RNS Number:3580U
Monsoon PLC
19 January 2004
MONSOON plc
INTERIM RESULTS FOR THE SIX MONTHS ENDED 29 NOVEMBER 2003
HIGHLIGHTS
* Record first half profits of #21m up 19% on the previous year.
* Like-for-like sales up 6% in the first six months to 29 November 2003.
* Over the Christmas period, for the five weeks to 3 January 2004,
like-for-like sales up 2%. This was in line with expectations.
6 months to 6 months to
29.11.2003 23.11.2002
Turnover #131.1m #107.7m +22%
Operating profit #20.6m #18.0m +14%
Profit before tax before #21.0m #18.5m +14%
exceptionals
Profit before tax after #21.0m #17.7m +19%
exceptionals
Basic EPS before exceptionals 8.23p 7.06p +17%
Basic EPS after exceptionals 8.23p 6.60p +25%
Dividend per share - 1.5p
* In the UK and Ireland 16 new stores were opened, including two flagship
stores, one a Monsoon store at Marble Arch in London and the other a Dual
Monsoon and Accessorize store in the Bullring Centre in Birmingham.
* 30 new international stores opened bringing the total to 136.
Commenting on the results, Peter Simon, Chairman said:
"These record results speak for themselves. I wish to thank the individuals,
managers, directors and international partners of Monsoon and Accessorize whose
commitment, expertise, hard work and enthusiasm to the brands have made it
possible to deliver such an excellent achievement."
Enquiries:
Monsoon plc Tel: 020 7313 4000
Peter Simon, Chairman
Gavin Anderson & Company Tel: 020 7554 1400
Neil Bennett/Laura Hickman/Charlotte Stone
OPERATING AND FINANCIAL REVIEW
Overview
Group operating profit for the first half of the year increased 14% from #18.0m
to #20.6m. Profit before tax after exceptionals increased 19% from #17.7m to
#21.0m. Like-for-like sales increased by 6%, and total sales were up 22% to
#131.1m. Earnings per share increased 25%, up from 6.60p to 8.23p. There will be
no dividend at the interim stage.
UK and Ireland
Operating profits increased 14% from #16.4m to #18.7m. Turnover increased by 21%
from #100.0m to #120.9m and like-for-like sales increased 7%.
During the period 16 new stores were opened including two flagship stores; one a
Monsoon store at Marble Arch, London and the other a Dual Monsoon and
Accessorize store in the Bullring Centre, Birmingham and three stores were
re-sited. 10 stores were closed, nine of which were John Lewis concessions,
bringing the total number of stores in the UK and Ireland to 293 (129
Accessorize, 101 Monsoon, 62 Dual and one concession). New till systems have
been installed in all UK stores by the end of November with a rollout to all
Irish stores planned for completion in February 2004. These systems have
enhanced customer service and stock control, and will enable the Company to
embrace new Chip/PIN technology.
International
Operating profits increased 18% from #1.6m to #1.9m. Turnover, which represents
mainly the sale of merchandise to and royalty income from franchisees, increased
by 31% from #7.7m to #10.1m.
Retail customer sales (including local sales tax) from the stores amounted to
#26.9m, an increase of 55% on last year. Like-for-like sales were up 1% in the
period
Our international business continues to make good progress with 30 new stores
opened in the six-month period, including four stores in two new countries -
Norway and Switzerland. We now have 136 stores trading in 24 countries outside
the UK and Ireland. In total 12 stores were closed, eight of which were in the
USA, as our joint venture was terminated and final closure costs of #285,000
were incurred. In addition our two remaining Monsoon stores in Australia ceased
trading incurring final losses of #166,000 in the half year, although 2 new
Accessorize stores have opened in Australia in the same period.
We have opened a further 5 stores in December and agreed a franchise agreement
for Sweden
Finances
Our financial position remains strong with net funds at the end of the period
totalling #38.1m (last year #32.2m).
We are currently in early negotiations for substantial capital acquisitions
internationally which, if completed, would utilise a significant part of the
Company's cash resources, and which it is anticipated would provide substantial
benefits in the long term.
