We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for real-time alerts, custom portfolio, and market movers
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Ted Baker Plc | LSE:TED | London | Ordinary Share | GB0001048619 | ORD 5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 109.80 | 109.80 | 110.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMTED
RNS Number : 5330I
Ted Baker PLC
22 March 2018
22 March 2018
Ted Baker Plc
("Ted Baker", the "Group")
Annual Results for the 52 weeks ended 27 January 2018
"Continued progress in Ted Baker's expansion as a global lifestyle brand"
Highlights:
Hot Features
Premium
2018 2017 Change
Group Revenue GBP591.7m GBP531.0m 11.4%
Profit Before Tax and
Exceptional Items GBP73.5m GBP65.8m 11.7%
Profit Before Tax GBP68.8m GBP61.3m 12.3%
Adjusted EPS 127.7p 114.0p 12.0%
Basic EPS 119.0p 105.7p 12.6%
Total Dividend 60.1p 53.6p 12.1%
-- Group revenue up 11.4% (9.6% in constant currency) to GBP591.7m
-- Retail sales up 10.4% (8.5% in constant currency) to GBP442.5m
o UK and Europe retail sales up 7.7% (6.4% in constant currency) to GBP301.1m
o US and Canada retail sales up 16.2% (12.4% in constant currency) to GBP120.1m
o E-commerce sales up 39.8 % (38.7% in constant currency) to GBP101.1m
-- Wholesale sales up 14.6% (13.3% in constant currency) to GBP149.2m -- Licence income up 17.6% to GBP21.4m -- Proposed final dividend of 43.5p bringing total dividend to 60.1p, an increase of 12.1%
Ray Kelvin CBE, Founder and Chief Executive, said:
"I am pleased to report a year of continued progress in Ted Baker's expansion as a global lifestyle brand. The Group's good performance demonstrates the strength of the brand as well as the quality and appeal of our collections.
Ted Baker's continued success is driven by the passion and talent of our global teams. I would like to take this opportunity to thank our colleagues across the world for their hard work and Tedication during the year.
Our new collections have been received positively and although we anticipate external trading conditions will remain challenging across many of our global markets, the strength of our brand and business model mean that we remain well positioned to continue the Group's momentum and long-term development. We have a clear strategy for growth across both established and new markets which is underpinned by our controlled, multi-channel distribution as well as the design, quality and attention to detail that are at the heart of everything we do."
This document contains inside information. Enquiries: Ted Baker Plc Tel: 020 7796 4133 on 22 March 2018 only Ray Kelvin CBE, Founder & Chief Executive Tel: 020 7255 4800 thereafter Lindsay Page, Chief Operating Officer & Group Finance Director Charles Anderson, Company Secretary & Finance Director Hudson Sandler Tel: 020 7796 4133 Alex Brennan Hattie O'Reilly
www.tedbaker.com
www.tedbakerplc.com
Media images available for download at:
http://www.tedbakerplc.com/ted/en/mediacentre/imagelibrary
Notes to editors:
Ted Baker Plc - "No Ordinary Designer Label"
Ted Baker is a global lifestyle brand that operates through three main distribution channels: retail, which includes e-commerce; wholesale; and licensing, which includes territorial and product licences.
We distribute through our own and licensed retail outlets, leading department stores and selected independent stores in the UK and Europe, North America, the Middle East, Africa, Asia and Australasia.
The brand continues to go from strength to strength driven along in part by its unconventional approach to product and design. Never forgetting its roots as a shirt specialist but always with an eye on the future, Ted is continuously innovating through its collections, store environments and now with digital and social media initiatives that foster a truly omnichannel view for its growing and highly engaged global audience.
Ted Baker is a truly global lifestyle brand with 532 stores and concessions worldwide, comprised of 195 in the UK, 113 in Europe, 127 in North America, 88 in the Middle East, Africa and Asia and 9 in Australasia.
The brand offers a wide range of collections including: Menswear; Womenswear; Global; Phormal; Endurance; Accessories; Bedding; Childrenswear; Crockery; Eyewear; Footwear; Fragrance and Skinwear; Gifting and Stationery; Jewellery; Lingerie and Sleepwear; Luggage; Neckwear; Rugs; Suiting; Technical Accessories; Tiles; and Watches.
Strategic Report
Chairman's Statement
I am pleased to report that Group revenue increased by 11.4% (9.6% in constant currency)(1) to GBP591.7m (2017: GBP531.0m) and profit before tax and exceptional items(2) increased by 11.7% to GBP73.5m (2017: GBP65.8m) for the 52 weeks ended 27 January 2018 (the "period"). Profit before tax increased by 12.3% to GBP68.8m (2017: GBP61.3m). This good performance reflects the strength of the Ted Baker brand and business model and was achieved despite a backdrop of on-going challenging external factors across our global markets.
The retail channel performed well, with retail sales including e-commerce up 10.4% (8.5% in constant currency)(1) to GBP442.5m (2017: GBP400.7m) on an increase in average square footage of 5.9%. Our e-commerce business is an integral and increasingly important component within our retail proposition and has performed very well, delivering strong sales growth of 39.8% (38.7% in constant currency)(1) to GBP101.1m (2017: GBP72.3m). We continued our controlled geographic expansion with openings across the UK and Europe, North America and the Rest of the World and we continue to invest and build brand awareness in our newer markets for the long-term development of the brand.
The wholesale channel delivered a strong performance, with sales up 14.6% (13.3% in constant currency)(1) to GBP149.2m (2017: GBP130.3m). This reflects a good performance from our UK wholesale business, which includes the supply of goods to our licensed stores and our export business, as well as a strong performance from our North American wholesale business.
Licence income delivered strong growth of 17.6% to GBP21.4m (2017: GBP18.2m). During the period, our licence partners opened further stores and concessions in Australia, Dubai, Indonesia, Kuwait, Lebanon, Mexico, Qatar, Saudi Arabia and Turkey.
In May 2017, we launched the next phase of the Microsoft Dynamics AX system across our UK and European businesses to fully support our retail, e-commerce and wholesale channels. We anticipate completing the final phases of this project towards the end of this year, and this will allow us to continue to enhance efficiency, streamline our operations and support the development of the business.
We have now successfully completed the transition from our three legacy distribution centres to our single European distribution centre in the UK. The new distribution centre now handles all logistic operations for our retail, e-commerce and wholesale businesses across the UK and Europe, supporting our long-term growth strategy. In September 2017, we successfully assigned the leases for our three UK legacy distribution centres to third parties.
The Group continues to consider its expansion and development plans for The Ugly Brown Building and has decided not to exercise the option to purchase 50% of neighbouring Block A, as future capacity requirements will be accommodated within our enhanced plans for the current site.
Financial Results
Group revenue for the period increased by 11.4% (9.6% in constant currency)(1) to GBP591.7m (2017: GBP531.0m). The Group gross margin remained constant at 61.0% (2017: 61.0%). This was a result of an increased retail margin driven by an improved full price sell-through and change in mix of full price and outlet sales, offset by a decrease in the wholesale margin, reflecting a prior-year foreign exchange benefit that was not expected to re-occur and a greater proportion of wholesale sales to our territorial licence partners which carry a lower margin.
Profit before tax and exceptional items(2) increased by 11.7% to GBP73.5m (2017: GBP65.8m) and profit before tax increased by 12.3% to GBP68.8m (2017: GBP61.3m). Adjusted basic earnings per share, which excludes exceptional items, increased by 12.0% to 127.7p (2017: 114.0p) and basic earnings per share increased by 12.6% to 119.0p (2017: 105.7p).
Exceptional items in the period amounted to GBP4.7m (2017: GBP4.5m) and comprised the impairment of retail assets, relating to three stores in the US and one store in Europe of GBP4.5m, and restructuring costs of GBP1.3m, partially offset by income of GBP1.1m related to the release of provisions against the Group's legacy warehouses following assignment of the leases. Exceptional items in the 52 weeks ended 28 January 2017 of GBP4.5m included a provision for lease commitments relating to the Group's legacy warehouses of GBP2.9m along with GBP0.7m of other closure costs and GBP0.9m in respect of closure costs for a concept store in London.
The Group's net borrowing position at the end of the period was GBP111.8m (2017: GBP95.2m) being the secured term loan of GBP52.5m (2017: GBP58.5m) used to purchase The Ugly Brown Building and other net debt of GBP59.3m (2017: GBP36.7m). The increase in other net debt primarily reflects the ongoing capital expenditure during the period and increased working capital.
Dividends
Reflecting the Group's continued good performance and the Board's confidence in the outlook, the Board is recommending a final dividend of 43.5p per share (2017: 38.8p), making a total for the period of 60.1p per share (2017: 53.6p per share), an increase of 12.1% on the prior period. Subject to approval by shareholders at the Annual General Meeting to be held on 12 June 2018, the final dividend will be paid on 22 June 2018 to shareholders on the register on 18 May 2018.
People
I would like to take this opportunity to thank all of my colleagues across the world for their continued hard work and commitment. The performance in the period is testament to our talented teams, whose skill and passion are key to our success as we continue to grow the business and develop Ted Baker as a global lifestyle brand.
Current Trading and Outlook
Retail
In the UK and Europe, we have opened a new store in London Luton Airport and plan to open new stores in Barcelona Airport and London Bridge station, an outlet in Lyon and our first outlet in Neumunster, Germany, along with further concessions in the UK, France, Germany and Spain. We will continue to invest in our e-commerce sites to enhance the customer experience.
In North America, we will continue to develop our presence with plans to open stores in Austin and Orlando, along with further licence partner concessions in Mexico.
In the Rest of the World, we remain focused on building brand awareness, as we are still in the relatively early stages of investment. In line with our development strategy in this territory, we plan to open a further concession in Japan.
Wholesale
We anticipate further growth across our wholesale businesses, which should result in high single-digit sales growth (in constant currency)(1) in the coming period.
Licence Income
Our product and territorial licences continue to perform well. We have opened a store in India, with further store openings planned in Egypt, India, Indonesia, Kazakhstan, Saudi Arabia, Singapore and Thailand.
Group
The recent unseasonal weather across Europe and the East Coast of America has had an impact on the early part of trading for Spring/Summer and we anticipate that external trading conditions will remain challenging across many of our global markets. However, the new season collections have been well received and the strength of our brand and business model mean that we remain well positioned to continue the Group's momentum and long-term development. We have a clear strategy for the continued expansion of Ted Baker as a global lifestyle brand across both established and newer markets. This is underpinned by our controlled distribution across channels as well as the design, quality and attention to detail that are central to everything we do.
To deliver our expansion plans, capital expenditure in the new financial period is planned to be at GBP30.0m (2018: GBP36.6m). This relates to further store openings and refurbishments, and the ongoing investment in new IT systems across the business.
We intend to make our trading statement covering trading from the start of the financial period in mid-June 2018.
David Bernstein CBE
Non-Executive Chairman
22 March 2018
Notes:
(1) Constant currency comparatives are obtained by applying the exchange rates that were applicable for the 52 weeks ended 28 January 2017 to the financial results in overseas subsidiaries for the 52 weeks ended 27 January 2018 to remove the impact of exchange rate fluctuations.
(2) Profit before tax and exceptional items is a non-GAAP measure. For further information about this measure, and the reasons why we believe it is important for an understanding of the performance of the business, please refer to page 14 in the Financial Review, and Note 1 and Note 3 of the Financial Statements.
The Directors believe these measures provide a consistent and comparable view of the underlying performance of the Group's ongoing business.
