TIDMALY
RNS Number : 7135O
Ashley (Laura) Hldgs PLC
23 August 2017
23 August 2017
LAURA ASHLEY HOLDINGS plc
("the Group")
Laura Ashley Holdings plc announces its full final results for
the 52 weeks to 30 June 2017.
Summary
-- Profit before tax and exceptional items of GBP8.4m (2016: GBP24.7m - 74 week period).
-- Statutory Profit before tax of GBP6.3m (2016: GBP22.8m - 74 week period).
-- Total like-for-like* retail sales down 3.1%.
-- Total Group sales of GBP277.0m (2016: GBP400.9m - 74 week period).
-- Online revenue of GBP57.3m (2016: GBP73.5m - 74 week period).
-- Online sales up 5.6% on a like-for-like* basis.
-- Hotel revenue of GBP2.5m (2016: GBP3.5m - 74 week period).
-- The board is not recommending payment of a final dividend.
Interim dividend of 0.5p already paid (2016 - 2.5p).
*References to "like-for-like" refer to a full 52 week
comparison.
Commenting on the results, Tan Sri Dr Khoo Kay Peng, Chairman,
said:
"Trading conditions have been challenging for the year ended 30
June 2017. The impact of weak sterling has also contributed to the
overall fall in profit which the Group has experienced.
We are focussed on addressing the challenges which our business
has encountered over the past year and are confident that we are
well-positioned to overcome them. Our online performance continues
to be strong and we saw like-for-like online revenues grow by 5.6%
over the year. Customer responses to the improvements we have made
to our multi-channel offer have been positive and we are committed
to its ongoing enhancement and development.
A strong and expanding international presence is at the core of
our strategy. We signed a new license partner in India earlier this
year and we are looking forward to the opening of our first Indian
stores next month. We launched our Chinese website in November and
I am pleased that this is making good progress and enhancing our
presence in the territory.
Laura Ashley is known worldwide for high quality, beautifully
designed products. 33% of our sales come from products manufactured
in the UK. We are confident that the enduring nature and heritage
of this much-loved British Brand as well as the execution of our
business strategies, will help position the Group to grow and
develop over the years to come."
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 52 weeks to 30 June 2017, total Group sales were
GBP277.0m compared with the 74 week period last year (2016:
GBP400.9m). Like-for-like* sales fell by 3.1% over the same period.
e-Commerce sales were GBP57.3m (2016: GBP73.5m - 74 weeks).
Like-for-like* e-Commerce sales grew by 5.6%.
Group profit before taxation, excluding exceptional items, was
GBP8.4m (2016: GBP24.7m - 74 weeks). An exceptional charge of
GBP2.8m was recorded in respect of impairment on the Singapore
property following a recent valuation.
Statutory profit before taxation, was GBP6.3m (2016: GBP22.8m -
74 weeks).
Operating expenses of GBP98.2m were recorded for the year (2016:
GBP143.0m - 74 week period).
Cash Flow and Balance Sheet
As at 30 June 2017, bank borrowings stood at GBP21.6m and the
net cash overdraft balance was GBP10.7m. Inventory of GBP57.7m 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 in 2015.
Dividend
The board is not recommending payment of a final dividend. The
total dividend paid for the year to 30 June 2017 remains at 0.5p,
having already paid an interim dividend. (Period ended 30 June
2016, 2.5p for a 74 week period)
UK Retail
As at 30 June 2017, the property portfolio in the UK comprised
167 stores (June 2016: 192). The portfolio is as follows: 114 Mixed
Product stores, 48 Home stores, 3concession stores, 1 Gifts &
Accessories store and 1 Clearance outlet. During the reporting
period, twenty five stores were closed and none opened, reducing
total selling space by 6.5% to 681,000 square feet. Twenty two of
the store closures were Homebase concession stores following the
takeover of Homebase by the Australian Wesfarmers group.
