Financial Express (Holdings) Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

  • FEAnalytics.com
  • FEInvest.net
  • FETransmission.com
  • Investegate.co.uk
  • Trustnet.hk
  • Trustnetoffshore.com
  • Trustnetmiddleeast.com

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 2nd Floor, Golden House, 30 Great Pulteney Street, London, W1F 9NN. Our nominated representative for the purpose of this Act is Kirsty Witter.

WHAT INFORMATION DO WE COLLECT ABOUT YOU?

We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.

COOKIES

In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.

HOW WE USE INFORMATION

We store and use information you provide as follows:

  • to present content effectively;
  • to provide you with information, products or services that you request from us or which may interest you, tailored to your specific interests, where you have consented to be contacted for such purposes;
  • to carry out our obligations arising from any contracts between you and us;
  • to enable you to participate in interactive features of our service, when you choose to do so;
  • to notify you about changes to our service;
  • to improve our content by tracking group information that describes the habits, usage, patterns and demographics of our customers.

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.

ACCESS TO YOUR INFORMATION AND CORRECTION

We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.

WHERE WE STORE YOUR PERSONAL DATA

The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.

CHANGES TO OUR PRIVACY POLICY

Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.

OTHER WEBSITES

Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.

CONTACT

If you want more information or have any questions or comments relating to our privacy policy please email publishing@financialexpress.net in the first instance.

 Information  X 
Enter a valid email address

Mulberry Group PLC (MUL)

  Print      Mail a friend       Annual reports

Thursday 12 June, 2014

Mulberry Group PLC

Preliminary Results

RNS Number : 4236J
Mulberry Group PLC
12 June 2014
 

MULBERRY GROUP PLC ("Mulberry" or the "Group")

PRELIMINARY RESULTS FOR THE YEAR ENDED 31 MARCH 2014

 

 

Mulberry Group plc, the English luxury brand, announces its results for the year ended 31 March 2014.

 

GODFREY DAVIS, EXECUTIVE CHAIRMAN, COMMENTED:

"Mulberry ended the year to 31 March 2014 in line with the guidance given in April.

 

We are taking steps to restore the business to growth by creating desirable new product across the entire Mulberry range whilst continuing to invest for the longer term.

 

We have listened to our customers and are introducing attractive new products in the key £500-800 price range.  As a first step we introduced the new Tessie collection two weeks ago which is proving popular.

 

We are proud of having created 320 new manufacturing jobs by opening our second factory in Somerset during June 2013.   With everyone now in place, we have doubled our UK production capacity and more than 50% of our handbags are now made in the UK using traditional skills and craftsmanship.

 

While the business faces a challenging year, I am confident that we can build on Mulberry's solid foundations and unique brand positioning in the luxury market to restore growth in the medium term."

 

FINANCIAL HIGHLIGHTS

·      Total sales of £163.5 million (2013: £165.1 million)

·      Retail sales up 2% to £109.0 million, down 3% like-for-like

·      Wholesale sales down 6% to £54.5 million

·      Profit before tax of £14.0 million (2013: £26.0 million), reflecting the increase in costs associated with new stores opened this year and last year (£4.8 million) as well as £3.4 million of exceptional, non-recurring costs as previously announced

·      Basic earnings per share of 14.5p (2013: 32.2p)

·      Proposed dividend of 5.0p per share (2013: 5.0p per share)

 

OPERATING HIGHLIGHTS

·      Construction of second UK factory completed during June 2013, with 320 new jobs created

·      Nine new international stores opened, two closed

·      Commenced the implementation of new supply chain management system which will allow us to forecast demand and allocate production more effectively as well as improve inventory management

 

CURRENT TRADING AND OUTLOOK

·      Product range rebalanced following management changes during March 2014

·      During the 10 weeks to 7 June 2014, total Retail sales were 9% below the same period last year (like-for-like sales down 15%)

·      Launch of the new Tessie collection has been well received

·      Double digit decline in Wholesale sales expected for 2014/15

·      Acquisition of new Paris flagship store; due to open during early 2015/16

 

FOR FURTHER DETAILS PLEASE CONTACT:

 

Bell Pottinger

   

Daniel de Belder / Kashara Taylor

020 7861 3232 / 07977 927142



Mulberry Investor Relations


Allegra Perry

020 7605 6795

   

   

Altium

   

Ben Thorne / Katie Hobbs

020 7484 4040



Barclays


Marcus Jackson / Nicola Tennent

 

020 3134 8370

 

 

BUSINESS REVIEW

 

Total revenue for the year to 31 March 2014 was £163.5 million, down 1% from £165.1 million last year, reflecting growth in Retail sales offset by a decline in Wholesale sales.