Business model and strategy
Ted Baker has grown steadily from its origins as a specialist shirt store in Glasgow to the global lifestyle brand it is today. In order to protect the ethos and persona for which we have gained an enviable reputation, we always ask ourselves the question: "Would Ted do it that way?"
Product
Ted Baker is a quintessentially British brand with a quirky yet commercial fashion offering that prides itself in always being able to satisfy the needs of our customer. Our approach is focused on unwavering attention to detail and firm commitment to quality.
We offer a wide range of collections including: Menswear; Womenswear; Global; Phormal; Endurance; Accessories; Bedding; Childrenswear; Crockery; Eyewear; Footwear; Fragrance and Skinwear; Gifting and Stationery; Jewellery; Lingerie and Sleepwear; Luggage; Neckwear; Rugs; Suiting; Technical Accessories; Tiles; and Watches.
The menswear collection is a reflection of popular contemporary culture, with a sense of humour and style mixed in. It also includes our Phormalwear range, offering a number of distinctive suiting collections that combine heritage British tailoring with a modern outlook. The womenswear collection is a fresh and feminine mix of European elegance with London flair, and is a celebration of beauty, individuality and exquisite attention to detail.
Distribution channels
The brand operates through three main distribution channels: retail, which includes e-commerce; wholesale; and licensing, which includes territorial and product licences. We want our customers to enjoy a seamless experience regardless of how they choose to shop and interact with the brand.
The retail channel comprises stores, concessions and e-commerce, which is now an integral part of our retail experience. We operate stores and concessions across the UK, Europe, North America and Asia, and localised e-commerce sites for the UK, Europe, US, Canada and Australia. We also have e-commerce businesses with some of our concession partners.
Stores and concessions are designed to showcase the brand's unique style of retail theatre and to ensure our customers enjoy a welcoming and pleasurable shopping experience. Each store boasts a fully bespoke design that is full of innovative and distinctive touches.
E-commerce enables us to offer our customers access to an extended product range and provides us with a means to talk directly with our customers and engage them with the brand in non-traditional ways. We focus on ensuring that we provide a user-friendly online brand and shopping experience across multiple devices.
The wholesale business in the UK serves countries across the world, primarily in the UK and Europe, as well as supplying products to stores operated by our territorial licence partners. In addition, we operate a wholesale business in North America serving the US and Canada. Our wholesale partners ("Trustees") are custodians of our collections and uphold our brand integrity by ensuring that their retail environment and brand adjacencies are in keeping with the profile and positioning of the brand. We have built up strong relationships with some of the best independent retailers and department stores around the world.
We operate both territorial and product licences. Our licence partners are all experts in their field and share our passion for unwavering attention to detail and firm commitment to quality.
Territorial licences cover specific countries or regions in Asia, Australasia, Europe, the Middle East and North America, where our partners operate licensed retail stores and, in some territories, wholesale operations.
Product licences cover: Bedding; Childrenswear; Crockery; Eyewear; Footwear; Fragrance and Skinwear; Gifting and Stationery; Jewellery; Lingerie and Sleepwear; Luggage; Neckwear; Rugs; Suiting; Technical Accessories; Tiles; and Watches.
Geographic reach
Ted Baker is a truly global lifestyle brand with 532 stores and concessions worldwide, comprised of 195 in the UK, 113 in Europe, 127 in North America, 88 in the Middle East, Africa and Asia and 9 in Australasia.
The Group opened its first shop in the UK in Glasgow in 1988 and has since established itself in all the major fashion destinations in the UK. We have also built a growing presence in Europe with stores and concessions in Belgium, France, Germany, Ireland, the Netherlands, Portugal, and Spain. Our e-commerce and wholesale businesses complement our locations in Europe.
In 1998, the Group opened its first store in North America in New York. Since then, the Group has established a presence across the US from the East to West coasts and into Canada through both own stores and concessions. In addition, the Group has a standalone e-commerce site in North America that is localised to each of Canada and the US, and a fast-growing wholesale business.
As part of our strategy to invest for the longer-term development of the brand, we have launched the brand in Asia with stores and concessions in China, Hong Kong and Japan. We also understand the growing desire of our customers to buy our products online and trade on renowned local websites in this region.
Through our territorial licences we also trade in many other countries across Africa, Asia, Australasia and the Middle East.
Strategy
Our strategy is to enhance our position as a leading global lifestyle brand by the continuous development of three main elements of our business model:
-- considered extension of the Ted Baker collections to achieve our brand growth potential. We review our collections continually to ensure we anticipate and react to trends and meet our customers' expectations. In addition, we look for opportunities to extend the breadth of collections and enhance our offer;
-- controlled distribution through three main channels: retail (including e-commerce); wholesale; and licensing. We consider each new opportunity to ensure it is right for the brand and will deliver margin led growth; and
-- further international growth through carefully managed development of overseas markets. We continue to manage growth in existing territories while considering new territories for expansion.
Underlying our strategy is an emphasis on design, product quality and attention to detail, delivered by the passion, commitment and skill of our teams, licence partners and wholesale customers.
Key Performance Indicators
We review the ongoing performance of the business using key performance indicators.
The Key Performance Indicators ("KPI's") that the Directors judge to be most effective in assessing progress against the Group's objectives and strategy have been detailed below and are considered throughout the Strategic Report.
Key Performance 52 weeks 52 weeks Variance Constant
Indicator ended 27 ended 28 currency
January January variance(1)
2018 2017
----------- ------------------------- ---------- ---------- --------- -------------
Group Revenue GBP591.7m GBP531.0m 11.4% 9.6%
----------- ------------------------- ---------- ---------- --------- -------------
Gross margin 61.0% 61.0% -
------------------------------------- ---------- ---------- --------- -------------
Operating contribution
(excluding exceptional
items) %(2) 12.7% 12.6% 10 bps
------------------------------------- ---------- ---------- --------- -------------
Operating contribution
(including exceptional
items) %(2) 12.0% 11.8% 20 bps
------------------------------------- ---------- ---------- --------- -------------
Profit before
tax (excluding
exceptional items)
as a % of revenue(2) 12.4% 12.4% -
------------------------------------- ---------- ---------- --------- -------------
Profit before
tax (including
exceptional items)
as a % of revenue(2) 11.6% 11.5% 10 bps
------------------------------------- ---------- ---------- --------- -------------
Retail Total revenue GBP442.5m GBP400.7m 10.4% 8.5%
----------- ------------------------- ---------- ---------- --------- -------------
Store revenue GBP341.4m GBP328.4m 4.0% 1.8%
------------------------------------- ---------- ---------- --------- -------------
E-commerce revenue GBP101.1m GBP72.3m 39.8% 38.7%
------------------------------------- ---------- ---------- --------- -------------
Gross margin 67.0% 66.1% 90 bps
------------------------------------- ---------- ---------- --------- -------------
Average square
footage(3) 410,190 387,373 5.9%
------------------------------------- ---------- ---------- --------- -------------
Closing square
footage(3) 420,158 395,088 6.3%
------------------------------------- ---------- ---------- --------- -------------
Sales per square
foot excluding
e-commerce sales GBP832 GBP848 (1.9%) (3.9%)
------------------------------------- ---------- ---------- --------- -------------
Wholesale Revenue GBP149.2m GBP130.3m 14.6% 13.3%
----------- ------------------------- ---------- ---------- --------- -------------
(180
Gross margin 43.3% 45.1% bps)
------------------------------------- ---------- ---------- --------- -------------
Licence
income Revenue GBP21.4m GBP18.2m 17.6%
----------- ------------------------- ---------- ---------- --------- -------------
Operating cashflow
Group per share(4) 98.4p 118.4p (16.9%)
----------- ------------------------- ---------- ---------- --------- -------------
Working capital(5) GBP168.6m GBP136.8m 23.3%
------------------------------------- ---------- ---------- --------- -------------
(1) Constant currency comparatives are obtained by applying the exchange rates that were applicable for the 52 weeks ended 28 January 2017 to the financial results in overseas subsidiaries for the 52 weeks ended 27 January 2018 to remove the impact of exchange rate fluctuations.
(2) Operating contribution is defined as operating profit as a percentage of revenue. For information about exceptional items please refer to page 14 in the Financial Review, and Note 1 and Note 3 of the Financial Statements.
(3) Excludes licensed partner stores.
(4) Operating cashflow per share is defined as net cash generated from operating activities divided by the weighted number of ordinary shares (diluted).
(5) Working capital comprises inventories, trade and other receivables and trade and other payables.
Business Review
Distribution channels
The brand operates through three main distribution channels: retail, which includes e-commerce; wholesale; and licensing, which includes territorial and product licences. As part of our strategy we look to further develop each of these routes to market, whilst ensuring the controlled distribution of our product.
Retail
Our retail channel comprises stores, concessions and e-commerce, which is now an integral part of our retail experience. We operate stores and concessions across the UK, Europe, North America and the Rest of the World, and localised e-commerce sites for the UK, Europe, the US, Canada and Australia. We also have e-commerce businesses with some of our concession partners. Our unique stores showcase the Ted Baker brand and are key to the growth and success of our e-commerce business. Our relatively low number of own stores and higher number of concession locations allows us to maintain a flexible store business model.
The retail division performed well, with sales up 10.4% (8.5% in constant currency)(1) to GBP442.5m (2017: GBP400.7m) despite a challenging trading environment across some of our global markets. The growth was driven by continued investment across the retail channel in new and existing stores and our e-commerce platform. We are particularly pleased with our strong e-commerce performance, where sales grew by 39.8% (38.7% in constant currency)(1) to GBP101.1m (2017: GBP72.3m) and represented 22.8% (2017: 18.0%) of our total retail sales.
The growth in retail sales (including e-commerce) of 10.4% (8.5% in constant currency)(1) exceeded the increase in
average retail square footage of 5.9% to 410,190 sq ft (2017: 387,373 sq ft). Retail sales per square foot (excluding e-commerce) decreased 1.9% (decrease of 3.9% in constant currency)(1) to GBP832 (2017: GBP848) demonstrating the changing
customer behaviour with customers shopping both online and in store.
The retail gross margin increased to 67.0% (2017: 66.1%), reflecting a change in mix between full price and outlet sales and also an improved full price sell-through in our retail channel.
Retail operating costs increased 10.8% (8.6% in constant currency)(1) to GBP225.2m (2017: GBP203.3m) and as a percentage of retail sales, slightly increased to 50.9% (2017: 50.7%) due to investment in online marketing costs to increase awareness of local e-commerce sites offset by the decrease in dual running costs associated with the transition to our new single European distribution centre.
Wholesale
Our wholesale business in the UK serves countries across the world, primarily in the UK and Europe, as well as supplying products to stores operated by our territorial licence partners. In addition, we operate a wholesale business in North America serving the US and Canada.
Group wholesale sales increased by 14.6% (13.3% in constant currency)(1) to GBP149.2m (2017: GBP130.3m), reflecting a good performance from our UK wholesale business, with sales increasing by 9.3% to GBP94.1m (2017: GBP86.1m), and a strong performance from our North American wholesale business, with sales increasing by 24.7% (21.0% in constant currency)(1) to GBP55.1m (2017: GBP44.2m).
The wholesale gross margin decreased to 43.3% (2017: 45.1%), reflecting a prior-year foreign exchange benefit that was not expected to re-occur and a greater proportion of sales to our territorial licence partners, which carry a lower margin.
