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Ashley (Laura) Hldgs (ALY)

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Wednesday 17 August, 2016

Ashley (Laura) Hldgs

Final Results

RNS Number : 3449H
Ashley (Laura) Hldgs PLC
17 August 2016
 

 

   17th August 2016

 

LAURA ASHLEY HOLDINGS plc

("the Group")

 

 

Laura Ashley Holdings plc announces its full final results for the 74 weeks to 30 June 2016.

 

Summary

 

·    Profit before tax and exceptional items of £25.8m (2015: £22.9m - 53 week period).

·    Profit before tax and after exceptional items of £23.9m (2015: £23.5m - 53 week period).

·    Total like-for-like* retail sales up 4.1% with like-for-like* growth across all categories.

·    Total Group sales of £400.9m (2015: £303.6m - 53 week period).

·    Online revenue of £73.5m. (2015: £48.5m - 53 week period). Like-for-like* up 15.7%.

·    Hotel revenue of £3.5m (2015: £1.9m - 53 week period).

·    £5.0m net cash balance.

·    Final dividend of 0.5 pence per share taking total dividends for the period to 2.5p.

 

*All references to "like-for-like" refer to a full 74 weeks comparison.

 

Commenting on the results, Tan Sri Dr Khoo Kay Peng, Chairman, said:

 

"I am pleased with the overall performance of the business. Continued like-for-like growth in the UK market, boosted by the good performance of our digital channel, is encouraging.

 

I am happy that the Company has signed a new licence partner for Australia and am confident that the business opportunity there will be optimised. Such partnership opportunities, in new territories, will continue to be explored and developed.

 

I am grateful for the enduring loyalty of our many worldwide customers, whose love of the Brand and its rich heritage, has helped to grow and strengthen the business.

 

The Company will continue to focus on enhancing the design and quality of its product ranges upon whose provenance the Brand has been built. In a time of uncertainty for retail and the global economy at large, I am optimistic and confident that Laura Ashley will remain a business with solid foundations to withstand challenges as they arise."

 

 

    

Enquiries:

 

 

 

Laura Ashley Holdings plc

Kwan Cheong Ng  ; CEO

Seán Anglim ; CFO / Joint COO

 

 

 

020 7880 5100

 

 

Media Enquiries

Brunswick

Anita Scott

Helen Smith

 

 

020 7404 5959

 

 

Corporate Broker

Cantor Fitzgerald Europe

Marc Milmo

Catherine Leftley

 

 

 

 

020 7894 7000

 

 

 Overview

 

For the 74 weeks to 30 June 2016, total Group sales were £400.9m compared with the 53 week period last year (2015: £303.6m). Like-for-like* sales grew by 4.1% over the same period. e-Commerce sales grew to £73.5m (2015: £48.5m). Like-for-like* e-Commerce sales grew by 15.7%.

 

Group profit before taxation, excluding exceptional items, was £25.8m (2015: £22.9m). During the period, the Group incurred exceptional charges of £1.9m, which included a charge of £1.3m following a licence partner in Australia being placed into administration. Group profit before taxation, including exceptional items, was £23.9m (2015: £23.5m). 

 

Operating expenses of £143.0m were recorded (2015: £105.3m - 53 week period).

 

Cash Flow and Balance Sheet

 

As at 30 June 2016, bank borrowings stood at £23.0m and the net cash balance was £5.0m. Inventory of £51.9m was in line with requirements. The bank borrowings reflect the balance of the loan due in respect of the property in Singapore which was acquired during the period.

 

Dividend

 

The Board has recommended the payment of a final dividend of 0.5 pence per share. This will take the total dividends paid for the 74 week period to 2.5p (period ended January 2015, 2.0p for a 53 week period). The dividend will be proposed at the forthcoming AGM and, subject to shareholders' approval, will be paid in due course.  

 

UK Retail      

 

As at 30 June 2016, the property portfolio in the UK comprised 192 stores (January 2015: 205). The portfolio is as follows: 117 Mixed Product stores, 48 Home stores, 25 concession stores, 1 Gifts & Accessories store and 1 Clearance outlet.  During the reporting period, five stores were opened and eighteen were closed, reducing total selling space by 4.2% to 729,000 square feet.

