0m)
* Like-for-like sales up 6%
* As foreshadowed at our June AGM, pre-tax profits of #3.7m (1996:
#5.2m) affected by ranging issues encountered in May
* A total of 6 new outlets in the UK and 4 overseas (1 in Germany and
three other licensees) were opened in the period, with a similar number
planned to open in the second half
* Good start in the first five weeks of the second half slowed by a
combination of national events and the long summer in the following 3
weeks. As a result, total sales up 13% and like-for-like sales flat for the
first 8 weeks of the second half
* Dividend increased to 2.4p (1996: 2.1p)
Commenting on the results, Chairman Michael Bennett said:
"The problems with our product range reported in June were swiftly dealt
with and, as these results demonstrate, sales came back in the remainder of
the first half. Oasis' new range has been well received and we continue to
have confidence in the underlying strength of the business. However, as
always, results for the full year will be much dependent on the important
Christmas period."
INTRODUCTION
I am pleased to report that, as a result of swift management action in
identifying the ranging issues we encountered in May, the slowdown in sales
growth which we experienced for a short period of time was reversed by the
end of the first half, enabling us to recover some of the lost ground. By
the end of the period, sales were up 20%, including like-for-like growth of
6%.
The situation in May was caused primarily by a buying strategy which
broadened the Oasis product range at a time when fashion trends were in
fact resulting in highly polarised demand for specific product ranges. A
higher than anticipated level of mark-downs then led to some pressure on
gross margins. As a result, interim pre-tax profits at #3.7m were down on
our 1996 result of #5.2m by 29%. Gross margins declined in the first half
to 51.9% (1996: 55.1%).
The improving sales growth trend referred to above has continued, with
sales for the first 8 weeks of the second half up 13%. However, like-for-
like sales for this period were flat - despite a good first 5 weeks trading
- slowed by a combination of national events and the long summer.
At the half year stage the Company had net cash balances of #9.9m, up 13.8%
on the previous year despite an increase in capital expenditure to #3.3m
(1996: #2.3m). Cash generation remained strong and the Company has
continued to invest significantly in systems, new store openings and
refurbishments. There was an increase in the depreciation charge during the
period to #1.7m (1996: #1.3m).
DIVIDEND
The Board is proposing to raise the interim dividend to 2.4p (1996: 2.1p),
reflecting its confidence in the prospects for the Company and the strength
of the balance sheet. It will be paid on 7th November 1997 to shareholders
who were on the register at 17th October 1997.
UK and IRELAND
During the period like-for-like sales increased by 6% and total sales by
16%. The great majority of established stores increased their sales
densities and the newer stores have performed to our normal expectations.
The concessions continue to make a worthwhile contribution with the
majority increasing sales densities; they continue to sit comfortably along
side our stand alone shops.
In the first half of the year we opened 5 new stores and 1 concession in
the UK. For the second half we plan to relocate 2 stores to larger premises
nearby and to open 5 new stores, of which one will be in the Republic of
Ireland, and another our first accessory shop. We will also open 4 new
concessions, one of which will be our first representation in Northern
Ireland.
We have continued our policy of upgrading existing shops and concessions
and our product offering, particularly in the accessories area, has been
further enhanced.
In the current environment of rapidly rising rentals, we continue to
maintain a cautious and prudent approach when negotiating in the property
market.
OVERSEAS
Germany
In Germany we opened one more concession in Frankfurt and there are a
further 5 planned for the second half of this year in Mainz, Wiesbaden,
Hanover, Mannheim and a second outlet in Dusseldorf.
Neither the sharp depreciation of the pound against the deutschmark nor the
continuously high level of unemployment in Germany have been helpful to us.
However, we feel strongly that we should continue with our controlled
expansion.
Licensees
In the period sales to overseas licencees represented 4.1% of sales up from
3.1% in the same period last year. New stores were opened in Bahrain,
Iceland and a second in Kuwait during the period. There are 6 further
openings planned for the second half of the year, including one in Saudi
Arabia, a flagship store in Taiwan and our first in Portugal.
MANAGEMENT
I am pleased to report the appointment of Dominic Lavelle as Finance
Director in May. He joined Oasis from Laura Ashley, where he was Finance
Director responsible for European operations.
We have a fine team of people who achieved a record profit last year. Our
performance in the first half coupled with the need to manage considerable
change within the business gave us all pause for thought. However, I am
happy to be able to express my thanks to my colleagues who have reacted so
positively and professionally to these challenges.
HEAD OFFICE
Both Distribution and Head Office costs grew in line with plan and the move
to our new London office was completed in November 1996 with the minimum of
disruption. In order to support the future health and growth of the
Company, the Board's expenditure plans have remained unchanged as it is
felt that the trading issues referred to above have been confined to the
first half.
SYSTEMS
We have continued to invest heavily in new technology to provide useful
information which will support the future growth of the Company.
In particular, we have implemented a new retail and distribution system and
a merchandise planning system. In the second half we plan to introduce the
new generation EPOS hardware and software. This will be phased in across
the Company over a six month period.