Collections
Ted Baker Menswear performed well with sales up 10.1% to GBP249.7m (2017: GBP226.7m). Menswear represented 42.2% of total sales in the period (2017: 42.7%). Ted Baker Womenswear delivered a good performance with sales up 12.4% to GBP342.0m (2017: GBP304.3m). Womenswear represented 57.8% of total sales (2017: 57.3%). The growth in the womenswear mix was driven by allocation of space as well as the increased proportion of e-commerce sales where we experience a higher percentage of womenswear sales.
Licence income
We operate both territorial and product licences. Our licence partners are carefully selected as experts in their field and share our passion for unwavering attention to detail and firm commitment to quality.
Both territorial and product licences delivered good performances, with licence income up 17.6% to GBP21.4m (2017: GBP18.2m). There were notable performances from our product licencees in Childrenswear, Eyewear, Skinwear and Suiting.
In the second half of the period, we transitioned our retail operations in South Korea to a distributor with the knowledge and experience to drive growth locally.
Geographic Performance
United Kingdom and Europe
52 weeks 52 weeks Variance Constant
ended ended currency
27 January 28 January variance(1)
2018 2017
---------------------------- ------------ ------------ --------- -------------
Total retail revenue* GBP301.1m GBP279.5m 7.7% 6.4%
---------------------------- ------------ ------------ --------- -------------
Store revenue GBP218.6m GBP218.4m 0.1% (1.4%)
---------------------------- ------------ ------------ --------- -------------
E-commerce revenue GBP82.5m GBP61.1m 35.0% 34.7%
---------------------------- ------------ ------------ --------- -------------
Average square footage* 257,367 246,826 4.3%
---------------------------- ------------ ------------ --------- -------------
Closing square footage* 261,261 250,624 4.2%
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot including e-commerce
sales GBP1,170 GBP1,132 3.4% 2.2%
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot excluding e-commerce
sales GBP849 GBP885 (4.1%) (5.5%)
---------------------------- ------------ ------------ --------- -------------
Wholesale revenue GBP94.1m GBP86.1m 9.3%
---------------------------- ------------ ------------ --------- -------------
Own stores 37 36 1
---------------------------- ------------ ------------ --------- -------------
Concessions 252 237 15
---------------------------- ------------ ------------ --------- -------------
Outlets 15 14 1
---------------------------- ------------ ------------ --------- -------------
Partner stores 4 3 1
---------------------------- ------------ ------------ --------- -------------
Total 308 290 18
---------------------------- ------------ ------------ --------- -------------
* Excludes licensed partner stores
Retail sales in UK and Europe increased by 7.7% (6.4% in constant currency)(1) to GBP301.1m (2017: GBP279.5m) despite ongoing challenging trading conditions.
Our e-commerce business performed very well during the period with sales increasing by 35.0% to GBP82.5m (2017: GBP61.1m) demonstrating that e-commerce sales are an integral part of the retail proposition in the UK and European markets. As a percentage of UK and Europe retail sales, e-commerce sales represented 27.4% (2017: 21.9%).
Sales per square foot excluding e-commerce sales decreased reflecting the move to online. However our stores remain key to the success of the e-commerce business through initiatives such as order in store and click and collect as well as showcasing the brand and the collections and contribute a healthy financial return.
Expansion continued with store openings in London, Oxford and Paris and outlets in Gloucester and Roermond. We also relocated three of our stores which included Heathrow T3, and our outlets in Bicester and La Vallee. We opened further concessions with premium department stores in the UK, France, Germany, the Netherlands and Spain. We also opened two licence partner stores in Turkey. We are pleased with the performance of the new openings and remain positive about further growth opportunities for our brand across these markets. During the period, we closed a concept store in London, and temporarily closed a store and an outlet for refurbishment. Given the ongoing challenging trading conditions, in the period the Group has impaired one store in Europe that failed to deliver on its potential.
Sales from our UK wholesale division, which include our wholesale export business and the supply of product to our retail licence partners, increased by 9.3% to GBP94.1m (2017: GBP86.1m) reflecting a good performance from sales to Trustees, particularly those with a strong online customer proposition.
North America
52 weeks 52 weeks Variance Constant
ended ended currency
27 January 28 January variance(1)
2018 2017
---------------------------- ------------ ------------ --------- -------------
Total retail revenue* GBP120.1m GBP103.4m 16.2% 12.4%
---------------------------- ------------ ------------ --------- -------------
Store revenue GBP103.8m GBP93.6m 10.9% 7.3%
---------------------------- ------------ ------------ --------- -------------
E-commerce revenue GBP16.3m GBP9.8m 66.3% 61.4%
---------------------------- ------------ ------------ --------- -------------
Average square footage
* 121,081 112,110 8.0%
---------------------------- ------------ ------------ --------- -------------
Closing square footage
* 126,524 116,590 8.5%
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot including e-commerce
sales GBP992 GBP922 7.6% 4.1%
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot excluding e-commerce
sales GBP857 GBP835 2.6% (1.3%)
---------------------------- ------------ ------------ --------- -------------
Wholesale revenue GBP55.1m GBP44.2m 24.7% 21.0%
---------------------------- ------------ ------------ --------- -------------
Own stores 32 31 1
---------------------------- ------------ ------------ --------- -------------
Concessions 61 55 6
---------------------------- ------------ ------------ --------- -------------
Outlets 12 11 1
---------------------------- ------------ ------------ --------- -------------
Partner Stores 22 14 8
---------------------------- ------------ ------------ --------- -------------
Total 127 111 16
---------------------------- ------------ ------------ --------- -------------
* Excludes licensed partner stores
We are confident that the Ted Baker brand is becoming more established and continues to gain recognition in this territory.
Sales from our retail division in North America increased by 16.2% (12.4% in constant currency)(1) to GBP120.1m (2017:
GBP103.4m). Our e-commerce business performed particularly well with sales increasing 66.3% (61.4% in constant currency)(1) to GBP16.3m (2017: GBP9.8m). As a percentage of North America retail sales, e-commerce sales represented 13.6%
(2017: 9.5%).
Sales per square foot excluding e-commerce sales decreased in constant currency(1) due to in part higher levels of
competitor promotional activity in the North American market and lower international tourism in the first half of the year. However, the second half of the year has seen an improving trend in this territory.
During the period, we opened new stores in Houston, Los Angeles and Montreal and expanded our Miami Aventura store. We opened an outlet in Chicago and concessions in Canada with a premium department store. We also opened concessions in Mexico with our licence partner. We closed one store in Los Angeles and one in New York and impaired three stores in light of the above trading conditions.
Sales from our North American wholesale business increased by 24.7% (21.0% in constant currency)(1) to GBP55.1m (2017:
GBP44.2m) reflecting a strengthening relationship with key trustees that attract domestic customers across North America, further demonstrating increased brand recognition in this territory.
Rest of the World
52 weeks 52 weeks Variance Constant
ended ended currency
27 January 28 January variance(1)
2018 2017
---------------------------- ------------ ------------ --------- -------------
Total retail revenue* GBP21.3m GBP17.8m 19.7% 17.3%
---------------------------- ------------ ------------ --------- -------------
Store revenue GBP19.0m GBP16.4m 15.9% 13.8%
---------------------------- ------------ ------------ --------- -------------
E-commerce revenue GBP2.3m GBP1.4m 64.3% 57.8%
---------------------------- ------------ ------------ --------- -------------
Average square footage
* 31,742 28,438 11.6%
---------------------------- ------------ ------------ --------- -------------
Closing square footage
* 32,373 27,874 16.1%
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot including e-commerce
sales GBP670 GBP625 7.2% 5.1%
---------------------------- ------------ ------------ --------- -------------
Sales per square
foot excluding e-commerce
sales GBP599 GBP576 4.0% 1.9% ---------------------------- ------------ ------------ --------- ------------- Own stores 12 8 4 ---------------------------- ------------ ------------ --------- ------------- Concessions 14 15 (1) ---------------------------- ------------ ------------ --------- ------------- Outlets 2 3 (1) ---------------------------- ------------ ------------ --------- ------------- Partner stores 69 63 6 ---------------------------- ------------ ------------ --------- ------------- Total 97 89 8 ---------------------------- ------------ ------------ --------- -------------
* Excludes licensed partner stores
We continue to develop the Ted Baker brand across the Middle East, Asia, Africa and Australasia through our retail and licensing channels.
We remain positive about the long-term opportunities in Asia. However, as has been widely reported, the trading environment continues to be challenging. Retail sales in Asia increased 19.7% (17.3% in constant currency)(1) to GBP21.3m (2017: GBP17.8m). In China, we opened a store in Shanghai; and in Japan, we relocated our Tokyo store and opened a concession. In South Korea, we closed our concessions and transitioned our retail operations to a distributor with the knowledge and experience to drive growth locally.
During the period, our Middle Eastern licence partners performed particularly well and opened stores in each of Dubai, Kuwait, Lebanon, Qatar and Saudi Arabia. Our South East Asian licence partner opened a store in Indonesia and Malaysia. As at 27 January 2018, our licence partners operated 60 stores and concessions across the Middle East, South East Asia and Africa (2017: 54).
The joint venture with our Australasian licence partner, Flair Industries Pty Ltd, continued to perform well. During the period, we opened one new store in Bondi and closed one in Melbourne. As at 27 January 2018, we operated 9 stores in Australasia (2017: 9 stores).
Notes:
(1) Constant currency comparatives are obtained by applying the exchange rates that were applicable for the 52 weeks ended 28 January 2017 to the financial results in overseas subsidiaries for the 52 weeks ended 27 January 2018 to remove the impact of exchange rate fluctuations.
The Directors believe this measure provides a consistent and comparable view of the underlying performance of the Group's ongoing business.
Financial Review
Revenue and Gross Margin
Group revenue increased by 11.4% (9.6% in constant currency)(1) to GBP591.7m (2017: GBP531.0m), driven by a 10.4% (8.5% in constant currency)(1) increase in retail sales to GBP442.5m (2017: GBP400.7m) and a 14.6% (13.3% in constant currency)(1) increase in wholesale sales to GBP149.2m (2017: GBP130.3m).
The gross margin for the Group remained constant at 61.0% (2017: 61.0%) as a result of improved full price sell-through in our retail channel offset by an increased proportion of wholesale sales to trustees, which carry a lower margin.
Operating Expenses before exceptional items(2)
Distribution costs, which comprise the cost of retail operations and distribution centres increased by 11.4% (9.3% in constant currency)(1) to GBP232.0m (2017: GBP208.2m) and as a percentage of sales remained consistent at 39.2% (2017: 39.2%). During the period we invested in online marketing costs to increase awareness of local e-commerce sites which was offset by a decrease in dual running costs associated with the transition to our new single European distribution centre.
Administrative costs increased by 14.3% to GBP80.2m (2017: GBP70.1m). Administration expenses excluding exceptional costs(2) increased by 15.1% (14.3% in constant currency)(1) to GBP75.5m (2017: GBP65.6m). This increase is due to the growth in our central functions, both in the UK and overseas, the continued deployment of our information technology infrastructure to support our growth and investment in customer engagement.
Dual running costs incurred in respect of our new European distribution centre and the systems roll-out were GBP2.1m (2017: GBP4.0m) in the period, some of these are expected to continue into the next financial year.
Profit Before Tax and exceptional items(3) and Profit Before Tax
Profit before tax and exceptional items(3) increased by 11.7% to GBP73.5m (2017: GBP65.8m) and profit before tax increased by 12.3% to GBP68.8m (2017: GBP61.3m).
