TIDMSTU
RNS Number : 5060A
Studio Retail Group PLC
30 September 2020
30 September 2020
Studio Retail Group plc ("SRG" or "the Group")
Strong retail performance continues at Studio, driven by
strength of its online offer
Studio Retail Group plc, a leading digital value retailer, today
provides an update on trading for the first 26 weeks of the
financial year ("H1"). The Group's primary business, Studio, has
seen a continuation of its strong retail trading performance in the
early weeks of its new Autumn/Winter season, with kidswear, gifting
and early Christmas ranges performing particularly strongly.
In the last 6 weeks since the Group's FY20 results announcement
on 24 August, product sales have grown by 30% against the
equivalent period from the prior year. This brings the total
products sales growth for H1 to 39%, as shown in the table
below:
Wks 1-11 Wks 12-20 Wks 21-26 Wks 1-26
--------------- --------- ----------
Product sales
growth 55% 27% 30% 39%
--------- ---------- ---------- ---------
The active customer base has grown by 15% in the last 12 months,
currently standing at 2.1m customers, of which just under 1.4m
customers have an active credit account.
Online sales now represent over 90% of total orders, with the
Studio App having been downloaded more than 700k times in under a
year since its launch. Year-on-year online growth in our Home &
Leisure ranges in FY21 has been 80%, with online Clothing &
Footwear sales growing by 22% despite an active decision to de-risk
more seasonal clothing ranges at the start of lockdown. We did see
some decline in our legacy telephone and written ordering channels
but these now account for less than 10% of the business.
The de-risking of clothing ranges allowed us to exit the
Spring/Summer season with a clean stock position. The impact of
this, alongside mix effects across the overall product ranges, led
to the margin rate achieved in H1 being broadly flat against the
prior year.
The value of credit receivables eligible for securitisation
funding has grown by 16% over the last year, so we are pleased to
have recently agreed an increase of GBP25m in the securitisation
facility which now stands at GBP225m committed until the end of
December 2022. Financial services revenue has grown by c.5.5% in H1
and we have yet to see a material change to the collections
performance, although we continue to anticipate more challenging
conditions for our customers later in the year or early 2021. As a
result, our liquidity remains strong and well ahead of normal
seasonal patterns.
The peak trading period of Q3 covering Black Friday and
Christmas is still ahead of us, which historically accounts for
around 40% of the full year's product sales. Notwithstanding the
inherent uncertainties that continue to be presented by Covid-19,
we currently expect the adjusted profit before tax from continuing
operations* (including the impact of IFRS 16) for FY21 to be ahead
of our previous internal expectations.
Findel Education has seen its trading performance return to
normal seasonal levels in recent weeks. We are continuing to
support YPO in achieving clearance from the Competition &
Markets Authority for the sale of the business and the parties have
agreed to extend the longstop date within the sale agreement to
11.59pm on 30(th) October 2020.
We will be announcing our interim results on 8 December which
will allow us to give a further update on peak season trading.
Enquiries
Studio Retail Group plc 0161 303 3465
Phil Maudsley, Group CEO
Paul Kendrick MD Studio Retail Ltd and CEO Designate
Stuart Caldwell, Group CFO
Tulchan Communications 020 7353 4200
Will Smith
Notes to Editors
Studio Retail Group currently contains market leading businesses
in the UK digital retailing and education supplies markets. It is
primarily a retailer and distributor, handling and supplying
specialist products manufactured by third parties.
The Group's activities are currently focused in two main
operating segments:
-- Studio - a leading UK digital value retailer, primarily
trading via the Studi o brand; and
-- Education - the second largest listed independent supplier of
resources and equipment (excluding information technology and
publishing) to schools in the UK and overseas. We announced the
sale of this business to YPO in December 2019 for GBP50m, subject
to approval from the Competition & Markets Authority, which is
expected to complete in due course.
* The adjusted profit before tax from continuing operations for
FY20 of GBP27.3m is calculated as follows:
Reallocation
Adoption to discontinued
Old GAAP of IFRS16 ops New GAAP
Studio 38,996 55 39,051
Central (2,370) 15 1,120 (1,235)
--------- ----------- ----------------- ---------
Operating profit 36,626 70 1,120 37,816
Interest (8,668) (1,823) (10,491)
Adjusted PBT from continuing
operations 27,958 (1,753) 1,120 27,325
--------- ----------- -----------------
Covid-19 bad debt (20,000)
Change in accounting estimate 3,675
Mark to market on financial
instruments 2,608
Individually significant
items (6,807)
Reported PBT from continuing
operations 6,801
---------
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END
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