TIDMMUL
RNS Number : 0052I
Mulberry Group PLC
14 June 2017
Mulberry Group plc
Preliminary results for the year ended 31 March 2017
Continued growth, international development and product
investment
Mulberry Group plc ("the Group" or "Mulberry"), the British
luxury brand, announces results for the year ended 31 March
2017.
FINANCIAL HIGHLIGHTS
-- Total revenue up 8% to GBP168.1 million (2016: GBP155.9 million)
-- Profit before tax up 21% to GBP7.5 million (2016: GBP6.2 million)
-- Cash of GBP21.1 million at the end of the period (2016: GBP14.0 million)
-- Inventory reduced to GBP42.8 million (2016: GBP44.4 million)
OPERATING HIGHLIGHTS
-- Retail sales (including Digital) up 8% to GBP128.3 million
(2016: GBP118.7 million) with like-for-like up 5%
-- Revenue from Digital channels increased by 19% to represent
15% of Group revenue (2016: 14%) with localised mulberry.com sites
introduced in China and Korea
-- Establishment of Mulberry (Asia) Limited ("Mulberry Asia"), a
majority-owned entity, to develop the brand in China, Hong Kong and
Taiwan
-- New products introduced under the creative direction of
Johnny Coca, including the new Zipped Bayswater, continue to gain
momentum
CURRENT TRADING
-- New Retail stores opened in Shanghai during April 2017 and in Hong Kong during May 2017
-- Retail like-for-like sales (including Digital) up 1% for the 10 weeks to 3 June 2017
THIERRY ANDRETTA, CHIEF EXECUTIVE OFFICER, COMMENTED:
"During the year we have made good progress. Our sales and
profits are growing, enhancing our strong cash position.
We have advanced our international growth strategy with a new
partnership in Asia and the continued expansion of our omni-channel
offer in key markets.
We have generated strong creative momentum with new products
that are well received by our existing and new customers.
Looking ahead, we will continue to invest in advancing our
international development and increasing Mulberry's relevance to
our customers' rapidly evolving lifestyle."
FOR FURTHER DETAILS PLEASE CONTACT:
Bell Pottinger
Daniel de Belder / Elizabeth Snow 07977 927142 / 020 3772
2582
Mulberry Investor Relations
Allegra Perry 020 7605 6795
GCA Altium
Sam Fuller / Tim Richardson 020 7484 4040
Barclays
Nicola Tennent / Thomas Dugarin 020 3134 9801
BUSINESS REVIEW
Sales
Total revenue grew by 8% to GBP168.1 million (2016: GBP155.9
million). Key elements of this growth have been: 1) Product
launches, 2) Retail, Digital and Omni-channel enhancement, and 3)
Selective Wholesale.
1) Product launches
During the year, a significant number of new products were
launched under the creative direction of Johnny Coca. The Zipped
Bayswater bag has become an immediate bestseller since its launch
during October 2016 and the family will be further extended in
coming seasons. The bag was highlighted during the marketing
campaign, "Modern Heritage", which ran during April and May
2017.
2) Retail, Digital and Omni-channel enhancement
Global Digital sales were up 19% to GBP25.5 million for the
period (2016: GBP21.4 million), accounting for 15% of Group revenue
(2016: 14%). Retail sales (including Digital) were up 8% to
GBP128.3 million for the period (2016: GBP118.7 million) with
like-for-like sales up 5%.
A number of services were added to the Group's omni-channel
offer during the period and local mulberry.com sites were
introduced in China and Korea. In the USA, a local distribution
centre has been established in order to facilitate local
fulfilment.
There were 67 directly operated stores at the end of the period
(2016: 67 stores). The network was refined with two key
priorities:
-- UK enhancement: relocation of the Covent Garden and Bicester stores; and
-- International development: acquisition of the store in
Sydney, Australia and through the Mulberry Asia agreement, signed
at the end of the financial year, the Group has acquired post year
end one store in Hong Kong and in addition will acquire two stores
in China, and one concession in Taiwan during the financial year
ending March 2018; in North America, two stores were closed, New
York (Madison Avenue) and Washington, the digital offer was
enhanced and sales commenced to the Nordstrom department store
chain.
3) Selective Wholesale
Wholesale revenue, comprising sales to partner stores and
selective multi-brand wholesale accounts, increased 7% to GBP39.8
million (2016: GBP37.2 million). The franchise store network at the
period end had a total of 52 stores in Asia, Europe and the Middle
East (2016: 55 stores). As highlighted above, the four stores
acquired by Mulberry Asia will join the Group's own Retail store
portfolio during the financial year to March 2018.
