TIDMALY
RNS Number : 8280J
Ashley (Laura) Hldgs PLC
22 August 2019
22 August 2019
LAURA ASHLEY HOLDINGS plc
("the Group")
Laura Ashley Holdings plc announces its full final results for
the 52 weeks to 30 June 2019.
Summary
-- Loss before tax and exceptional items of GBP9.8m (2018: Profit of GBP5.6m).
-- Statutory loss before tax of GBP14.3m (2018: Profit of GBP0.1m).
-- Total Group sales of GBP232.5m (2018: GBP257.2m).
-- Total like-for-like retail sales down 3.5%.
-- Fashion like-for-like retail sales up 9.2%.
-- Online revenue of GBP51.2m (2018: GBP59.7m).
-- The Board is not recommending payment of a dividend.
Commenting on the results, Andrew Khoo, Chairman, said:
"The last twelve months have proved to be a difficult trading
period for the Group and indeed for the retail sector as a
whole.
The primary causes for the year-on-year drop in profit have been
the performance of Home Furnishing and that of our website
following a re-platforming exercise which took place in November
2018.
We have focussed on the reasons why Home Furnishings have
underperformed and have taken necessary steps to mitigate this,
including adding new contemporary product to our ranges. We have
taken active steps to listen to our customers and now believe that
we are on an appropriate recovery path. We continue to invest in
our website and are working with our online service providers to
ensure that it is optimised to deliver an enhanced customer
experience and to achieve the desired growth.
We are pleased with the continued resurgence of our fashion
business, achieving like-for-like growth of 9.2%. This is the
result of the improved design of our ranges.
As the group expands its international reach, we are delighted
to announce that we have recently signed a master licensing
agreement with IMG to market and develop the brand in China. This
partnership will give us greater access to customers and increase
the distribution of our products in the market. We will also be
focussing on the Australian market with the first store anticipated
to open in Melbourne in 2020.
We are also delighted with the progress of our growing licensed
hospitality business. There are now nine Laura Ashley licensed
tearooms and two Laura Ashley licensed hotels. The pipeline of new
licenses is very healthy as we enter a new financial period. We are
especially pleased with the customer response to this
initiative.
During the last twelve months the Group disposed of its property
in Singapore and its Hotel property in Elstree. This has enabled us
to eliminate all long term debt and put us on a stronger financial
footing for the years ahead.
As we look to expand our international licensing and hospitality
business and optimise UK retail, we are confident in our business
strategy which is to create a total lifestyle experience.
Enquiries:
Laura Ashley Holdings plc
Kwan Cheong Ng ; CEO
Seán Anglim ; FD / Joint COO 020 7880 5100
Media Enquiries
Brunswick
Anita Scott
Alice Gibb
Carolina Neri 020 7404 5959
Corporate Broker
Cantor Fitzgerald Europe
Rick Thompson
Michael Boot 020 7894 7000
Overview
For the 52 weeks to 30 June 2019, total Group sales were
GBP232.5m (2018: GBP257.2m). Like-for-like sales fell by 3.5% over
the same period. e-Commerce sales were GBP51.2m (2018: GBP59.7m).
Like-for-like e-Commerce sales fell by 14.2%.
The Group recorded a loss before taxation, excluding exceptional
items, of GBP9.8m (2018: Profit of GBP5.6m). An exceptional charge
of GBP4.5m was recorded in the year of which GBP1.3m relates to the
write off of an investment in a Japanese associate company.
Statutory loss before tax was GBP14.3m (2018: Profit of
GBP0.1m).
Operating expenses of GBP91.1m were recorded for the year (2018:
GBP91.7m). The reduction is largely attributed to the net reduction
of store property costs but is offset by national living wage
increases.
Cash Flow and Balance Sheet
As at 30 June 2019, there was no bank borrowing and net cash was
GBP0.8m. Inventory of GBP46.7m was in line with requirements.
Additionally, we have a new 3 year debt facility in place with
Wells Fargo Capital Finance (UK) Limited.
Dividend
No interim dividend was paid during the year and the Board is
not recommending payment of a final dividend. No dividend was paid
during the year ended June 2018.
