Fashion house Mulberry (MUL) is trying to boost brand awareness overseas to offset declining sales in its core UK market and, so far, that seems to be paying off. International retail revenue rose 29 per cent year on year to £6.3m and generated 8 per cent of group sales - as Mulberry opened nine overseas stores and launched a global website that will soon accommodate multiple languages and currencies.
UK retail sales grew 5 per cent to £36.6m, but footfall was lower so progress was helped by higher pricing. Online sales fell 4 per cent to £6.6m and this left group retail sales 6 per cent higher at £49.5m, with like-for-like retail growth of 4 per cent. However, wholesale revenue continued to fall, slipping 5 per cent to £28.6m - reflecting cautious ordering in Europe. Management expects the trend to continue into the second half.
Profits fell, however, despite higher sales and gross margin improvement - reflecting higher costs related to international expansion. The handbag maker also reckons that, with a greater percentage of sales generated through retail, the business is more seasonal, so profits are increasingly weighted towards the second half.
Analysts at Barclays expect full-year pre-tax profit of £27m, giving EPS of 32p (from £26m and 32p in 2013).
| MULBERRY (MUL) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,024p | MARKET VALUE: | £613m | |
| TOUCH: | 1,009-1,024 | 12-MONTH HIGH: | 1,459p | LOW: 828p |
| DIVIDEND YIELD: | 0.5% | PE RATIO: | 37 | |
| NET ASSET VALUE: | 135p | NET CASH: | £11.1m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 76.5 | 10.0 | 12.9 | nil |
| 2013 | 78.1 | 7.23 | 8.70 | nil |
| % change | +2 | -28 | -33 | - |
Ex-div:- Payment:- | ||||