 

Retail

 

The Retail business grew by 2% to £109.0 million (2013: £107.2 million), driven by new store openings with like-for-like sales down 3%.

·      UK Retail sales were unchanged at £91.9 million (2013: £91.8 million), reflecting a decline in full price stores offset by significant growth in outlet;

·      International Retail sales were up 11% to £17.1 million (2013: £15.4 million);

·      Online sales, which are included in UK and International Retail sales, were down 11% to £15.6 million, accounting for 10% of Group sales (2013: 11%); and

·      During the year we opened seven new directly operated stores in the USA, Austria, Germany and Canada.

 

Wholesale

 

Wholesale sales were down 6% to £54.5 million (2013: £57.9 million), reflecting slower UK and Asian sales.

During the year we opened two partner stores (one in Europe, one in Asia) and closed two partner stores in Korea and the Middle East.

 

Financial

 

Gross margin was 63.3% for the year to 31 March 2014, in line with the prior year (2013: 63.3%).

 

Net operating expenses for the period increased by £10.7 million to £89.7 million (2013: £79.0 million).  This includes £4.8 million additional costs related to new directly operated international stores opened during this year and the previous year as well as £3.4 million of non-recurring costs relating to the impairment of two US stores and to the recent management change.

 

Due to the continued investment in directly operated international stores both this year and last year and the non-recurring items identified above, profit before tax fell 45% to £14.0 million (2013: £26.0 million).

 

The Group had an effective tax rate of 38.6% for the year (2013: 28.2%) resulting in a tax charge of £5.4 million (2013: £7.3 million).  The effective rate has risen due to losses arising in the new Canadian and European businesses where a deferred tax asset has not been established.

 

Capital expenditure for the period was £15.5 million, of which £8.1 million related to stores, £4.4 million to factories and £2.8 million to investment in IT systems.

 

Inventories have decreased to £33.8 million from £35.7 million at the start of the period reflecting effective purchasing and stock management. Overall, the Group balance sheet remains strong with cash of £23.4 million at 31 March 2014 (2013: £21.9 million) and no debt.

 

Basic earnings per share for the year decreased to 14.5p (2013: 32.2p). 

 

The Board is recommending the payment of a dividend on the ordinary shares of 5.0p per ordinary share (2013: 5.0p) which will be paid on 10 September 2014 to shareholders on the register on 15 August 2014.

 

STRATEGY

 

The long term strategy remains to grow Mulberry as an international luxury brand and we are confident that we can grow sales and profits in the medium term. We are taking the following key steps to achieve this:

 

1.   Re-focus the product offering:

 

The new handbag offering introduced over the last two seasons has focused on bags priced above £1,000, but has lacked new and interesting products in the key price range of £500 to £800. The design team will ensure that they deliver attractive new product within this key price range while continuing to refresh the collections across our full price spectrum. The benefit of this will be progressive.

2.   Stores:

 

We have invested in the growth of the Mulberry store network over the last three years and will continue to invest in the current financial year.  Due to the major investment in the Paris flagship store, which is expected to open at the beginning of the next financial year, we will open fewer stores in the current financial year and take the opportunity to focus on improving the productivity of existing stores.

3.   Supply chain:

 

Continued investment in supply chain management is enabling us to build a scalable platform for the business.  We are on track to complete the implementation of a new integrated supply chain management system during the course of the current financial year; this will allow us to forecast demand and allocate production more effectively as well as improving inventory management.

 

CURRENT TRADING AND OUTLOOK

 

During the 10 weeks to 7 June 2014, total Retail sales were 9% below the same period last year (like-for-like sales down 15%).