 

Total UK retail sales of £363.2m were recorded during the period (2015: £267.4m - 53 weeks). Our UK retail business performed in line with the overall retail market and ahead of market in some product categories.

 

Total e-Commerce sales of £73.5m were recorded during the period (2015: £48.5m - 53 weeks).  On a like-for-like* basis, sales grew by 15.7%.

 

   

Product

 

The UK business is split into four main categories.  For the 74 weeks ended 30 June 2016, the relative split of UK sales was as follows: Home Accessories 30%, Furniture 30%, Decorating 23% and Fashion 17%. All categories recorded like-for-like* growth.

 

Furniture

The Furniture product category includes upholstered and cabinet furniture, beds and mirrors.

 

Furniture sales for the 74 weeks to 30 June 2016 increased by 2.1% over the same period last year with like-for-like* sales up 4.3%. The depth of choice and diversity of style have enabled the furniture business to flourish. New finishes, textures and materials have complemented what was already a comprehensive range. The availability of financing products has also helped this category to grow.

 

Home Accessories

The Home Accessories product category includes lighting, gifts, bed linen, rugs, throws, cushions and children's accessories.

 

Home Accessories sales for the 74 weeks to 30 June 2016 increased by 3.4% over the same period last year with like-for-like* performance up by 6.8%. The continued growth of this category is based on range additions, new and innovative product categories such as cookware and kitchen products as well as an enhanced seasonal offering. As always, these products are designed to work with our decorating themes.

 

Decorating

This category includes fabric, curtains, wallpaper, paint and decorative accessories.

 

Decorating sales for the 74 weeks to 30 June 2016 fell by 1.2% with like-for-like* sales up 1.6%. This category draws on a combination of brand heritage and contemporary classic design to give a rich and varied choice to our customers.  We are extremely proud that our wide variety of made-to-measure curtains, wallpapers and growing paint ranges are all manufactured by ourselves in the UK.

 

Fashion

This category includes adult fashion, fashion accessories and perfumery. 

 

Fashion sales for the 74 weeks to 30 June 2016 decreased by 3.9% over the same period last year with like-for-like* sales up 2.2%.

 

We have started to partner with selected British retailers to give broader exposure to our fashion ranges.

 

Hotel

 

The Laura Ashley hotel recorded sales of £3.5m (2015: £1.9m) over the period, reflecting the continued growth trend of recent years.

 

  

International Operations

 

Contributing 7.7% of total Group revenue, our international Franchise and Licensing channels are an important and strategic part of our business.  As at 30 June 2016, there were 252 franchised stores (303 as at 31 January 2015) in 29 territories worldwide. 

 

Franchise and Licensing revenue of £30.7m was recorded during the period to 30 June 2016. (2015: £31.2m). This was below expectation primarily due to the performance of a sluggish Japanese market and also due to continued political instability and economic difficulties in other territories.

 

We will continue to work closely with our partners and are confident that the Franchise and Licensing business will continue to grow and develop.

 

We are pleased to announce that we have acquired a new licence partner in Australia and are making good progress in a number of other territories.

 

Current Trading and Outlook

 

Trading for the six weeks to 13 August 2016 is performing in line with management expectations.

 

We will continue to focus on enhancing the design and quality of our product ranges upon whose provenance the Brand has been built. In a time of uncertainty for retail and the global economy at large, we are optimistic and confident that Laura Ashley will remain a business with solid foundations to withstand challenges as they arise.

 

Acknowledgements

 

The success of the Group is due, in no small part, to the hard work and commitment of the staff, management and my fellow board members. For this, I wish to convey my thanks and appreciation.

 

For their continued support and loyalty to the Group, I would like to thank our customers, shareholders and suppliers.