OUTLOOK
In the first 5 weeks of the second half, sales were ahead by 8% on a like-
for-like basis. Due to recent national events and the long summer, sales
growth for the first 8 weeks of the period has slowed and has been flat
like-for-like. However, we have confidence in our new range, which has been
well received but, as always, results for the full year will be much
dependent on the important Christmas period.
We continue to make smooth progress on our mail order venture with Grattan
and Otto Versand in preparation for the launch in Autumn 1998.
PROFIT AND LOSS ACCOUNT
26 weeks ended 26 weeks 52 weeks ended
ended
26th July 1997 27th July 25th January
1996 1997
Unaudited Unaudited Audited
#'000 #'000 #'000
Turnover 39,580 32,959 81,651
Cost of sales (19,033) (14,787) (36,828)
Gross profit 20,547 18,172 44,823
Net operating expenses (17,645) (13,513) (30,498)
Operating profit 2,902 4,659 14,325
Net interest receivable 778 528 1,288
Profit on ordinary 15,613
activities before 3,680 5,187
taxation
Taxation on profit on (1,215) (1,792) (5,376)
ordinary activities
Profit on ordinary
activities
after taxation 2,465 3,395 10,237
Dividends (1,259) (1,102) (3,672)
Retained profit 1,206 2,293 6,565
Pence Pence Pence
Earnings per share 4.70 6.47 19.51
BALANCE SHEET
As at As at As at
26th July 27th July 25th January
1997 1996 1997
Unaudited Unaudited Audited
#'000 #'000 #'000
Tangible fixed assets 14,316 10,791 12,750
Investments (own shares
held by ESOP) 0 365 0
Stock 8,809 6,039 8,093
Debtors 3,212 2,811 3,912
Cash at bank 9,899 8,688 13,142
21,920 17,538 25,147
Creditors due within
one year (11,355) (8,634) (15,407)
Net current assets 10,565 8,904 9,740
Long term creditors and
provisions (1,715) (2,372) (531)
Net assets 23,166 17,688 21,959
Capital and reserves
Share capital 5,246 5,246 5,246
Profit and loss account 17,920 12,442 16,713
Equity shareholders' 23,166 17,688 21,959
funds
CASH FLOW STATEMENT
26 weeks 26 weeks 52 weeks ended
ended ended
26th July 27th July 25th January
1997 1996 1997
Unaudited Unaudited Audited
#'000 #'000 #'000
Operating profit 2,902 4,659 14,325
Depreciation 1,744 1,257 2,832
Working capital (1,456) (834) (221)
movement
Net cash inflow from
operating
activities 3,190 5,082 16,936
Return on investments
and
servicing of finance 779 538 1,298
Tax paid (1,332) (577) (4,101)
Capital expenditure and
financial
investment
Purchase less sale of
tangible fixed
assets (3,310) (2,306) (5,840)
Equity dividend paid (2,570) (1,747) (2,849)
(Decrease)/increase in (3,243) 990 5,444
cash
NOTES
Comparative Figures
The comparative figures for the fifty two week period ended 25th January
1997 and the summary balance sheet as at 25th January 1997 have been
extracted from the Company's 1996/7 statutory accounts which have been
filed with the Registrar of Companies. The auditors' opinion on those
accounts was unqualified and did not include a statement under Section 237
(2) or (3) of the Companies' Act 1985.
Accounting Policies
The interim statements have been prepared on the basis of the accounting
policies set out in the Company's 1996/7 Annual Report and Accounts.
Earnings per Share
The calculation of earnings per share is based on the profit on ordinary
activities after taxation and a weighted average number of shares being
52,457,175 ordinary shares of 10p in issue (July 1996 - 52,457,175).
Interim Dividend
An interim dividend of 2.4p per ordinary share (July 1996 - 2.1p) will be
paid on 7th November 1997 to shareholders on the register as at 17th
October 1997.
Cash Flow Statement
The Cash Flow Statement has been prepared in accordance with the principles
of the Financial Reporting Standard 1 (revised). The comparative figures
have been restated on a comparable basis.
REVIEW REPORT BY THE AUDITORS TO
OASIS STORES PLC
We have reviewed the interim financial information for the twenty six weeks
ended 26th July 1997 set out in this report which is the responsibility of
and has been approved by the Directors. Our responsibility is to report on
the results of our review.
Our review was carried out having regard to the Bulletin "Review of Interim
Financial Information", issued by the Auditing Practices Board. This
review consisted principally of applying analytical procedures to the
underlying financial data, assessing whether accounting policies have been
consistently applied, and making enquiries of management responsible for
financial and accounting matters. The review was substantially less in
scope than an audit performed in accordance with Auditing Standards and
accordingly we do not express an audit opinion on the interim financial
information.
On the basis of our review:
- in our opinion the interim financial information has been prepared
using accounting policies consistent with those adopted by Oasis Stores Plc
in its financial statements for the fifty two week period ended 25th
January 1997, and
- we are not aware of any material modifications that should be made to
the interim financial information as presented
KPMG Audit Plc London
Chartered Accountants 29th September 1997
END
IR AWSAKBSKKUUR
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