UK Retail
As at 30 June 2019, the property portfolio in the UK comprised
155 stores (June 2018: 160). The portfolio is as follows: 105 Mixed
Product stores, 47 Home stores, 1 concession store, 1 Gifts &
Accessories store and 1 Clearance outlet. During the reporting
period, six stores were closed and one opened, reducing total
selling space by 3.6% to 639,000 square feet.
Over the coming year, we will open two new stores and close five
to seven stores as we continue to optimise the store portfolio.
Total UK retail sales of GBP222.9m were recorded during the 52
week period to 30 June 2019 (2018: GBP236m). UK retail sales were
affected by the six closures and considerable market
uncertainty.
Total e-Commerce sales of GBP51.2m were recorded during the 52
week period to 30 June 2019 (2018: GBP59.7m). On a like-for-like
basis, online sales fell by 14.2% following a re-platforming of our
website.
Product
The UK business is split into four main categories. For the
period ended 30 June 2019, the relative split of UK sales was as
follows: Home Accessories 35%, Furniture 28%, Decorating 18% and
Fashion 19%.
Home Accessories
The Home Accessories product category includes lighting, gifts,
bed linen, rugs, throws, cushions and children's accessories.
Home Accessories sales for the year to 30 June 2019 fell by 0.8%
over the same period last year with like-for-like sales up by 1.1%.
Our best performing products in this category were lighting,
seasonal gifting and bedlinen. We have seen consistent
like-for-like growth in this category over recent years and expect
that this will continue as we grow and enhance the product
ranges.
Furniture
The Furniture product category includes upholstered furniture,
cabinet furniture, beds and mirrors.
Furniture sales for the year to 30 June 2019 decreased by 10.1%
over the same period last year with like-for-like sales down by
9.0%. As our most expensive product category, we believe that there
has been some impact from weak consumer confidence, particularly at
higher price points. We remain confident in the quality of our
furniture ranges. We will add more contemporary styles to this
category over the coming months.
Decorating
This category includes fabric, curtains, wallpaper, paint and
decorative accessories.
Decorating sales for the period to 30 June 2019 fell by 15.0%
with like-for-like sales down 13.7%. This product category has had
a difficult year and we have undertaken a thorough review of the
entire range. We are introducing new styles and designs which will
add modernity but retain the Laura Ashley handwriting. Decorating
is central to our brand and our intention is to broaden its
customer base and accordingly strengthen the underlying
business.
Fashion
This category includes adult fashion, selected girls wear,
fashion accessories and perfumery.
Fashion sales for the period to 30 June 2019 increased by 4.2%
over the same period last year with like-for-like sales up by 9.2%.
This performance is built on a very strong performance in 2018 and
we are pleased with the continuity. We are confident that this
level of growth can be maintained in what is an extremely
competitive product category.
Hotels and Tea Rooms
Following our recent focus on hospitality, there are now nine
licensed Laura Ashley Tea rooms and two licensed Laura Ashley
Hotels. We are delighted with the progress of this concept and are
optimistic that this growth will continue into the year ahead and
will become a key part of total Group revenue. Currently all
licenses are with UK partners. However, we are working to expand
hospitality to an international audience and good progress, in that
regard, has been made.
International Operations
Contributing 3.2% of total Group revenue, our international
Franchise and Licensing channels are an important and strategic
part of our business. As at 30 June 2019, there were 80 franchised
stores (213 as at 30 June 2018) in 25 territories worldwide.
Franchise and Licensing revenue of GBP7.4m was recorded during
the period to 30 June 2019 (2018: GBP18.0m). The primary reason for
the year on year shortfall is the loss of business in Japan from
September 2018, following the termination of our partnership with
Aeon. We have subsequently signed a Master Licensing partnership
agreement with the Itochu Corporation for the marketing and
development of the Brand in Japan.
We are also pleased to announce that we have signed an exclusive
Master License agreement with IMG to develop and market the Brand
in China. This is an exciting opportunity for the Group and we look
forward to a successful partnership with IMG.
We now have master license agreements with partners in place for
Japan, USA and China and are very optimistic that, this strategy
will deliver market penetration and sustained growth over the years
to come.
Sale of Properties
During the year to June 2019, the group disposed of two
properties. Our offices in Singapore were sold for SGD$54.5m and
our hotel, Laura Ashley The Manor in Elstree was sold for GBP6.0m.
