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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Shoe Zone Plc | LSE:SHOE | London | Ordinary Share | GB00BLTVCF91 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 2.50 | 1.27% | 200.00 | 195.00 | 205.00 | 200.00 | 197.50 | 197.50 | 141,174 | 09:13:26 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Footwear-wholesale | 165.66M | 13.22M | 0.2860 | 6.99 | 92.45M |
From Apr 2019 to Apr 2024
TIDMSHOE
RNS Number : 0873P
Shoe Zone PLC
24 May 2018
24 May 2018
Shoe Zone plc
Interim Results
Shoe Zone plc ("Shoe Zone", the "Company" or the "Group") the leading UK value footwear retailer, is pleased to announce its Interim Results for the six months to 31 March 2018.
Financial Highlights
-- Revenue growth of 1.1% to GBP73.7m (2017 H1: GBP72.9m) -- Strong product margins at 60.6% (2017 H1: 62.8%) -- Statutory Profit before tax of GBP1.0m (2017 H1: GBP0.3m) -- Cash increased to GBP5.9m (2017 H1: 4.6m) -- Statutory earnings per share of 1.70p (2017 H1: 0.50p) -- Interim dividend raised to 3.5p per share (2017 H1: 3.4p per share)
Operational Highlights
-- Rent on renewals fell on average by 22%, equivalent to a full year saving of GBP100k -- Rent as a % of turnover remained static at 12% (2017 H1: 12%) -- Footwear orders placed directly with overseas factories increased to 87.1% (2017 H1: 84.7%) -- Operating from 12 big box locations at period end contributing GBP3.1m sales in H1
-- Multi-channel sales increased by 21% to GBP4.9m (2017 H1: GBP4.0m) achieving contribution of GBP1.2m (2017 H1: GBP1.0m)
Nick Davis, Chief Executive of Shoe Zone plc, said:
"This has been a good first half for the Group, trading in line with management's expectations and achieving profitable revenue growth.
Our on-going strategic focus on the property portfolio has continued to benefit the Group, with careful management of leases and measured opening of core and Big Box stores, taking advantage of the favourable retail rental environment.
This good performance also reflects our close management of costs and ability to maintain appealing key price-points and multi-buy offers for our customers.
We are delighted that multi-channel revenue has continued to grow profitably, especially via mobile, which remains an ongoing area of development for the business.
Trading momentum has continued into the second half, in line with expectations for the full year. With our growth strategy in place, we believe we are favourably insulated against many of the structural sector issues and the Board remains confident of the outlook for Shoe Zone."
There will be a presentation for analysts at the offices of FTI Consulting, 200 Aldersgate, London, EC1A 4HD, at 9:30am on 24 May 2018.
The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via regulatory news service this inside information is now considered to be in the public domain.
For further information, please call:
Shoe Zone plc Tel: via FTI Consulting Nick Davis (CEO) Jonathan Fearn (CFO) Finncap (Nominated Advisor) Tel: +44 (0)20 7220 Matt Goode 0500 Carl Homes Alice Lane Hannah Boros FTI Consulting (Financial PR) Tel: +44 (0)20 3727 Jonathon Brill 1000 Alex Beagley Eleanor Purdon Charlotte Cobb
Chief Executive's Statement
Introduction
Shoe Zone is the leading UK value footwear retailer, offering low price and high quality footwear for the whole family. The Group operates from a portfolio of around 500 stores and employs approximately 3,500 employees across the UK and the Republic of Ireland. Shoe Zone's online offering, combined with its extensive store portfolio, enables it to provide a true multi-channel shopping experience to its customers. I will now provide an update on our core areas of progress in the first six months of our financial year.
Financial Summary
In the six months to 31 March 2018, the Company generated revenues of GBP73.7m (2017 H1: GBP72.9m) and profit before tax of GBP1.0m (2017 H1: GBP0.3m). This performance reflects the continued focus on driving profitable sales through our existing Shoe Zone core estate, developing our successful multi-channel offering and the roll out of the Big Box store format.
Product gross margin performance remained strong at 60.6% (2017 H1: 62.8%). The slight fall compared to last year is due to higher write downs early in the year and sales mix in the second quarter.
Cash generation continues to be a focus throughout the year and as at 31 March 2018, Shoe Zone had net cash of GBP5.9m (2017 H1: GBP4.6m) with no bank debt. This is due to a strong trading performance and the opportunistic disposal of five freehold properties for GBP1.2m.
Management continues to monitor all costs closely and these remain tightly controlled.
Dividend
The Board is declaring an interim dividend of 3.5 pence per share (2017 H1: 3.4p per share). This will be paid on 15 August 2018 to shareholders on the register on 20 July 2018. The shares will go ex-dividend on 19 July 2018.
