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Mulberry sports fine numbers

Mulberry sports fine numbers

Mulberry (MUL) is in fine fettle under the creative direction of Johnny Coca. The top line has positive momentum, gross margins have stabilised and pre-tax profits are on the rise. The group has also pushed ahead with new initiatives such as Mulberry Asia - a new entity responsible for running the Chinese, Hong Kong and Taiwanese operations, formed with its majority shareholder Challice.

Product launches like the Zipped Bayswater bag, and a digital focus, have helped. International retail sales rose by 1 per cent last year, or 7 per cent on a like-for-like basis, and this is likely to improve further as the division in North Asia moves from a wholesale operation to a retail one this year. It will, however, dampen wholesale revenues, which grew strongly last year, up 7 per cent to £39.8m.

But there are concerns regarding current trading: like-for-like retail sales rose just 1 per cent for the 10 weeks to 3 June, and domestic demand in the UK is softening. International growth is also weaker, albeit in "non-strategic" locations.

Analysts at Barclays expect pre-tax profits of £9m for the year ending March 2018, giving EPS of 10p, compared to £7.5m and 10p in FY2017.

MULBERRY (MUL)
ORD PRICE:1,119pMARKET VALUE:£664m
TOUCH:1,056-1,119p12-MONTH HIGH:1,158pLOW: 945p
DIVIDEND YIELD:0.4%PE RATIO:133
NET ASSET VALUE:143pNET CASH:£21m

Year to 31 MarTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201316526.032.25.0
201416314.014.55.0
20151491.9-2.35.0
20161566.24.55.0
20171687.58.45.0
% change+8+21+87-

Ex-div: 26 Oct

Payment: 23 Nov

IC VIEW:

To what extent can Mulberry keep this momentum going amid concerns about a slowdown in consumer spending, both at home and abroad, is in doubt. What's more, the shares' astronomical forward rating of 112 remains as prohibitive as ever. Hold.

Last IC View: Hold, 1,100p, 8 Dec 2016

visible-status-Standard story-url-Mulberry_results_15_6_17.xml

By Harriet Russell,
15 June 2017

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