Exceptional Items(2)
Exceptional items in the period amounted to GBP4.7m (2017: GBP4.5m) and comprised the impairment of retail assets, relating to three stores in the US and one store in Europe of GBP4.5m, and restructuring costs of GBP1.3m, partially offset by income of GBP1.1m related to the release of provisions against the Group's legacy warehouses following assignment of the leases. Exceptional items in the 52 weeks ended 28 January 2017 of GBP4.5m included a provision for lease commitments relating to the Group's legacy warehouses of GBP2.9m along with GBP0.7m of other closure costs and GBP0.9m in respect of closure costs for a concept store in London.
For further information about this measure, and the reasons why we believe it is important for an understanding of the performance of the business, please refer to Note 1 of the Financial Statements.
Finance Income and Expenses
Net interest payable during the period was GBP3.2m (2017: GBP2.9m). The increase was largely due to higher average borrowings on the Revolving Credit Facility as well as an increase in LIBOR rates in the fourth quarter of the year.
The net foreign exchange gain during the period of GBP0.7m (2017: GBP1.1m) was due to the translation of monetary assets and liabilities denominated in foreign currencies. The decrease from the prior period was due to the appreciation of sterling this year compared to the devaluation in the prior year following the UK's EU referendum result.
Taxation
The Group tax charge for the year was GBP16.0m (2017: GBP14.7m), an effective tax rate of 23.3% (2017: 24.0%). This effective tax rate is higher than the UK tax rate for the period of 19.16% largely due to higher overseas tax rates and to the non-recognition of losses in overseas territories. The UK corporation tax rate reduced to 19% from 1 April 2017 and will reduce to 17% from 1 April 2020. The US federal corporate income tax rate has reduced to 21% with effect from 1 January 2018.
Our closing UK deferred tax assets and liabilities have been measured at 19% based on the corporation tax rate at which they are largely anticipated to unwind. Overseas deferred tax assets and liabilities have been measured at the applicable overseas tax rates.
Our future effective tax rate is expected to be higher than the UK tax rate as a result of overseas profits arising in jurisdictions with higher tax rates than the UK. The Group's effective tax rate will however benefit from the fall in the US federal tax rate to 21%. We would expect future reductions in the effective tax rate given the US federal rate reduction and the UK rate reduction to 17% from 1 April 2020.
Cash Flow
The net decrease in cash and cash equivalents of GBP21.9m (2017: GBP13.5m) primarily reflected an increase in working capital and further capital expenditure to support our long-term development.
Total working capital, which comprises inventories, trade and other receivables and trade and other payables, increased by GBP31.8m to GBP168.6m (2017: GBP136.8m). This was mainly driven by an increase in inventories of GBP28.7m to GBP187.2m (2017: GBP158.5m) reflecting the growth of our business, stock on hand for our wholesale customers and territorial licence partners and the impact of the movement in foreign exchange rates.
Group capital expenditure of GBP36.6m (2017: GBP43.8m) relates to the opening and refurbishment of stores, concessions and outlets and the ongoing investment in business-wide IT systems to support our continued growth.
The Group's net borrowing position at the end of the period was GBP111.8m (2017: GBP95.2m).
Shareholder Return
Basic earnings per share increased by 12.6% to 119.0p (2017: 105.7p). Adjusted earnings per share, which exclude exceptional items(4) , increased by 12.0% to 127.7p (2017: 114.0p).
The proposed final dividend of 43.5p per share will make a total for the period of 60.1p per share (2017: 53.6p per share), an increase of 12.1% on the previous period.
Operating cash flow per share was 98.4p (2017: 118.4p) and reflected a decrease in cash generated from operating activities. The decrease was largely due to increased working capital, in particular inventory, reflecting the growth of our business and increased stock on hand.
Borrowing Facilities
During the period, the Group agreed an extension of its multi-currency Revolving Credit Facility. A new agreement was signed on 25 September 2017 which increased the Group's committed borrowing facility from GBP110.0m to GBP135.0m, expiring in September 2020.
The increased facility provides the resources to fund the planned investment in capital expenditure and working capital required to support the Group's long term growth strategy. The new borrowing facility is on the same terms and contains the same covenants as the previous facility. The Group monitors actual and prospective compliance on a regular basis.
Treasury Risk Management
The most significant exposure to foreign exchange fluctuation relates to purchases made in foreign currencies, principally the US Dollar and the Euro.
A proportion of the Group's purchases are hedged in accordance with the Group's risk management policy, which allows for foreign currency to be hedged for up to 24 months in advance. The balance of purchases is hedged naturally as the business operates internationally and income is generated in the local currencies. In June 2016, ahead of the UK referendum on Brexit, the Group extended its hedging arrangements for US Dollars to April 2018. At the balance sheet date, the Group has hedged its projected commitments in respect of the period ending 26 January 2019 as well as a proportion of its requirements for the following period.
The Group is exposed to movements in UK interest rates as both the Revolving Credit Facility and term loan accrue interest based on LIBOR plus a fixed margin.
During the previous period, the Group entered into interest rate swap agreements, fixing GBP30.0m of the floating rate net debt.
Notes:
(1) Constant currency variances are calculated by applying the exchange rates for the 52 weeks ended 28 January 2017 to financial results in overseas subsidiaries for the 52 weeks ended 27 January 2018 to remove the impact of exchange rate fluctuations.
(2) For information about exceptional items and Note 1 and Note 3 of the Financial Statements.
(3) Profit before tax and exceptional items is a non-GAAP measure, adjusted for exceptional items.
(4) Adjusted earnings per share is a non-GAAP measure, adjusted for exceptional items.
Principal Risks and Uncertainties
The Board is ultimately responsible for the Group's system of risk management, internal control and for reviewing its effectiveness, and for determining the Group's risk appetite. The Board confirms that there is an ongoing process for identifying, evaluating and managing the significant risks faced by the Group, which has been in place for the period and up to the date of approval of these financial statements, and that this process is regularly reviewed by the Board. However, such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.
Risk Management Process
In order to help manage the Group's risks and uncertainties, the Board has delegated responsibility for monitoring the effectiveness of the Group's systems of internal control and risk management to the Audit Committee.
In addition, the Group has established a Risk Committee that includes the Finance Director and various members of the Executive Board and heads of department. The Risk Committee helps the Executive Board review the risk management and control process in each key business area on an ongoing basis, and provides a platform for management to drive improvement across the business. The Risk Committee considers:
-- the authority, resources and co-ordination of those involved in the identification, assessment and management of significant risks faced by the Group;
-- the response to the significant risks which have been identified by management and others;
-- the maintenance of a controlled environment directed towards the proper management of risk; and
-- the annual reporting procedures.
Having considered the key risks inherent in the business and the system of control necessary to manage such risks, the Finance Director presents the Risk Committee's findings to the Board on a regular basis. In addition, the Chief Executive reports to the Board on changes in the business and the external environment which affect significant risks.
In turn, the Audit Committee assesses the findings and recommendations of the Risk Committee and the Group's external and internal audit processes and looks critically at how the Business responds, as well as investigating material issues and what actions they implement to prevent future issues.
On behalf of the Board, the Audit Committee has reviewed the effectiveness of the system of risk management and internal control during the period, covering all material controls, including financial, operational and compliance controls. In particular, it has reviewed and updated the process for identifying and evaluating the significant risks affecting the business and the policies and procedures by which these risks are managed. Management is responsible for the identification and evaluation of significant risks applicable to their areas of the business together with the design and operation of suitable internal controls. These risks are assessed on a continual basis and may be associated with a variety of internal or external sources including control breakdowns, disruption in information systems, competition, natural catastrophes and regulatory requirements, and also by reference to the Group's five year strategic and financial plan. During the period, the Board has continued to place significant focus on risk management. Following the Audit Committee's engagement of PricewaterhouseCoopers LLP ("PwC") to undertake a detailed review of the Group's risk framework and internal audit function in the prior period, the Board has again retained PwC to assist the Risk Committee and Audit Committee in managing the Group's risk profile and increasing engagement with stakeholders in the Group.
The Group has an independent internal audit function whose findings are regularly reviewed by the Board and the Executive Committee. The Audit Committee monitors and reviews the effectiveness of the internal audit activities.
The Chief Operating Officer and Group Finance Director provides the Board with monthly financial information which includes updates by reference to the Group's key performance indicators.
The Board has carried out a robust assessment of the principal risks facing the Group, including those that would threaten its business model, future performance, solvency or liquidity. The following list highlights the principal risks identified by the Group (which are not shown in order of importance). Additional risks and uncertainties not presently known, or currently considered to be less material, may also have an adverse effect on the Group:
Issue Potential impact Mitigation Change
in level
of risk
------------ -------------------- -------------------------- -------------------------- --------------
Strategic Brand The strength We carefully
Risks and Reputational and reputation consider each
Risk of the Ted Baker new partner with
brand is important whom we do business.
to the business. Such partners No material
There is a risk are subject to change
that our brand due diligence
may be undermined and are monitored
or damaged by on an ongoing
our actions or basis to ensure
those of our they remain appropriate
partners or supply to the brand.
chain.
Our dedicated
social media
team closely
monitors social
media channels
and addresses
any reputational
issues in accordance
with our protocol.
------------ -------------------- -------------------------- -------------------------- --------------
Development Failure in growing We perform extensive
of Overseas the international due diligence
Markets business through on all potential
franchise operations, partners and
licencees and territories and No material
e-commerce. Risk to assess our change
that the Group appropriate routes
fails to prioritise to market. We
the right territories operate in a
or investment range of international
or fails to support markets, which
these markets helps to mitigate
with systems over-reliance
and supply chain and exposure
capability. to any one territory.
------------ -------------------- -------------------------- -------------------------- --------------
Fashion As with all fashion We maintain a
and Design brands there high level of
is a risk that market awareness
our offer will and an understanding
not satisfy the of consumer trends No material
needs of our and fashion to change
customers or ensure that we
we fail to correctly remain able to
identify trends respond to changes
in an increasingly in consumer preference.
competitive market, We use customer
resulting in data to develop
lower sales and targeted marketing
reduced market and promotional
share. activity.
We continue to
focus on product
design, quality
and attention
to detail.
------------ -------------------- -------------------------- -------------------------- --------------
External External events These risk factors
Events may occur which are monitored
may affect the closely on an
global, economic ongoing basis
and financial ensuring that Increased
environment in we are prepared risk
which we operate. for and can react
These events to changes in
can affect our the external
suppliers, customers environment,
and partners, allowing us to
increasing our reduce our exposure
cost base and as early as possible.
adversely affecting
our revenue. The geographic
spread of our
business and
supply chain
also helps to
mitigate these
risks.
------------ -------------------- -------------------------- -------------------------- --------------
Brexit The UK's decision
to leave the The Group has
European Union established a
has increased Brexit Committee
the level of which, together Increased
economic and with its external risk
consumer uncertainty. advisers, continues
to carefully
monitor the potential
impact of Brexit.
Scenario planning
includes: the
impact of additional
customs duties,
VAT and customs
duty declarations;
and the restriction
on the free movement
of people.
In addition to
this ongoing
monitoring and
mitigation, our
presence in a
range of international
markets helps
mitigate the
impact of this
risk.
------------ -------------------- -------------------------- -------------------------- --------------
Operational Supply If garments do
Risks Chain not reach us Our supply chain
on time and to is diversified
specification, across a number
there is a risk of suppliers No material
of a loss of in different change
revenue and customer regions, reducing
confidence. Over reliance on a
reliance on key small number
suppliers could of key suppliers.
also have an Suppliers are
impact on our treated as key
business. business partners
and we work closely
with them to
mitigate these
risks. The Group
continues to
improve and evolve
its supply chain.