Dividends
Given the company's prudent policy of cash management and absence of bank
borrowings, and the negotiations outlined in the Finances section above, as part
of a review of dividend policy, the Board has decided to review the subject of
dividend payments on an annual rather than on a bi-annual basis for the
foreseeable future. Accordingly no interim dividend is being paid at the interim
stage.
Current Trading
Like-for-like sales for the five weeks up to 3 January 2004 were up 2%. Total
sales were 18% higher.
We have maintained margin and our stock position is as planned during this
period.
Copyright and Design Infringement
Monsoon and Accessorize are strong brands with a highly distinctive identity. We
are vigorous in our pursuit of those who attempt to copy our designs to protect
the exclusivity of the Monsoon and Accessorize brands. We take the issue of
copyright and design infringement very seriously and have been successful in our
pursuit of those who have copied our designs.
Outlook
In the first half of the year our performance of generating record profits again
gives us confidence that our strategy of expansion in the UK and Ireland and
internationally is working to build long term value. We shall continue to
develop our product, invest in new stores and refits utilising our financial
resources to fund our capital expenditure requirements.
UNAUDITED STATEMENT OF GROUP RESULTS
for the six months ended Six Six Year
29 November 2003 months to months to to
Note November November May
2003 2002 2003
#'000 #'000 #'000
------------------------ ----- --------- --------- --------
Turnover 2 131,057 107,697 231,180
------------------------ ----- --------- --------- --------
Operating profit 20,616 18,008 38,217
Net interest receivable 433 506 785
Exceptional amount written off 3 - (815) (815)
investment
------------------------ ----- --------- --------- --------
Profit before taxation 21,049 17,699 38,187
Taxation 4 (6,379) (5,962) (11,427)
------------------------ ----- --------- --------- --------
Profit after taxation 14,670 11,737 26,760
Dividends - (2,670) (8,900)
------------------------ ----- --------- --------- --------
Retained profit for the period 14,670 9,067 17,860
------------------------ ----- --------- --------- --------
Earnings per share 5
Basic 8.23p 6.60p 15.04p
Diluted 8.22p 6.58p 15.00p
Basic before exceptionals 8.23p 7.06p 15.36p
------------------------ ----- ========= ========= ========
Dividend per share - 1.50p 5.00p
------------------------ ----- ========= ========= ========
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
for the six months ended 29 November 2003
Six months to Six months to Year to
November 2003 November 2002 May 2003
#'000 #'000 #'000
------------------------ --------- --------- --------
Profit for the period 14,670 11,737 26,760
Currency translation differences (179) (287) (520)
------------------------ ========= ========= ========
Total gains and losses recognised 14,491 11,450 26,240
in the period
------------------------ ========= ========= ========
BALANCE SHEET
as at 29 November 2003
November November May
2003 2002 2003
#'000 #'000 #'000
------------------------ --------- --------- --------
Fixed assets
Intangible assets 1,258 1,229 1,300
Tangible assets 45,094 35,009 39,812
------------------------ --------- --------- --------
46,352 36,238 41,112
------------------------ --------- --------- --------
Current assets
Stock 25,407 22,570 23,977
Debtors 14.549 12,043 13,206
Cash at bank and in hand 41,687 35,727 40,628
------------------------ --------- --------- --------
81,643 70,340 77,811
Creditors: amounts falling due
within one year (39,059) (39,358) (45,262)
------------------------ --------- --------- --------
Net current assets 42,584 30,982 32,549
------------------------ --------- --------- --------
Total assets less current
liabilities 88,936 67,220 73,661
Provisions for liabilities and
charges (669) (2,543) (424)
------------------------ --------- --------- --------
Net assets 88,267 64,677 73,237
------------------------ --------- --------- --------
Capital and Reserves
Called up share capital 17,855 17,800 17,800
Share premium 572 88 88
Merger reserve 5,271 5,271 5,271
Profit and loss account 64,569 41,518 50,078
------------------------ ========= ========= ========
Equity shareholders' funds 88,267 64,677 73,237
------------------------ ========= ========= ========