 

The outlook for the current financial year remains challenging.  Although there are encouraging signs in our own full price Retail business, including the well-received launch of the new Tessie collection, we expect the improvement in sales will be progressive.  Following effective stock clearance during 2013/14, outlet sales have settled at more normal levels this year.  The new Spring Summer 15 collection has been well-received by our Wholesale customers but this channel will take longer to recover and we expect there to be a double digit decline for the year as a whole.

 

We remain committed to our strategy of international expansion and traction has been gained in new markets in recent years through the opening of high quality stores.  For 2014/15 we plan to open five new directly operated stores and fit out the Paris flagship store which we plan to open at the beginning of the next financial year. 

 

There will be some effect on gross margin during the year from our second factory in Somerset, which is still building up to full production capacity.

 

Capital expenditure for the year to 31 March 2015 is expected to be approximately £18.0 million, of which £14.6 million will be on stores (2014: £15.5 million, £8.1 million on stores), subject to the timing of new store openings and other investments. This includes a significant investment in a Paris flagship store which will be an important step for the brand.  The Group is expected to continue to generate sufficient cash from operations to fund its investment programme.

 

Notwithstanding the short-term pressures, we are confident that we can build on Mulberry's solid foundations and unique brand positioning in the luxury market to restore growth in the medium term.

 

 

Consolidated income statement

Year ended 31 March 2014

 



Note


2014

£'000


2013

£'000








Revenue




163,456


165,130








Cost of sales




(59,992)


(60,623)








Gross profit




103,464


104,507








Other operating expenses




(86,806)


(79,413)

Exceptional operating expenses


3


(3,388)


-








Operating expenses




(90,194)


(79,413)

Other operating income




447


437








Operating profit




13,717


25,531








Share of results of associates




292


477

Finance income




35


48

Finance expense




(30)


(30)








Profit before tax




14,014


26,026








Tax




(5,412)


(7,333)








Profit for the year




8,602


18,693








Attributable to:







Equity holders of the parent




8,602


18,693















Basic earnings per share


5


14.5p


32.2p

Diluted earnings per share


5


14.3p


32.0p

 

 

Reconciliation of adjusted profit before tax:

 



Note


2014

£'000


2013

£'000








Profit before tax




14,014


26,026

Exceptional items:







  Impairment relating to retail assets




2,740


-

  Net non-recurring Director costs




648


-








Adjusted profit before tax - non-GAAP measure




17,402


26,026








Adjusted earnings per share - non-GAAP measure







Basic earnings per share


5


19.8p


32.2p

Diluted earnings per share


5


19.6p


32.0p








 

Consolidated statement of comprehensive income

Year ended 31 March 2014

 





2014

£'000


2013

£'000








Profit for the year




8,602


18,693

Items that may be reclassified subsequently to profit or loss







  Exchange differences on translation of foreign operations




(981)


215

  Tax impact arising on above exchange differences




545


(170)

Total comprehensive income for the year




8,166


18,738








Attributable to:







Equity holders of the parent




8,166


18,738

 

 

Consolidated balance sheet

At 31 March 2014

 





2014

£'000


2013

£'000








Non-current assets







Intangible assets




7,323


5,740

Property, plant and equipment




35,139


33,494

Interests in associates




64


281

Deferred tax assets




770


201





43,296


39,716

Current assets







Inventories




33,780


35,698

Trade and other receivables




13,574


14,233

Cash and cash equivalents




23,414


21,858





70,768


71,789








Total assets




114,064


111,505








Current liabilities







Trade and other payables




(29,423)


(29,800)

Current tax liabilities




(683)


(2,996)





(30,106)


(32,796)








Total liabilities




(30,106)


(32,796)








Net assets




83,958


78,709















Equity







Share capital




3,000


2,992

Share premium account




11,961


11,835

Own share reserve




(1,676)


(2,937)

Capital redemption reserve




154


154

Special reserves




1,467


1,467

Foreign exchange reserve




(212)


224

Retained earnings




69,264


64,974








Total equity




83,958


78,709

 

 







Consolidated statement of changes in equity

Year ended 31 March 2014

 


Equity attributable to equity holders of the parent











 

Share

Capital

Share premium account

Own share reserve

 

Capital reserve

 

Special reserve

Foreign exchange reserve

 