Over the coming year, we will open two new stores and close
three stores as we optimise store profitability.
Total UK retail sales of GBP252.0m were recorded during the 52
weeks to 30 June 2017 (2016: GBP363.2m - 74 weeks). UK retail sales
were affected by the Homebase concession closures and the mainline
store closures.
Total e-Commerce sales of GBP57.3m were recorded during the 52
weeks to 30 June 2017 (2016: GBP73.5m - 74 weeks). On a
like-for-like* basis, sales grew by 5.6%.
Product
The UK business is split into four main categories. For the year
ended 30 June 2017, the relative split of UK sales was as follows:
Home Accessories 33%, Furniture 30%, Decorating 22% and Fashion
15%.
Home Accessories
The Home Accessories product category includes lighting, gifts,
bed linen, rugs, throws, cushions and children's accessories.
Home Accessories sales for the year to 30 June 2017 increased by
1.3% over the same period last year with like-for-like* performance
up by 3.7%. Now our largest category, its continued growth is based
on new, relevant and innovative product as well as an ever
improving seasonal offering. As always, these products are designed
to complement our decorating and furnishing themes.
Furniture
The Furniture product category includes upholstered and cabinet
furniture, beds and mirrors.
Furniture sales for the year to 30 June 2017 decreased by 7.2%
over the same period last year with like-for-like* sales down by
5.3%. Furniture is our most price sensitive category and we are
reviewing the end to end supply chain to ensure that good value, as
well as our rich and diverse depth of choice, enables the furniture
business to flourish. New products have been added to what was
already a comprehensive range.
Decorating
This category includes fabric, curtains, wallpaper, paint and
decorative accessories.
Decorating sales for the year to 30 June 2017 fell by 5.9% with
like-for-like* sales down 4.0%. While the performance of decorating
has been below expectation, we remain confident that, our
combination of heritage and contemporary classic designs, have
broad and enduring appeal to both our existing and new
customers.
Fashion
This category includes adult fashion, fashion accessories and
perfumery.
Fashion sales for the year to 30 June 2017 decreased by 12.2%
over the same period last year with like-for-like* sales down
10.4%. This performance has been disappointing and we have been
working hard to remedy this. We have restructured our fashion team
and appointed a new Head of Fashion, who joined us in July. We are
confident that the building blocks are now in place to stabilise
and grow our fashion business.
Hotel
The Laura Ashley hotel recorded sales of GBP2.5m (2016: GBP3.5m
- 74 Weeks) over the period. Like for like performance was flat
year on year. We continue to partner under license with a hotel in
the Lake District, (Laura Ashley, The Belsfield).
In June 2017, we opened our first Tea Room. Located in the
Regency Hotel, Solihull, it has met with both customer and media
acclaim. Further Tea Rooms may be opened as we refine and develop
the model.
International Operations
Contributing 7.4% of total Group revenue, our international
Franchise and Licensing channels are an important and strategic
part of our business. As at 30 June 2017, there were 243 franchised
stores (252 as at 30 June 2016) in 29 territories worldwide.
Franchise and Licensing revenue of GBP20.6m was recorded during
the year to 30 June 2017. (2016: GBP30.7m - 74 weeks). Like for
like performance was down 1.1%.
We will continue to work closely with our partners and are
confident that the Franchise and Licensing business will grow and
develop.
We are pleased that we have acquired a new licence partner, The
Future Group, in India and will be opening our first Indian stores
in September. We have continued to grow and develop our online
presence in China having launched a website there in November 2016.
We have already seen progress in both of these territories and we
are also in discussions with a number of potential partners in
other territories in the Far East.
Current Trading and Outlook
Trading for the seven weeks to 19 August 2017 is performing in
line with management expectations.
Laura Ashley is known worldwide for high quality, beautifully
designed products. With 33% of our sales coming from products
manufactured in the UK, we are confident that the enduring nature
and heritage of this much loved British Brand will help position
the Group's growth and development over the years to come.