These transactions have enabled the group to pay down all long term
debt. The Board believed that it was an appropriate time to sell
these properties and that it would put the Group on a sounder
financial footing going forward.
Current Trading and Outlook
Trading for the seven weeks to 17 August 2019 is performing in
line with management expectations.
Laura Ashley's Brand is built on beautifully designed, high
quality products. We remain resolutely confident in the underlying
strength of this much loved Brand, in its relevance for today and
in our strategies to both maintain and develop it.
Acknowledgements
I wish to convey my thanks and appreciation to the staff,
management and my fellow Board members for their hard work,
dedication and commitment.
For their continued support and loyalty to the Group, I would
like to thank our customers, shareholders and suppliers.
Group Statement of Comprehensive
Income
For the Year ended 30 June 2019
52 weeks 52 weeks
to to
30 June 30 June
2019 2018
(restated)
Notes GBPm GBPm
------------------------------------- ------ --------- -----------
Revenue 3 232.5 257.2
Cost of sales (150.4) (159.1)
------------------------------------- ------ --------- -----------
Gross Profit 82.1 98.1
Other operating expenses (91.1) (91.7)
------------------------------------- ------ --------- -----------
(Loss)/Profit from operations
before exceptionals (9.0) 6.4
Exceptional Items:
Impairment of property - (4.7)
Bad debt provision (0.9) -
Onerous lease provision (0.5) -
Investment in associate write
off (1.3) -
Pension GMP Equalization (0.9) -
Loss on disposal of property (0.9) (0.8)
-------------------------------------
(Loss)/ profit from operations (13.5) 0.9
Other income - 0.5
Finance costs (0.8) (1.3)
------------------------------------- ------ --------- -----------
(Loss)/ profit before taxation (14.3) 0.1
Taxation 0.3 (1.5)
------------------------------------- ------ --------- -----------
(Loss) for the financial year* (14.0) (1.4)
Other comprehensive income:
Actuarial (loss)/gain on defined
benefit pension schemes (3.6) 1.7
Deferred tax effect 0.8 (0.3)
------------------------------------- ------ --------- -----------
Total that will not be subsequently
reclassified to profit and loss (2.8) 1.4
------------------------------------- ------ --------- -----------
Exchange differences arising
on re-translation of foreign
operations 0.6 (0.3)
Other reserve movement - -
---------
Total that may be subsequently
reclassified to profit and loss 0.6 (0.3)
------------------------------------- ------ --------- -----------
Other comprehensive (loss)/income
for the period net of tax (2.2) 1.1
------------------------------------- ------ --------- -----------
Total comprehensive loss for
the period (16.2) (0.3)
*(Loss) per share - basic and
diluted - calculated based on
loss for the financial period 2 (1.30) 0.56
------------------------------------- ------ --------- -----------
The Group's results shown are derived entirely from continuing
operations.
Group Statement of Financial
Position
As at 30 June 2019
GROUP 2019 2018
GBPm GBPm
---------------------------------- ------- -------
Non-current assets
Intangibles 1.1 1.4
Property, plant and equipment 7.6 43.9
Investment property - 2.9
Deferred tax asset 2.8 2.1
Investment in associate - 1.3
11.5 51.6
Current assets
Inventories 46.7 55.7
Trade and other receivables 12.8 17.3
Current tax asset 0.8 -
Cash and cash equivalents 0.8 -
Assets held for sale 1.5 -
62.6 73.0
---------------------------------- ------- -------
Total assets 74.1 124.6
------------------------------------ ------- -------
Current liabilities
Current tax liabilities - 0.8
Trade and other payables 38.1 44.0
Short-term borrowings - 12.7
38.1 57.5
Non-current liabilities
Retirement benefit liabilities 15.2 11.1
Long-term borrowings - 18.8
Provisions and other liabilities 0.6 0.8
15.8 30.7
---------------------------------- ------- -------
Total liabilities 53.9 88.2
------------------------------------ ------- -------
Net assets 20.2 36.4
------------------------------------ ------- -------
Equity
Share capital 37.3 37.3
Share premium 86.4 86.4
Own shares (3.2) (3.2)
Treasury shares (4.6) (4.6)
Retained losses (95.7) (79.5)
------------------------------------ ------- -------
Total equity 20.2 36.4
------------------------------------ ------- -------
