TIDMALY
RNS Number : 4459Y
Ashley (Laura) Hldgs PLC
09 September 2015
9(th) September 2015
LAURA ASHLEY HOLDINGS plc
("the Group")
Laura Ashley Holdings plc announces its results for the 26 weeks
to 1 August 2015
Summary
-- Profit before taxation of GBP8.4m (2014: GBP8.5m).
-- Total Group sales down 3.0% to GBP139.7m (2014: GBP144.0m).
-- Like-for-like retail sales up by 7.0%.
-- Online revenue up by 4.5%.
-- Hotel revenue increased by 44%.
-- GBP20.2m net cash balance.
-- Interim dividend of 1.00 pence per share (2014: 1.00 pence per share).
Commenting on the results, Tan Sri Dr Khoo Kay Peng, Chairman,
said:
"I am pleased to report that our business has maintained the
robust performance of recent years with a healthy increase in
like-for-like, retail sales. Our U.K. business, buoyed by a strong
performance from our online channel, has shown resilience and
potential for continued growth. The hotel is realising its
potential and is proving to be a valuable asset to the brand.
We are encouraged as we enter the second half of the year. We
will continue to work with our overseas franchisees to ensure that
we maximise the international opportunities for our franchise
partners and the Group. Development and improvement of our digital
platform, which has been a core Group strategy over recent years,
will remain a key focus as we strive to deliver a high quality,
multi channel experience for our customers.
The enduring appeal of our great British brand and the loyalty
of our worldwide customers give us confidence and optimism that the
growth of recent years should continue."
Enquiries:
Laura Ashley Holdings plc
Seán Anglim CFO / Joint COO 020 7880 5100
Media Enquiries
Brunswick
Anita Scott
Helen Smith 020 7404 5959
Corporate Broker
Cantor Fitzgerald Europe
Richard Redmayne
Marc Milmo
Catherine Leftley 020 7894 7000
Overview
For the 26 weeks to 1 August 2015, total Group sales decreased
by 3.0% to GBP139.7m compared with the same period last year (2014:
GBP144.0m). Total UK retail sales increased by 0.7% to GBP125.5m
(2014: GBP124.6m). Like-for-like sales grew by 7.0% over the same
period. e-Commerce sales grew by GBP1.0m (4.5%) to GBP23.5m (2014:
GBP22.5m).
Profit before taxation fell by 1.2% to GBP8.4m, (2014:
GBP8.5m).
Operating expenses fell by 1.0% compared to the same period last
year.
Cash Flow and Balance Sheet
As at 1 August 2015, there were no bank borrowings and the net
cash balance was GBP20.2m. Inventory was in line with
requirements.
On 3 August 2015, a loan of Singapore Dollars 42.9m (GBP20.2m)
was drawn down by the Group upon the acquisition of the head office
of the Group's Asian operation in Singapore. This represents 65% of
the purchase price of the building. The remainder of the purchase
price was funded from cash reserves of the Group.
Dividend
The Board has approved the payment of an interim dividend of
1.00 pence per share (2014: 1.00 pence per share). The interim
dividend will be paid on 9 October 2015 to all shareholders on the
register at the close of business on 18 September 2015. The ex
dividend date will be 17 September 2015.
UK Retail
As at 1 August 2015, the property portfolio in the UK comprised
198 stores (January 2015: 205). The portfolio is as follows: 120
Mixed Product stores, 49 Home stores, 25 Home concession stores, 3
Gifts & Accessories stores and 1 Clearance outlet. During the
first half, three new stores were opened and ten were closed,
reducing total selling space by 2.0% to 745,000 square feet.
Total e-Commerce sales were up 4.5% on last year and now
represent 19.0% of total UK Retail sales (2014: 18%). We now offer
online delivery to the Benelux countries and early indications are
that this will grow quickly.
Product
The UK business is split into four main categories. For the 26
weeks ended 1 August 2015, the relative split of UK sales is as
follows: Furniture 31%, Home Accessories 29%, Decorating 23% and
Fashion 17%.
Furniture
The Furniture product category includes upholstered and cabinet
furniture, beds and mirrors.
Furniture sales for the 26 weeks to 1 August 2015 increased by
8.8% over the same period last year with like-for-like sales up
10.4%. This is an extremely impressive performance considering the
many new entrants to market over the past two years in this
category. With seventeen wooden furniture ranges available in many
colours and finishes, upholstery which is available in over one
hundred fabrics and an extended range of beds, mattresses &
mirrors, the depth of choice now on offer has enabled this
category's growth and broadened its appeal. Further product
development has added to the range in Autumn / Winter 2015.
Home Accessories
The Home Accessories product category includes lighting, gifts,
bed linen, rugs, throws, cushions and children's accessories.
