When you report strong sales growth, expanding margins and rising pre-tax profits, it’s got to be something specific driving your share price down on results day. For fashion chain Ted Baker (TED), £4.5m worth of exceptional costs largely relating to warehousing operations were to blame.
The company is opening a new, larger distribution centre in the Midlands to help fulfil orders across its European business, but the older warehouse is still in operation until the new facility comes fully on stream later in the year. As part of that figure, £2.9m relates to a provision against the existing lease commitments, with closure costs (some unrelated) making up the balance. Stripping out those exceptionals, as well as US pre-opening costs of £6m, analysts at Peel Hunt suggest earnings growth would have been closer to 20 per cent.
Otherwise, last year's results are hard to fault. Sales accelerated across all three channels: retail, wholesale and licensing. Foreign exchange rates and higher full-price sales added 110 basis points to gross margins.
Analysts at Liberum still expect pre-tax profits of £74.7m for the year ending January 2018, giving EPS of 130p, compared to £65.8m and 115p in FY2017.
| TED BAKER (TED) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,672p | MARKET VALUE: | £1.18bn | |
| TOUCH: | 2,670-2,673p | 12-MONTH HIGH: | 3,150p | LOW: 2,069p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 476p | NET DEBT: | 45% | |
| Year to 28 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 254 | 28.9 | 51.5 | 26.6 |
| 2014 | 322 | 38.9 | 67.2 | 33.7 |
| 2015 | 388 | 48.8 | 82.0 | 40.3 |
| 2016 | 456 | 58.7 | 101 | 47.8 |
| 2017 | 531 | 61.3 | 106 | 53.6 |
| % change | +16 | +4 | +5 | +12 |
Ex-div: 18 May Payment: 23 Jun | ||||