------------ -------------------- -------------------------- -------------------------- --------------
Retail Outlook in the
Sector retail sector The Group's Credit
Outlook remains uncertain, Committee closely
with increasing monitors any
pressures on outstanding debts Increased
the Group's customers. and takes appropriate risk
action where
necessary.
The Group manages
its credit risk
through insurance,
stand-by letters
of credit or
other supplier
financing products
wherever possible.
------------ -------------------- -------------------------- -------------------------- --------------
Infrastructure There is a risk
of operational The business
problems, including continuity plan No material
disruption to is constantly change
the infrastructure reviewed and
that supports updated by the
our business, Risk Committee.
which may lead In addition,
to a loss of business disruption
revenue, data is covered by
and inventory. our insurance
policies.
-------------------- -------------------------- -------------------------- --------------
Social We are committed A sub-committee
Responsibility to operating of the Executive
in a responsible Committee has
and sustainable been tasked with
manner as regards overseeing specific No material
our supply chain, areas of our change
environment and social responsibility
community. If agenda. Ted's
we fail to operate Conscience Team
in a manner that is responsible
supports our for monitoring
philosophy, this this agenda and
could damage ensure our practices
the trust and fall in line
confidence of with it.
our stakeholders.
-------------------- -------------------------- -------------------------- --------------
Cyber The business The Group has
Security is subject to invested in additional
threats from specialist IT
hacking or viruses resources.
or other unauthorised Increased
data breaches. The continual risk
upgrading of
There is the security equipment
possibility of and software
unintentional also mitigates
loss of controlled these risks.
data by authorised
users. Tightly controlled
security controls,
an extensive
penetration testing
programme, and
data recovery
and business
continuity plans
have been implemented
with the support
of specialist
third parties.
-------------------- -------------------------- -------------------------- --------------
IT Infrastructure The Group's IT The Group's IT
and Implementation infrastructure Steering Committee
of ERP is key to the meets on a two
operation of weekly basis
its business. to review the
implementation No material
We are in the and all other change
process of implementing major IT projects.
the final phases This Committee
of Microsoft comprises members
Dynamics AX across of the Executive
the business. Committee and
With any project is advised by
of this scale, external professional
there is a risk advisers. The
of a poorly managed IT Steering Committee
implementation has established
or take-up of a Design Authority
new systems, charged with
which could lead overseeing the
to business disruptions. scheduling of
the implementation
This, and the of any new system.
implementation
of other new Robust change
business systems, management and
has potential professional
to impact interdependent project managers
systems and the recruited to
business. oversee the project
team which includes
key business
stakeholders.
-------------------- -------------------------- -------------------------- --------------
People Our performance Identification
is linked to and retention
the performance of key talent
of our people is important
and, in particular, and we take active No material
to the leadership steps to provide change
of key individuals. stability and
The loss of a security to the
key individual key team. We
whether at management carry out an
level or within annual benchmarking
a specialist review to ensure
skill set could that we provide
have a detrimental competitive remuneration
effect on our and total reward
operations and, packages. We
in some cases, also utilise
the creative long-term incentive
vision for the schemes to retain
brand. key talent. Employee
engagement through
our culture and
environment strengthen
the commitment
of team members
and has a positive
impact on our
retention rate.
Succession plans
are in place
and have been
reviewed during
the period.
-------------------- -------------------------- --------------------------
Regulatory We operate in The Group closely
and Legal a range of international monitors changes
Framework markets and must in the legal
comply with various and regulatory
regulatory requirements. framework within No material
Failure to do the markets in change
so could lead which it operates.
to financial We work closely
penalties and/or with specialist
reputational advisers in each
damage. market to ensure
compliance with
local laws and
regulations.
For example,
the Group has
established a
cross-functional
GDPR steering
committee that
has worked with
external advisors
to ensure the
Group's policies
and procedures
are GDPR compliant.
-------------------- -------------------------- -------------------------- --------------
Infringement Unauthorised The Group, with
of the use of the Group's its external
Group's designs, trademarks advisers, rigorously
Intellectual and other intellectual manages and defends No material
Property property rights its intellectual change
could damage property.
the Ted Baker
brand and the The Group deals
Group's reputation. with counterfeit
goods in accordance
with its robust
enforcement strategy.
------------ -------------------- -------------------------- -------------------------- --------------
Financial Currency, The Group's policies
Risks Interest, In the course for dealing with
Credit of its operations, these risks are
and Counterparty we are exposed discussed in
Credit to these financial detail in Note
Risks, risks which, 23 to the financial No material
including if they were statements. change
Financial to arise, may
Covenants have material
under financial impacts
the Group's on the Group.
credit
facilities
------------ -------------------- -------------------------- -------------------------- --------------
Foreign The Group is The Group's Foreign
Exchange exposed to fluctuations Exchange strategy
in the exchange is closely managed No material
rates of key by the Finance change
currencies. Director and
the Group's external
advisers. The
Group has adopted
a hedging policy
to mitigate short-term
foreign exchange
risk.
------------ -------------------- -------------------------- -------------------------- --------------
Viability statement
In accordance with provision C.2.2 of the UK Corporate Governance Code dated April 2016 (the "Code"), the Directors have assessed the prospects and viability of the Group over a five year period, taking into account the Group's current position and the potential impact of the principal risks documented above.
The Group operates a five year plan, which is updated and reviewed regularly by the Board. Within the five year plan, detailed scenario planning and stress testing has been carried out over a five year period. The Directors therefore consider the five year period to 29 January 2022 to be the appropriate period to assess the viability and prospects of the Group with a high level of certainty.
The Directors' assessment has been further enhanced by analysing the current and future risks, controls and assurances available, resulting in a clear picture of the risk profile across the whole business. The principal risks, including specific operational risks, that could affect the future viability of the Group over the next five years are identified on pages 17 to 21 in Principal Risks and Uncertainties.
In making this assessment, the Directors have considered the resilience of the Group to the occurrence of these risks in severe but plausible scenarios, including by reference to certain principal risks, and taking into account the effectiveness of any mitigating actions. In addition, the Board has considered the impact on the Group's cash flows, headroom, covenants and other key financial ratios having stress tested the potential impact of these scenarios, both individually and in combination.
Sensitivity analysis was also used to stress test the Group's strategic plan and to confirm that sufficient headroom would remain available under the Group's credit facilities. The Board considers that under each scenario tested, the mitigating actions would be effective and sufficient to ensure the continued viability of the Group. For the reasons stated above, based on the robust assessment undertaken, the Directors confirm they have a reasonable expectation that the Group will be able to continue in operation, and meet its liabilities as they fall due, over the period of assessment.
Going Concern
The Directors have reviewed the Group's budgets and long-term projections. After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for 12 months from the approval of these accounts. For this reason, they continue to adopt the going concern basis of accounting in preparing the financial statements.
Group Income Statement
For the 52 weeks ended
27 January 2018
Note 52 weeks 52 weeks
ended ended
27 January 28 January
2018 2017
GBP'000 GBP'000
Revenue 2 591,670 530,986
Cost of sales (230,865) (207,257)
----------- -----------
Gross profit 360,805 323,729
Distribution costs (231,996) (208,221)
Administrative expenses (80,160) (70,103)
Administrative expenses
before exceptional items (75,484) (65,590)
Exceptional items 3 (4,676) (4,513)
------------------------------------ ----- ----------- -----------
Licence income 21,443 18,237
Other operating income
/ (expense) 635 (1,145)
----------- -----------
Operating profit 70,727 62,497
Finance income 4 802 1,597
Finance expense 4 (3,314) (3,373)
Share of profit of jointly
controlled entity, net
of tax 574 550
----------- -----------
Profit before tax 3 68,789 61,271
Profit before tax and exceptional
items 73,465 65,784
Exceptional items (4,676) (4,513)
Income tax expense 5 (16,045) (14,703)
Income tax expense before
exceptional items (16,868) (15,605)
Income tax relating to
exceptional items 823 902
------------------------------------ ----- ----------- -----------
Profit for the period 52,744 46,568
=========== ===========
Earnings per share
Basic 7 119.0p 105.7p
Diluted 7 118.3p 104.5p
Group Statement of Comprehensive Income
For the 52 weeks ended 27 January 2018
52 weeks 52 weeks
ended ended
27 January 28 January
2018 2017
GBP'000 GBP'000
Profit for the period 52,744 46,568
------------ ------------
Other comprehensive income / (expense)
Items that may be reclassified to
the Income Statement
Net effective portion of changes
in fair value of cash flow hedges (5,139) 10,521
Net change in fair value of cash
flow hedges transferred to profit
or loss (4,599) (5,435)
Exchange differences on translation
of foreign operations net of tax (7,926) 5,580
------------ ------------
Other comprehensive (expense) / income
for the period (17,664) 10,666
Total comprehensive income for the
period 35,080 57,234
============ ============
Group Statement of Changes in Equity
For the 52 weeks ended 27
January 2018
Share Share Cash Translation Retained Total
capital premium flow reserve earnings equity
hedging attributable
reserve to equity
shareholders
of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 28
January 2017 2,208 9,935 6,736 7,891 183,774 210,544
Comprehensive
income for the
period
Profit for the
period - - - - 52,744 52,744
Exchange differences
on translation
of foreign operations - - - (9,889) - (9,889)
Current tax on
foreign currency
translation - - - 1,963 - 1,963
Effective portion
of changes in
fair value of
cash flow hedges - - (7,423) - - (7,423)
Net change in
fair value of
cash flow hedges
transferred to
profit or loss - - (4,599) - - (4,599)
Deferred tax
associated with
movement in hedging
reserve - - 2,284 - - 2,284
Total comprehensive
income for the
period - - (9,738) (7,926) 52,744 35,080
========= ========= ========= ============ ========== ==============
Transactions
with owners recorded
directly in equity
Increase in issued
share capital 16 552 - - - 568
Share-based payments
charges - - - - 1,876 1,876
Movement on current
and deferred
tax on share-based
payments - - - - 535 535
Dividends paid - - - - (24,553) (24,553)
--------- --------- --------- ------------ ---------- --------------
Total transactions
with owners 16 552 - - (22,142) (21,574)
========= ========= ========= ============ ========== ==============
Balance at 27
January 2018 2,224 10,487 (3,002) (35) 214,376 224,050
========= ========= ========= ============ ========== ==============
Group Statement of Changes in Equity
For the 52 weeks ended 28
January 2017
Share Share Cash Translation Retained Total
capital premium flow reserve earnings equity
hedging attributable
reserve to equity
shareholders
of the
parent
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30
January 2016 2,199 9,617 1,650 2,311 156,822 172,599
Comprehensive
income for the
period
Profit for the
period - - - - 46,568 46,568
Exchange differences
on translation
of foreign operations - - - 7,038 - 7,038
Current tax on
foreign currency
translation - - - (1,458) - (1,458)
Effective portion
of changes in
fair value of
cash flow hedges - - 11,714 - - 11,714
Net change in
fair value of
cash flow hedges
