Q1 FY 2008 Results for the period ended 28 April 2007
Statutory* Sales up 95% to £192m - EBITDA** up 47% to £14.8m
Highlights, on a statutory basis:
• Following the acquisition of Rubicon Retail in the 3rd Quarter of last year,
total group sales increased by 95% in the first quarter of this year, to
£192m (Q1 FY2007: £98.4m).
• EBITDA, was up 47% to £14.8m, (Q1 FY2007: £10.1m) representing 8% of sales.
• Loss after tax for the quarter was £3.3m (Q1 FY2007: £0.8m profit) as a
result of increased financing costs.
• Loss per share was -0.114p, compared to a profit per share of 0.027p in Q1
FY2007.
• Equity up by £18m to £148.7m (Q1 FY2007: £130.4m).
Highlights, on a proforma*** basis:
• EBITDA of £14.8m in Q1 FY2008, level with last year, representing 8% of
sales. Total group sales increased by 4% in the quarter, to £192m (Q1 FY2007:
£184m).
Karen Millen, Oasis, Warehouse and Whistles delivered sales growth, Shoe
Studio growth was level, but there were sales declines at Coast and
Principles.
International sales**** , across all brands, were up 27%, and now
represent 18% of group turnover (Q1 FY2007: 14%).
e-commerce sales amounted to £3.6m, almost three times Q1 FY2007.
• During the quarter, a net 27 new stores and concessions were opened in the UK
and mainland Europe, taking the owned portfolio to 1,656 stores. 15
international franchise stores were opened, taking the franchise portfolio to
183.
As announced last week, an offer for the whole of the outstanding share capital
of the company, at a price of ISK17.5, is pending.
Derek Lovelock, CEO Mosaic Fashions, commented:
‘The 1st Quarter has been disappointing for us, with fashion retailing in the
UK generally difficult, combined with continuing underperformance in Coast and
Principles. The 2nd Quarter started slowly, but there has been some evidence of
improvement in recent weeks. Coast has shown encouraging signs of recovery, but
conversely sales at Oasis have slowed. International sales are still
outperforming the UK, and e-commerce sales continue to exceed our expectations.
The new Coast transactional website is doing remarkably well, and we look
forward to the Karen Millen launch in August. Although FY2008 threatens to be
another difficult year for the Group, we remain confident in the long term
strength of our brand portfolio and at this stage we are maintaining our
guidance of low double digit growth in proforma EBITDA.'
CHIEF EXECUTIVE'S REVIEW
The first quarter was characterised by a significant shift in the pattern of
trade before and after Easter. The first months were dominated by a strong
fashion look of printed tunics and shift dresses worn over leggings and
trousers, which had limited appeal outside the young fashion market. After
Easter, with the market saturated with print dresses and tunics, customers
reverted to more individual and special products, which drove improved sales in
Coast, Karen Millen and Whistles.
The strong fashion trend for dresses of all forms inevitably had repercussions
for Coast, which struggled to compete with such intense competition from every
quarter. With the shift in trading patterns after Easter, Coast reasserted its
authority in time for the traditional occasionwear season, supported by the
incredibly strong launch of a new transactional website.
Karen Millen launched one of the strongest collections of recent seasons, which
resulted in solid sales growth in the UK and continued excellent sales growth
in international markets. Whistles has also seen a significant turnaround with
sales strengthening as the season has progressed. Reactions to these later
ranges give us confidence in the new creative team.
Warehouse's strong performance at the end of last year has continued throughout
the spring/summer season. Oasis had a strong start to the year heavily backing
the print tunics and dresses, but Principles focused too heavily on this
fashion trend, which proved of limited appeal to their target customer.
Interestingly the absence of a strong clothing fashion following Easter has led
to a significant improvement on what was already a reasonable trend for shoes,
and we are satisfied with the progress being made at Shoe Studio.
Current Trade
May was a particularly difficult month, however performance has improved in
June, with sales being driven by the demand for occasionwear. We expect the
rest of the year to continue to be challenging in the UK high street, however
with continued growth in our international and e-commerce businesses, we are
still maintaining our forecast of low double digit growth in proforma EBITDA
for the year.
* Statutory basis: The Group acquired the entire issued share capital of
Rubicon Retail Limited on 12 October 2006. 'Statutory Basis' financial
information has been derived from the Consolidated Financial Statements and
includes the post acquisition profits of Rubicon Retail Limited for the period
from 13 October 2006 to 27 January 2007, together with their closing balance
sheet as at 27 January 2007.
** EBITDA stated before acquisition and integration costs of £0.1m
*** Proforma basis: The acquisition of Rubicon Retail Ltd. did not take place
until October 2006. In order to provide clear and unambiguous information to
investors, where indicated, figures for the current and comparative periods
have been prepared as if all the businesses had been part of the group for the
whole of those periods.
**** International sales comprise all own store, concession, franchise and
joint venture outlets outside of the UK.
