Mulberry's (MUL) growth strategy is based on international and digital expansion, and doing a greater amount of its business with customers directly, rather than through intermediaries via its wholesale business, but so far it has failed to counteract the sorry state of UK retail.
The high-end merchant makes 69 per cent of its sales in the UK, even after a 6 per cent drop in sales in the region and a 7 per cent increase in its international business. Challenges in the UK pushed adjusted pre-tax profits down from £8m to £1m, and the statutory numbers look even worse after accounting for adjustments of £6m, including £2.1m in write-offs relating to the collapse of House of Fraser and £1.8m in launch costs for the South Korean business.
However, the group looks to be making the right moves in response. It converted retailer John Lewis from a wholesale customer to a concession arrangement - which led to a drop in receivables - and introduced more efficient supply chain processes, allowing it to reduce inventories and payables on the balance sheet. Digital sales were up 27 per cent and now represent 22 per cent of group sales, from 17 per cent last year.
| MULBERRY (MUL) | ||||
| ORD PRICE: | 275p | MARKET VALUE: | £ 165m | |
| TOUCH: | 266-279p | 12-MONTH HIGH: | 826p | LOW: 255p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | NA | |
| NET ASSET VALUE: | 137p | NET CASH: | £11.1m | |
| Year to 30 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 149 | 1.90 | -2.3 | 5.0 |
| 2016 | 156 | 6.20 | 4.5 | 5.0 |
| 2017 | 168 | 7.50 | 8.4 | 5.0 |
| 2018 | 170 | 6.92 | 8.3 | 5.0 |
| 2019* | 166 | -5.01 | -8.2 | 5.0 |
| % change | -2 | - | - | - |
| Ex-div: | 24 Oct | |||
| Payment: | 21 Nov | |||
| *53 week period | ||||
