SuperGroup PLC Pre-Close Trading Statement (9714V)

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RNS Number : 9714V

SuperGroup PLC

09 November 2017

SuperGroup<Plc

Pre-close Trading Statement

Superdry delivers further strong financial growth, progress to build a Global Digital Brand continues

9 November 2017

SuperGroup Plc ('Superdry' or 'Group'), the owner of Superdry, the Global Digital Brand, today provides a trading update covering the 26-week period to 28 October 2017 (the 'half year' or 'period').

Revenue

 
                               26 weeks        26 weeks       Reported 
   GBPm                            to              to          Growth 
                               28 October      29 October 
                               2017 ("H1       2016 ("H1 
                                 FY18")          FY17") 
-------------------------  --------------  --------------  ----------- 
 Global Brand revenue(1)         756.3              604.1    +25.2% 
-------------------------  --------------  --------------  ----------- 
 
 Group revenue                   402.0           334.0       +20.4% 
-------------------------  --------------  --------------  ----------- 
 
 Wholesale revenue               159.3           118.8       +34.1% 
-------------------------  --------------  --------------  ----------- 
 
 Retail revenue                  242.7           215.2       +12.8% 
-------------------------  --------------  --------------  ----------- 
     Store revenue               181.5           168.7        +7.6% 
-------------------------  --------------  --------------  ----------- 
     Ecommerce revenue           61.2            46.5        +31.6% 
-------------------------  --------------  --------------  ----------- 
 
     Retail LFL(2) (%)           6.3%            12.8% 
-------------------------  --------------  --------------  ----------- 
     Average owned space 
      ('000's sq ft)             1,084            939        +15.4% 
-------------------------  --------------  --------------  ----------- 
 

Global Brand revenue increased by 25.2% to GBP756.3m in the half, benefitting from continued strong growth across all channels. Reported group revenues increased by 20.4% in the half to GBP402.0m, including an approximate GBP12m benefit from the impact of foreign exchange, the majority of which fell in the first quarter.

Wholesales revenue continued to grow strongly, up 34.1%. Total Retail revenues increased by 12.8% year on year, led by Ecommerce revenue that grew by 31.6%, and included like-for-like revenue growth of 6.3%. New and non-annualised retail space contributed c.6.8% sales growth over the period.

The strong performance delivered in the half year reflects the Group's focus on its four strategic pillars:

Global Digital Brand

Superdry continued to strengthen its brand presence with two fully integrated digital marketing campaigns, The Night is Young and This is My City. Each campaign was successful; introduced new customers to Superdry, re-enforced ownership of key seasonal categories and delivered strong financial returns. The autumn This is the Jacket campaign was launched in the final week of the period, with positive initial consumer reaction providing momentum into the second half.

World Market Opportunity

Disciplined expansion continued during the period across each of Superdry's eight channels to market, led, as outlined above, through flexible, capital light Wholesale and Ecommerce growth. Through 37 franchise stores and 13 owned stores, 50 dedicated Superdry stores were added to the portfolio in the period across 23 different countries. The development markets of North America and China are each now in disciplined roll-out and investment has continued, in line with plan.

Relentless Innovation

Innovation continued in both mainline and development areas. Within the core mainline, authority within jackets was strengthened by the launch of the first of a series of responsibly sourced down jackets, which will meet the highest ethical standards, containing only ethically sourced down. The college-inspired Varsity range, targeted at younger customers, pairing on-trend badging with Superdry's renowned graphic handwriting in a traditional colour palette of red, white and blue, was also highly successful.

The Superdry Sport proposition continues to build. In the period this included the launch of an expanded range including performance footwear, developed in the SuperDesignLab, and the opening of the first of a planned series of stand-alone franchise stores along with 12 "shop-in-shop" implants in owned stores.

