Full Year Trading Update

RNS Number : 9447D

Shoe Zone PLC

25 October 2022

 

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. It forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Shoe Zone plc

("Shoe Zone" or the "Company")

Full Year Trading Update

Shoe Zone is pleased to announce its unaudited full year trading update for the 52 weeks to 1 October 2022 ("FY 2022").

Financial Highlights:

· Group revenue increased by 31.2% to £156.2m (FY 2021: £119.1m)

· Stores traded for the full 52 weeks compared to 36 weeks in FY 2021 due to COVID closures

o  Store revenue of £129.8m (FY 2021: £88.5m) and Digital revenue of £26.4m (FY 2021: £30.6m)

· Product margin of c.61.3% (FY 2021: 61.3%)

· Net cash of £24.4m (FY 2021: £14.6m)

· Adjusted profit before tax expected to be not less than £11.0m 1

· Interim dividend paid of 2.5 pence per share

· Second interim dividend of £1.5m, equivalent to 3.0 pence per share, to be paid on 21 December 2022

· Share buy-back programme started

· Store numbers: 360 (FY 2021: 410)

1Adjusted to exclude the profit on sale of freehold properties and foreign exchange revaluations

Financial Summary

Revenue

In the 52 weeks to 1 October 2022 revenue was £156.2m (FY 2021: £119.1m). The FY 2021 figures were impacted by the 16 weeks that stores were closed due to COVID restrictions. This represents an increase of 31.2% on FY 2021.

Digital revenue stood at £26.4m (FY 2021: £30.6m) a reduction of 13.6%. This revenue represents 16.9% of Group revenue (FY 2021: 25.7%). The reduction reflects a return to a normalised level of revenue post pandemic and is in line with management expectations.

Margins

Product margin remained at 61.3% (FY 2021: 61.3%). This is due to contrasting impacts of increasing container prices and improved stock management due to less market volatility.

Profit before tax

Adjusted profit before tax is expected to be not less than £11.0m This is adjusted for £1.4m profit on sale of freeholds and a foreign exchange revaluation gain of £1.0m. Shoe Zone has traded positively during the period, particularly in the second half of the year which included our key Back to School period.

Cash

The Company ended the period with net cash of £24.4m (FY 2021: £14.6m). The increased cash balance is due to the cash generated from the higher level of trading profitability, offset by an increase in planned capital expenditure of £4.7m, reflecting a more normalised level (FY 2021: £2.2m) and £4.4m CLBILS loan paid off.

Dividend

A 2.5 pence per share interim payment was made in August.

In addition, the Board is pleased to announce a one off second interim dividend of 3.0 pence per share. This dividend will become payable on 21 December 2022 to those shareholders on the Company's register as at close of business on the record date of 4 November 2022. The ex-dividend date will be 3 November 2022.

A final dividend, the amount of which is yet to be determined, will be proposed on 10 January alongside our final results.

Share Buy-back programme

The Company started its share buy-back programme in August 2022 and as at the year-end had purchased 955,813 shares (of which 500,000 have been cancelled) at an average price of £1.79. The current phase completes at the end of November 2022 and the Board expects to continue the buy-back programme for the foreseeable future.

Store numbers

We ended the year trading out of 360 (FY 2021: 410) retail stores. We have closed 63 stores, opened 13 and refitted 11. The total is made up of 271 original Shoe Zone stores, 45 Big Box and 44 Hybrid stores. We continue our strategy to expand the number of Big Box and Hybrid formats through relocations and refits of existing Shoe Zone stores. In the year we sold 14 freehold properties which generated a profit on sale of £1.4m.

Chief Executive Update, Anthony Smith

"I am pleased to announce that Shoe Zone had a positive year that included a full 52 weeks trade post pandemic. We continue our strategy to expand our Hybrid and Big Box formats via refits and relocations.  Shoe Zone continues to show how resilient it is, with a proven track record of delivering robust results during times of economic uncertainty.

We look forward to updating shareholders in more detail at the time of our final results on 10 January 2023.

I would like to thank all of our teams for their continued commitment and hard work that have produced these great results."

For further information please call:

Shoe Zone PLC  Tel: [phone]

Anthony Smith (Chief Executive)

Terry Boot (Finance Director) 

Zeus (Nominated Adviser and Broker)                                                                       Tel: [phone]

David Foreman, James Hornigold, Ed Beddows (Investment Banking)

Dominic King (Corporate Broking)

About Shoe Zone

Shoe Zone is a Town Centre, Retail Park and Digital footwear retailer, offering low price and high quality footwear for the whole family.

Shoe Zone operates from a portfolio of 360 stores and has approximately 2,650 employees across the UK.

The store portfolio consists of 271 high street stores containing the core Shoe Zone product range and 44 hybrid high street stores and 45 larger Retail Park stores which also have additional brands such as Skechers, Hush Puppies and Kickers.

shoezone.com, combined with the store network, ensures a full multi-channel offering for great customer service.

During an average year Shoe Zone sells 14.5 million pairs of shoes per annum at an average retail price of £12.50.

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