Statement of Changes in
Shareholders' Equity
As at 30 June 2019
Group
Share Share EBT Treasury Retained Total
Capital Premium Shares Shares Earnings Equity
Notes GBPm GBPm GBPm GBPm GBPm GBPm
----------------------------- ------ --------- --------- -------- --------- ---------- --------
Balance as at 30 June
2017 - previously reported 37.3 86.4 (3.2) (4.6) (80.5) 35.4
Prior period adjustment 5 - - - - 1.3 1.3
----------------------------- ------ --------- --------- -------- --------- ---------- --------
Balance as at 30 June
2017 - restated 37.3 86.4 (3.2) (4.6) (79.2) 36.7
Loss for the year - - - - (1.4) (1.4)
Other comprehensive income
(restated) - - - - 1.1 1.1
Total comprehensive income - - - - (0.3) (0.3)
------ --------- --------- -------- --------- ----------
Dividends paid - - - - - -
Balance as at 30 June
2018 37.3 86.4 (3.2) (4.6) (79.5) 36.4
Loss for the year - - - - (14.0) (14.0)
Other comprehensive income - - - - (2.2) (2.2)
Total comprehensive income - - - - (16.2) (16.2)
------ --------- --------- -------- --------- ----------
Dividends paid - - - - - -
Balance as at 30 June
2019 37.3 86.4 (3.2) (4.6) (95.7) 20.2
----------------------------- ------ --------- --------- -------- --------- ---------- --------
Statement of Cash Flows
For the Year ended 30 June 2019
Group
--------------------
52 weeks 52 weeks
to to
30 June 30 June
2019 2018
Notes GBPm GBPm
Operating activities
Cash generated from operations 4 (1.6) 5.6
Corporation tax paid (1.2) (1.6)
(2.8) 4.0
Investing activities
Disposal of property, plant and
equipment 36.0 (1.9)
Purchase of intangible assets (0.3) (0.4)
35.7 (2.3)
Financing activities
Repayment of bank loan (20.1) (1.5)
Interest expense (0.6) (0.9)
(20.7) (2.4)
Net increase/(decrease) in cash
and cash equivalents 12.2 (0.7)
--------------------------------- ------ --------- ---------
Reconciliation of Net Cash Flow to Movement in
Net funds
For the Year ended 30 June 2019
Group
----------------
2019 2018
GBPm GBPm
----------------------------------------- ------- -------
Net increase/(decrease) in cash and
cash equivalents 12.2 (0.7)
Net funds at the beginning of the
financial year (11.4) (10.7)
Net funds at the end of the financial
year 0.8 (11.4)
------------------------------------------- ------- -------
The statement of financial position shows GBP0.8m of cash and
cash equivalents and no longer has any short-term borrowings.
Therefore, the above reconciliation shows the net increase in funds
during the financial year.
Notes
1 Basis of Preparation
Consolidated financial statements and accounting policies
The preliminary announcement for the year ended 30 June 2019 has
been prepared in accordance with International Accounting Standards
("IAS") and International Financial Reporting Standards ("IFRS") as
adopted by the European Union.
These consolidated financial statements have been prepared using
the historical cost convention as stated in the accounting
policies. Details of the accounting policies applied are those set
out in Laura Ashley Holdings Plc's Annual Report 2019.
The annual financial information presented in the announcement
for the period ended 30 June 2019 is based on and is consistent
with the financial statements of Laura Ashley Holdings Plc and its
subsidiaries ("the Group") for the period ended 30 June 2019. The
audit of the financial statements for the year ended 30 June 2019
is not yet complete however, an unqualified opinion is expected.
These accounts will be finalised on the basis of the financial
information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies
following the Company's annual general meeting.
Statutory Accounts
Information in this preliminary announcement does not constitute
statutory accounts of the Group within the meaning of Section 434
of the Companies Act 2006. Statutory accounts for the year ended 30
June 2018 have been filed with the Registrar of Companies. The
auditor's report on these accounts was unqualified and did not
contain any statement under Section 498 of the Companies Act
2006.
The Group's Annual Report for the year ended 30 June 2019 will
be made available in due course and can be viewed and downloaded
from the Group's website at www.lauraashley.com. The Annual Report
will be circulated in September 2019 to those shareholders who have
elected to receive a copy in printed form.