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
2017 Restated
52 weeks 74 weeks
to to
30 June 2017 30 June 2016
Notes GBPm GBPm
---------------------------------------------- ---------- -------------- ------------------
Revenue 5 277.0 400.9
Cost of sales (167.8) (229.0)
---------------------------------------------- ---------- -------------- ------------------
Gross profit 109.2 171.9
Operating expenses (98.2) (144.0)
---------------------------------------------- ---------- -------------- ------------------
Profit from operations 11.0 27.9
Share of operating (loss)/ profit of
associate (1.4) (1.9)
Finance costs (1.2) (1.3)
---------------------------------------------- ---------- -------------- ------------------
Profit before taxation and exceptional
items 8.4 24.7
Exceptional items (2.1) (1.9)
---------------------------------------------- ---------- -------------- ------------------
Profit before taxation 6.3 22.8
Taxation 6 (2.3) (6.9)
---------------------------------------------- ---------- -------------- ------------------
Profit for the financial year* 4.0 15.9
Other comprehensive income:
Actuarial (loss)/ gain on defined benefit
pension schemes 1.9 1.1
Deferred tax effect (0.4) (0.2)
---------------------------------------------- ---------- -------------- ------------------
Total that will not be subsequently
reclassified to profit and loss 1.5 0.9
---------------------------------------------- ---------- -------------- ------------------
Exchange differences on translation
of investments (0.4) (2.2)
Other reserve movements 0.9 1.8
Total that may be subsequently reclassified
to profit and loss 0.5 (0.4)
---------------------------------------------- ---------- -------------- ------------------
Other comprehensive income/(expense)
for the year net of taxation 2.0 0.5
---------------------------------------------- ---------- -------------- ------------------
Total comprehensive income for the year 6.0 16.4
---------------------------------------------- ---------- -------------- ------------------
*Earnings per share - basic and diluted
- calculated based on profit for the
financial year 2 0.55p 2.18p
Adjusted earnings per share (excluding
exceptional items) 2 0.84p 2.45p
Statement of Financial Position
As at 30 June 2017
Restated Restated
GROUP 2017 2016 2015
Notes GBPm GBPm GBPm
---------------------------------- ------ ------- ---------- ----------
Non-current assets
Intangibles 11 1.9 2.4 2.0
Property, plant and equipment 12 47.2 52.0 21.2
Investment property 13 3.8 3.9 -
Deferred tax asset 22 2.6 3.2 3.6
Investment in associate 14 1.3 2.6 3.7
Investment in subsidiaries 15 - - -
------- ---------- ----------
56.8 64.1 30.5
Current assets
Inventories 16 57.7 51.1 50.4
Trade and other receivables 17 19.1 17.2 22.1
Cash and cash equivalents 25 - 5.0 27.8
------- ---------- ----------
76.8 73.3 100.3
---------------------------------- ------ ------- ---------- ----------
Total assets 133.6 137.4 130.8
---------------------------------- ------ ------- ---------- ----------
Current liabilities
Current tax liabilities 1.0 3.0 2.1
Trade and other payables 18 50.9 50.5 68.0
Short-term borrowings 19 12.0 1.3 -
------- ---------- ----------
63.9 54.8 70.1
Non-current liabilities
Retirement benefit liabilities 28 13.8 16.2 17.8
Deferred tax liabilities 22 0.1 0.2 0.2
Long-term borrowings 34 20.3 21.7 -
Provisions and other liabilities 21 0.1 0.6 0.7
------- ---------- ----------
34.3 38.7 18.7
---------------------------------- ------ ------- ---------- ----------
Total liabilities 98.2 93.5 88.8
---------------------------------- ------ ------- ---------- ----------
Net assets 35.4 43.9 42.0
---------------------------------- ------ ------- ---------- ----------
Equity
Share capital 23 37.3 37.3 37.3
Share premium 86.4 86.4 86.4
Own shares (3.2) (3.2) (3.2)
Treasury shares (4.6) (4.6) (4.6)
Retained earnings (80.5) (72.0) (73.9)