Operational Excellence

The Group continued to develop its infrastructure including the extension of multi-channel capability to our European distribution centre and successful implementation of a new Order Management System for Ecommerce. The combination of these developments will reduce delivery times and enable Superdry's sector-leading UK customer delivery options to be introduced in Europe ahead of peak trading. As previously guided, the remaining dual running and other migration costs totaled c. GBP0.5m in the half year.

Financial Guidance

Gross margin in the period is anticipated to decline year-on-year by approximately 170bps, primarily reflecting the strong participation of Wholesale sales. Also, as previously guided, gross margins will also be impacted by input inflation not passed on to consumers and investments made to reduce the overall level of inventory, partially offset by not repeating promotional mechanics trialed in 2016.

The Board anticipates that underlying(4) full year profit before taxation will be in line with market expectations(5) and that half year underlying profit, after distribution centre migration costs and development market investment referred to above, will be in the range of GBP25m - GBP26m.

Commenting on Superdry's performance Euan Sutherland, Chief Executive Officer, said:

"We have delivered another strong performance in this half, further demonstrating the unique advantages and attractiveness of Superdry as a Global Digital Brand. Our growth has further diversified the brand, both geographically and across channels, which serves to insulate the business from trading conditions in any single market.

"Our focus is on executing against the clear growth opportunities we have identified. We have a clear brand positioning, a disruptive multi-channel approach and a growing culture of operational excellence. The performance in this half underlines our confidence in both the strength of the brand we are building and the quality of sustainable financial performance we can deliver."

Other Updates

   1.     Changes to Reporting Calendar 

Reflecting the development of Superdry as a Global Digital Brand and the growing significance of Wholesale to the Group's revenue and profit streams the following Financial Reporting calendar will be adopted from FY19 onward with the revised financial metrics being adopted from H2 FY18.

 
 Announcement      Timing           Content / Key Financial 
                                     Metrics 
----------------  ---------------  -------------------------------- 
 Full Year         May              Quarter 4 & Half 2 Performance: 
  - Pre-Close                        - Retail store sales 
  Statement                          - Ecommerce sales 
                                     - Total Wholesale sales 
                                     Gross Margin 
                                     Full Year Underlying(4) 
                                     Profit guidance 
----------------  ---------------  -------------------------------- 
 Preliminary       July             Statutory Results 
  Results                            Final Dividend Confirmation 
                                     Strategy Update 
----------------  ---------------  -------------------------------- 
 Half Year         November         Quarter 1, Quarter 2 and 
  - Pre-Close                        Half 1 Performance: 
  Statement                          - Retail store sales 
                                     - Ecommerce sales 
                                     - Total Wholesale sales 
                                     Gross Margin 
                                     Half 1 Underlying(4) Profit 
                                     guidance 
----------------  ---------------  -------------------------------- 
 Interim Results   December(Note)   Statutory Results 
                                     Interim Dividend confirmation 
                                     Strategy Update 
----------------  ---------------  -------------------------------- 
 Third Quarter     February         Quarter 3 Performance: 
  Trading Update                     - Retail store sales 
                                     - Ecommerce sales 
                                     - Total Wholesale sales 
                                     Gross margin guidance 
----------------  ---------------  -------------------------------- 
 

Note: The FY18 Interim Results, together with a trading update for the third quarter, will be announced on 10 January 2018.

   2.     Change of Name 

As announced at our Capital Markets Update on 25 September 2017, the name of the Group will change to Superdry Plc, reflecting our focus on developing the brand globally and digitally. We are currently putting in place the changes necessary for this step and expect the name change to take effect during the first quarter of 2018.

For further information:

 
   SuperGroup 
   Nick Wharton                                      [phone] 
   Chief Financial Officer                           [e-mail] 
   Tulchan 
   Susanna Voyle                                     [phone] 
   Samantha Chiene                                   [e-mail] 
 

Conference call

SuperGroup will be hosting a conference call for analysts and institutional investors at 08:00 hours today. A recording of the conference call will be available on www.supergroup.co.uk shortly afterwards.