The Wholesale sales trend reflects a positive reaction to the
new collections. Selective new wholesale accounts were opened in
Europe, North America and Asia.
52 weeks to 31-Mar 52 weeks to 31-Mar Total change (this Like-for-like**
2016 (GBP million) 2017 (GBP million) year vs last year) change (this year vs
last year)
----------------------- ---------------------- ---------------------- ---------------------- ---------------------
UK Retail Sales* 97.4 106.8 +10% +5%
International Retail
Sales* 21.3 21.5 +1% +7%
Group Retail Sales 118.7 128.3 +8% +5%
Wholesale Sales 37.2 39.8 +7% n/a
Group Total Sales 155.9 168.1 +8% n/a
----------------------- ---------------------- ---------------------- ---------------------- ---------------------
* Regional splits include Digital sales
** LFL is defined as the year-on-year change in sales from
stores which have been trading for 12 months after the anniversary
of the store opening
Digital sales increased by 19% during the year to 31 March
2017
Financial
Gross margin for the year to 31 March 2017 was 61.6% (2016:
62.0%). After incurring significant production start-up costs due
to a large number of new designs introduced during the first six
months, production efficiencies returned to normal levels during
the second six months of the year. Gross margin reflects a one-off
cost of GBP0.6 million relating to the stock repurchase associated
with the North Asia acquisition.
Operating expenses (net) for the year increased to GBP96.5
million (2016: GBP90.5 million) primarily due to higher Retail
store costs of GBP3.7 million and increased marketing, advertising
and promotion costs of GBP1.6 million.
Profit before tax was GBP7.5 million (2016: GBP6.2 million)
after accounting for non-recurring costs relating to activities in
North Asia (c. GBP0.8 million), adverse currency movements (c.
GBP0.5 million) and non-cash store impairments (c. GBP1.1
million).
The tax charge for the year was GBP2.5 million (2016: GBP3.5
million) giving an effective tax rate of 33.8% (2016: 56.8%)
following the implementation of a revised transfer pricing policy
during the year. The Group expects the effective tax rate to remain
at this level in future.
Capital expenditure for the period was GBP5.3 million, including
GBP3.2 million related to stores, GBP0.9 million in IT systems and
GBP0.6 million in factories.
Inventories decreased to GBP42.8 million at 31 March 2017 from
GBP44.4 million at 31 March 2016 reflecting an on-going initiative
to reduce inventory levels in the business.
The Group generated cash of GBP7.1 million during the year with
cash balances of GBP21.1 million as at 31 March 2017 (2016: GBP14.0
million) and has no debt.
The Board of Mulberry seeks to balance paying dividends to
shareholders with investing in the business. The Board remains
confident of the medium term outlook and is recommending the
payment of a dividend of 5.0p per ordinary share (2016: 5.0p) which
will be paid on 23 November 2017 to shareholders on the register at
27 October 2017.
NORTH ASIA
As previously communicated, the Group has created a new entity,
Mulberry (Asia) Limited ("Mulberry Asia") with Challice Limited
("Challice") to operate its business in China, Hong Kong and
Taiwan. As a result the existing Distribution Agreement with Club
21 for the Asia-Pacific region has been modified to remove Hong
Kong, China and Taiwan from Club 21's distribution territory.
Challice, which owns c. 56% of the Group's share capital, is under
the same ultimate shareholder control as Mulberry's existing
distributor in the region, Club 21. The Group owns 60% of the share
capital of Mulberry Asia, with Challice holding the remaining 40%.
Mulberry Asia commenced trading in Hong Kong during April 2017. A
subsidiary in China and a branch office in Taiwan are being formed
and are expected to be operational during 2017, once the relevant
business licences for those territories have been received. The
total share capital of Mulberry Asia is GBP3.2 million (HK$32
million), of which the Group has invested GBP1.9 million (HK$19.2
million).
CURRENT TRADING AND OUTLOOK
Sales
Like-for-like Retail sales (including Digital) were up 1% for
the 10 weeks to 3 June 2017. In the UK, like-for-like sales were up
2% and continue to benefit from an increase in tourist spending in
London, although domestic demand has been softer. International
like-for-like sales show a weakening in non-strategic locations
with management continuing to focus on the optimisation of the
store network.