transferred to
profit or loss - - (5,435) - - (5,435)
Deferred tax
associated with
movement in hedging
reserve - - (1,193) - - (1,193)
Total comprehensive
income for the
period - - 5,086 5,580 46,568 57,234
========= ========= ========= ============ ========== ==============
Transactions
with owners recorded
directly in equity
Increase in issued
share capital 9 318 - - - 327
Share-based payments
charges - - - - 1,839 1,839
Movement on current
and deferred
tax on share-based
payments - - - - 281 281
Dividends paid - - - - (21,736) (21,736)
--------- --------- --------- ------------ ---------- --------------
Total transactions
with owners 9 318 - - (19,616) (19,289)
========= ========= ========= ============ ========== ==============
Balance at 28
January 2017 2,208 9,935 6,736 7,891 183,774 210,544
========= ========= ========= ============ ========== ==============
Company Statement of Changes in Equity
For the 52 weeks ended 27 January 2018
Share Share Other Retained Total
capital premium reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 28 January 2017 2,208 9,935 20,680 44,426 77,249
Profit for the period - - - 25,825 25,825
Transactions with owners recorded
directly in equity
Increase in issued
share capital 16 552 - - 568
Share-based payments
charges - - - 185 185
Share-based payments
charges for awards
granted to subsidiary
employees - - 1,691 - 1,691
Dividends paid - - - (24,553) (24,553)
-------- -------- --------- --------- --------
Total transactions with owners 16 552 1,691 (24,368) (22,109)
======== ======== ========= ========= ========
Balance at 27 January 2018 2,224 10,487 22,371 45,883 80,965
======== ======== ========= ========= ========
Company Statement of Changes in Equity
For the 52 weeks ended 28 January 2017
Share Share Other Retained Total
capital premium reserves earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 30 January 2016 2,199 9,617 19,060 38,697 69,573
Profit for the period - - - 27,246 27,246
Transactions with owners recorded
directly in equity
Increase in issued
share capital 9 318 - - 327
Share-based payments
charges - - - 219 219
Share-based payments
charges for awards
granted to subsidiary
employees - - 1,620 - 1,620
Dividends paid - - - (21,736) (21,736)
-------- -------- --------- --------- --------
Total transactions with owners 9 318 1,620 (21,517) (19,570)
======== ======== ========= ========= ========
Balance at 28 January 2017 2,208 9,935 20,680 44,426 77,249
======== ======== ========= ========= ========
Group and Company Balance Sheet
At 27 January 2018
Note Group Group Company Company
27-Jan-18 28-Jan-17 27-Jan-18 28-Jan-17
GBP'000 GBP'000 GBP'000 GBP'000
Intangible assets 8 34,373 24,445 - -
Property, plant and
equipment 9 139,075 144,354 - -
Investment in subsidiary - - 24,793 23,102
Investment in equity
accounted investee 1,893 1,897 - -
Deferred tax assets 4,114 4,446 - -
Prepayments 353 401 - -
---------- ---------- ---------- ----------
Non-current assets 179,808 175,543 24,793 23,102
Inventories 187,227 158,500 - -
Trade and other receivables 64,273 59,251 55,232 51,932
Amount due from equity
accounted investee 666 653 - -
Derivative financial
assets 478 8,974 - -
Cash and cash equivalents 16,712 21,401 940 2,238
---------- ---------- ---------- ----------
Current assets 269,356 248,779 56,172 54,170
Trade and other payables (82,858) (80,995) - (23)
Bank overdraft (76,043) (58,074) - -
Term loan (5,500) (6,000) - -
Income tax payable (8,522) (10,327) - -
Provisions for liabilities - (915) - -
and charges
Derivative financial
liabilities (3,918) (616) - -
---------- ---------- ---------- ----------
Current liabilities (176,841) (156,927) - (23)
Deferred tax liability (1,273) (2,349) - -
Provisions for liabilities - (2,002) - -
and charges
Term loan (47,000) (52,500) - -
----------
Non-current liabilities (48,273) (56,851) - -
---------- ---------- ---------- ----------
Net assets 224,050 210,544 80,965 77,249
========== ========== ========== ==========
Equity
Share capital 2,224 2,208 2,224 2,208
Share premium 10,487 9,935 10,487 9,935
Other reserves (3,002) 6,736 22,371 20,680
Translation reserve (35) 7,891 - -
Retained earnings 214,376 183,774 45,883 44,426
----------
Total equity attributable
to equity shareholders
of the parent company 224,050 210,544 80,965 77,249
----------
Total equity 224,050 210,544 80,965 77,249
========== ========== ========== ==========
These financial statements were approved by the Board of Directors on 22 March 2018 and were signed on its behalf by:
Lindsay Page
Director
Company number: 03393836
Group and Company Cash Flow Statement
For the 52 weeks ended 27 January 2018
Group Group Company Company
52 weeks 52 weeks 52 weeks 52 weeks
ended ended ended ended
27 January 28 January 27 January 28 January
2018 2017 2018 2017
GBP'000 GBP'000 GBP'000 GBP'000
Cash generated from
operations
Profit for the period 52,744 46,568 25,825 27,246
Adjusted for:
Income tax expense 16,045 14,703 - -
Depreciation and amortisation 23,238 20,966 - -
Impairments 4,533 - - -
Loss on disposal of
property, plant and
equipment 166 416 - -
Share-based payments 1,876 1,839 185 219
Net finance expense 2,512 1,776 - -
Net change in derivative
financial assets and
liabilities carried
at fair value through
profit or loss 1,517 677 - -
Share of profit in joint
venture (574) (550) - -
Decrease in non-current
prepayments 63 59 - -
Increase in inventory (34,067) (27,128) - -
(Increase) in trade
and other receivables (6,779) (16,335) (3,299) (4,446)
Increase / (decrease)
in trade and other payables 2,845 20,392 (24) 13
(Decrease) / increase
in provisions for liabilities
and charges (2,917) 2,917 - -
Interest paid (3,341) (2,886) - -
Income taxes paid (13,975) (10,644) - -
------------ ------------ ------------ ------------
Net cash generated from
operating activities 43,886 52,770 22,687 23,032
------------ ------------ ------------ ------------
Cash flow from investing
activities
Purchases of property,
plant and equipment
and intangibles (36,562) (43,753) - -
Proceeds from sale of
property, plant and
equipment 115 93 - -
Dividends received from
joint venture 578 294 - -
Interest received 61 15 - -
------------ ------------ ------------ ------------
Net cash from investing
activities (35,808) (43,351) - -
------------ ------------ ------------ ------------
Cash flow financing
activities
Repayment of term loan (6,000) (1,500) - -
Dividends paid (24,553) (21,736) (24,553) (21,736)
Proceeds from issue
of shares 568 327 568 327
------------ ------------ ------------ ------------
Net cash from financing
activities (29,985) (22,909) (23,985) (21,409)
------------ ------------ ------------ ------------
Net (decrease) / increase
in cash and cash equivalents (21,907) (13,490) (1,298) 1,623
------------ ------------ ------------ ------------
Net cash and cash equivalents
at the beginning of
the period (36,673) (24,574) 2,238 615
Exchange rate movement (751) 1,391 - -
------------ ------------ ------------ ------------
Net cash and cash equivalents
at the end of the period (59,331) (36,673) 940 2,238
------------ ------------ ------------ ------------
Cash and cash equivalents
at the end of the period 16,712 21,401 940 2,238
Bank overdraft at the
end of the period (76,043) (58,074) - -
------------ ------------ ------------ ------------
Net cash and cash equivalents
at the end of the period (59,331) (36,673) 940 2,238
------------ ------------ ------------ ------------
Notes to the Financial Statements
1. Summary of Significant Accounting Policies
Basis of preparation
EU law (IAS Regulation EC 1606/2002) requires that the Group financial statements, for the 52 weeks ended 27
January 2018 are prepared in accordance with International Financial Reporting Standards (IFRSs) adopted for use in the EU ("adopted IFRSs").
The financial information set out above does not constitute the company's statutory accounts for the 52 weeks ended 27 January 2018 or 28 January 2017 but is derived from those accounts. Statutory accounts for 2017 have been delivered to the registrar of companies, and those for 2018 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
Statutory accounts for 28 January 2017 have been delivered to the Registrar of Companies. The auditor has reported on those accounts; their reports were i) unqualified and, ii) did not contain statements under Section 498 (2) or (3) of the Companies Act 2006.
Going concern
The Group's business activities, together with the factors likely to affect its future development, performance and position are set out on pages 3 to 16. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Chairman's Statement on pages 3 to 5. In addition, the financial statements include the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.
The Group meets its day-to-day working capital requirements through a committed overdraft facility expiring in September 2020 which is a multi-currency Revolving Credit Facility with The Royal Bank of Scotland, Barclays and HSBC. The facility will be used to the extent necessary to fund working capital and capital expenditure to support the Group's growth strategy.
The Group's forecasts and projections, taking into account reasonably possible changes in trading performance, show that the Group has sufficient financial resources. As a consequence, the Directors have a reasonable expectation that the Company and the Group are well placed to manage their business risks and to continue in operational existence for the twelve months from the date of signing the financial statements, despite the current uncertain global economic outlook. Accordingly, the Directors continue to adopt the going concern basis in preparing the consolidated financial statements.
Non-GAAP performance measures
Exceptional items are added back/deducted to derive certain non-GAAP measures as follows:
-- Profit attributable to the owners of the Company, to arrive at adjusted earnings per share (after the tax effect of exceptional items), and
-- Profit before tax, to arrive at Profit before tax and exceptional items.
Exceptional items are those items which, in the opinion of the Directors, should be excluded in order to provide a consistent and comparable view of the underlying performance of the Group's ongoing business. Generally, exceptional items include those items that do not occur often and are material.
We believe the non-GAAP performance measures presented along with comparable GAAP measurements is useful to provide information with which to measure our performance, and our ability to invest in new opportunities. Management uses these measures with the most directly comparable GAAP financial measures in evaluating our operating performance and value creation. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP. The requirements for identifying exceptional items are on a consistent basis each period and presented consistently, and a reconciliation of profit before tax and exceptional items to profit before tax is included in Note 3 to the financial statements.
Exceptional items in the period included:
-- The impairment of assets in three retail stores in the US and one in Europe. The Directors believe this to be exceptional as the Group does not frequently impair assets of this quantum.
-- Restructuring costs incurred in aligning internal structures to the Group's strategic aims. The Directors believe this to be exceptional due to the infrequent occurrence of such costs.
-- The release of the provision for the Group's legacy warehouses following assignment of the leases. The Directors believe this to be exceptional as the initial recognition of the cost of provision was treated as exceptional.
Exceptional items in the prior period included:
-- Costs in relation to the closure of the Group's legacy warehouses in the UK. The Directors believe this cost to be infrequent in nature as the Group do not close existing warehouses or move to new warehouses regularly.
-- Costs in relation to the closure of a concept store in London. The Directors believe this cost to be infrequent in nature as the Group does not open concept stores frequently.
The Directors believe that the profit before tax and exceptional items and adjusted earnings per share measures provide useful information for shareholders on the underlying performance of the business. These measures are also consistent with how underlying business performance is measured internally.
The profit before tax and exceptional items and adjusted earnings per share are not recognised measures under IFRS and may not be directly comparable with adjusted profit and earnings per share measures used by other companies.
Constant currency comparatives are obtained by applying the exchange rates that were applicable for the 52 weeks ended 28 January 2017 to the financial results in overseas subsidiaries for the 52 weeks ended 27 January 2018 to remove the impact of exchange rate fluctuations.
Significant accounting policies
No new standards, amendments or interpretations, effective for the first time for the period beginning on or after 29 January 2017 have had a material impact on the Group or Company.
IFRS 15, 'Revenue from Contracts with Customers' which is effective from 1 January 2018 has been considered by the Group and it was concluded this will not be significant to the Group's financial statements in the future.