Home Accessories sales for the 26 weeks to 1 August 2015
increased by 8.2% over the same period last year with like-for-like
performance up by 10.5%. As the stand out category, significant
growth was achieved by our lighting, bed linen and gift ranges, all
of which significantly outperformed the market. Diversity, quality
and the ability to complement and enhance our decorating themes are
what sets us apart in this category.
Early indications are that this growth will continue into
Autumn/Winter 2015.
Decorating
This category includes fabric, curtains, wallpaper, paint and
decorative accessories.
Decorating sales for the 26 weeks to 1 August 2015 increased by
2.1%, with like-for-like sales up 4.0%. Decorating is the
cornerstone of the Home business. Our signature designs, colours
and prints are imbued with the innate qualities of the Brand
handwriting and illustrate its diversity and range. Our best
performing products in this category were our made to measure
curtains, readymade curtains and our paint ranges.
Fashion
This category includes adult fashion, fashion accessories and
perfumery.
Fashion sales for the 26 weeks to 1 August 2015 decreased by
5.0% over the same period last year, with like-for-like sales up
0.6%. We had many successes within our fashion ranges over the
first half and will continue to focus on the core values of the
brand which include design, quality and print. Undoubtedly the most
competitive category in which we trade, we expect like-for-like
growth to continue this year.
Hotel
Following the good sales performance in the year to January
2015, which saw a year on year increase of 37%, the hotel has
continued to improve steadily with further growth over the 6 month
period of 44%. We expect this growth to continue over the second
half.
International Operations
Contributing 8.4% of total Group revenue, our international
Franchising and Licensing channel is an extremely important and
strategic part of our business. As at 1 August 2015, there were 296
franchised stores (303 as at January 2015) in 30 territories
worldwide.
Franchise and Licensing revenue fell by 31.5% to GBP11.7m (2014:
GBP17.1m) during the 26 weeks to 1 August 2015. The primary reason
for this shortfall against last year was the performance of the
Japanese market where, following a rise in local sales tax (GST),
the domestic economy has been sluggish. This, aligned to a weak
Japanese Yen over the period, has resulted in a sharp fall in
demand. The political and economic difficulties of Russia and
Ukraine have also contributed to a relatively weak performance.
However, good growth was recorded in a number of territories
including South Korea and the Middle East.
We expect performance to improve during the second half of 2015.
The Laura Ashley brand and product continues to resonate with our
many worldwide customers. The acquisition of the Group's Asian head
office in Singapore will lead the company's expansion into the
Asian market.
Current Trading and Outlook
Trading for the five weeks to 5 September is up 5.7% on a
like-for-like basis.
Condensed Group Statement of Comprehensive Income
For the 26 weeks ended 1 August 2015
26 weeks
to
26 weeks 52 weeks
to to
1 August 26 July 31 January
2015 2014 2015
(unaudited) (unaudited) (audited)
Note GBPm GBPm GBPm
Revenue 2 139.7 144.0 303.6
Cost of sales (79.2) (83.2) (174.5)
------------------------------------- ----- ------------- ------------- ------------
Gross profit 60.5 60.8 129.1
Operating expenses (52.5) (53.0) (105.3)
------------------------------------- ----- ------------- ------------- ------------
Profit from operations 8.0 7.8 23.8
Share of operating profit/(loss)
of associate 0.3 0.7 (0.5)
Finance costs - - (0.4)
------------------------------------- ----- ------------- ------------- ------------
Profit before taxation excluding
exceptional items 8.3 8.5 22.9
Exceptional items 0.1 - 0.6
------------------------------------- ----- ------------- ------------- ------------
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Profit before taxation 8.4 8.5 23.5
Taxation (1.7) (2.2) (5.2)
------------------------------------- ----- ------------- ------------- ------------
Profit for the financial period* 6.7 6.3 18.3
Other comprehensive income:
Actuarial loss on defined benefit
pension scheme - - (9.4)
Deferred tax effect - - 2.0
------------------------------------- ----- ------------- ------------- ------------
Total that will not be subsequently
reclassified to profit and loss - - (7.4)
------------------------------------- ----- ------------- ------------- ------------
Exchange differences on translation
of investments 0.3 1.0 2.3
Other reserve movements (1.2) (1.2) (3.4)
Total that may be subsequently
reclassified to profit and loss (0.9) (0.2) (1.1)
------------------------------------- ----- ------------- ------------- ------------
Other comprehensive loss for
the period net of tax (0.9) (0.2) (8.5)
------------------------------------- ----- ------------- ------------- ------------
Total comprehensive income for
the period 5.8 6.1 9.8
------------------------------------- ----- ------------- ------------- ------------
*Earnings per share - basic
and diluted calculated based
on profit for the financial
period 0.93p 0.87p 2.51p
------------------------------------- ----- ------------- ------------- ------------
The Group's results shown above are derived entirely from
continuing operations.