Retail like-for-like sales* Retail total sales**
This year vs. 26 weeks to 52 weeks to 10 weeks to 26 weeks to 52 weeks to 10 weeks to
last year (%) 30-Sep 31-Mar 2017 3-June 30-Sep 31-Mar 2017 3-June
2016 2017 2016 2017
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
UK Retail*** +7% +5% +2% +12% +10% -3%
International
Retail*** +10% +7% -3% +2% +1% 0%
Group Retail
total +7% +5% +1% +10% +8% -3%
---------------- --------------- --------------- --------------- --------------- --------------- ---------------
* LFL is defined as the year-on-year change in sales from stores
which have been trading for 12 months after the anniversary of the
store opening
** The decline in total sales reflects the shift in timing of
the half-yearly UK friends and family event which occurred during
April 2016 but took place during March in 2017
*** Regional splits include Digital sales
Digital sales increased by 19% in the year to 31 March 2017 and
increased by 23% in the 10 weeks to 3 June 2017
Wholesale
North Asia (Hong Kong, China, Taiwan) will transition from a
wholesale account to a Retail subsidiary during the current
financial year will reduce the Group's total Wholesale revenue and
increase Retail revenue.
International
The Group will continue to invest in advancing its international
development during the current financial year.
Mulberry Asia's Hong Kong activities have been operational since
3 April 2017, with activities in China and Taiwan expected to
commence during 2017. Since the end of March 2017, the store in
Hong Kong has been relocated to an improved location, a pop-up shop
has been opened in a prominent Hong Kong shopping mall and a new
store has been opened in Shanghai. The Group also plans to relocate
the existing store in Beijing to a better location during Summer
2017.
In Europe and North America, the Group continues to focus on
improving productivity in existing stores, with limited new store
openings and strategic refinement of the store network, as
opportunities arise, coupled with further omni-channel
enhancements.
Omni-channel
The Group has introduced further enhancements to the Digital and
omni-channel offering and will continue to invest in this area
going forward.
In Asia, the mulberry.com sites in China and Korea are expected
to be fully translated during Summer 2017.
Capital expenditure
A new design concept for the Group's stores is being developed.
This will lead to increased capital expenditure as it is rolled
out. This is expected to commence during 2018.
Capital expenditure for the full year ending 31 March 2018 is
expected to be in the region of GBP7.5 million (2017: GBP5.3
million), of which the majority will be on stores.
STRATEGY
The Board's long term objective is to grow Mulberry as a global
luxury brand, offering unique and desirable product at the best
value for price, and thereby create shareholder value. The Group
considers that revenue growth is the key performance indicator with
which this goal can be measured.
Product
Leather goods remain the core commercial focus of the Group.
Following the acceleration of new product launches during the
financial year ended 31 March 2017, there will continue to be a
focus on novelty in coming seasons. This will include the extension
of existing bag families into new sizes, as well as the
introduction of new bag designs to cover all functions and
lifestyles.
Over the longer term, the objective is to reinforce Mulberry as
a lifestyle brand by strengthening complementary categories to its
core leather goods ranges. The key focus categories are footwear,
ready-to-wear, soft accessories and jewellery. As part of the
initiative to further develop these relatively new categories, the
Group will continue to invest in targeted product development and
marketing.
Marketing and Brand
Mulberry continues to invest in building the brand globally via
a dynamic marketing and communication strategy, aiming to engage
with new and loyal customers, whilst enhancing the understanding of
the brand in new and emerging markets. The Group aims to engage
with customers across all touch points via an integrated marketing
approach coupling traditional events and press formats with
extensive use of digital, mobile and social media. Digital
continues to take the highest share of all media investment.
To reinforce its customer-centric business strategy and enhance
the customer experience, the Group recently announced it is
evolving the format of its seasonal collection launches. The Group
will hold private previews of its Spring Summer 2018 collection to
UK editors in London and international press and buyers in Paris.
The collection will be unveiled during London Fashion Week during
February 2018 to offer an instantly shoppable, real-time global
consumer experience. The shift will enable the Group to continue to
drive engagement and increase relevance with its customers.
The Group continues to develop its Somerset-based customer
service operations, including further investment in aftercare and
call centre operations.
Retail, Digital and Omni-channel
The Group will continue to strengthen its position in the UK and
expand internationally through its omni-channel strategy, with well
situated stores complemented by a strong digital presence. The
penetration of omni-channel is expected to grow in the UK, Europe
and North America, through continued enhancements of the offering.
