Oasis Stores PLC - Interim Results
28 September 1998 - 5:31PM
UK Regulatory
RNS No 5186x
OASIS STORES PLC
28th September 1998
Contacts: Michael Bennett, Chairman
Dominic Lavelle, Finance Director
Oasis Stores Plc Tel: 0171 452 1000
Charles Watson
Tom Baldock
Financial Dynamics Tel: 0171 831 3113
OASIS STORES PLC
Interim Results Announcement
For the 26 weeks ending 1st August 1998
Highlights
* Turnover increased by 20% to #47.6m (1997: #39.6m)
* Oasis store sales up 19%
* Like-for-like sales up 9%
* Pre-tax profit up 30% to #4.8m (1997:#3.7m)
* Product well received by customers
* Acquisition of Coast
* Earnings per share increased 30% to 6.13p (1997: 4.70p)
* Dividend up 10% to 2.65p (1997: 2.40p)
Commenting on the results, Chairman Michael Bennett said:
"After last year's disappointment it is very pleasing to report this
improved performance. Our customers' response to the Autumn/Winter 1998
range has been encouraging but, as always, Oasis' performance for the full
year will be dependent on the important Christmas period."
CHAIRMAN'S STATEMENT
INTRODUCTION
I am pleased to report that our recovery from the disappointment of last
year is well underway.
The 26 week period ending 1st August 1998 has produced a result in line with
our expectations. Our product has been well received by our customers,
resulting in a 19% increase in Oasis retail store sales including like-for-
like growth of 9%. This performance corresponds with the growth levels
reported at the AGM in June. When these figures are adjusted for the
effects of foreign exchange movements, they result in total sales growth of
17% including like-for-like of 8%.
Gross margins grew slightly from 51.9% to 52.0%.
Pre-tax profits grew by 30% to #4.8m (1997: #3.7m) and earnings per share
rose by 30% to 6.13p (1997: 4.70p). The Board proposes to raise the interim
dividend by 10% to 2.65p (1997: 2.40p).
UK & IRELAND
During the period, like-for-like sales increased by 9% and total sales by
17%. Our established stores increased both their sales and profit
contribution and the newer stores also performed well. Our concessions
continued to make progress, both on a like-for-like and total sales basis.
In the first half of the year we opened 2 new branches and 2 new concessions
and we plan to open 5 further branches and 3 concessions in the second half
including our first branch in Northern Ireland.
The Irish stores made a valuable contribution to sales, although the bottom
line continues to be affected by the strength of sterling.
OVERSEAS
Germany
Overall sales grew by 77% in the period, including 20% like-for-like growth
before the impact of foreign exchange movements reduced this to 9% like-for-
like. As in Ireland, profitability was affected by the strength of
sterling. No new stores were opened during the period and no openings are
planned for the second half. Our concession in Neuss was closed during the
period.
Licensees
In the period, our overseas licensees represented 4.4% of Oasis' sales, up
from 4.1% last year, and 2 new stores were opened in Taiwan. There are 4
further openings planned for the second half, including a major store in
Kuwait and our first store in Norway.
COAST
In April we acquired the trade and assets of the 'Coast' retail business
which comprised of 29 concessions and one branch. Coast is a womenswear
brand retailing at higher price points than our existing Oasis brand.
It is intended to develop Coast as a separate chain and we plan to open 3
new shops and one concession during the second half. However its impact on
the financial performance of the Company is not expected to be material for
some time.
HEAD OFFICE
Both distribution and head office costs grew in line with plan and costs
have reduced from 44.6% to 43.3% of sales. We opened a buying office in
Hong Kong during the period which is already producing efficiencies in our
supply chain.
We place high importance on ensuring, as far as reasonably possible, that
the business and its trading relationships are not impacted as a result of
year 2000 problems.
A project has been established to review the compliance status of all our
systems, performing remedial or replacement work where necessary and is
closely liaising with our suppliers and business partners on the subject.
The project will be completed during the course of 1999.
OUTLOOK
In the first 7 weeks of the second half, Oasis retail store sales were ahead
by 29% including like-for-like 19%, an encouraging start. This strong level
of sales increase was against a background of weak 1997 comparatives and
markdowns effected during August. As a result, profit contribution for the
7 week period is broadly in line with our expectations.
Sales of the new season range are progressing well. However, the general
retailing environment remains challenging and, as always, results for the
full year will be dependent on the important Christmas period.
I would like to take this opportunity to express my thanks to all my
colleagues for their energy and commitment after last year's difficulties.
In addition to the importance of the brands our strength has always been in
teamwork and respect for each other's skills and the fruits of these
practices are reflected in the current improving trend.