At the balance sheet date there are a number of new standards and amendments to existing standards in issue but not yet effective. None of these is expected to have a significant effect on the financial statements of the Group or Company, except the following, set out below:
IFRS 9, 'Financial instruments', which is effective for periods beginning on or after 1 January 2018, replaces IAS 39 and addresses the classification, measurement and recognition of financial assets and financial liabilities. This was endorsed by the EU in November 2016 and as such the full impact on the Group is currently being assessed. If the Group adopted this standard in the financial statements for the 52 weeks ended 27 January 2018, the impact of the change in hedge accounting for financial instruments on the consolidated income statement would have been an decrease in profit before tax of GBP767,000 with no impact on net assets.
IFRS 16, 'Leases' addresses the definition of a lease, recognition and measurement of leases and establishes principles for reporting useful information to users of financial statements about the leasing activities of both lessees and lessors. A key change arising from IFRS 16 is that most operating leases will be accounted for on balance sheet for lessees. The standard replaces IAS 17 'Leases', and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2019. The quantitative impact of IFRS 16 on the Group's net assets and results is being assessed and will be quantified closer to the date of adoption. IFRS 16 is expected to have a material impact on the balance sheet as both assets and liabilities will increase and is also expected to have a material impact on key components within the income statements because operating lease rental charges will be replaced by depreciation and finance costs. IFRS 16 will not have any impact on the underlying commercial performance of the Group or the cash flow generated in the period.
2. Segment information
The Group has three reportable segments: retail, wholesale and licensing.
For each of the three segments, the Executive Committee reviews internal management reports on a four weekly basis.
The accounting policies of the reportable segments are the same as described in the Group's financial statements. Information regarding the results of each reportable segment is included below. Performance for the retail segment is measured based on operating contribution, whereas performance of the wholesale segment is measured based on gross profit and performance of the licensing segment is measured based on royalty income, as included in the internal management reports that are reviewed by the Board.
Segment results before exceptional items are used to measure performance as management believes that such information is the most relevant in evaluating the performance of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm's length basis.
a) Segment revenue and segment result
52 weeks ended 27 January 2018 Retail Wholesale Licensing Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 442,451 149,219 - 591,670
Cost of sales (146,230) (84,635) - (230,865)
---------- ---------- ---------- ----------
Gross profit 296,221 64,584 360,805
Operating costs (225,224) - - (225,224)
---------- ---------- ---------- ----------
Operating contribution 70,997 64,584 - 135,581
Licence income - - 21,443 21,443
---------- ---------- ---------- ----------
Segment result 70,997 64,584 21,443 157,024
Reconciliation of segment
result to profit before tax
Segment result 70,997 64,584 21,443 157,024
Other operating costs - - - (82,256)
Exceptional costs - - - (4,676)
Other operating income - - - 635
----------
Operating profit - - - 70,727
Net finance expense - - - (2,512)
Share of profit of jointly controlled entity, net of tax - - - 574
----------
Profit before tax - - - 68,789
==========
Capital expenditure 21,621 396 - 22,017
Unallocated capital expenditure - - - 14,821
----------
Total capital expenditure - - - 36,838
==========
Depreciation and amortisation 16,386 455 - 16,841
Unallocated depreciation and amortisation - - - 6,397
----------
Total depreciation and amortisation - - - 23,238
==========
Segment assets 241,427 92,343 - 333,770
Deferred tax assets - - - 4,114
Derivative financial assets - - - 478
Intangible assets - head office - - - 79,279
Property, plant and equipment - head office - - - 28,611
Other assets - - - 2,912
==========
Total assets - - - 449,164
==========
Segment liabilities (117,940) (40,961) - (158,901)
Income tax payable - - - (8,522)
Provisions for liabilities and charges - - - -
Term loan - - - (52,500)
Other liabilities - - - (5,191)
----------
Total liabilities - - - (225,114)
==========
Net assets - - - 224,050
==========
Wholesale sales are shown after the elimination of inter-company sales of GBP113,081,488 (2017: GBP89,695,272).
52 weeks ended 28 January 2017 Retail Wholesale Licensing Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue 400,724 130,262 - 530,986
Cost of sales (135,704) (71,553) - (207,257)
---------- ---------- ---------- ----------
Gross profit 265,020 58,709 - 323,729
Operating costs (203,253) - - (203,253)
---------- ---------- ---------- ----------
Operating contribution 61,767 58,709 - 120,476
Licence income - - 18,237 18,237
---------- ---------- ---------- ----------
Segment result 61,767 58,709 18,237 138,713
Reconciliation of segment
result to profit before tax
Segment result 61,767 58,709 18,237 138,713
Other operating costs - - - (70,558)
Exceptional costs - - - (4,513)
Other operating expense - - - (1,145)
----------
Operating profit - - - 62,497
Net finance expense - - - (1,776)
Share of profit of jointly controlled entity, net of tax - - - 550
----------
Profit before tax - - - 61,271
==========
Capital expenditure 21,358 411 - 21,769
Unallocated capital expenditure - - - 21,985
----------
Total capital expenditure - - - 43,754
==========
Depreciation and amortisation 16,588 397 - 16,985
Unallocated depreciation and amortisation - - - 3,981
----------
Total depreciation and amortisation - - - 20,966
==========
Segment assets 225,632 83,161 - 308,793
Deferred tax assets - - - 4,446
Derivative financial assets - - - 8,974
Intangible assets - head office - - - 21,718
Property, plant and equipment - head office - - - 77,440
Other assets - - - 2,951
==========
Total assets - - - 424,322
==========
Segment liabilities (104,953) (34,116) - (139,069)
Income tax payable - - - (10,327)
Provisions for liabilities and charges - - - (2,917)
Term loan - - - (58,500)
Other liabilities - - - (2,965)
----------
Total liabilities - - - (213,778)
==========
Net assets - - - 210,544
==========
b) Geographical information
UK US Rest of World Total
GBP'000 GBP'000 GBP'000 GBP'000
52 weeks ended 27 January 2018
Revenue 336,056 153,603 102,011 591,670
Non-current assets* 127,429 26,795 21,470 175,694
52 weeks ended 28 January 2017
Revenue 316,542 130,941 83,503 530,986
Non-current assets* 118,879 34,571 17,647 171,097
*Non-current assets exclude deferred tax assets.
c) Revenue by collection
52 weeks ended 52 weeks ended
27 January 28 January
2018 2017
------------ --------------- ---------------
GBP'000 GBP'000
Menswear 249,685 226,731
Womenswear 341,985 304,255
--------------- ---------------
591,670 530,986
=============== ===============
3. Profit before tax
Profit before tax is stated 52 weeks 52 weeks
after charging/(crediting): ended ended
27 January 28 January
2018 2017
GBP'000 GBP'000
Depreciation and amortisation 23,238 20,966
Exceptional items 4,676 4,513
Leasehold properties:
Fixed lease payments* 41,238 38,022
Variable rental payments* 3,725 2,780
Concessions:
Fixed lease payments* 18,177 18,536
Variable rental and commission
payments* 34,866 33,345
Loss on sale of property,
plant & equipment and intangibles 166 416
Auditor remuneration:
Audit of these financial
statements 12 12
Amounts receivable by the
Company's auditor and its
associates in respect of:
Audit of financial statements
of subsidiaries of the Company 348 300
Interim financial statements
review 17 17
Other assurance services 20 21
Taxation compliance and other
advisory services - 10
*Disclosed above are the costs charged in the period relating to leasehold properties and concession arrangements. These are either fixed in nature or variable based on revenue levels for a particular store or concession, where relevant, including e-commerce sales with concession partners.
Reconciliation of profit before tax to profit before tax and exceptional items
52 weeks ended 52 weeks ended
27 January 28 January
2018 2017
----------------------------- -------------- --------------
GBP'000 GBP'000
Profit before tax 68,789 61,271
============== ==============
Impairment of retail assets,
relating to three stores
in the US and one store
in Europe 4,533 -
Restructuring costs 1,251 -
Movement in provisions
related to the Group's
legacy warehouses (1,108) 2,917
Other closure costs - 659
Closure costs for a concept
store in London - 937
-------------- --------------
Exceptional items 4,676 4,513
-------------- --------------
Profit before tax and
exceptional items 73,465 65,784
============== ==============
4. Finance income and expenses
52 weeks 52 weeks
ended ended
27 January 28 January
2018 2017
GBP'000 GBP'000
Finance income
- Interest receivable 61 15
- Foreign exchange gains 741 1,582
802 1,597
=========== -----------
Finance expenses
- Interest payable (3,301) (2,933)
- Foreign exchange losses (13) (440)
----------- -----------
(3,314) (3,373)
=========== ===========
5. Income tax expense
a) The tax charge comprises
52 weeks 52 weeks
ended ended
27 January 28 January
2018 2017
----------------------------------------- ------------ ------------
GBP'000 GBP'000
Current tax
United Kingdom Corporation
tax 12,190 12,343
Overseas tax 5,499 3,625
Deferred tax
United Kingdom Corporation
tax 827 977
Overseas tax (1,833) (1,038)
Prior period (over)/under
provision
Current tax (2,403) (4,481)
Deferred tax 1,765 3,277
------------ ------------
16,045 14,703
============ ============
The movements in prior year current and deferred tax provisions are largely as a result of claiming interest deductions in US tax returns previously not taken (2017: movements largely due to accelerated tax relief claims on fixed assets in the US).
b) Deferred tax movement by type
52 weeks 52 weeks
ended ended
27 January 28 January
2018 2017
------------------------------- ------------ ------------
GBP'000 GBP'000
Property, plant and equipment (388) (464)
Share-based payments (174) (49)
Overseas losses 757 379
Inventory 475 (41)
Other 336 236
------------ ------------
1,006 61
============ ============
c) Factors affecting the tax charge for the period
The tax assessed for the period is higher than the tax calculated at domestic rates applicable to profits in the respective countries. The differences are explained below.
52 weeks 52 weeks
ended ended
27 January 28 January
2018 2017
---------------------------------- ----------- -----------
GBP'000 GBP'000
Profit before tax 68,789 61,271
Profit multiplied by the standard
rate in the UK - 19.16%, (2017:
standard rate in the UK of
20%) 13,180 12,254
Income not taxable/expenses
not deductible for tax purposes 771 675
Overseas losses not recognised 1,334 1,494
Movement in current and deferred
tax on share awards and options 103 31
Prior period over provision (638) (1,204)
Difference due to overseas
tax rates 1,295 1,453
----------- -----------
Total income tax expense 16,045 14,703
=========== ===========
d) Deferred and current tax recognised directly in equity
52 weeks 52 weeks
ended ended
27 January 28 January
2018 2017
---------------------------------- ----------- -----------
GBP'000 GBP'000
Current tax credit on share
awards and options (1,058) (554)
Deferred tax charge on share
awards and options 523 273
Deferred tax (credit) / charge
associated with movement
in hedging reserve (2,284) 1,193
Current tax (credit) / charge
associated with foreign exchange
movements in reserves (1,963) 1,458
----------- -----------
(4,782) 2,370
=========== ===========
There was a reduction in the UK corporation tax rate to 19% from 1 April 2017 and there will be a further reduction to 17% from 1 April 2020. There was a reduction in the US federal corporate income tax rate to 21% from 1 January 2018.
As the deferred tax assets and liabilities should be recognised based on the corporation tax rate at which they are anticipated to unwind, the assets and liabilities on UK operations have been recognised at a rate of 19%. Assets and liabilities arising on foreign operations have been recognised at the applicable overseas tax rates.