Retained earnings

 

 

Total


£'000

£'000

£'000

£'000

£'000

£'000

£'000

£'000










Balance at 1 April 2012

2,982

11,578

(3,966)

154

1,467

179

50,069

62,463

Total comprehensive    income for the year

-

-

-

-

-

45

18,693

18,738

Issue of share capital

1

-

-

-

-

-

-

1

Charge for employee share-based payments

-

-

-

-

-

-

888

888

Exercise of share options

9

257

-

-

-

-

(1,770)

(1,504)

Own shares

-

-

1,029

-

-

-

-

1,029

Ordinary dividends paid

-

-

-

-

-

-

(2,906)

(2,906)










As at 31 March 2013

2,992

11,835

(2,937)

154

1,467

224

64,974

78,709










Total comprehensive    (expense) / income for the year

-

-

-

-

-

(436)

8,602

8,166

Charge for employee share-based payments

-

-

-

-

-

-

81

81

Exercise of share options

8

126

-

-

-

-

(1,461)

(1,327)

Own shares

-

-

1,261

-

-

-

-

1,261

Ordinary dividends paid

-

-

-

-

-

-

(2,932)

(2,932)










As at 31 March 2014

3,000

11,961

(1,676)

154

1,467

(212)

69,264

83,958

 

 

Consolidated cash flow statement

Year ended 31 March 2014

 

 





2014

£'000


2013

£'000








Operating profit for the year




13,717


25,531








Adjustments for:







Depreciation and impairment of property, plant and equipment




9,870


5,553

Amortisation of intangible assets




1,428


803

Profit on disposal of property, plant and equipment




(13)


(26)

Effects of foreign exchange




(40)


(270)

Share-based payments charge




127


1,011








Operating cash flows before movements in working capital




25,089


32,602








Decrease/(increase) in inventories




1,931


(3,101)

Decrease in receivables




558


533

Decrease in payables




(377)


(5,657)








Cash generated from operations




27,201


24,377








Corporation taxes paid




(7,749)


(10,922)

Interest paid




(30)


(30)








Net cash inflow from operating activities




19,422


13,425








Investing activities:







Interest received




35


49

Dividend received from associate




441


518

Purchases of property, plant and equipment




(13,199)


(13,976)

Proceeds from disposal of property, plant and equipment




44


37

Acquisition of intangible fixed assets




(3,023)


(2,108)








Net cash used in investing activities




(15,702)


(15,480)








Financing activities:







Dividends paid




(2,932)


(2,906)

Proceeds on issue of shares




-


1

Settlement of share awards




(493)


(1,504)

Disposal of own shares




1,261


1,029








Net cash used in financing activities




(2,164)


(3,380)








Net increase/(decrease) in cash and cash equivalents




1,556


(5,435)








Cash and cash equivalents at beginning of year




21,858


27,293








Cash and cash equivalents at end of year




23,414


21,858

 

 

Notes

 

 

1.         Basis of preparation

 

The financial information in this announcement, which was approved by the Board of Directors on 11 June 2014, does not constitute the Company's statutory accounts for the years ended 31 March 2014 or 2013, but is derived from those accounts.

                                                                                                                                                                                      

Statutory accounts for the year ended 31 March 2013 have been delivered to the Registrar of Companies and those for the year ended 31 March 2014 have been approved and will be delivered to the Registrar of Companies following the Company's Annual General Meeting.  The auditors have reported on those accounts, their reports were unqualified and did not draw attention to any matters by way of emphasis without qualifying their reports and did not contain any statement under section 498 (2) or (3) of the Companies Act 2006.

                                                                                                                                                                                      

Whilst the financial information included in this preliminary announcement has been completed in accordance with International Financial Reporting Standards (IFRS), this announcement itself does not contain sufficient information to comply with IFRS.

 

2.         Accounting policies

 

The Group's financial statements for the year ended 31 March 2014 have been prepared in accordance with the measurement criteria of the International Financial Reporting Standards (IFRS) as adopted for use in the European Union.

 

For the year ended 31 March 2014, the financial year runs for the 52 weeks to 29 March 2014 (2013: 53 weeks ended 30 March 2013).

