Shares in SuperGroup (SGP) had a super jump after the clothing retailer reported a resilient set of full-year results after a sluggish first half. Last year's unusually warm autumn weather hampered sales of winter clothing, but SuperGroup managed to shift the excess stock through aggressive promotions in the second half of the financial year. The gross margin rose 120 basis points last year to 60.9 per cent, but continued infrastructure investment took a toll on operating margins, which stayed fairly flat year on year.
The bumper second half has carried over into the new financial year as well. Current retail revenues are tracking 35 per cent ahead of last year, while like-for-like sales are up by a fifth. But the group is trading against soft comparative figures compared with this time last year.
Having navigated a tricky year of trading, SuperGroup has set its sights on European expansion, a return to the US and the launch of a new autumn/winter collection designed and modelled by British actor Idris Elba. The hope is Mr Elba - said to be a "big fan" of the brand - and his design skills will attract a new 'premium' customer base.
The group wants to add another 125,000 sq ft of retail space across mainland Europe this year, with 40 per cent given over to the key German market. New stores are also planned for Norway, Sweden and Denmark, where the group will hope to further exploit its existing reputation for outer/sports wear. But SuperGroup has other markets on its mind as well, specifically the US and China. It bought back the brand's US distribution rights last March (having sold them in 2008) and has formed a joint venture in the Far East with Chinese group Trendy International. It will take £18m to get it going, but SuperGroup hopes the new venture will break even within two years.
Analysts at Investec Securities have upped their forecasts for the current financial year. The broker upgraded pre-tax profit forecasts by 3 per cent to £70m, giving EPS of 65.1p, up from £63.2m and 58.7p in the year ended April 2015.
| SUPERGROUP (SGP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,288p | MARKET VALUE: | £1.04bn | |
| TOUCH: | 1,286-1,288p | 12-MONTH HIGH: | 1,307p | LOW: 750p |
| DIVIDEND YIELD: | nil | PE RATIO: | 23 | |
| NET ASSET VALUE: | 362p | NET CASH: | £68m | |
| Year to 25 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 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 |
| 2015 | 487 | 59.5 | 56.1 | nil |
| % change | +13 | +32 | +65 | - |
Ex-div: na Payment: na | ||||
