- 'Material uncertainty' over going concern status
- Major store impairment
Superdry (SDRY) has had a far from super year. After a short delay, it has reported a £148mn loss before tax for the year to 29 April 2023, amid “extremely challenging market conditions”, particularly in the wholesale division. As well as the cost of living crisis, the fashion retailer said “poor weather” in the second half of the year subdued demand for its spring and summer clothes. The new financial year has also got off to a rocky start with sales sinking by 18.4 per cent between May and July. “Unseasonal weather” was again used as an excuse.
The backdrop is obviously difficult for retailers. However, given the recent success of companies such as Next (NXT) and Marks and Spencer (MKS), investors will be asking whether Superdry is facing stickier, brand-specific issues. Its “re-evaluation of future store growth assumptions” – which resulted in a £43.3mn impairment charge in the period – doesn’t inspire confidence.
Financial pressure is mounting. There is now “material uncertainty” over Superdry’s ability to continue as a going concern, with auditors citing “challenges in the macro environment” and limited headroom within the retailer’s funding facilities. Liabilities have also overtaken assets, meaning shareholder funds have turned negative.
Superdry has devised a cost-saving programme to deliver £35mn, and generated £45mn from an equity raise and the sale of some of its intellectual property to a South Korean company. Chief executive and founder Julian Dunkerton also claimed that the “brand is in sound health and has momentum”. Today’s results do not reflect this, however, and the group’s financial health looks far from sound. Sell*
*Shares are currently suspended due to the delay to Superdry's results. The group said it would request a restoration of the listing of ordinary shares on publication of its results.
Last IC View: Hold, 121p, 27 Jan 2023
| SUPERDRY (SDRY) | ||||
| ORD PRICE: | 56p | MARKET VALUE: | £54.8mn | |
| TOUCH: | 55-57p | 12-MONTH HIGH: | 168p | LOW: 55p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | * | NET DEBT: | £214mn | |
| Year to 29 Apr | Turnover (£mn) | Pre-tax profit (£mn) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 872 | -89.3 | -124 | 11.5 |
| 2020 | 704 | -167 | -75.0 | 2.00 |
| 2021 | 556 | -36.7 | -44.0 | nil |
| 2022 | 610 | 17.6 | 27.4 | nil |
| 2023 | 623 | -78.5 | -181 | nil |
| % change | +2 | - | - | - |
| Ex-div: | - | |||
| Payment: | - | |||
| *Negative shareholder funds | ||||