The Group also plans to introduce omni-channel services to newly
controlled territories, including Australia, China and Hong
Kong.
In the short to medium term, the Group plans to continue to
strategically refine and enhance the store network, while focusing
upon improving the range of omni-channel services to match rapidly
evolving customer buying behaviour.
Operations
The Group continues to invest in its operational capability to
maintain a high quality, scalable platform.
The Group's two factories in Somerset manufacture approximately
50% of its bags, reinforcing the authenticity of the Mulberry brand
and, at a practical level, contributing to the attainment of high
product quality standards. Looking forward, the Group is committed
to its "Made in England" strategy and intends to maintain its UK
production of handbags at approximately 50%.
As part of the strategic goal of best-in-class service to our
customers, the Group will continue to invest in IT and Digital
infrastructure and orientate organisational structures around the
customer.
GROUP INCOME STATEMENT
YEARED 31 MARCH 2017
2017 2016
Note GBP'000 GBP'000
-------------------------------- ------- ---------- ----------
Revenue 168,121 155,867
-------------------------------- ------- ---------- ----------
Cost of sales (64,535) (59,300)
-------------------------------- ------- ---------- ----------
Gross profit 103,586 96,567
-------------------------------- ------- ---------- ----------
Operating expenses (96,961) (91,961)
-------------------------------- ------- ---------- ----------
Other operating income 482 1,504
-------------------------------- ------- ---------- ----------
Operating profit 7,107 6,110
-------------------------------- ------- ---------- ----------
Share of results of associates 148 169
-------------------------------- ------- ---------- ----------
Finance income 295 4
-------------------------------- ------- ---------- ----------
Finance expense (17) (66)
-------------------------------- ------- ---------- ----------
Profit before tax 7,533 6,217
-------------------------------- ------- ---------- ----------
Tax (2,543) (3,532)
-------------------------------- ------- ---------- ----------
Profit for the year 4,990 2,685
-------------------------------- ------- ---------- ----------
Attributable to:
-------------------------------- ------- ---------- ----------
Equity holders of the parent 5,338 2,685
-------------------------------- ------- ---------- ----------
Non-controlling interests (348) -
-------------------------------- ------- ---------- ----------
Profit for the year 4,990 2,685
-------------------------------- ------- ---------- ----------
Basic earnings per share 4 8.4p 4.5p
-------------------------------- ------- ---------- ----------
Diluted earnings per share 4 8.4p 4.5p
-------------------------------- ------- ---------- ----------
All activities arise from continuing operations.
Reconciliation to adjusted profit before tax:
2017 2016
GBP'000 GBP'000
-------------------------------------------------------------------- ---------- ----------
Profit before tax 7,533 6,217
-------------------------------------------------------------------- ---------- ----------
Impairment charge related to retail property , plant and equipment 1,087 1,615
-------------------------------------------------------------------- ---------- ----------
Profit on disposal of retail stores - (1,078)
-------------------------------------------------------------------- ---------- ----------
Adjusted Profit before tax - non-GAAP measure 8,620 6,754
-------------------------------------------------------------------- ---------- ----------
Adjusted basic earnings per share 4 10.2p 5.4p
-------------------------------------------------------------------- ---------- ----------
Adjusted diluted earnings per share 4 10.2p 5.4p
-------------------------------------------------------------------- ---------- ----------
GROUP STATEMENT OF COMPREHENSIVE INCOME
YEARED 31 MARCH 2017
2017 2016
GBP'000 GBP'000
-------------------------------------------------------------------------------------- ---------- ----------
Profit for the year 4,990 2,685
-------------------------------------------------------------------------------------- ---------- ----------
Items that may be reclassified subsequently to profit or loss
-------------------------------------------------------------------------------------- ---------- ----------
Exchange differences on translation of foreign operations 1,803 1,330
-------------------------------------------------------------------------------------- ---------- ----------
Losses on a hedge of a net investment taken to equity (5) -
-------------------------------------------------------------------------------------- ---------- ----------
Income tax relating to items that may be reclassified subsequently to profit or loss (361) (276)
-------------------------------------------------------------------------------------- ---------- ----------
Total comprehensive income for the year 6,427 3,739
-------------------------------------------------------------------------------------- ---------- ----------
Attributable to:
-------------------------------------------------------------------------------------- ---------- ----------
Equity holders of the parent 6,775 3,739
-------------------------------------------------------------------------------------- ---------- ----------
Non-controlling interests (348) -
-------------------------------------------------------------------------------------- ---------- ----------
Total comprehensive income for the year 6,427 3,739
-------------------------------------------------------------------------------------- ---------- ----------