---------------------------------- ------ ------- ---------- ----------
Total equity 35.4 43.9 42.0
---------------------------------- ------ ------- ---------- ----------
Group Statement of Changes in Shareholder's Equity
As at 30 June 2017
Share Share EBT Treasury Retained Total
Capital Premium Shares Shares Earnings Equity
GBPm GBPm GBPm GBPm GBPm GBPm
---------------------------- --------- --------- -------- --------- ---------- --------
Balance as at 31
January 2015 - previously
reported 37.3 86.4 (0.8) - (79.0) 43.9
Prior year adjustments - - (2.4) (4.6) 5.1 (1.9)
---------------------------- --------- --------- -------- --------- ---------- --------
Balance as at 31
January 2015 - restated 37.3 86.4 (3.2) (4.6) (73.9) 42.0
Profit for the financial
year - previously
reported - - - - 17.0 17.0
Adjustment to profit
for the financial
year - - - - (1.1) (1.1)
Profit for the financial
year - restated - - - - 15.9 15.9
---------------------------- --------- --------- -------- --------- ---------- --------
Dividends paid - - - - (14.5) (14.5)
Other comprehensive
loss - - - - 0.5 0.5
---------------------------- --------- --------- -------- --------- ---------- --------
Balance as at 30
June 2016 - restated 37.3 86.4 (3.2) (4.6) (72.0) 43.9
Profit for the financial
year - - - - 4.0 4.0
Dividends paid - - - - (14.5) (14.5)
Other comprehensive
income - - - - 2.0 2.0
---------------------------- --------- --------- -------- --------
Balance as at 30
June 2017 37.3 86.4 (3.2) (4.6) (80.5) 35.4
---------------------------- --------- --------- -------- --------- ---------- --------
Group Statement of Cash Flows
For the Period ended 30 June 2017
Group
-----------------------------------------------
52 weeks 74 weeks
to to
30 June 2017 30 June 2016
Note GBPm GBPm
restated
--------------------------------------- ----- ---------------------- -----------------------
Operating activities
Cash generated from operations 3 5.8 16.3
Corporation tax paid (4.2) (5.8)
Dividends paid (14.5) (14.5)
Dividends received - -
Finance income - -
Finance cost - -
---------------------- -----------------------
(12.9) (4.0)
Investing activities
Purchase of property, plant and
equipment (0.5) (39.5)
Purchase of intangible assets (0.3) (1.7)
Sale of investment in shares - -
Sale of property, plant and equipment - -
---------------------- -----------------------
(0.8) (41.2)
Financing activities
Bank loan received - 24.1
Repayment of bank loan (1.3) (1.1)
Interest expense (0.7) (0.6)
---------------------- -----------------------
(2.0) 22.4
Net decrease in cash and cash
equivalents (15.7) (22.8)
--------------------------------------- ----- ---------------------- -----------------------
1 Basis of Preparation
Consolidated financial statements and accounting policies
The preliminary announcement for the period ended 30 June 2017
has been prepared in accordance with International Accounting
Standards ("IAS") and International Financial Reporting Standards
("IFRS") as adopted by the European Union.
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 2017.
The annual financial information presented in this announcement
for the period ended 30 June 2017 is based on, and is consistent
with, that in the audited financial statements of Laura Ashley
Holdings Plc and its subsidiaries ("the Group") for the period
ended 30 June 2017, and those financial statements will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting. The auditor's report on those financial
statements is unqualified and does not contain any statement under
Section 498(2) or (3) of the Companies Act 2006.
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 year ended 30
June 2016 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 2017 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 2017 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 year by the weighted average number of ordinary shares
during the year (excluding treasury shares of 18,272,500).