Product
We remain committed to offering our customers the best value possible and have continued to maintain key price points for our Core Value lines alongside our focus on multi-buy deals (e.g. '2 for GBP8'). We have continued to increase our direct sourcing and as a result, footwear orders placed directly with overseas factories increased to 87.1% (2017 FY: 84.7%) of total footwear orders. Working closely with manufacturers has helped support gross product margins as well as improving communication and control across the supply chain.
Non-footwear ranges including handbags, school bags, lunch boxes, purses and accessories continue to grow with sales from non-footwear achieving GBP3.6m, a 12% increase on prior year.
Property
We continue to make progress with the Company's strategy to roll out the new Big Box concept in a managed expansion. During 2018 we have opened a further three Big Box stores in the first half, and are currently completing works on two more stores. We remain on track to deliver 10 stores by the end of the year. The availability of out of town retail space, at the right size and price, has increased in recent months and therefore the pipeline for future roll out remains strong.
Within the core Shoe Zone estate we have opened a further four stores and closed 10 stores resulting in total store numbers at the 31 March 2018 of 493. Having pursued a programme of closing loss-making stores since IPO in 2014, we have achieved our target of loss makers making up no more than 5% of the core estate. Of those that remain, the majority only make a marginal loss.
We have continued to enhance the store portfolio by completing 12 full refits and seven fascia updates in the first half.
Rents on renewal fell by 22%, equivalent to a full year saving of GBP100k. Total rents remain tightly controlled at 12% of turnover and the average outstanding lease length on the portfolio has reduced to 2.2 years (2017 FY: 2.3 years).
During the period we completed the sale and leaseback of five freehold properties for net proceeds of GBP1.2m. Proceeds were in line with Net Book Value held and therefore did not impact on profit. There are 14 remaining freeholds within the estate with a Net Book Value of GBP7.8m.
Multi-channel
Multi-channel continues to show strong profitable growth, delivering a year on year sales increase of 21% and contribution of GBP1.2m (H1 2017: GBP1.0m).
The email database continues to be a strong source of income. Email revenue increased by 28.6% from an increase of only 6.3% increase in emails sent. Significant work is on-going to identify and focus on engaged customers, attempt to re-engage those that have not responded in some time to emails and then remove those customers who do not.
Mobile visits now account for 79% (2017 H1: 76%) of total visits and mobile revenue has grown to 69% (2017 H1: 66%). We continue to develop mobile technology as the primary focus of our digital strategy.
Current trading and outlook
Trading in the first half of the year was in line with management's expectations and this has continued into the second half. We believe that the current growth strategy including management of the cost base and particularly the property portfolio means that we are confident that Shoe Zone is insulated against many of the structural issues faced by other retailers.
We continue to diversify our customer base through the roll out of Big Box stores, capturing a broader demographic through the sale of own label and branded shoe styles. New 'Unity' fixtures and fittings will be trialled in the second half which will update the look of the core Shoe Zone estate and reduce future Big Box fit out costs by delivering synergies between the equipment used in both store formats.
The Board would like to thank all of our Shoe Zone teams and business partners for all their hard work in the first half of the financial year.
Unaudited consolidated income statement
Hot Features
Premium
Note 26 weeks 26 weeks 52 weeks
ended 31 ended 1 ended 30
March 2018 April September
2017 2017
GBP'000 GBP'000 GBP'000
Revenue 2 73,672 72,862 157,777
Cost of sales (63,634) (62,532) (127,657)
----------- -------- ----------
Gross profit 10,038 10,330 30,120
Administration expenses (6,067) (7,050) (14,454)
Distribution costs (2,928) (2,827) (5,872)
-----------
Profit from operations 1,043 453 9,794
Finance income 7 11 15
Finance expense (95) (155) (306)
----------- -------- ----------
Profit before taxation 955 309 9,503
Taxation 4 (104) (60) (1,620)
----------- -------- ----------
Profit attributable to equity holders
of the parent 5 851 249 7,883
=========== ======== ==========
Earnings per share - basic and
diluted 51.70p 0.50p 15.77p
===== ====== ======
Unaudited consolidated statement of total comprehensive income
26 weeks 26 weeks 52 weeks
ended 31 March ended 1 April ended 30 September
2018 2017 2017
GBP'000 GBP'000 GBP'000
Profit for the period 851 249 7,883
--------------- ----------------- ----------------------
Items that will not be reclassified subsequently to
the income statement
Remeasurement gains and losses on defined benefit
pension scheme 840 5,064 5,608
Movement in deferred tax on pension schemes 60 (912) (1,217)
Cash flow hedges
Fair value movements in other comprehensive income 2,578 1,001 (934)
Cash flow hedges recognised in inventories (2,333) (1,140) (1,233)
Tax on cash flow hedges (327) (24) 377