GROUP BALANCE SHEET
AT 31 MARCH 2017
2017 2016
GBP'000 GBP'000
---------------------------------------------- ---------- ----------
Non-current assets
---------------------------------------------- ---------- ----------
Intangible assets 10,833 11,088
---------------------------------------------- ---------- ----------
Property, plant and equipment 24,136 28,143
---------------------------------------------- ---------- ----------
Interests in associates 198 206
---------------------------------------------- ---------- ----------
Deferred tax asset 1,500 1,467
---------------------------------------------- ---------- ----------
36,667 40,904
---------------------------------------------- ---------- ----------
Current assets
---------------------------------------------- ---------- ----------
Inventories 42,822 44,378
---------------------------------------------- ---------- ----------
Trade and other receivables 14,669 10,767
---------------------------------------------- ---------- ----------
Cash and cash equivalents 21,093 14,014
---------------------------------------------- ---------- ----------
78,584 69,159
---------------------------------------------- ---------- ----------
Total assets 115,251 110,063
---------------------------------------------- ---------- ----------
Current liabilities
---------------------------------------------- ---------- ----------
Trade and other payables (28,350) (27,805)
---------------------------------------------- ---------- ----------
Current tax liabilities (1,257) (2,342)
---------------------------------------------- ---------- ----------
Total liabilities (29,607) (30,147)
---------------------------------------------- ---------- ----------
Net assets 85,644 79,916
---------------------------------------------- ---------- ----------
Equity
---------------------------------------------- ---------- ----------
Share capital 3,000 3,000
---------------------------------------------- ---------- ----------
Share premium account 11,961 11,961
---------------------------------------------- ---------- ----------
Own share reserve (1,461) (1,474)
---------------------------------------------- ---------- ----------
Capital redemption reserve 154 154
---------------------------------------------- ---------- ----------
Hedging reserve (5) -
---------------------------------------------- ---------- ----------
Foreign exchange reserve 1,063 (379)
---------------------------------------------- ---------- ----------
Retained earnings 69,957 66,654
---------------------------------------------- ---------- ----------
Equity attributable to holders of the parent 84,669 79,916
---------------------------------------------- ---------- ----------
Non-controlling interests 975 -
---------------------------------------------- ---------- ----------
Total equity 85,644 79,916
---------------------------------------------- ---------- ----------
GROUP STATEMENT OF CHANGES IN EQUITY
YEARED 31 MARCH 2017
Share Own Capital Foreign Non-controlling
Share premium share redemption Special Hedging exchange Retained interest Total
capital account reserve reserve reserve* reserve reserve earnings Total GBP,000 equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
As at 1 April
2015 3,000 11,961 (1,601) 154 1,467 - (1,433) 65,141 78,689 - 78,689
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Profit for the
year - - - - - - - 2,685 2,685 - 2,685
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Other
comprehensive
income for the
year - - - - - - 1,054 - 1,054 - 1,054
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Total
comprehensive
income for the
year - - - - - 1,054 2,685 3,739 - 3,739
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Charge for
employee
share-based
payments - - - - - - - 478 478 - 478
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Exercise of
share options - - - - - - - (149) (149) - (149)
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Own shares - - 127 - - - - - 127 - 127
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Dividends paid - - - - - - - (2,968) (2,968) - (2,968)
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Redemption of
reserve - - - - (1,467) - - 1,467 - - -
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Balance at 31
March 2016 3,000 11,961 (1,474) 154 - - (379) 66,654 79,916 - 79,916
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Profit for the
year - - - - - - 4,990 4,990 - 4,996
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Other
comprehensive
income for the
year - - - - - (5) 1,442 - 1,437 - 1,437
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Total
comprehensive
income for the
year - - - - (5) 1,442 4,990 6,427 - 6,427
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Charge for
employee
share-based
payments - - - - - - - 1,086 1,086 - 1,086
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Exercise of
share options - - - - - - - (153) (153) - (153)
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Own shares - - 13 - - - - - 13 - 13
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Adjustment
arising from
movement in
non-controlling
interest - - - - - - - 348 348 975 1,323
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Dividends paid - - - - - - - (2,968) (2,968) - (2,968)
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
Balance at 31
March 2017 3,000 11,961 (1,461) 154 - (5) 1,063 69,957 84,669 975 85,644
----------------- ------------ --------- --------- ------------ ----------- --------- ---------- ------------ --------- ----------------- -----------------
* The special reserve was created as part of a capital
restructuring of the Group in 2004. It was released to retained
earnings during 2016.
