Despite a strong set of annual numbers, shares in fashion retailer Ted Baker (TED) didn't react well to news that softer economic conditions in Asia had hindered the group's growth there. But Ted's Asian business is still pretty small - accounting for roughly 3.4 per cent of group sales - and finance director Charles Anderson insists the brand is well received there. The long-term opportunity, he says, remains intact.
Asia aside, Ted's retail sales are growing fast across other geographies. These include North America, where sales rose by more than a quarter last year and the UK and Europe, where sales rose 8.9 per cent, or 10.7 per cent at constant currencies. Overall, this made for a solid retail performance, with total sales for the division up 13.5 per cent to £348m based on an average increase in square footage of 7.5 per cent. More retail space is on the way: a new store is slated to open in Paris along with further concessions in Germany and Spain. Shop openings are also scheduled in Asia, with further concessions across mainland China and Japan to follow a new store in Beijing. Meanwhile, good domestic performance pushed wholesale sales up a third to £108m.
Another area of growth is online. Last year web-based sales grew by a massive 46 per cent to £53.5m and now represent around 15 per cent of total revenue (from 12 per cent in FY2015). Investments in the web platform are set to continue this year.
But that won't be the only reason for higher running costs this year. Ted just entered a new lease agreement for a 'state-of-the-art' distribution facility in the UK which will serve as the main European distribution centre for the group's general retail stock. Therefore, it's Mr Anderson's belief that costs will increase marginally this year while the company migrates to the new system. Costs should revert to normal levels thereafter.
Analysts at Peel Hunt expect pre-tax profit of £68.9m for the year ending January 2017, giving EPS of 117p, compared with £58.7m and 101p in FY2016.
| TED BAKER (TED) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,926p | MARKET VALUE: | £1.29bn | |
| TOUCH: | 2,926-2,930p | 12-MONTH HIGH: | 3,650p | LOW: 2,463p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 392p | NET DEBT: | 49% | |
| Year to 30 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 216 | 24.3 | 42.2 | 23.4 |
| 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 |
| % change | +18 | +20 | +23 | +19 |
Ex-div: 19 May Payment: 17 Jun | ||||