 

 

 

Group Statement of Comprehensive Income

 

 

 

 

For the Financial period ended 30 June 2016

 

 

 

 

 

 

 

 

 

 

Notes

74 weeks
to

30 June 2016

£m

     53 weeks to

31 Jan 2015

£m

 

 

 

 

Revenue

5

400.9

303.6

Cost of sales

 

(228.9)

(174.5)

Gross profit

 

172.0

129.1

Operating expenses

 

(143.0)

(105.3)

Profit from operations

 

29.0

23.8

Share of operating (loss) of associate

 

(1.9)

(0.5)

Finance costs

 

(1.3)

               (0.4)

Profit before taxation and exceptional items

 

25.8

22.9

Exceptional items

 

(1.9)

0.6

Profit before taxation

 

23.9

23.5

Taxation

6

(6.9)

(5.2)

Profit for the financial period*

 

17.0

18.3

 

 

 

 

Other comprehensive income:

 

 

 

Actuarial gain/(loss) on defined benefit pension schemes

 

1.1

(9.4)

Deferred tax effect

 

(0.2)

2.0

Total that will not be subsequently reclassified to profit and loss

 

0.9

(7.4)

 

 

 

 

Exchange differences on translation of investments

 

(2.2)

2.3

Other foreign exchange differences

 

1.8

(3.4)

Total that may be subsequently reclassified to profit and loss

 

(0.4)

(1.1)

Other comprehensive income/(expense) for the period net of taxation

 

0.5

(8.5)

 

 

 

 

Total comprehensive income for the period

 

17.5

9.8

 

*Earnings per share - basic and diluted - calculated based on profit for the financial period

2

2.34p

2.51p

Adjusted earnings per share (excluding exceptional items)

2

2.60p

2.43p

               

 

 

Group Balance Sheet

 

 

As at 30 June 2016

 

 

 

 

 

 

 

Group

 

Notes

 

          30 June

2016

£m

 

        31 January

2015

£m

Non-current assets

 

 

 

 

 

Intangible assets

 

 

2.4

 

2.0

Property, plant and equipment

 

 

52.0

 

21.2

Investment property

 

 

3.9

 

-

Deferred tax assets

 

 

3.2

 

3.6

Investment in associate

 

 

2.6

 

3.7

 

 

 

64.1

 

30.5

Current assets

 

 

 

 

 

Inventories

 

 

51.9

 

51.0

Trade and other receivables

 

 

17.2

 

22.1

Cash and cash equivalents

4

 

19.8

 

27.8

 

 

 

88.9

 

100.9

Total assets

 

 

153.0

 

131.4

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

Current tax liabilities

 

 

3.0

 

2.1

Trade and other payables

 

 

48.3

 

66.7

Short-term borrowings

 

 

16.1

 

-

 

 

 

67.4

 

68.8

Non-current liabilities

 

 

 

 

 

Retirement benefit liabilities

 

 

16.2

 

17.8

Deferred tax liabilities

 

 

0.2

 

0.2

Long-term borrowings

 

 

21.7

 

-

Provisions and other liabilities

 

 

0.6

 

0.7

 

 

 

38.7

 

18.7

Total liabilities

 

 

106.1

 

87.5

Net assets

 

 

46.9

 

43.9

 

 

 

 

 

 

Equity

 

 

 

 

 

Share capital

 

 

37.3

 

37.3

Share premium

 

 

86.4

 

86.4

Own shares

 

 

(0.8)

 

(0.8)

Retained earnings

 

 

(76.0)

 

(79.0)

Total equity

 

 

46.9

 

43.9

               

 

 

 

Group Statement of Changes in Shareholder's Equity

As at 30 June 2016

 

 

 

 

 

 

 

 

 

 

 

 

Share Capital

£m

Share Premium

£m

 Own Shares

£m

 

Retained Earnings

£m

Total Equity

£m

Balance as at 25 January 2014

37.3

86.4 

        (0.8)

(74.3)

48.6

 

 

 

 

 

 

Profit for the financial period

-

-

-

18.3

18.3

Dividends paid

-

-

-

(14.5)

(14.5)

Other comprehensive expense

-

-

-

(8.5)

(8.5)

Balance as at 31 January 2015

37.3

86.4 

        (0.8)

(79.0)

43.9

 

 

 

 

 

 

Profit for the financial period

-

-

-

17.0

17.0

Dividends paid

-

-

-

(14.5)

(14.5)

Other comprehensive income

-

-

-

0.5

0.5

Balance as at 30 June 2016

37.3

86.4 

        (0.8)

(76.0)

46.9

 

 

Group Statement of Cash Flow

For the financial period ended 30 June 2016

 

 

 

 

 

Group

 

 

 2016

(74 weeks)

 

2015

(53 weeks)

 

Note

£m

 

£m

Operating activities

 