---------------
Other comprehensive income for the period 818 3,989 2,601
--------------- ----------------- ----------------------
Total comprehensive income for the period
attributable to equity holders of the parent 1,669 5,516 10,484
=============== ================= ======================
Unaudited consolidated statement of financial position
Notes 26 weeks ended 31 26 weeks ended 1 52 weeks ended 30 September
March April 2017
2018 2017
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Property, plant and equipment 20,430 18,667 20,783
Deferred tax asset 932 540 861
----------------- ---------------- ---------------------------
Total non-current assets 21,362 19,207 21,644
----------------- ---------------- ---------------------------
Current assets
Inventories 25,171 27,294 28,017
Trade and other receivables 5,335 5,638 6,108
Derivative financial assets 3 - 225 -
Corporation tax asset 411 273 -
Cash and cash equivalents 5,900 4,613 11,786
----------------- ---------------- ---------------------------
Total current assets 36,817 38,043 45,911
----------------- ---------------- ---------------------------
Total assets 58,179 57,250 67,555
----------------- ---------------- ---------------------------
Current liabilities
Trade and other payables (17,638) (18,928) (23,576)
Provisions for liabilities and charges (715) (751) (829)
Derivative financial liability 3 (2,520) - (2,546)
Corporation tax liability - - (474)
Total current liabilities (20,873) (19,679) (27,425)
----------------- ---------------- ---------------------------
Non-current liabilities
Trade and other payables (1,743) (3,002) (1,742)
Provisions for liabilities and charges (123) (104) (120)
Employee benefit liability (6,011) (7,851) (7,108)
Total non-current liabilities (7,877) (10,957) (8,970)
Total liabilities (28,750) (30,636) (36,395)
----------------- ---------------- ---------------------------
Net assets 29,429 26,614 31,160
================= ================ ===========================
Equity attributable to equity holders of
the company
Called up share capital 500 500 500
Share premium reserve 2,662 2,662 2,662
Cash flow hedge reserve (1,601) 107 (1,520)
Retained earnings 27,868 23,345 29,518
----------------- ---------------- ---------------------------
Total equity and reserves 29,429 26,614 31,160
================= ================ ===========================
Unaudited consolidated statement of changes in equity
Share Share Cash Retained Total
capital premium flow earnings
hedge
reserve
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 October 2016 500 2,662 270 26,344 29,776
Profit for the period - - - 249 249
Deferred tax on other comprehensive
income - - (163) 4,152 3,989
------------- -------- ---------------- --------- -------
Total comprehensive income
for the period - - (163) 4,401 4,238
------------- -------- ---------------- --------- -------
Dividends paid during the
period - - - (7,400) (7,400)
------------- -------- ---------------- --------- -------
Total contributions by and
distributions to owners - - - (7,400) (7,400)
------------- -------- ---------------- --------- -------
At 1 April 2017 500 2,662 107 23,345 26,614
------------- -------- ---------------- --------- -------
At 1 October 2016 500 2,662 270 26,344 29,776
Profit for the period - - - 7,883 7,883
Defined benefit pension movements - - - 5,608 5,608
Cash flow hedge movements - - (2,167) - (2,167)
Deferred tax on other comprehensive
income - - 377 (1,217) (840)
------------- -------- ---------------- --------- -------
Total comprehensive income
for the period - - (1,790) 12,274 10,484
------------- -------- ---------------- --------- -------
Dividends paid during the
period - - - (9,100) (9,100)
------------- -------- ---------------- --------- -------
Total contributions by and
distributions to owners - - - (9,100) (9,100)
------------- -------- ---------------- --------- -------
At 30 September 2017 500 2,662 (1,520) 29,518 31,160
------------- -------- ---------------- --------- -------
Profit for the period - - - 851 851
Defined benefit pension movements - - - 840 840
Cash flow hedge movements - - 246 - 246
Deferred tax on other comprehensive
income - - (327) 59 (268)
------------- -------- ---------------- --------- -------
Total comprehensive income
for the period - - (81) 1,750 1,669
------------- -------- ---------------- --------- -------
Dividends paid during the
period - - - (3,400) (3,400)
------------- -------- ---------------- --------- -------
Total contributions by and
distributions to owners - - - (3,400) (3,400)
------------- -------- ---------------- --------- -------
At 31 March 2018 500 2,662 (1,601) 27,868 29,429
============= ======== ================ ========= =======
Unaudited consolidated statement of cash flows
26 weeks ended 31 26 weeks 52 weeks
March ended 1 ended 30
2018 April September
2017 2017
GBP'000 GBP'000 GBP'000
Operating activities
Profit after taxation 851 249 7,883
Corporation tax 104 60 1,620
Finance income (7) (11) (15)
Finance expense 95 155 306
Pension contributions paid (351) (298) (649)
Depreciation of property, plant and equipment 1,456 1,535 2,962
Loss on disposal of property, plant and equipment 41 88 188
----------------- -------- ----------
2,189 1,778 12,295
Decrease in trade and other receivables 773 1,553 1,084
Decrease in foreign exchange contract - - 321
