An additional 100,000 sq ft of retail space helped fashion retailer SuperGroup (SGP) grow retail sales by 18 per cent last year. Like-for-like sales rose 3 per cent, while underlying pre-tax profits (which exclude exceptional costs related to expansion in Germany and Spain) were up 19 per cent to £62m. The fourth quarter was tough, impacted by a lack of spring stock in stores and heavy discounting by competitors. Thankfully, however, a strong first half - like-for-like sales grew more than 8 per cent - more than made up for the poor finale.
In the coming year SuperGroup wants to expand further into mainland Europe before setting its sights on China and the US. Last year, 43 per cent of new retail space was on the continent, with large stores opening in Amsterdam, Paris, Bruges and Marseille. Last July, SuperGroup bought out its Spanish partner and followed up in October by taking majority control of its German business, acquiring seven stores and 14,000 sq ft of new space in the process. A further six new stores are expected to open in Germany before Christmas.
But the group again denied investors a dividend, despite a year-end cash balance of more than £80m. In defence of the decision, chief executive Julian Dunkerton said expanding into Asia would require capital, and stressed SuperGroup's improved return on capital employed - 29.8 per cent last year, up from 25.7 per cent.
Back home, the group spent time amalgamating its logistics division into a single, 500,000 sq ft distribution centre at Burton upon Trent. Two warehouses in Gloucester and a small site in Belgium were closed, with all future orders - including those made online - to be dispatched from the central warehouse. This system was launched in tandem with a new centralised merchandising management system, which Mr Dunkerton says will keep costs down and manage the growing complexity of a global store base.
Broker Investec Securities expects pre-tax profits of £72.3m for the current financial year, giving EPS of 65.4p.
SUPERGROUP (SGP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,043p | MARKET VALUE: | £845m | |
| TOUCH: | 1,040-1,043p | 12-MONTH HIGH: | 1,749p | LOW: 783p |
| DIVIDEND YIELD: | nil | PE RATIO: | 31 | |
| NET ASSET VALUE: | 320p | NET CASH: | £86.2m | |
| Year to 28 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 139 | 22.5 | 127 | nil |
| 2011 | 238 | 47.3 | 37.9 | nil |
| 2012 | 314 | 51.4 | 45.0 | nil |
| 2013 | 360 | 51.8 | 44.7 | nil |
| 2014† | 431 | 45.2 | 34.0 | nil |
| % change | +20 | -13 | -24 | - |
Ex-div: na Payment: na †Period to 26 April | ||||