 

 

 

Net cash inflow generated from operations

3

16.3

 

23.8

Corporation tax paid

 

(5.8)

 

(5.2)

Dividends paid

 

(14.5)

 

(21.8)

Dividends received

 

-

 

0.1

Finance costs

 

-

 

(0.4)

 

 

(4.0)

 

(3.5)

Investing activities

 

 

 

 

Purchase of property, plant and equipment

 

(39.5)

 

(1.8)

Purchase of intangible assets

 

(1.7)

 

(0.2)

Sale of investment in shares

 

-

 

8.0

Sale of property, plant and equipment

 

-

 

1.2

 

 

(41.2)

 

7.2

 

 

 

 

 

Financing activities

 

 

 

 

Bank loan received

 

24.1

 

-

Repayment of bank loan

 

(1.1)

 

-

Interest expense

 

(0.6)

 

-

 

 

22.4

 

-

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

(22.8)

 

3.7

 

 
1   Basis of Preparation
 
Consolidated financial statements and accounting policies

 

The preliminary announcement for the period ended 30 June 2016 has been prepared in accordance with International Accounting Standards ("IAS"). The policies adopted by the Group in preparing the statement, are in accordance with International Financial Reporting Standards ("IFRS").

 

These consolidated financial statements have been prepared using the historical cost convention, modified for certain items carried at fair value, as stated in the accounting policies. Details of the accounting policies applied are those set out in Laura Ashley Holdings plc's Annual Report 2016.

 

The annual financial information presented in this announcement for the period ended 30 June 2016 is based on, and is consistent with, that in the financial statements of Laura Ashley Holdings plc and its subsidiaries ("the Group") for the period ended 30 June 2016, and those financial statements will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

 

Statutory Accounts

 

Information in this preliminary announcement does not constitute statutory accounts of the Group within the meaning of Section 434 of the Companies Act 2006. Statutory accounts for the period ended 31 January 2015 have been filed with the Registrar of Companies. The auditor's report on these accounts was unqualified and did not contain any statement under Section 498 of the Companies Act 2006.  

 

The Group's Annual Report for the period ended 30 June 2016 will be made available in due course and can be viewed and downloaded from the Group's website at www.lauraashley.com. The Annual Report will be circulated in September 2016 to those shareholders who have elected to receive a copy in printed form.  

 

 

2   Earnings per Share

 

 

 

 

 

 

 

 

 

 

 

Earnings per share is calculated by dividing the profit for the financial period by the weighted average number of ordinary shares during the period (excluding treasury shares of 18,272,500).

 

 

 

 

 

 

 

 

 

 

2016

(74 weeks)

2015

(53 weeks)

 

Profit for the financial period (£m)

 

 

17.0

18.3

 

Exceptional (loss)/gain (£m)

 

 

(1.9)

0.6

 

 

 

 

 

 

 

Weighted average number of ordinary shares ('000) - basic and diluted

             727,763

         727,763

 

Earnings per share

 

 

2.34p

2.51p

 

Adjusted earnings per share (excluding exceptional items)

2.60p

       2.43p

 

 

 

 

 

 

 

 

 

 

 

 

 

3   Reconciliation of Profit from Operations to Net Cash Inflow from Operations

 

 

 

 

 

 

 

 

 

 

2016

(74 weeks)

2015

(53 weeks)

 

 

 

 

 £m

 £m

 

Profit from operations

 

 

29.0

23.8

 

Exceptional (loss)/gain

 

 

(1.9)

0.6

 

Amortisation charge

 

 

1.2

0.6

 

Depreciation charge

 

 

4.6

2.9

 

Loss/(profit) on disposal of property, plant and equipment

 

0.2

(0.5)

Exchange movement on property, plant and equipment

 

 

0.1

0.1

 

(Increase)/decrease in inventories

 

 

(0.9)

1.3

 

Decrease in receivables

 

 

4.9

2.1

 

(Decrease) in payables

 

 

(17.8)

(5.9)

 

Movement in provisions

 

 

(3.1)

(1.2)

 

Net cash inflow from operations

 

 

16.3

23.8

 

 

 

 

 

 

 

 

 

 

 

 

 

4   Analysis of Net Funds

 

 

 

 

 

 

 

 

 

 

 

 

 

 At 31 Jan

 Cash

 At 30 Jun

 

 

 

 2015

Flow

2016

 

 

 

 £m

 £m

 £m

 

Cash and cash equivalents

 

27.8

(22.8)

5.0

 

 

The Balance Sheet shows cash balance of £19.8m of which £14.8m is restricted cash (overdraft). Therefore, the above reconciles movement in the period of pure net funds.

