Superdry plc (SDRY) Superdry plc: TST-Trading Statement
14-Apr-2023 / 07:00 GMT/BST
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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF REGULATION (EU) NO. 596/2014, WHICH FORMS PART OF
UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018.
SuperdryPlc
("Superdry" or the "Company")
14 April 2023
Trading update on FY23 outlook, turnaround plan and actions to
strengthen balance sheet
Highlights
-- Retail sales continue to show good like-for-like growth,
albeit at a slower rate than anticipated
-- Whilst progress has been made with our Wholesale partners to
support their recovery, sales performancecontinues to be
challenging
-- FY23 revenue now expected in the range of GBP615m to GBP635m
(FY22: GBP609m)
-- Given the challenging trading environment, the Board has
taken the decision to withdraw the existingprofit guidance of
'broadly breakeven' for FY23
-- Asia Pacific region IP sale, expected to deliver c.GBP34m net
proceeds, is progressing well withshareholder circular anticipated
to be published in May
-- Initial cost savings of c.GBP35m identified and externally
validated, which are expected to deliver amaterial uplift in
underlying profitability over the medium term
-- Credit facility partner, Bantry Bay, remains supportive of
the Class 1 disposal, and has increased theflexibility of the
facility
-- Capital raise options being considered, including a potential
equity raise up to 20% fully supported byJulian Dunkerton, founder
and CEO
Current trading and outlook
Retail sales in February and March, whilst showing significant
year-on-year like-for-like growth, have not met our expectations.
This can partly be attributed to factors outside the Company's
control, including the cost-of-living crisis having a significant
impact on spending and footfall, and poor weather resulting in less
demand for our new spring-summer collection. These trends are
consistent across both the UK and Europe. Wholesale performance
continues to lag the rest of the group, although we are making
progress in working with our partners to support their
recovery.
These factors have impacted the Company's revenue performance,
which is now expected to be between GBP615m and GBP635m for the
full year. The increasing amount of uncertainty arising from the
final weeks of trading and the actions associated with the
reorganisation of our Wholesale division make the assessment of
full year profit challenging. Therefore, the Board has taken the
decision to withdraw the previously issued guidance of broadly
breakeven for our FY23 adjusted profit before tax.
Turnaround plan
The Company's growth ambitions are driven by three pillars:
inspiring through product and style; engaging through social; and
leading through sustainability. These pillars are underpinned by,
among other things, a much-simplified business model.
To achieve this aim, the Company has identified initial cost
savings of over GBP35m which have been externally validated. These
will be achieved through estate optimisation, logistics and
distribution savings, better procurement, and continued range
reduction. The Company expects these savings to be fully realised
by the end of FY24, with the costs to achieve them primarily
incurred in calendar year 2023. The Company is currently reviewing
further re-engineering options to deliver additional savings. As a
result of these actions, the Company expects to deliver a material
uplift in underlying profitability over the medium term.
Financing update
As announced on 22 March 2023, the Company has agreed, subject
to certain conditions, to sell its IP assets in certain countries
within the Asia Pacific ("APAC") region for USD50 million USD
(GBP34 million net after transaction costs and taxation). This
agreement constitutes a Class 1 transaction under the FCA's Listing
Rules and is therefore conditional on the approval of Superdry's
shareholders. The Company currently anticipates sending
shareholders a circular in May 2023.
Bantry Bay, the Company's lender has indicated their support for
the Class 1 disposal and has also agreed to waive certain borrowing
limits whilst the Company progresses the Class 1 process and has
increased flexibility of the existing facility.
In the same announcement, the Company stated that it is
considering additional steps to further strengthen its balance
sheet in connection with its turnaround programme which could
include a potential equity issue. The Company confirms it is
considering an equity raise of up to 20% of the Company's issued
share capital. Julian Dunkerton, subject to any necessary
regulatory and shareholder approvals, will fully support and
materially participate in any such equity raise, reflecting
Julian's confidence in the prospects of the business and provides a
strong platform to undertake such a fundraise. There can be no
certainty that any equity raise will proceed, and the Company will
update in due course.
Julian Dunkerton, Founder and Chief Executive Officer, said:
"The Superdry brand continues to evolve but there is no doubt
that the market conditions we face are challenging, compounded by
the issues we have previously disclosed and are working to address
in Wholesale. As a result, while we continue to deliver
like-for-like growth in retail sales, we need to ensure our
business is in the right shape to navigate these difficult times,
which is why we are looking hard at our cost base.
My belief in the Superdry brand is stronger than ever which is
why I'm prepared to provide material support to any equity raise
undertaken. I am confident that we have the right plan and, working
together as a team, the business will emerge from the current
turbulence stronger than ever."
On publication of this announcement via a Regulatory Information
Service, the inside information contained herein is now considered
to be in the public domain. The person responsible for arranging
this announcement on behalf of Superdry Plc is Shaun Wills, Chief
Financial Officer.
For further information
Superdry
Shaun Wills shaun.wills@superdry.com 44 (0) 1242 586747
Chris MacDonald investor.relations@superdry.com 44 (0) 1242 586747
Joint Corporate Brokers
Peel Hunt LLP 44 (0) 2074 188900
George Sellar
Mike Burke
Liberum Capital Limited 44 (0) 2031 002000
John Fishley
Edward Thomas
Media Enquiries
Rachael Layfield/Mia Clayton superdry@brunswickgroup.com 44 (0) 207 4045959
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Dissemination of a Regulatory Announcement, transmitted by EQS
Group. The issuer is solely responsible for the content of this
announcement.
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ISIN: GB00B60BD277
Category Code: TST
TIDM: SDRY
LEI Code: 213800GAQMT2WL7BW361
Sequence No.: 236767
EQS News ID: 1607337
End of Announcement EQS News Service
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