GROUP CASH FLOW STATEMENT
YEARED 31 MARCH 2017
2017 2016
GBP'000 GBP'000
-------------------------------------------------------------- ---------- ----------
Operating profit for the year 7,107 6,110
-------------------------------------------------------------- ---------- ----------
Adjustments for:
-------------------------------------------------------------- ---------- ----------
Depreciation and impairment of property, plant and equipment 8,763 8,442
-------------------------------------------------------------- ---------- ----------
Amortisation of intangible assets 1,852 1,949
-------------------------------------------------------------- ---------- ----------
Loss/(profit) on sale of property, plant and equipment 325 (1,316)
-------------------------------------------------------------- ---------- ----------
Share-based payments charge 1,086 478
-------------------------------------------------------------- ---------- ----------
Operating cash flows before movements in working capital 19,133 15,663
-------------------------------------------------------------- ---------- ----------
Decrease/(increase) in inventories 2,344 (4,485)
-------------------------------------------------------------- ---------- ----------
(Increase)/decrease in receivables (2,326) 2,574
-------------------------------------------------------------- ---------- ----------
Increase/(decrease) in payables 168 (1,041)
-------------------------------------------------------------- ---------- ----------
Cash generated from operations 19,319 12,711
-------------------------------------------------------------- ---------- ----------
Income taxes paid (4,021) (4,145)
-------------------------------------------------------------- ---------- ----------
Interest paid (17) (66)
-------------------------------------------------------------- ---------- ----------
Net cash inflow from operating activities 15,281 8,500
-------------------------------------------------------------- ---------- ----------
Investing activities:
-------------------------------------------------------------- ---------- ----------
Interest received 232 4
-------------------------------------------------------------- ---------- ----------
Dividend received from associate 195 167
-------------------------------------------------------------- ---------- ----------
Purchases of property, plant and equipment (4,409) (5,050)
-------------------------------------------------------------- ---------- ----------
Proceeds from disposal of property, plant and equipment 40 4,460
-------------------------------------------------------------- ---------- ----------
Acquisition of intangible fixed assets (962) (855)
-------------------------------------------------------------- ---------- ----------
Net cash used in investing activities (4,904) (1,274)
-------------------------------------------------------------- ---------- ----------
Financing activities:
-------------------------------------------------------------- ---------- ----------
Dividends paid (2,968) (2,968)
-------------------------------------------------------------- ---------- ----------
Settlement of share awards (153) (24)
-------------------------------------------------------------- ---------- ----------
Net cash used in financing activities (3,121) (2,992)
-------------------------------------------------------------- ---------- ----------
Net increase in cash and cash equivalents 7,256 4,234
-------------------------------------------------------------- ---------- ----------
Cash and cash equivalents at beginning of year 14,014 9,900
-------------------------------------------------------------- ---------- ----------
Effect of foreign exchange rate changes (177) (120)
-------------------------------------------------------------- ---------- ----------
Cash and cash equivalents at end of year 21,093 14,014
-------------------------------------------------------------- ---------- ----------
NOTES
1. BASIS OF PREPARATION
The financial information in this announcement, which was
approved by the Board of Directors on 13 June 2017, does not
constitute the Company's statutory accounts for the years ended 31
March 2017 or 2016, but is derived from those accounts.
Statutory accounts for the year ended March 2016 have been
delivered to the Registrar of Companies and those for the year
ended 31 March 2017 have been approved and will be delivered to the
Registrar of Companies following the Company's Annual General
Meeting. The auditors have reported on those accounts, their
reports were unqualified and did not draw attention to any matters
by way of emphasis without qualifying their reports and did not
contain any statement under section 498 (2) or (3) of the Companies
Act 2006.
Whilst the financial information included in this preliminary
announcement has been completed in accordance with International
Financial Reporting Standards (IFRS), this announcement itself does
not contain sufficient information to comply with IFRS.