 
 Dial in: 
 UK Toll Number:         [phone] 
 UK Toll-Free Number:    0808 237 0030 
 Pin:                    40740470# 
 

Announcement of FY18 Interim Results

SuperGroup will announce its Interim Results for the 26 weeks ended 28 October 2017, together with a third quarter trading update on Wednesday 10 January 2018.

Notes

1. Global Brand revenue represents the equivalent value of Group revenue at the values paid by consumers. It is calculated by uplifting all revenues by applicable sales tax rates and uplifting revenues in our Wholesale division by a factor representing the applicable mark up from wholesale to consumer prices.

2. Like-for-like sales ('LFL') growth is defined as the year-on-year sales growth for stores and concessions open for more than one year and include Ecommerce revenues. Foreign currency sales are translated at the average rate for the month in which they were made.

 
  Reported                                Q2                                Q1 
----------------  ---------------------------------  ------------------------------ 
 GBPm                    FY18     FY17     Growth       FY18       FY17     Growth 
 Total retail         126.4       114.6     10.3%       116.3      100.6     15.6% 
 
   LFL (%)2              3.7%      13.7%                 9.3%       11.9% 
 
   Ave. Space 
   (sq. '000s)2         1,100       957       14.9%      1,067       920      16.0% 
----------------  -----------  ---------  ---------  ---------  ---------  -------- 
 
   3.       Owned Retail Space Analysis: 
 
                     Closing               FY18 H1 
                      FY17 
---------------  ----------------  ----------------- 
                    Sq ft  Stores      Sq ft  Stores 
---------------  --------  ------  ---------  ------ 
 UK & ROI          573       99       580      102 
---------------  --------  ------  ---------  ------ 
 EU                405      101       441      108 
---------------  --------  ------  ---------  ------ 
 North America      76       20       101       23 
---------------  --------  ------  ---------  ------ 
 Group            1,054     220      1,122     233 
---------------  --------  ------  ---------  ------ 
 

The Group opened 15 stores, relocated four stores and two stores were closed during the half year.

4. Underlying is defined as reported results adjusted to reflect the impact of exceptional and other items (including the fair valuation of financial derivatives), and, when appropriate, the related income tax. The Board believes that the underlying results provide additional guidance to statutory measures to help understand the performance of the Group.

5. The Board considers market expectations for the financial year ended 28 April 2018 are best defined by taking the range of forecasts of PBT published by analysts who consistently follow the Group. The current consensus of PBT forecasts as at 2 November 2017, of which the Board is aware, is GBP97.9m.

Notes to Editors

Superdry is a Global Digital Brand, obsessed with design, quality and fit and committed to relentless innovation. We design and make affordable, premium-quality clothing, accessories, footwear and cosmetics which are sold around the world. Our customers don't believe in being categorised by what they wear - they are individuals that share a common attitude in life and feel amazing when they wear the Superdry logo. We create the clothes...our customers create the stories.

We operate a significant and continually expanding international business, with a disruptive multi-channel approach and selling through our websites, wholesale partners and a network of franchise and owned stores. We are becoming a more efficient business as we improve our process from Design to Customer and refine our Wholesale model. Simultaneously, we are focused on expanding our business globally with a clear strategy for growing our Ecommerce business as well as our operations in key markets within Europe, North America and China.

We operate in 52 countries worldwide with a combination of physical stores and websites and have more than 5,000 colleagues worldwide.

Cautionary Statement

This announcement contains certain forward-looking statements with respect to the financial condition and operational results of SuperGroup Plc. These statements and forecasts involve risk, uncertainty and assumptions because they relate to events and depend upon circumstances that will occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. These forward-looking statements are made only as at the date of this announcement. Nothing in this announcement should be construed as a profit forecast. Except as required by law, SuperGroup Plc has no obligation to update the forward-looking statements or to correct any inaccuracies therein.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

This information is provided by RNS

The company news service from the London Stock Exchange

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November 09, 2017 02:00 ET (07:00 GMT)