Herning, Denmark, 2013-06-26 07:58 CEST (GLOBE NEWSWIRE) --
- Pre-tax profit was DKK 17 million
- Revenue was DKK 1,026 million, which is on a par with last year and a reflection of the current challenging market conditions in Europe and the USA
- Same-store-sales in terms of order intake were up by 2.5%. The favourable trend we experienced in the first six months of the year was followed by a decline in same-store-sales in the third and fourth quarters of 2012/2013 - a consequence of lower consumer confidence and reduced traffic
- The group opened 24 new brand stores and closed 27, resulting in a total of 252 stores at year-end. Developments in the retail trade and difficulty in obtaining finance delayed the planned expansion, but we have improved our pipeline by canvassing for franchisees and offering selected candidates start-up finance
- The decline in the number of own stores led to the gross profit margin dropping to 43.3%, while increased concept development and greater promotional activity reduced the operating margin (EBIT percentage) to 1.9%
- Financial resources and scope increased during the year. The equity ratio was 42.8%
- An improvement in the composition of working capital strengthened cash flow from operating activities. After net investments totalling DKK 32 million, cash flow before financing activities was 2.3% of revenue, or DKK 23 million
FORECAST FOR THE 2013/2014 FINANCIAL YEAR
- If the current difficult market conditions continue to prevail, BoConcept's management expects group revenue to increase by approx. 4% in the 2013/2014 financial year. The growth is attributable to a DKK 40 million additional turnover from the stores acquired in China on 1 May 2013, whereas zero growth in same-store-sales and 35 new stores (net addition of 10 stores) will compensate for a negative exchange rate effect of DKK 25 million. The operating margin (EBIT percentage) is expected to increase to about 2.5-3.0% as a result of cost-cutting measures, while increased resources allocated to expansion loans and investments in promotional activities will lead to cash flow before financing activities remaining around zero
'The 2012/2013 financial was year characterised by very challenging trading conditions on the Western markets. In Europe in particular, where the debt crisis in Southern Europe created unease and slashed demand for durable consumer goods. Nevertheless, we succeeded in consolidating the market position of our brand in a declining market and maintaining group revenue, as we did our utmost to optimise trading conditions, expand the franchise chain and ensure profitability,' says Torben Paulin, CEO in BoConcept Holding. He continues:
'Looking ahead, the outlook is unclear, and we do not expect an improvement in market conditions to strengthen earnings in the coming year. In such a market it is essential to maintain our focused strategy and make additional investments to consolidate our global concept and brand. Accordingly, we will allocate more resources to launching collections, marketing investment and initiating even more market-oriented activities. With the acquisition of the master rights for the attractive and fast growing Chinese market we will accelerate store openings in the market, and at the same time speed up further the expansion of the franchise chain strengthening the pipeline-building initiatives, which are now beginning to produce positive results. Finally, we insist on strengthening the profitability and have thus implemented an adaptation of our cost structure at the beginning of the 2013/14 financial year, which will reduce capacity costs by DKK 20 million on a full-year basis, when fully implemented. We are confident that these initiatives and our will to invest in our concept will lay the foundation for utilising the potential of the business model – in the long and the short term,' says Torben Paulin.
Annual general meeting
The annual general meeting will be held at the company's office, Mørupvej 16, Herning on 29 August 2013 at 4 pm.
Motions for consideration at the general meeting must be submitted in writing to the supervisory and executive boards no later than six weeks before the general meeting, i.e. no later than 18 July 2013.
The published annual report for 2012/2013 is expected to be available in early August 2013.
BoConcept Holding A/S
For further information, please contact CEO Torben Paulin or CFO Hans Barslund on tel. +45 70 13 13 66