2) (Losses) per Share
Earnings per share is calculated by dividing the profit/(loss)
for the financial year by the weighted average number of ordinary
shares during the year (excluding treasury shares of
18,272,500).
52 weeks ended 52 weeks ended
30 June 2019 30 June 2018
------------------------------- ----------------------------
Earnings Shares Pence Earnings Shares Pence
per
GBPm million per share GBPm million share
------------------- --------- -------- ---------- --------- -------- -------
Basic EPS (14.0) 727.8 (1.92) (1.4) 727.8 (0.19)
Exceptional Items 4.5 - 0.62 5.5 - 0.75
Adjusted EPS (9.5) 727.8 (1.30) 4.1 727.8 0.56
------------------- --------- -------- ---------- --------- -------- -------
3 Segmental Analysis
|---------------------Retail--------------------l
E-commerce
& Mail Total Total
Stores Order Hotel Retail Non-retail Total
2019 (52 weeks) GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- ---------------- -------------------- -------------- -------- ------------ -------
Revenue 172.5 51.2 1.4 225.1 7.4 232.5
--------------------- ---------------- -------------------- -------------- -------- ------------ -------
Contribution (1.7) 7.6 0.1 6.0 3.0 9.0
Indirect overhead
costs (18.0) - (18.0)
Finance income - - -
Finance costs (0.8) - (0.8)
Exceptional items (4.5) - (4.5)
Profit before
taxation (17.3) 3.0 (14.3)
--------------------- ---------------- -------------------- -------------- -------- ------------ -------
|---------------------Retail--------------------l
E-commerce
& Mail Total Total
Stores Order Hotel Retail Non-retail Total
2018 (52 weeks) GBPm GBPm GBPm GBPm GBPm GBPm
--------------------- ---------------- -------------------- -------------- -------- ------------ -------
Revenue 177.4 59.7 2.1 239.2 18.0 257.2
--------------------- ---------------- -------------------- -------------- -------- ------------ -------
Contribution 4.5 12.3 (0.6) 16.2 7.5 23.7
Indirect overhead
costs (17.3) - (17.3)
Finance income 0.5 - 0.5
Finance costs (1.3) - (1.3)
Exceptional items (5.5) - (5.5)
Profit before
taxation (7.4) 7.5 0.1
--------------------- ---------------- -------------------- -------------- -------- ------------ -------
Non-current assets Revenue
--------------------- --------------
2019 2018 2019 2018
GBPm GBPm GBPm GBPm
---------------------- ---------- --------- ------ ------
Geography
UK, Ireland & France 8.7 16.6 226.3 243.3
Other Continental
Europe - - - -
Japan - 2.6 0.8 8.1
Singapore - 30.3 - -
Rest of the World - - 5.4 5.8
8.7 49.5 232.5 257.2
---------------------- ---------- --------- ------ ------
4 Reconciliation of (Loss)/Profit from Operations to Net Cash
(Outflow)/Inflow from Operating Activities
Group
---------------
2019 2018
GBPm GBPm
Loss from operations (13.5) 0.9
Amortisation charge 0.6 0.9
Depreciation charge 2.1 2.6
Impairment charge - 4.7
Investment in associate write off 1.3 -
Losses on disposal of stores 0.7 0.8
Gain on disposal of non-current assets (0.4) 0.3
Decrease in inventories 9.0 2.0
Decrease in receivables 4.5 1.8
(Decrease) in payables (5.9) (7.4)
Movement in provisions - (1.0)
Net cash (outflow)/inflow from operating activities (1.6) 5.6
----------------------------------------------------- ------- ------
5 Prior period adjustment
Prior year comparatives have been restated whereby GBP1.3m of
other reserve movements shown in Other Comprehensive Income for the
year ended 30 June 2018 should have been adjusted against the
opening balance of retained earnings on 1 July 2017, with a
corresponding increase in Property, Plant and Equipment at 1 July
2017.
The restatement arose following an enquiry by the Financial
Reporting Council as a result of which the Group concluded that, in
accordance with IAS 8 "Accounting Policies, Changes in Accounting
Estimates and Errors", the adjustment to fixed assets, which arose
as a result of a discrepancy between the fixed asset register and
the underlying accounting records should have been accounted for by
way of a prior year adjustment.
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END
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