 

5  Segmental Analysis

 

 

 

 

 

 

 

 

---------------------Retail---------------

 

 

 

 

 

 

 

 

E-Commerce

 

 

Total

 

Total

 

 

 

Stores

& Mail Order

Hotel

 

Retail

 

Non-Retail

 

Total

2016 (74 weeks)

£m

£m

£m

 

£m

 

£m

 

£m

Revenue

291.3

73.5

3.5

 

368.3

 

32.6

 

400.9

Contribution

22.7

17.0

(0.3)

 

39.4

 

13.5

 

52.9

Share of loss of associate

 

 

 

 

-

 

(1.9)

 

(1.9)

Indirect overhead costs

 

 

 

 

(23.9)

 

-

 

(23.9)

Finance costs

 

 

 

 

(1.3)

 

-

 

(1.3)

Exceptional items

 

 

 

 

(1.9)

 

-

 

(1.9)

Profit before taxation

 

 

 

 

12.3

 

11.6

 

23.9

 

 

 

 

 

 

 

 

 

 

 

---------------------Retail---------------

 

 

 

 

 

 

 

 

E-Commerce

 

 

Total

 

Total

 

 

 

Stores

& Mail Order

Hotel

 

Retail

 

Non-Retail

 

Total

2015 (53 weeks)

 

£m

£m

 

£m

 

£m

 

£m

Revenue

220.6

48.5

1.9

 

271.0

 

32.6

 

303.6

Contribution

19.6

   9.6

 (0.4)

 

28.8

 

13.4

 

42.2

Share of profit of associate

 

 

 

 

-

 

(0.5)

 

(0.5)

Indirect overhead costs

 

 

 

 

(18.4)

 

-

 

(18.4)

Finance costs

 

 

 

 

(0.4)

 

-

 

(0.4)

Exceptional items

 

 

 

 

0.6

 

-

 

0.6

Profit before taxation

 

 

 

 

10.6

 

12.9

 

23.5

 

The reported segments are consistent with the Group's internal reporting for performance measurement and resources allocation. The Group does not allocate indirect overhead costs between its retail and non-retail segments. As significant elements of the indirect overhead costs arise from the retail segment, it is decided that the entire indirect costs are allocated to this segment.

 

Retail revenue reflects sales through Laura Ashley's Managed Stores, Mail Order, e-Commerce and Hotel. Non-retail revenue includes Licensing, Franchising and Manufacturing. Contribution is stated after deducting direct operating expenses, buying, marketing and administrative costs. 

 

 

5    Segmental Analysis (continued)

 

 

 

Non-Current Assets

 

 

 

Revenue

 

 

2016

 

2015

 

 

 

2016

(74 weeks)

 

2015

(53 weeks)

 

 

£m

 

£m

 

 

 

£m

 

£m

Destination

 

 

 

 

 

 

 

 

 

 

UK & Ireland

 

23.7

 

26.8

 

 

 

372.3

 

 273.9

Continental Europe

 

-

 

-

 

 

 

4.0

 

    3.7

Other

 

40.4

 

  3.7

 

 

 

24.6

 

  26.0

 

64.1

 

30.5

 

 

 

400.9

 

303.6

 

 

6.   Taxation

 

The taxation charge for the period comprises taxation for the Group and the associate entity on current and prior periods' taxable profits.

 

The effective tax rate for the current period is higher than the rate of UK Corporation tax primarily due to the decrease in the Group's overall deferred tax asset due to the reduction in the UK tax rate and non-relievable losses arising in Japan.

 

In the previous period, the effective tax rate was lower than the rate of UK Corporation tax mainly due to capital gains being covered by capital losses in the Group, which eliminate the impact of excess depreciation over capital allowances, the decrease in the Group's overall deferred tax asset due to the reduction in the UK tax rate and the higher rate in Japan.

 

 

 


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