2. Accounting policies
During the current year the following new and revised Standards
and Interpretations have been adopted but have not had an impact on
the Group:
-- Amendments to IAS 16: Property, Plant and Equipment and IAS 38: Intangible assets.
At the date of approval of these financial statements, the
following Standards and Interpretations which have not been applied
in these financial statements were in issue but not yet
effective:
-- IFRS 9: Financial Instruments;
-- IFRS 15: Revenue from Contracts with Customers; and
-- IFRS 16: Leases.
-- IFRS 2 (amendments)
-- IAS 7 (amendments)
-- IAS 12 (amendments)
IFRS 16 sets out the principles for the recognition,
measurement, presentation and disclosure of leases for both lessees
and lessors. It replaces IAS 17 Leases and IFRIC 4 Determining
whether an arrangement contains a lease. The most significant
changes are in relation to lessee accounting. Under the new
Standard, the concept of assessing a lease contract as either
operating or financing is replaced by a single lessee accounting
model. Under this new model, substantially all lease contracts will
result in a lessee acquiring a right-to-use asset and obtaining
financing. The lessee will be required to recognise a corresponding
asset and liability. The asset will be depreciated over the term of
the lease and the interest on the financing liability will be
charged over the same period. The Standard is effective for annual
periods beginning on or after 1 January 2019, however it is not
currently endorsed by the European Union. Adopting this new
Standard will result in a fundamental change to the Group's balance
sheet, with right-to-use assets and accompanying financing
liabilities for the Group's retail stores, warehouses and offices
being recognised for the first time. The income statement will also
be impacted, with rent expense relating to operating leases being
replaced by a depreciation charge arising from the right-to-use
assets and interest charges arising from lease financing. The full
impact of these changes will be quantified closer to the date of
adoption.
Except for IFRS 16, the Directors do not expect that the
adoption of the Standards listed above will have a material impact
on the financial statements of the Group in future periods. Beyond
the information above, it is not practicable to provide a
reasonable estimate of the effect of these Standards until a
detailed review has been completed.
3. DIVIDENDS
2017 2016
GBP'000 GBP'000
---------------------------------------------------------------------------------------------- ---------- ----------
Dividend for the year ended 31 March 2016 of 5p (2015: 5p) per share paid on 24 November 2016 2,968 2,968
---------------------------------------------------------------------------------------------- ---------- ----------
Proposed dividend for the year ended 31 March 2017 of 5p per share (2016: 5p) 2,968 2,968
---------------------------------------------------------------------------------------------- ---------- ----------
This proposed dividend is subject to approval by shareholders at
the Annual General Meeting and has not been included as a liability
in these financial statements.
4. EARNINGS PER SHARE ('EPS')
2017 2016
pence pence
------------------------------------- -------- --------
Basic earnings per share 8.4 4.5
------------------------------------- -------- --------
Diluted earnings per share 8.4 4.5
------------------------------------- -------- --------
Adjusted basic earnings per share 10.2 5.4
------------------------------------- -------- --------
Adjusted diluted earnings per share 10.2 5.4
------------------------------------- -------- --------
Earnings per share is calculated based on the following
data:
GBP'000 GBP'000
----------------------------------------------------------------------- ---------- ----------
Profit for the year for basic and diluted earnings per share 4,990 2,685
----------------------------------------------------------------------- ---------- ----------
Adjustments to include exceptional items:
----------------------------------------------------------------------- ---------- ----------
Impairment relating to retail assets 1,087 1,615
----------------------------------------------------------------------- ---------- ----------
Profit on disposal of retail stores - (1,078)
----------------------------------------------------------------------- ---------- ----------
Adjusted profit for the year for basic and diluted earnings per share 6,077 3,222
----------------------------------------------------------------------- ---------- ----------
Million Million
--------------------------------------------------------------------------- ---------- ----------
Weighted average number of ordinary shares for the purpose of basic EPS 59.4 59.3
--------------------------------------------------------------------------- ---------- ----------
Effect of dilutive potential ordinary shares : share options 0.1 0.5
--------------------------------------------------------------------------- ---------- ----------
Weighted average number of ordinary shares for the purpose of diluted EPS 59.5 59.8
--------------------------------------------------------------------------- ---------- ----------
The weighted average number of ordinary shares in issue during
the year excludes those held by the Mulberry Group Plc Employee
Share Trust
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR ZMGMVMFRGNZZ
(END) Dow Jones Newswires
June 14, 2017 02:00 ET (06:00 GMT)
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