Decrease in inventories 2,727 3,007 2,767
Decrease in trade and other payables (5,968) (5,773) (2,467)
Increase / (decrease) in provisions 3 (142) (48)
----------------- -------- ----------
(2,465) (1,355) 1,657
----------------- -------- ----------
Cash generated from operations (276) 423 13,952
Income taxes paid (989) (1,889) (2,990)
----------------- -------- ----------
Net cash flows from operating activities (1,265) (1,466) 10,962
----------------- -------- ----------
Investing activities
Purchase of property, plant and equipment (2,381) (1,578) (5,137)
Sale of property, plant and equipment 1,153 - -
Interest received 7 11 15
----------------- -------- ----------
Net cash used in investing activities (1,221) (1,567) (5,122)
----------------- -------- ----------
Financing activities
Dividends paid during the year (3,400) (7,400) (9,100)
Net cash used in financing activities (3,400) (7,400) (9,100)
----------------- -------- ----------
Net decrease in cash and cash equivalents (5,886) (10,433) (3,260)
Cash and cash equivalents at beginning of period 11,786 15,046 15,046
----------------- -------- ----------
Cash and cash equivalents at end of period 5,900 4,613 11,786
================= ======== ==========
Notes to the financial statements for the 26 weeks ended 31 March 2018
Basis of preparation
The consolidated interim financial statements of the Group for the 26 weeks ended 31 March 2018, which are unaudited, have been prepared in accordance with the same accounting policies, presentation and methods of computation followed in the condensed set of financial statements as applied in the group's latest annual audited financial statements. A copy of those accounts has been delivered to the Registrar of Companies.
The financial information for the 26 weeks ended 31 March 2018, contained in this interim report, does not constitute the full statutory accounts for that period. The Independent Auditors' Report on the Annual Report and Financial Statements for 2017 was unqualified, did not draw attention to any matters by way of emphasis, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.
The consolidated interim financial statements have neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board.
The condensed consolidated interim financial statements have been prepared on a going concern basis and under the historical cost convention, as modified by the revaluation of derivative financial instruments to fair value.
The condensed consolidated interim financial statements are presented in sterling and have been rounded to the nearest thousand (GBP'000).
The preparation of financial information in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual events ultimately may differ from those estimates.
1. Accounting policies
In preparing these interim financial statements, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements reported in the latest annual audited financial statements for the 52 weeks ended 30 September 2017.
2. Segmental information
The group complies with IFRS 8 'Operating Segments', which determines and presents operating segments based on information provided to the chief operating decision-maker. The chief operating decision maker has been identified as the management team including the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer. The Board considers that each store is an operating segment but there is only one reporting segment as the stores qualify for aggregation, as defined under IFRS 8.
31 1 30
March April September
2018 2017 2017
GBP'000 GBP'000 GBP'000
External revenue by location of customers:
United Kingdom 71,532 70,404 152,562
Republic of Ireland 2,080 2,458 4,991
Other 60 - 224
------- ------- ----------
73,672 72,862 157,777
======= ======= ==========
There are no customers with turnover in excess of 10% of total turnover
31 1 30
March April September
2018 2017 2017
GBP'000 GBP'000 GBP'000
Non-current assets by location:
United Kingdom 20,416 18,667 20,499
Other 14 - 284
------- ------- ---------------
20,430 18,667 20,783
======= ======= ===============
3. Derivative financial instruments
At the balance sheet date, details of the forward foreign exchange contracts that the group has committed to are as follows:
31 1 30
March April September
2018 2017 2017
GBP'000 GBP'000 GBP'000
Derivative financial assets
Derivatives not designated as hedging
instruments (591) 95 (709)
Derivatives designated as hedging
instruments (1,929) 130 (1,837)
------- ------- ----------
(2,520) 225 (2,546)
======= ======= ==========
4. Taxation
The taxation charge for the 26 weeks ended 31 March 2018 is based on the estimated effective tax rate for the full year of 19% (2017:19.5%).
The standard rate of Corporation Tax in the UK reduced from 20% to 19% with effect from 1 April 2017. The standard rate will fall further to 17% with effect from 1 April 2020. These rates were enacted during the current year and deferred tax balances have been stated at a rate at which they are expected to reverse.
5. Earnings per share
31 1 30
March April September
2018 2017 2017
GBP'000 GBP'000 GBP'000
Profit for the period and earnings
used in basic and diluted earnings
per share 851 249 7,883
Earnings per share - basic and diluted 1.70p 0.50p 15.80p
======= ============ ==========
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 AJMATMBJTBIP
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