Jimmy Choo (CHOO) shareholders are now in receipt of documents relating to the group’s impending takeover by US luxury house Michael Kors (US:KORS). Just three months after its largest shareholder announced the shoe king was up for sale, Michael Kors agreed to a 230p all-cash offer totalling £896m, representing a 37 per cent premium to Choo’s undisturbed share price and making it one of the most generous offers seen this year in the luxury retail sector.
And by the look of these half-year numbers, Kors might have bagged itself a company that has finally got some of its affairs in order. Retail sales grew by a steady 3.5 per cent on a like-for-like basis (compared with a 4 per cent decline in last year's first half) which, thanks to the one-off nature of last year’s losses on foreign exchange and finance expenses, allowed pre-tax profit to flourish.
Licensing also fared better year on year, although wholesale reported a 1.6 per cent revenue decline (compared with 5.6 per cent growth this time last year) following an expected reduction in orders from US department stores. Lower working capital commitments meant cash conversion rates improved from 84.5 per cent to 118.9 per cent, helped by net debt falling by 16.4 per cent to £119m.
Analysts have suspended their forecasts in light of the pending takeover.
| JIMMY CHOO (CHOO) | ||||
| ORD PRICE: | 229.5p | MARKET VALUE: | £894m | |
| TOUCH: | 229.5-229.6p | 12-MONTH HIGH: | 231p | LOW: 120p |
| DIVIDEND YIELD: | nil | PE RATIO: | 37 | |
| NET ASSET VALUE: | 127p* | NET DEBT: | 24% | |
| Half-year to 30 June | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2016 | 173 | 6.6 | 1.5 | nil |
| 2017 | 202 | 18.1 | 3.6 | nil |
| % change | +16 | +174 | +140 | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £607m, or 155p a share | ||||