 

During the current year the following new and revised Standards and Interpretations have been adopted but have not had an impact on the Group:

·              IFRS 10: Consolidated Financial Statements

·              IFRS 11: Joint Arrangements

·              Amendment to IAS 27: Separate Financial Statements

·              Amendment to IAS 28: Investments in Associates and Joint Ventures

·              IFRS 13: Fair Value Measurement

·              IAS 12: Deferred Tax

·              IAS 19: Employee Benefits

·              IAS 36: Impairment of Assets

·              IFRS 7 (amended) and IAS 32 (amended): Disclosures - offsetting financial assets and financial liabilities

·              IFRS 1 (amended): Government Loans

·              IFRS 10, IFRS 12 and IAS 27 (amended): Investment Entities

 

At the date of approval of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:

·              IFRS 9: Financial instruments

·              IFRS 12: Disclosure of Interests in Other Entities

 

The Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group in future periods, except IFRS 12 will impact the disclosure of interests the Group has in other entities. Beyond the information above, it is not practicable to provide a reasonable estimate of the effect of these Standards until a detailed review has been completed.

 

3.         Exceptional expenses

 

The exceptional operating expenses for the year include:

 

·              An impairment charge of £2.7 million relating to the retail assets of two stores on Spring Street, New York, and Short Hills, New Jersey.  Neither location has traded in line with their expected potential; and

 

·              Net non-recurring Director costs associated with the settlement agreed with Bruno Guillon following his resignation from the Company.  This includes £0.8 million for compensation and payment in lieu of notice, £0.1 million relating to social security costs and a credit of £0.3 million from the forfeiture of his share awards.

 

There were no exceptional income or expenses in the prior year.

 

4.         Dividends

 

The dividends approved and paid during the year are as follows:

 




2014

£'000


2013

£'000







Dividend for the year ended 31 March 2013 of 5p (2012: 5p) per share paid in September 2013



2,932


2,906







Proposed dividend for the year ended 31 March 2014 of 5p per share (2013: 5p)



3,000


2,992

 

The proposed dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as a liability in these financial statements.

 

5.         Earnings per share ('EPS')

 




2014

pence


2013

pence







Basic earnings per share



14.5


32.2

Diluted earnings per share



14.3


32.0







Adjusted basic earnings per share



19.8


32.2

Adjusted diluted earnings per share



19.6


32.0

 

Earnings per share is calculated based on the following data:

 




2014

£'000


2013

£'000







Profit for the year for basic and diluted earnings per share



8,602


18,693

Adjustments to exclude exceptional items:






Impairment relating to retail assets



2,740


-

Net non-recurring Director costs



648


-

Tax impact of above



(216)


-







Adjusted profit for the year for basic and diluted earnings per share



11,774


18,693

 

Earnings per share is calculated based on the following data:

 




2014

million


2013

million







Weighted average number of ordinary shares for the purpose of basic EPS



59.4


58.1

Effect of dilutive potential ordinary shares: share options



       0.8


0.4







Weighted average number of ordinary shares for the purpose of diluted EPS



60.2


58.5

 

The weighted average number of ordinary shares in issue during the year excludes those held by the Mulberry Group Plc Employee Share Trust. 

 

6.         Acquisitions and subsequent events

 

On 19 November 2013, the Group entered into an agreement to purchase KJ Saint Honoré SA, a company registered in France, for approximately €9 million.  This company owns the rights to a lease for a store on Rue Saint-Honoré, Paris, where it is planned to open a new flagship store in 2015.  This acquisition is subject to various conditions being fulfilled by the vendor.  These are due to be completed at the end of June 2014.  The acquisition will be undertaken by Mulberry Company (France) SARL.  Included within other debtors at the year end is a deposit of £0.7 million paid in relation to this acquisition.

 

7.         Information

 

Copies of the Annual Report and financial statements will be posted to shareholders.  Further copies can be obtained from Mulberry Group plc's registered office at The Rookery, Chilcompton, Bath, Somerset, BA3 4EH.  Copies of this announcement are available for a period of one month from the date hereof from the Company's registered office, and from the Company's nominated adviser, Altium Capital Limited, 30 St James's Square, London, SW1Y 4AL.


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR FMGMVRMMGDZM