CASH FLOW
for the six months ended Six months Six months Year
29 November 2003 to November to November to May
2003 2002 2003
#'000 #'000 #'000
------------------------- ---------- ---------- --------
Operating profit 20,616 18,008 38,217
Depreciation and disposals 2,199 3,625 8,077
Diminution in value of intangible 68 56 128
assets
(Increase) / Decrease in working (3,342) (4,782) (5,350)
capital
------------------------- ---------- ---------- --------
Net cash inflow from operating 19,541 16,907 41,072
activities
Returns on investment and servicing 433 515 762
of finance
Taxation (5,906) (5,471) (13,289)
Capital expenditure and financial (7,507) (4,028) (11,723)
investment
Acquisitions and disposals - (1,269) (1,225)
Equity dividends paid (6,237) (6,221) (8,891)
------------------------- ---------- ---------- --------
Net cash inflow before management of 324 433 6,706
liquid resources and financing
Management of liquid resources (4,047) 2,469 (6,429)
Financing - issue of shares 540 114 114
------------------------- ---------- ---------- --------
(Decrease) / Increase in cash in the (3,183) 3,016 391
period
------------------------- ---------- ---------- --------
Reconciliation of net cash flow to
movement in net funds
(Decrease) / Increase in cash in the (3,183) 3,016 391
period
Movement in liquid resources 4,047 (2,469) 6,429
------------------------- ---------- ---------- --------
Change in net funds resulting from 864 547 6,820
cash flows
Translation differences (179) (88) (1,162)
------------------------- ---------- ---------- --------
Movement in net funds in the 685 459 5,658
period
Net funds at the start of the 37,448 31,790 31,790
period
------------------------- ---------- ---------- --------
Net funds at the end of the period 38,133 32,249 37,448
------------------------- ---------- ---------- --------
NOTES TO THE RESULTS
1. Accounting policies
The financial information has been prepared using the accounting policies set
out in the May 2003 Annual Report. This included a change in the method of
depreciating fixed assets from the reducing balance method to the straight line
method.
2. Turnover and Operating Profit Analysis
The analysis of turnover and operating profit is as follows:
Turnover Operating Profit
-------------------- --------------------
6 months 6 months Year to 6 months 6 months Year
to Nov to Nov May to Nov to Nov to May
2003 2002 2003 2003 2002 2003
#'000 #'000 #'000 #'000 #'000 #'000
----------- -------- -------- ------- -------- -------- -------
UK and Ireland 120,948 99,996 214,408 18,730 16,404 34,117
Rest of World 10,109 7,701 16,772 1,886 1,604 4,100
----------- ======== ======= ======== ======== ======== =======
131,057 107,697 231,180 20,616 18,008 38,217
======== ======= ======== ======== ======== =======
Operating profits were #2.3m from the continuing operations of the international
business before charging store closure costs of #451k for Australia and the USA.
3. Exceptional charge
Following an impairment review in 2002, the Group provided in full against the
fixed asset investment of #815k in M&A Joint Venture LLC in the USA in which it
held 20% of the Capital Stock. Subsequently it was agreed with our partners that
the stores should be closed and this programme was completed at the end of June
2003.
4. Tax
The tax charge for the six months to November 2003 is based on an apportionment
of the estimated tax charge for the full year.
5. Earnings per share
The calculation of basic earnings per ordinary share is based on earnings after
tax of #14.7m (2002: #11.7m) and on 178,176,299 ordinary shares (2002:
177,832,968), being the weighted average number of shares in issue during the
period.
The calculation of diluted earnings per ordinary share is based on the same
profits after tax and weighted average number of shares stated above increased
by the dilutive effect of potential ordinary shares from employee share option
schemes of 293,293 shares (2002: 466,268).
6. Status of financial information
The interim results are unaudited. The accounts for the year to May 2003 are not
full accounts within the meaning of Section 240 of the Companies Act 1985. Full
accounts for that period incorporating an unqualified audit report have been
delivered to the Registrar of Companies.
This information is provided by RNS
The company news service from the London Stock Exchange
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