A fall in pre-tax profits at Ted Baker masked the continued success of the fashion group's change in strategic direction.
Part of the reason for the fall in profits was the continued shift in business mix from wholesale to retail, which means that the profit profile of the group has changed to be more second-half weighted. Wholesale revenues were down 16.3 per cent, with around 6 per cent of the fall the result of Ted Baker opening directly-operated retail concessions in department stores that were previously supplied on a wholesale basis, such as John Lewis. Another 6 per cent of the drop was the result of the group choosing to stop supplying certain customers that it felt were no longer appropriate for the brand.
That shift meant direct retail sales now account for 80 per cent of turnover, up from 75 per cent a year ago, and pushed retail sales 15 per cent higher to £61.3m. However, that represented a marginal slip in like-for-like sales, as average selling space rose by 16.1 per cent. Strength in its UK and European retail operation offset continuing weakness in the US, where sales fell 23.8 per cent in dollar terms.
Broker Investec Securities has upgraded its 2010 pre-tax profit forecast by £1m to £18m, giving EPS of 29.7p (£19.6m and 33.8p in 2009).
TED BAKER (TBK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 461p | MARKET VALUE: | £192m | |
| TOUCH: | 459-461p | 12-MONTH HIGH: | 463p | LOW: 287p |
| DIVIDEND YIELD: | 2.5% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 140p | NET CASH: | £0.73m | |
| Half-year to 15 Aug | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 71.6 | 7.39 | 12.4 | 5.25 |
| 2009 | 76.6 | 6.03 | 10.4 | 5.25 |
| % change | +7 | -18 | -16 | - |
Ex-div: 21 Oct Payment: 27 Nov | ||||