Condensed Group Balance Sheet
As at 1 August 2015
At 1 August At 26 July At 31 January
2015 2014 2015
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
Non-current assets
----------- ------------- --------------
Intangibles 2.2 2.1 2.0
Property, plant and equipment 24.9 22.1 21.2
Deferred tax asset 3.6 1.9 3.6
Investment in associate 4.2 5.0 3.7
34.9 31.1 30.5
Current assets
----------- ------------- --------------
Inventories 48.1 50.5 51.0
Trade and other receivables 19.4 23.6 22.1
Cash and cash equivalents 20.2 13.8 27.8
----------- ------------- --------------
87.7 87.9 100.9
-------------------------------------- ----------- ------------- --------------
Total assets 122.6 119.0 131.4
-------------------------------------- ----------- ------------- --------------
Current liabilities
----------- ------------- --------------
Current tax liabilities 1.7 2.6 2.1
Trade and other payables 60.0 59.0 66.7
----------- ------------- --------------
61.7 61.6 68.8
Non-current liabilities
----------- ------------- --------------
Retirement benefit liabilities 17.5 8.8 17.8
Deferred tax liabilities 0.2 0.3 0.2
Provisions and other liabilities 0.7 0.8 0.7
----------- ------------- --------------
18.4 9.9 18.7
-------------------------------------- ----------- ------------- --------------
Total liabilities 80.1 71.5 87.5
-------------------------------------- ----------- ------------- --------------
Net assets 42.5 47.5 43.9
-------------------------------------- ----------- ------------- --------------
Equity
Share capital 37.3 37.3 37.3
Share premium 86.4 86.4 86.4
Own shares (0.8) (0.8) (0.8)
Retained earnings (80.4) (75.4) (79.0)
-------------------------------------- ----------- ------------- --------------
Total equity 42.5 47.5 43.9
-------------------------------------- ----------- ------------- --------------
Condensed Group Statement of Changes in Shareholders' Equity
As at 1 August 2015
Share Share Own Retained Total
capital premium shares earnings equity
GBPm GBPm GBPm GBPm GBPm
----------------------------- --------- --------- -------- ---------- --------
Balance as at 25 January
2014 37.3 86.4 (0.8) (74.3) 48.6
Profit for the period ended
26 July 2014 - - - 6.3 6.3
Dividend paid - - - (7.2) (7.2)
Other comprehensive loss - - - (0.2) (0.2)
----------------------------- --------- --------- -------- ---------- --------
Balance as at 26 July 2014 37.3 86.4 (0.8) (75.4) 47.5
Profit for the period ended
31 January 2015 - - - 12.0 12.0
Dividend paid - - - (7.3) (7.3)
Other comprehensive income - - - (8.3) (8.3)
----------------------------- --------- --------- -------- ---------- --------
Balance as at 31 January
2015 37.3 86.4 (0.8) (79.0) 43.9
Profit for the period ended
1 August 2015 - - - 6.7 6.7
Dividend paid - - - (7.2) (7.2)
Other comprehensive loss - - - (0.9) (0.9)
----------------------------- --------- --------- -------- ---------- --------
Balance as at 1 August 2015 37.3 86.4 (0.8) (80.4) 42.5
----------------------------- --------- --------- -------- ---------- --------
Condensed Group Cash Flow Statement
For the 26 weeks ended 1 August 2015
26 weeks 26 weeks 52 weeks
to to to
1 August 26 July 31 January
2015 2014 2015
(unaudited) (unaudited) (audited)
Note GBPm GBPm GBPm
Operating activities
------------- ------------- -------------
Net cash inflow/(outflow)
from operations 5 7.7 (1.0) 23.8
Corporation tax paid (2.1) (1.7) (5.2)
Dividend paid (7.2) (7.2) (21.8)
Dividend received - - 0.1
Finance cost - - (0.4)
------------- ------------- -------------
(1.6) (9.9) (3.5)
Investing activities
------------- ------------- -------------
Purchase of intangible
assets (1.0) (0.1) (0.2)
Purchase of property, plant
and equipment (5.0) (0.4) (1.8)
Sale of investment in shares - - 8.0
Sale of property, plant
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and equipment - - 1.2
Net cash receive from associate - 0.1 -
(6.0) (0.4) 7.2
Net (decrease)/increase
in cash and cash equivalents (7.6) (10.3) 3.7
--------------------------------- ----- ------------- ------------- -------------
Reconciliation of Net Cash Flow to movement in Net Funds
for the 26 weeks ended 1 August 2015
26 weeks 26 weeks 52 weeks
to to to
1 August 26 July 31 January
2015 2014 2015
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
---------------------------- ---------------- ------------- -------------
Net (decrease)/increase in
cash and cash equivalents (7.6) (10.3) 3.7
Net funds at the beginning
of the period 27.8 24.1 24.1
--------------------------------- ----------- ------------- -------------
Net funds at the end of the
period 20.2 13.8 27.8
--------------------------------- ----------- ------------- -------------
Notes
1 Basis of preparation
This condensed set of financial statements has been prepared in
accordance with the requirements of IAS 34 'Interim Financial
Reporting' as adopted by the European Union ('EU').