6. Dividends per share
52 weeks 52 weeks
ended ended
27 January 28 January
2018 2017
------------------------------- ------------ ------------
GBP'000 GBP'000
Final dividend paid for prior
period of 38.8p per ordinary
share (2017: 34.6p) 17,176 15,215
Interim dividend paid of
16.6p per ordinary share
(2017: 14.8p) 7,377 6,521
------------ ------------
24,553 21,736
============ ============
A final dividend in respect of 2018 of 43.5p per share, amounting to a dividend payable of GBP19,346,280 is to be proposed at the Annual General Meeting on 12 June 2018.
7. Earnings per share
52 weeks 52 weeks ended
ended 28 January
27 January 2017
2018
------------------------------- ------------ ---------------
Number of shares: No. No.
Weighted number of ordinary
shares outstanding 44,306,134 44,034,459
Effect of dilutive options 289,241 516,310
Weighted number of ordinary
shares outstanding - diluted 44,595,375 44,550,769
============ ===============
Earnings: GBP'000 GBP'000
Profit for the period basic
and diluted 52,744 46,568
Profit for the period adjusted
* 56,597 50,178
Basic earnings per share 119.0p 105.7p
Adjusted earnings per share
* 127.7p 114.0p
Diluted earnings per share 118.3p 104.5p
Adjusted diluted earnings
per share* 126.9p 112.6p
Diluted earnings per share and adjusted diluted earnings per share have been calculated using additional ordinary shares of 5p each available under the Ted Baker Sharesave Scheme and the Ted Baker Plc Long-Term Incentive Plan 2013.
There were no share related events after the balance sheet date that may affect earnings per share.
* Adjusted profit for the period and adjusted earnings per share are shown before the exceptional items (net of tax) of GBP3.9m (2017: GBP3.6m).
8. Intangible assets
Key money Computer Computer Total
software software
under development
--------------- --------- --------- ------------------ -------
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 28 January
2017 624 13,619 14,854 29,097
Additions /
transfers 738 14,300 (1,739) 13,299
Disposals - - - -
Exchange rate
movement 19 (119) - (100)
--------- --------- ------------------ -------
At 27 January
2018 1,381 27,800 13,115 42,296
Amortisation
At 28 January
2017 - 4,652 - 4,652
Charge for the
period - 3,377 - 3,377
Disposals - - - -
Exchange rate
movement - (106) - (106)
--------- --------- ------------------ -------
At 27 January
2018 - 7,923 - 7,923
--------- --------- ------------------ -------
Net book value
--------- --------- ------------------ -------
At 28 January
2017 624 8,967 14,854 24,445
========= ========= ================== =======
At 27 January
2018 1,381 19,877 13,115 34,373
========= ========= ================== =======
Key money Computer Computer Total
software software
under development
--------------- --------- --------- ------------------ -------
GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 30 January
2016 879 8,361 10,649 19,889
Additions /
transfers - 5,134 4,205 9,339
Disposals (351) - - (351)
Exchange rate
movement 96 124 - 220
--------- --------- ------------------ -------
At 28 January
2017 624 13,619 14,854 29,097
Amortisation
At 30 January
2016 - 2,642 - 2,642
Charge for the
period - 1,925 - 1,925
Disposals - - - -
Exchange rate
movement - 85 - 85
--------- --------- ------------------ -------
At 28 January
2017 - 4,652 - 4,652
--------- --------- ------------------ -------
Net book value
--------- --------- ------------------ -------
At 30 January
2016 879 5,719 10,649 17,247
========= ========= ================== =======
At 28 January
2017 624 8,967 14,854 24,445
========= ========= ================== =======
The key money brought forward relates to the right to lease stores that have a guaranteed residual value. The guaranteed value arises because the next tenants based on current market conditions are required to pay these amounts to the Group. Due to the nature of this, the assets are considered recoverable and no amortisation is charged each period as the residual value of the asset is considered to be in excess of the carrying value. The current market rate rents, for both stores included within the intangible assets, continue to be above the rent under the lease terms and hence no decline in values is foreseen.
Additions included within key money relate to the right to lease a new store that has a guaranteed residual value. Additions included within computer software relate to the Microsoft Dynamics AX system and further development of our e-commerce platforms and other business systems. Additions included within the computer software under development category relate to the Microsoft Dynamics AX system and are stated net of transfers to computer software. Transfers from the computer software under development category in the period amounted to GBP14,300,000 (2017: GBP5,134,000) whilst additions into this category were GBP12,561,000 (2017: GBP9,339,000).
9. Property, plant and equipment
Freehold Leasehold Fixtures, Motor Assets Total
land and improvements fittings vehicles under
buildings and office construction
equipment
--------------- ---------- ------------- ----------- --------- ------------- -------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 28 January
2017 57,973 116,013 80,163 111 6,204 260,464
Additions
/ transfers - 10,570 10,789 - 2,180 23,539
Disposals - (3,608) (2,799) - - (6,407)
Exchange rate
movement - (5,225) (1,991) - (270) (7,486)
---------- ------------- ----------- --------- ------------- -------
At 27 January
2018 57,973 117,750 86,162 111 8,114 270,110
---------- -------------
Depreciation
At 28 January
2017 483 56,654 58,866 107 - 116,110
Charge for
the period 448 10,573 8,839 1 - 19,861
Disposals - (3,435) (2,690) - - (6,125)
Impairment - 4,072 461 - - 4,533
Exchange rate
movement - (2,018) (1,326) - - (3,344)
---------- ------------- ----------- --------- ------------- -------
At 27 January
2018 931 65,846 64,150 108 - 131,035
---------- ------------- ----------- --------- ------------- -------
Net book value
---------- ------------- ----------- --------- ------------- -------
At 28 January
2017 57,490 59,359 21,297 4 6,204 144,354
========== ============= =========== ========= ============= =======
At 27 January
2018 57,042 51,904 22,012 3 8,114 139,075
========== ============= =========== ========= ============= =======
Freehold Leasehold Fixtures, Motor Assets Total
land and improvements fittings vehicles under
buildings and office construction
equipment
--------------- ---------- ------------- ----------- --------- ------------- -------
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 30 January
2016 57,973 87,384 69,813 110 3,308 218,588
Additions
/ transfers - 23,816 8,038 1 2,560 34,415
Disposals - (1,538) (986) - - (2,524)
Exchange rate
movement - 6,351 3,298 - 336 9,985
---------- ------------- ----------- --------- ------------- -------
At 28 January
2017 57,973 116,013 80,163 111 6,204 260,464
---------- -------------
Depreciation
At 30 January
2016 32 45,120 49,934 105 - 95,191
Charge for
the period 451 10,562 8,026 2 - 19,041
Disposals - (1,466) (898) - - (2,364)
Impairment - - - - - -
Exchange rate
movement - 2,438 1,804 - - 4,242
---------- ------------- ----------- --------- ------------- -------
At 28 January
2017 483 56,654 58,866 107 - 116,110
---------- ------------- ----------- --------- ------------- -------
Net book value
---------- ------------- ----------- --------- ------------- -------
At 30 January
2016 57,941 42,264 19,879 5 3,308 123,397
========== ============= =========== ========= ============= =======
At 28 January
2017 57,490 59,359 21,297 4 6,204 144,354
========== ============= =========== ========= ============= =======
Additions included within the assets under construction category are stated net of transfers to other property, plant and equipment categories. Transfers from the assets under construction category in the period amounted to GBP21,359,000 (2017: GBP31,855,000) whilst additions into this category were GBP23,539,000 (2017: GBP34,415,000).
Impairment of leasehold improvements
The Group has determined that for the purposes of impairment testing, each store and outlet is tested for impairment if there are indications of impairment at the balance sheet date.
Recoverable amounts for cash-generating units are based on value in use, which is calculated from cash flow projections using data from the Group's latest internal forecasts, the results of which are reviewed by the Board. The key assumptions for the value in use calculations are those regarding discount rates, growth rates and expected changes in margins. Management estimates discount rates using pre-tax rates that reflect the current market assessment of the time value of money and the risks specific to the cash-generating units. Changes in selling prices and direct costs are based on past experience and expectations of future changes in the market.
The pre-tax discount rate used to calculate value in use is derived from the Group's adjusted weighted average cost of capital.
The impairment losses relate to stores whose recoverable amounts (value in use) did not exceed the asset carrying values. In all cases, impairment losses arose due to stores performing below projected trading levels.
The impairment charge of GBP4.5m (2017: GBPnil) for the 52 weeks ended 27 January 2018 is in respect of three stores in the US and one store in Europe that have not performed as expected.
10. Related Parties
The Group considers its Executive and Non-Executive Directors as key management and their compensation therefore comprises a related-party transaction.
Total compensation in respect of key management for the period was as follows:
52 weeks ended 52 weeks ended
27 January 28 January
2018 2017
-------------------------------- -------------- --------------
GBP'000 GBP'000
Salaries & short-term
benefits 2,852 2,582
Contributions to money-purchase
pension schemes 54 53
Share-based payment charges 364 427
-------------- --------------
3,270 3,062
============== ==============
Directors of the Company and their immediate relatives control 35.2% per cent of the voting shares of the Company.
At 27 January 2018, No Ordinary Designer Label Limited ("NODL"), the main trading company owed Ted Baker Plc GBP55,232,000 (2017: GBP51,932,000). NODL was owed GBP138,911,000 (2017: GBP136,813,000) from the other subsidiaries within the Group. Transactions between subsidiaries were priced on an arm's length basis.
The Group has a 50% interest in the ordinary share capital of No Ordinary Retail Company Pty*, a company incorporated in Australia, through its wholly owned subsidiary No Ordinary Designer Label Limited. As at 27 January 2018, the joint venture owed GBP666,000 to the main trading company (2017: GBP653,000). In the period the value of sales made to the joint venture by the Group was GBP2,648,000 (2017: GBP2,696,000).
Ray Kelvin and Lindsay Page are both directors of, and shareholders in, THAT Bournemouth Company Limited*, THAT TopCo Limited* and THAT Bournemouth Big Hotel Limited* and as such, these entities are a related party of the Company for the purposes of Chapter 11 of the Listing Rules.
Previously the Group provided design services to THAT Bournemouth Company Limited for which licence income fees were charged. No services were provided in the year ended 27 January 2018. No amounts were outstanding as at 27 January 2018 (2017: GBPnil).
During the period the main trading company provided office space to THAT TopCo Limited for which rental charges were made of GBP122,550 (2017: GBP34,560) and other miscellaneous charges of GBP8,946 (2017: GBP3,446). As at 27 January 2018, THAT TopCo Limited owed GBP102,418 to the main trading company (2017: GBPnil).
During the period the main trading company supplied services to THAT Bournemouth Big Hotel Limited for which charges were made of GBP6,741 (2017: GBP16,551). As at 27 January 2018, THAT Bournemouth Big Hotel Limited owed GBP1,849 to the main trading company (2017: GBPnil).
*The registered office addresses are as follows:
Related Party Registered Office Address
--------------------------- ---------------------------
No Ordinary Retail Company 6 Albert St, Preston
Pty VIC 3072, Australia
--------------------------- ---------------------------
THAT Bournemouth Company 6A St Pancras Way, London,
Limited NW1 0TB
--------------------------- ---------------------------
THAT TopCo Limited 6A St Pancras Way, London,
NW1 0TB
--------------------------- ---------------------------
THAT Bournemouth Big 6A St Pancras Way, London,
Hotel Limited NW1 0TB
--------------------------- ---------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR DXGDXXSDBGIB
(END) Dow Jones Newswires
March 22, 2018 03:01 ET (07:01 GMT)
1 Year Ted Baker Chart |
1 Month Ted Baker Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