Profit and Loss Account
26 weeks 26 weeks 53 weeks ended
ended ended 31st January
1st August 26th July 1998
1998 1997 Audited
Unaudited Unaudited #'000
#'000 #'000
Turnover 47,645 39,580 92,936
Cost of sales (22,887) (19,033) (46,665)
Gross profit 24,758 20,547 46,271
Net operating expenses (20,639) (17,645) (37,524)
Operating profit 4,119 2,902 8,747
Net interest receivable 650 778 1,616
Profit on ordinary
activities before
taxation 4,769 3,680 10,363
Taxation (1,551) (1,215) (3,479)
Profit for the
financial period 3,218 2,465 6,884
Dividend (1,390) (1,259) (3,934)
Retained profit for the
financial period 1,828 1,206 2,950
pence pence pence
Earnings per share 6.13 4.70 13.12
Balance Sheet
As at As at As at
1st August 26th July 31st January
1998 1997 1998
Unaudited Unaudited Audited
#'000 #'000 #'000
Fixed assets
Tangible fixed assets 18,047 14,316 16,818
Goodwill 246 - -
18,293 14,316 16,818
Current assets
Stock 14,591 8,809 9,850
Debtors 4,883 3,212 4,870
Short term deposits and
cash 853 9,899 7,130
20,327 21,920 21,850
Creditors
due within one year (9,843) (11,355) (13,213)
Net current assets 10,484 10,565 8,637
Long term creditors and
provisions (2,039) (1,715) (546)
Net assets 26,738 23,166 24,909
Capital and reserves
Share capital 5,246 5,246 5,246
Profit and loss account 21,492 17,920 19,663
Equity shareholders'
funds 26,738 23,166 24,909
Cash Flow Statement
26 weeks ended 26 weeks 53 weeks ended
1st August ended 31st January
1998 26th July 1998
Unaudited 1997 Audited
#'000 Unaudited #'000
#'000
Operating profit 4,119 2,902 8,747
Depreciation 2,288 1,744 4,062
Working capital
movement (5,701) (1,456) (3,419)
Net cash inflow from
operating activities 706 3,190 9,390
Returns on investments
and servicing of
finance 650 779 1,615
Tax paid (1,196) (1,332) (5,612)
Capital expenditure
Purchase less sale of
tangible fixed assets (3,763) (3,310) (7,576)
Equity dividends paid (2,675) (2,570) (3,829)
(Decrease) in cash (6,278) (3,243) (6,012)
Notes
1. Comparative figures
The comparative figures for the fifty three week period ended 31st January,
1998 and the summary balance sheet as at 31st January, 1998 have been
extracted from the Company's 1997/8 Report and Accounts which have been
filed with the Registrar of Companies. The auditor's opinion on those
accounts was unqualified and did not include a statement under Section
237(2) or (3) of the Companies' Act 1985.
2. Accounting Policies
The interim statements have been prepared on the basis of the accounting
policies set out in the Company's 1997/8 Report and Accounts with the
exception of a new accounting policy concerning goodwill acquired during the
period, where goodwill has been capitalised and amortised over 20 years in
accordance with FRS10.
3. Earnings per Share
The calculation of earnings per share is based on the profit on ordinary
activities after taxation and a weighted average number of share being
52,457,175 ordinary shares of 10p in issue (1997: 52,457,175).
4. Interim Dividend
An interim dividend of 2.65p per ordinary share (1997: 2.4p) will be paid on
6th November, 1998 to shareholders on the register as at 16th October, 1998.
Report of the Auditor
Review Report by the Auditor to Oasis Stores Plc
We have reviewed the interim financial information for the twenty six weeks
ended 1st August, 1998 set out in this report which is the responsibility of
and has been approved by the Directors. Our responsibility is to report on
the results of our review.
Our review was carried out having regard to the Bulletin "Review of Interim
Financial Information", issued by the Auditing Practices Board. This review
consisted principally of applying analytical procedures to the underlying
financial data, assessing whether accounting policies have been consistently
applied, and making enquiries of management responsible for financial and
accounting matters. The review was substantially less in scope than an
audit performed in accordance with Auditing Standards and accordingly we do
not express an audit opinion on the interim financial information.
On the basis of our review:
- in our opinion the interim financial information has been prepared
using accounting policies consistent with those adopted by Oasis Stores Plc
in its financial statements for the fifty three week period ended 31st
January, 1998 other than where changes are necessary to implement the new
accounting policy as described in Note 2 and
- we are not aware of any material modifications that should be made to
the interim financial information as presented.
KPMG Audit Plc
Chartered Accountants
28th September 1998
END
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