As required by the Disclosure and Transparency Rules of the UK's
Financial Conduct Authority and other than described below, this
condensed set of financial statements has been prepared by applying
the accounting policies and presentation that were applied in the
preparation of the Company's published financial statements for the
financial year ended 31 January 2015, which were prepared in
accordance with International Financial Reporting Standards as
adopted by the EU.
No new or amended financial accounting standards have been
adopted in these financial statements.
The statutory audited accounts for the year ended 31 January
2015 have been delivered to the Registrar of Companies in England
and Wales. The Auditor's report on these accounts was unqualified
and did not contain statements under Section 498 of the Companies
Act 2006.
These half-year condensed financial statements are unaudited,
not reviewed in accordance with 'International Standard on Review
Engagements (UK and Ireland) 2410' and do not constitute statutory
accounts within the meaning of Section 434(3) of the Companies Act
2006.
2 Segmental analysis
26 weeks 26 weeks 52 weeks
to to to
1 August 26 July 31 January
2015 2014 2015
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
------------------------------ ---------------- ------------- ------------
Revenue
Retail:
----------- ------------- ------------
Stores 102.6 103.0 220.6
e-Commerce & Mail Order 23.5 22.5 48.5
Hotel 1.2 0.8 1.9
----------- ------------- ------------
Total Retail 127.3 126.3 271.0
Non-Retail 12.4 17.7 32.6
----------------------------------- ----------- ------------- ------------
Total Revenue 139.7 144.0 303.6
----------------------------------- ----------- ------------- ------------
Retail
Contribution:
----------- ------------- ------------
Stores 7.7 7.0 19.6
e-Commerce & Mail Order 5.4 4.6 9.6
Hotel (0.1) (0.2) (0.4)
----------- ------------- ------------
Total contribution 13.0 11.4 28.8
Indirect overhead costs (10.1) (10.2) (18.4)
Finance costs - - (0.4)
Exceptional costs 0.1 - 0.6
----------------------------------- ----------- ------------- ------------
Profit before taxation 3.0 1.2 10.6
----------------------------------- ----------- ------------- ------------
Non-Retail
Contribution 5.1 6.6 13.4
Share of associate profit 0.3 0.7 (0.5)
Profit before taxation 5.4 7.3 12.9
----------------------------------- ----------- ------------- ------------
Total Retail and Non-Retail
Contribution 18.1 18.0 42.2
Indirect overhead costs (10.1) (10.2) (18.4)
Share of associated profit 0.3 0.7 (0.5)
Finance costs - - (0.4)
Exceptional costs 0.1 - 0.6
----------------------------------- ----------- ------------- ------------
Profit before taxation 8.4 8.5 23.5
----------------------------------- ----------- ------------- ------------
2 Segmental analysis (continued)
26 weeks 26 weeks 52 weeks
to to to
1 August 26 July 31 January
2015 2014 2015
(unaudited) (unaudited) (audited)
GBPm GBPm GBPm
-------------------------- ------------- ------------- ------------
Non-Current Assets
Destination
UK, Ireland & France 30.7 26.1 26.8
Rest of the World 4.2 5.0 3.7
-------------------------- ------------- ------------- ------------
Total Non-Current Assets 34.9 31.1 30.5
-------------------------- ------------- ------------- ------------
Revenue
Destination
UK, Ireland & France 127.3 126.3 273.9
Continental Europe 1.6 2.8 3.7
Rest of World 10.8 14.9 26.0
Total Revenue 139.7 144.0 303.6
-------------------------- ------------- ------------- ------------
The reported segments are consistent with the Group's internal
reporting for performance measurement and resource allocation. The
Group does not allocate indirect overhead costs between its retail
and non-retail segments. As significant elements of the indirect
overhead costs, being head office expenditure, 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.
3 Taxation
Taxation has been calculated by applying the forecast full year
effective rate of tax in the individual fiscal territories to the
results for this period.
4 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 year (excluding treasury shares of 18,272,500).
26 weeks 26 weeks 52 weeks
to to to
1 August 26 July 31 January
2015 2014 2015
(unaudited) (unaudited) (audited)
--------------------------------- ------------- ------------- ------------
Profit for the financial period
(GBPm) 6.7 6.3 18.3
Weighted average number of
ordinary shares -
basic and diluted ('000) 727,763 727,763 727,763
Earnings per share 0.93p 0.87p 2.51 p
5 Reconciliation of profit from operations to net cash inflow/(outflow) from
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