2017 2016
(52 weeks) (74 weeks)
---------------------------------------------------------------- ---- ---- ------------------- ---------------
Profit for the financial year (GBPm) 4.0 15.9
Exceptional (loss)/gain (GBPm) (2.1) (1.9)
Weighted average number of ordinary shares ('000) - basic and diluted 727,763 727,763
Earnings per share 0.55p 2.18p
Adjusted earnings per share (excluding exceptional items) 0.84p 2.45p
---------------------------------------------------------------------------- ------------------- ---------------
3 Reconciliation of Profit from Operations to Net Cash Inflow from Operations
2017 2016
(52 weeks) (74 weeks)
GBPm GBPm
---------------------------------------------------- --- --- ----------- -----------
Profit from operations 11.0 27.9
Exceptional (loss)/gain (2.1) (1.9)
Amortisation charge 0.9 1.2
Depreciation charge 3.0 4.6
Loss/(gain) on disposal of fixed/non-current asset 0.4 0.2
Exchange movement on property, plant and equipment 0.8 0.1
(Increase)/decrease in inventories (6.6) (0.9)
(Increase)/decrease in receivables (1.9) 4.9
Increase/(decrease) in payables 0.4 (16.7)
Movement in provisions (0.1) (3.1)
Net cash inflow from operations 5.8 16.3
-------------------------------------------------------------- ----------- -----------
4 Analysis of Net Funds
At 30 Jun Cash At 30 Jun
2016 Flow 2017
GBPm GBPm GBPm
-------------------------- ---------- ------ ----------
Cash and cash equivalents 5.0 (15.7) (10.7)
--------------------------- ---------- ------ ----------
5 Segmental Analysis
---------------------Retail--------------
E-Commerce Total Total
Stores & Mail Order Hotel Retail Non-Retail Total
2017 (52 weeks) GBPm GBPm GBPm GBPm GBPm GBPm
----------------------- ----------- ---------------------- -------- ------ ---------- ------
Revenue 196.0 57.3 2.5 255.8 21.2 277.0
----------------------- ----------- ---------------------- -------- ------ ---------- ------
Contribution 3.9 13.8 (0.2) 17.5 11.7 29.2
Share of loss of
associate - (1.4) (1.4)
Indirect overhead
costs (18.2) - (18.2)
Finance costs (1.2) - (1.2)
Exceptional items (2.1) - (2.1)
----------------------- ----------- ---------------------- -------- ------ ---------- ------
Profit before taxation (4.0) 10.3 6.3
----------------------- ----------- ---------------------- -------- ------ ---------- ------
---------------------Retail--------------
E-Commerce Total Total
Stores & Mail Order Hotel Retail Non-Retail Total
2016 (74 weeks) GBPm GBPm GBPm GBPm GBPm GBPm
----------------------- ----------- ---------------------- -------- ------ ---------- ------
Revenue 291.3 73.5 3.6 368.4 32.5 400.9
----------------------- ----------- ---------------------- -------- ------ ---------- ------
Contribution 21.6 17.0 (0.3) 38.3 13.5 51.8
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 11.2 11.6 22.8
----------------------- ----------- ---------------------- -------- ------ ---------- ------
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.
Segmental Analysis (continued)
Non-Current Assets Revenue
2017 2016
2017 2016 (52 weeks) (74 weeks)
GBPm GBPm GBPm GBPm
Destination
UK & Ireland & France 20.3 23.6 257.6 372.3
Other Continental
Europe (1.3) (1.2) 2.8 4.0
Japan 2.6 3.9 9.8 14.6
Singapore 35.1 37.8 - -
Rest of the World - - 6.8 10.0
--------------------------- -------- --- ------- ----------- -----------
56.8 64.1 276.9 400.9
--------------------------- -------- --- ------- ----------- -----------
6. Taxation
The taxation charge for the year comprises taxation for the
Group and the associate entity on current and prior years' taxable
profits.
The effective tax rate for the current year 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 year, 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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